The theory of efficient capital markets suggests that if the capital markets are efficient, security prices can be assumed at any time to “fully reflect” all available information. Various forms of the model have been subjected to extensive empirical testing. The results of these tests have been such that in reviewing the literature on the theory Fama [3] states, “ … the evidence in support of the efficient markets model is extensive, and (somewhat uniquely in economics) contradictory evidence is sparse.” Most of the research, however, has been addressed to the question of whether prices “fully reflect” particular subsets of available information. The validity of these results depends on the extent to which the information in the subset used for testing captures the information actually impounded in prices.

Journal Article The Marginalist Principle in a Discrete Production Model Under Uncertain Demand: Comment Get access T. M. Whitin T. M. Whitin Wesleyan University Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 88, Issue 1, February 1974, Pages 139–140, https://doi.org/10.2307/1881801 Published: 01 February 1974

One of the phenomena on Wall Street during the sixties was the new issues market. During the decade new issues became a popular investment alternative, particularly in the bull markets of 1962, 1966, and 1968. The height of enthusiasm occurred in the hot new issues market of the fiscal year 1968–1969 when 2, 171 issues were offered to the public. This interest in new issues was followed by studies such as Reilly and Hatfield [12], McDonald and Fisher [9], the SEC [13], and others, all of which show that there is a downward bias in the issue price of new issues. Why this downward bias is present was treated later by Logue [5]. Although these studies also suggest that there is a difference in the pricing behavior by individual underwriters, none of the previous studies has addressed itself specifically to this point.

Presents a reply to comments made by authors on a study about the usage and relationship between opportunity and incremental costs in accounting and economics. Definition of incremental cost.

Presents a hypothetical situation which is helpful in teaching and establishing several basic concepts of accounting for beginning accountancy students. Concepts that can be derived from the fairy tale story; Information on relationship between assets and expenses; Suggestion that accounting entities and the owner of those entities must be clearly identified.

THE assumption that taxes are capitalized plays a central role in public finance theory. It would seem that the taxation of residential property offers a good opportunity to test this assumption empirically. One need simply investigate whether or not, after holding constant housing and land characteristics, a house with higher taxes sells for a lower price. Indeed there have been many attempts in the literature to estimate the extent to which -residential property taxes are capitalized.' Many of these studies have focused on differences in tax rates existing in neighbouring communities, and have attempted to determine whether in such a setting property values are inversely related to tax rates. The major difficulty with this approach, in which tax rates in different communities are compared, is that government expenditures may also differ from one location to another and may also be capitalized in property values. It is therefore necessary to hypothesize that property values depend on both taxes and expenditures, in which case the relationship comes close to being an identity, with average property values related to average tax rates and average levels of government expenditures.2 It is not surprising that tax rates are found in these cases to be negatively, and government expenditures positively, related to property values. However, it is not clear (two-stage least squares notwithstanding) how much of these effects can be attributed to capitalization and how much is due to the tautological nature of the problem. In this paper we focus on individual residential property values in one municipality only, and thus avoid the major problem discussed above since the level of general government services is the same for all property owners.3'4 Further, restriction to one locale does not imply that effective tax rates will be the same on all houses even though the mill rate is, of course, the same. As is the case in most cities there are wide variations in the ratio of assessed value to market value for residential properties, (even within homogeneous housing categories) thus resulting in differences in taxes paid for basically identical housing units.5' 6 Consequently, we hypothesize a relationship of the form