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The purpose of this paper is to introduce a non‐normality premium (NNP) to identify the extra return that will compensate an investor for a non‐normal return distribution. The NNP quantifies the economic significance of non‐normality to complement a statistical significance test of non‐normality, such as the Jarque‐Bera test.

The NNP is patterned after the risk premium, the amount that compensates an investor for the risk of an investment. The theoretical NNP is examined on the margins with Taylor series approximation and applied to hedge fund data.

An increase of 1 in the skewness has the same effect on an investor as an increase in the mean of 2.5 basis points per month. An increase of 1 in the kurtosis has the same effect on an investor as a decrease in the mean of 0.15 basis points per month. A sample of 716 hedge funds revealed that while 72 per cent statistically reject normality, only 29 per cent require more than a single basis point per month difference in the mean to compenscate an investor for the non‐normality.

The NNP allows for a valuation on the higher moments (skewness and kurtosis) of an investor's return distribution. The evaluation is tailored to the individual through use of a utility function. Once applied to an alternative investment vehicle, it is learned that rejecting normality is not sufficient grounds to suspect that the non‐normality is important to investors.

THAT WAS a bold experiment that was sponsored by the NatWest Bank and which is reported in our news pages. They selected sixteen out of several hundred applicants, gave them a grant of £2,000 each and sent them off on a fact‐finding mission to Europe.

Political economy is a term in wide use and has been for centuries. Yet standard economic theory reduces politics to ethics or economics. This reduction is enabled by the presumption of closed choice data or given utility and cost functions. In this conceptual framework, the political vanishes into an activity of preference satisfaction according to a welfare function (ethics) or into trade (economics). To bring the political back to life within a theory of political economy requires that closed schemes of thought be replaced by open schemes. The ways in which individuals react to the indeterminacy of their subjective choice data, in innocuous small-scale settings as well as in situations of dramatic exception to constitutional rules, separates them into leaders and followers. Followership creates an opportunity for political enterprise at the social level (enterprise in rules) and at the subjective level (enterprise in visions of options, and hence preferences). At both levels the political comes to the fore of political economy as an answer to the “challenge of exception.” Much of our inspiration for this argument traces to the work of Friedrich Wieser, Carl Schmitt, and Vincent Ostrom.

Under this heading arc published regularly abstracts of all Reports and Memoranda of the Aeronautical Research Council, Reports and Technical Memoranda of the United States National Advisory Committee for Aeronautics and publications of other similar Research Bodies as issued

Many consumer choice situations are characterized by the simultaneous demand for multiple alternatives that are imperfect substitutes for one another. A simple and parsimonious multiple discrete-continuous extreme value (MDCEV) econometric approach to handle such multiple discreteness was formulated by Bhat (2005) within the broader Kuhn–Tucker (KT) multiple discrete-continuous economic consumer demand model of Wales and Woodland (1983). In this chapter, the focus is on presenting the basic MDCEV model structure, discussing its estimation and use in prediction, formulating extensions of the basic MDCEV structure, and presenting applications of the model. The paper examines several issues associated with the MDCEV model and other extant KT multiple discrete-continuous models. Specifically, the paper discusses the utility function form that enables clarity in the role of each parameter in the utility specification, presents identification considerations associated with both the utility functional form as well as the stochastic nature of the utility specification, extends the MDCEV model to the case of price variation across goods and to general error covariance structures, discusses the relationship between earlier KT-based multiple discrete-continuous models, and illustrates the many technical nuances and identification considerations of the multiple discrete-continuous model structure. Finally, we discuss the many applications of MDCEV model and its extensions in various fields.

This paper updates and expands Norton's 1979 study of the political economy of city life cycles in thirty jurisdictions. Using 1970 and 1976 fiscal data, Norton had found that older cities of the Northeast and North Central states provide a more extensive range of services and have a stronger commitment to social welfare functions than younger cities of the South and Southwest. A thirty-five city survey using 1991 data generally confirms his findings. We found significant differences in the service mix, spending patterns and revenue sources of older and younger cities. Older cities offer a broader mix of services with the most dramatic differences among redistributive and safety functions, and notable differences in the public works and administrative services categories. Older cities expend more per capita on local services and exhibit different spending priorities. They spend propor-tionately more on redistributive services, eg. health, hospitals, welfare and housing. They also spend more per capita on police, fire and education. On the revenue side, older cities depend more on commercial property taxes, while newer cities rely more on residential property taxes. The most significant difference on the revenue side, however, concerns the greater reliance of younger cities on locally generated non-tax sources (eg. user fees), whereas older cities remain more dependent on intergovernmental aid.

This paper aims to present an off-site construction (OSC) readiness maturity model for assessing the readiness of offsite construction companies in the Indian construction sector.

The research was conducted in three stages. The first stage consisted of a detailed literature review to document 17 different variables affecting the OSC adoption in India. In Stage 2, 15 semi-structured interviews were carried out where the participants were asked to refine those variables for the Indian context and define what would be different levels of attainment. In the third stage, another set of 5 semi-structure interviews was performed to validate the maturity levels and definitions.

A three-level OSC readiness maturity model is presented for discussion. This describes 17 variables at different levels of maturity.

The proposed OSC readiness maturity model guides construction practitioners in India through a structured process to enable them to assess their OSC readiness in the market. This assessment enables them to evaluate and benchmark their processes through the strategic and operational phases. The maturity model also identifies the areas of concern and the scope for further development or change to secure the optimal advantage of OSC methods.

The research produced a model to assess the readiness of OSC adoption in the Indian construction sector. Although the model has been applied to the Indian construction sector, it can easily be modified to accommodate other OSM contexts.

At the end of 2011, one of the largest food retailers in Brazil, Grupo Pão de Açúcar, or GPA (a subsidiary of Companhia Brasileira De Distribuição, or CBD), was reviewing its accounts payable terms with suppliers in search of additional value. Manager of analytics Maria Cristina Santos was examining the trade credit terms GPA had with Oalem Ltda, a family-owned melon grower located in northeastern Brazil. Oalem, like most small family businesses, was financed with bank loans and equity that was held predominantly by the family. The case examines how accounts payable (trade credit) terms should be set or negotiated between a large retailer and a small supplier, especially when the bargaining power between the two may not be equal. The case demonstrates that trade credit terms can be as important as the terms of more traditional forms of financing.

After analyzing and discussing the case, students should be able to:

• Determine when it is efficient or value-increasing for one nonfinancial firm to borrow from another nonfinancial firm through trade credit, as opposed to borrowing from financial institutions (e.g., banks) or financial markets

• Understand how competition or relative bargaining power can influence feasible and optimal trade credit terms

• Explain why trade credit can be a cheaper form of financing than the alternative forms of financing available to small family businesses like Oalem Ltda

Determine when it is efficient or value-increasing for one nonfinancial firm to borrow from another nonfinancial firm through trade credit, as opposed to borrowing from financial institutions (e.g., banks) or financial markets

Understand how competition or relative bargaining power can influence feasible and optimal trade credit terms

Explain why trade credit can be a cheaper form of financing than the alternative forms of financing available to small family businesses like Oalem Ltda

Although the federal gasoline tax played multiple roles in financing surface transportation infrastructure in the United States, experts did not agree on the tax's purpose. Some argued that it was essentially a fee for users of the nation's federally supported highways. Others suggested that it should play a more prominent role in environmental, energy, and transportation policy by correcting for driving-related externalities. Still others suggested that it should be used to reduce the federal budget deficit. Finally, the tax itself had remained at the same level since 1993, and with the Highway Trust Fund virtually insolvent, many experts believed it was time for an increase. The case presents a background on the U.S. federal gasoline tax, an overview of the market for gasoline in the United States, and survey of gasoline taxes in U.S. states as well as several other countries around the world.

The case can be used to discuss the incidence of the gasoline tax, as well as its role as a Pigouvian tax to deal with negative externalities related to gasoline consumption and driving. There is sufficient data in the case to enable students to analyze the incidence of the federal gasoline tax and to determine the socially efficient level of the tax in light of externalities related to gasoline consumption and driving.

The purpose of this case study is to examine the impact of regional culture and family dynamics on firm survival and longevity. Secondary issues include operations management in a retail grocery, hardware, and building supply store.

The author performed in‐depth qualitative interviews with the business owners and visited on site. The tape‐recorded interviews followed a formal list of questions, but were semi‐structured in nature.

Although the store was remotely located, wise management and intelligent leadership have contributed to business success and survival into the fourth generation of family ownership.

As an exploratory qualitative case study, there are limitations concerning generalizability. Additionally, the findings here relate particularly to small family businesses.

Family firms possess a business side and a family side. In this case, success factors on the business side included merchandising skills, responsiveness to customer needs, profitable sales margins, and reinvestment in facilities. On the family side, success factors included harmonious relations among family members, the incumbent leaders’ desire for succession to occur, incumbent leaders’ financial forbearance or sacrifice, solid education of successors, mentoring of the next generation, and willing and able successors.

This case analyzed characteristics that lead to long term survival, examined the process of succession, and assessed the two‐sided nature – business side and family side – of a small family business.