The Journal of Economics

Volume XXXIV No. 1, 2008

Investing in Fortune’s 100 Best Companies to Work for in America

Cullen F. Goenner

Each year, since 1998, Fortune magazine has published a list of firms deemed the “100 Best Companies to Work for in America” based on their superior employer-employee relations.  This relationship represents an intangible asset that may significantly influence future firm performance.  We investigate whether investment strategies that invest in the 100 Best are able to outperform the market.  The results indicate that portfolios, consisting of firms on the list, offer higher risk adjusted returns than the S&P 500 over the period 1998-2005.  (G11) 

An Examination of the Impact that Classroom Based Experiments have on Learning Economic Concepts

David M. Mitchell

This paper examines and extends the important pedagogical issue of whether using classroom based experiments to illustrate concepts such as supply and demand increases students’ knowledge and understanding of economics.  Previous literature has only considered this in a single course whereas this work broadens the focus to both the principles of microeconomics and macroeconomics course.  Student understanding and knowledge was measured via the standardized Test of Understanding College Economics exam in conjunction with the individual courses’ final exam.  Results indicate that there is not an improvement in either TUCE scores or the final exam score by students who were exposed to classroom experiments.  Furthermore, there is some evidence that the experiments might actually lower an instructor’s student evaluations. (A22)

Analyzing the Technical Efficiency of School Districts in Oklahoma

Lee C. Adkins and Ronald L. Moomaw

The parameters of a stochastic production frontier and the determinants of X inefficiency are estimated simultaneously using a maximum likelihood estimator proposed by Battese and Coelli (1995). Our results indicate that additional instructional and noninstruction expenditures improve student performance, but only by a small amount. In addition, we find that school district size, teacher education and experience, and teacher salary affect the technical efficiency of schools (F33, F41).

Factors Influencing Governors’ Salaries: An Update and Extension

M.H. Tuttle and Donald L. Bumpass

This paper updates and extends an earlier study by Abraham, Johnson and Uyar (1994) by examining the determinants of governors’ salaries for the forty-eight contiguous states. State per capita personal income, population, unemployment rate and per capita government revenues are the primary determinants of governors’ compensation. Further, state per capita revenues and expenditures have a negative impact on governors’ pay. Our findings support the view that a governor’s pay is based primarily on the responsibility and productivity measures given the size of a state’s economy and government (H70, J30).

The West African Economic and Monetary Union  and the African Growth and Opportunity Act:  A Computable General Equilibrium Approach

Hounsou Remy and Michael J Applegate

The countries of the West African Economic and Monetary Union (WAEMU) like the other Sub-Saharan African countries face the challenge of generating sustained economic growth.  Among factors that contribute to this problem are the low degree of openness to trade and the lack of foreign capital.  To encourage trade and investment in Sub-Saharan Africa, the United States passed the African Growth and Opportunity Act (AGOA).  This paper develops and uses a Computable General Equilibrium model to determine the impacts of this act on WAEMU as a group.  The results from the simulation of free-trade and an increase in foreign capital inflow show that the sectoral effects of these policies are considerable.  At the macro level we see increases in the growth rate of real GDP, real investment, government revenues, total saving, and total consumption. (C68, F47, F42, O55)

Information Manipulation and Entry Deterrence

Hilde Patron and Kenneth Roskelley

In this paper we study the production decisions of a firm facing uncertain demand and the threat of entry from a rival. The incumbent, who has the ability to generate information about demand by appropriately choosing quantity, can use information to make better informed choices and to manipulate the decisions of the rival firm. We find that, although the monopolist may increase or even decrease quantity to discourage entry, it always manipulates information in a way that lowers the ex ante probability of entry. (L1, D83)