The author investigates the Averch-Johnson-Wellisz hypothesis as it applies to the interstate natural gas transmission industry and analyzes the impact on the industry of rate-of-return regulation. Four optimization models simulate the industry's input-output decisions. The constrained revenue-maximizing model is shown to make the best predictions in comparison with the constrained profit-maximizing (CPM) and profit-maximizing (PM) models. Regulation is shown to have modified industry behavior. The author then analyzes the social-welfare benefits from marginal-cost pricing and finds them to be acceptable. 27 references.

Integrated sampling procedures have been suggested in recent accounting literature. Yuji Ijiri and Robert Kaplan have proposed a nonlinear model which, when solved, yields a sampling procedure which satisfies several auditing goals. This paper presents a solution procedure for the proposed model. The solution procedure takes advantage of lagrange multipliers to create a problem which is linear in the constraints and convex in the objective function. A search technique then is used in conjunction with the convex simplex method to solve the problem. The procedure is used to test the model results in an actual auditing environment. The results of this study indicate the feasibility of using this approach for generating sampling designs.

This paper examines the implications for fiscal policy of systematic differences between (social) rates of return on private investment and savings. We show that the social discount rate lies between these divergent rates of return, that the controversy between this result and Marglin's stems entirely from different treatments of depreciation, and that reinvestment of net project output has negligible quantitative effects on the social discount rate. Then, within a macroeconomic framework, we derive the stringent conditions for a unique discount rate and demonstrate that, as public-sector consumption must also be charged a shadow price, the social value of a global change in output induced by countercyclical fiscal policy must exceed its (nonzero) social cost. Finally, we examine the Little-Mirrlees concept of the social cost of labor and find it unacceptable.

This paper examines the implications for fiscal policy of systematic differences between (social) rates of return on private investment and savings. We show that the social discount rate lies between these divergent rates of return, that the controversy between this result and Marglin's stems entirely from different treatments of depreciation, and that reinvestment of net project output has negligible quantitative effects on the social discount rate. Then, within a macroeconomic framework, we derive the stringent conditions for a unique discount rate and demonstrate that, as public-sector consumption must also be charged a shadow price, the social value of a global change in output induced by countercyclical fiscal policy must exceed its (nonzero) social cost. Finally, we examine the Little-Mirrlees concept of the social cost of labor and find it unacceptable.