Gerald S. McDougall

Separation of ownership from control and the demand for corporate aircraft

Evidence is offered on the relationship between separation of ownership from control and managements profit-maximizing behavior. Various regression models, built around managerial equity holdings, are specified to capture managements consumption behavior via the ownership of executive aircraft. These aircraft are widely perceived as being the ultimate in managerial perquisites. The results indicate that both the probability of possessing a corporate executive fleet and the value of existing fleets decline as managerial equity holdings increase. These findings are consistent with the convergence of interests hypothesis, wherein managerial equity holdings strengthen the incentives for managers to maximize profit.

Urban Service Distributions Some Answers to Neglected Issues

The distributional consequences of service outcomes are analyzed using citizen evaluations. The legitimacy of this approach is established by arguing that an evaluation of service equity should consider the fiscal incidence of service provision. As such, an equity norm is defined around the concept of a positive fiscal residual. Six urban services are evaluated using this norm. Patterned inequality is detected with respect to race, regardless of income or tenure status. This result calls into question conclusions from previous studies that have analyzed equity in terms of service inputs and outputs, rather than service outcomes. The analysis also indicates that local officials may be able to redress inequities in service outcomes through their planning and expenditure decisions.

The demand for corporate jets: a discrete choice analysis

Discrete choice analysis is extended into the corporate arena with an analysis of general aviation business jet purchases. Based on previously overlooked data derivable from US aircraft registrations, an estimated model confirms that the business jet market processes information about product attributes similar to household markets for automobiles. Corporate purchasing decisions seem most sensitive to operating efficiencies, interior comfort, and brand loyalty. Price matters, but the average estimated response is inelastic. Other statistically significant attributes with choice elasticities less than one, include aircraft speed and reliability/safety.

Race, moving status, and urban services in central cities☆

Abstract The influences of race and moving status on the likelihood of receiving unsatisfactory or inadequate urban services are investigated using logistic probability models. The analysis bears upon the perennial issue of felt injustice and the charge that white America has a policy of sustaining separate and unequal societies for minorities in cities. The results also speak to the limits on market adjustments to correct undesirable public outcomes. Statistically significant racial distinctions are isolated in the assessment of five urban services; in three cases these are unambiguously consequential. The extent to which moving costs and limited housing opportunities inhibit housing market adjustments to uneven service provision is measured by a decomposition of estimated probabilities for minorities and whites. The evidence generated supports continuing policies that expand minority housing opportunities and reduce impediments to the mobility of minorities in urban areas.

A proposal for improving the measurement of benefits from pollution abatement

Abstract Two basic and competing approaches for measuring the benefits of pollution abatement have found support in the recent literature-the property value approach and the health damage function approach. The purpose of this paper is to show that conditions will often exist when the property value approach will not accurately measure all benefits and conditions will always be present that cause the health damage function approach to underestimate benefits. In general, neither approach can stand alone. It is possible, however, that the two approaches can be combined in such a way as to improve the measurement of abatement benefits. We present an approach for combining these two methods and do so by introducing an “information coefficient” that measures the degree of knowledge about pollution effects held by the public. Approaches to estimating the information coefficient are suggested.