Edwin J. Elton, Martin J. Gruber, Paul R. Kleindorfer, A Closer Look at the Implications of the Stable Paretian Hypotheses, The Review of Economics and Statistics, Vol. 57, No. 2 (May, 1975), pp. 231-235

B AINis (1956) analysis of the sources of barriers to new competition suggests that scale economies to the plant or firm allow sellers to elevate price somewhat above average cost without attracting new rivals. Multivariate statistical analyses of the determinants of seller concentration and profits henceforth have included measures of scale economies among their independent variables. However, direct measures, based on engineering or survey evidence, have been available to only a few investigators (Bain, 1956; Eastman and Stykolt, 1967). Others have employed various statistical proxies for the missing firsthand evidence. This paper proposes a new way to form these surrogate measures, compares its properties with those of previous approaches, and reports its performance in two recent studies of allocative efficiency in manufacturing industries.

W HILE debate rages on, it seems only a matter of time before some form of national health insurance becomes a reality. Aside from the central questions regarding coverage, financing, and eligibility, an important issue involves the administration of such an insurance program. A recent analysis of 13 proposed national health insurance bills found that 10 of the bills include the existing industry to one degree or another.' This strategy makes sense because of the expertise and machinery that presently exist within the health insurance industry. If such a strategy is adopted, the fundamental problem of allocating the administrative responsibility remains. There is wide disparity in the average costs of administration among the insuring organizations. Ideally, designation of responsibility for administering any national health insurance program should be based upon efficiency considerations. To the extent that economies of scale are present within the administrative function of existing health insurers, centralization in one or a few hands can be justified. In contrast, if economies of scale are not present, administrative responsibility should be decentralized on efficiency grounds. The purpose of the present paper is to examine the administrative cost experience of the commercial health insurers in an effort to determine whether economies of scale exist.

A survey of the empirical work involving interest rates indicates an almost universal use of seasonally unadjusted rates, apparently due to a conviction that seasonal factors are not important in interest rates. Studies by V. Kerry Smith and Richard Marcis (1972), Stanley Diller (1969) and William Gibson (1970), however, provide evidence showing that interest rates exhibit seasonal variation. Seasonality in interest rates merits careful consideration for at least two reasons. First, as noted by Gibson, An aim of the Federal Reserve System is to accommodate seasonal swings in the financial needs of trade, and the system tries to do this by removing seasonal fluctuations from interest rates. The seasonal variations remaining in interest rates suggest that the system is not wholly successful in these efforts. . (Gibson, 1970, p. 442). Second, from an econometric point of view, any model, such as a money demand model, which contains an interest rate as an independent variable should also contain seasonal dummy variables; otherwise, the coefficient of the interest rate variable may be both biased and inconsistent.' These issues underscore the importance of determining whether there is seasonality in interest rates. In this regard, it is interesting to note that the Federal Reserve does not report seasonally adjusted rates, apparently because the Board does not recognize the existence of a seasonal component. The purpose of this paper is to provide additional information regarding seasonality in interest rates. Unlike earlier studies, both daily and monthly data are analyzed. And, whereas Smith and Marcis employed spectral analysis to detect seasonality, ordinary least squares techniques with seasonal dummies are employed here. Using this technique, we find, in contrast to the findings reported by other investigators, no evidence of a significant seasonal component in monthly rates. Seasonality is, however, present in the daily rate. The plan of the remainder of the paper is as follows. In section II, the magnitude and the importance of seasonality in three interest rates are assessed. Section III contains a discussion of seasonal variation in a short-term rate employing daily as opposed to monthly data. A summary and the conclusions are presented in the last section.

[Models of the behavior of populations of self-reproducible natural resources in an economic framework have rarely anticipated the consequences of different forms of production functions. This paper investigates sufficient conditions for extinction in a very general model as well as a model having a specific production function. In the second section additional considerations relating to extinction are deduced as well as the existence of a watershed level of population. These conclusions are exemplified using data from one particular population of red deer.]