Why should a rationally motivated political decision process generate an inverse relationship between tax rates and tax revenues? There would never seem a logical reason for increasing tax rates beyond maximum revenue limits. In this note, we explain how such a position can emerge and show why, once in such a position, political decision makers may find it difficult to escape.

Douglas W. Caves, Laurits R. Christensen, W. Erwin Diewert, The Economic Theory of Index Numbers and the Measurement of Input, Output, and Productivity, Econometrica, Vol. 50, No. 6 (Nov., 1982), pp. 1393-1414

This paper compares students who studied accounting in high school (Group I) to those students who did not (Group II). Two questions were addressed. First, do Group I students outperform Group II students in the first college-level accounting course? Second, what impact does prior accounting education have on dropout behavior from the first college-level course? Data were compiled for 498 students enrolled in elementary financial accounting. The first question was addressed by performing an analysis of covariance with repeated measures on examination scores. Vocabulary and quantitative skills scores were used as the covariates. The second question was evaluated by analysis of total drop-outs and drop-out patterns. Overall, Group I students performed no differently on examinations than those in Group II. While they scored higher on early examinations, they scored less well later. There was no difference in drop-out rate, although Group I students tended to drop later in the semester.

[The estimation and testing of a singular equation system in the context of a general dynamic specification is considered. In an application to factor demand equations, hypotheses suggested by economic theory are expressed in terms of the long run structure of the system under alternative dynamic specifications. Variations in the dynamic specification are found to have a significant impact upon the inferences that can be made about the long run structure.]

In Section 2, we review some important results of the received auction theory, introduce a new general auction model, and summarize the results of our analysis. Section 3 contains a formal statement of our model, and develops the properties of affiliated random variables. The various theorems are presented in Sections 4-8. In Section 9, we offer our views on the current state of auction theory. Following Section 9 is a technical appendix dealing with affiliated random variables.

In this paper, a mathematical modeling approach to the audit staff allocation problem is proposed. The solution procedure is interactive and recognizes the multiple-criterion nature of the problem. The interactive procedure operates within a fixed number of iterations and presents a fixed number of candidate solutions to the decision-maker at each iteration. The decision-maker is required only to select his most preferred candidate from each of the groups of solutions presented to him. Criterion preferences in terms of a weighting vector are not elicited. The procedure's final solution provides two types of recommendations' (a) how the projected workload is to be allocated among the audit staff, and (b) whether or not the audit staff should be increased or decreased at its different levels.