M. Kevin McGee

Variance Distributions from Round Robin Series of Zero-Sum Competitions

When observations involve the outcomes of many series of simple zero-sum games, with competitor i facing competitor j in some of those games, competitor i’s observed value will not be independent of competitor j’s value. Therefore, the sampling distribution of the sum of squared deviations from the mean cannot be assumed to have a chi-squared distribution. In this paper we derive moments and the sampling distributions for the sum of squared deviations in these situations and show that they are asymptotically gamma distributions. For n competitors and sufficiently large number of games g in each series, the sampling distribution of sum of squared deviations will have a gamma distribution, with parameters α = (n−1)/2 and β = 2n/(n−1). This distribution approaches the chi-squared distribution as the number of competitors approaches infinity.

A Framework for Reconsidering the Lake Wobegon Effect

The Lake Wobegon Effect (LWE) describes the potential measurement-error bias introduced into survey-based analyses of education issues. Although this effect potentially applies to any student-report variable, the systematic overreporting of academic achievements such as grade point average is often of preeminent concern. This concern can be easily circumvented if official records data are available; however, many researchers can only access student-reported data. In this article, the authors examine whether using student-survey data in place of official records data meaningfully biases regression estimates. They motivate their contribution by noting a useful statistical feature of overreporting on bounded variables such as grade point average. Specifically, the misreports will be negatively correlated with the true grade point average, yielding a form of nonclassical measurement error that actually counteracts the bias. The authors connect this observation to reliability ratios used in labor economics, which are simple ways to adjust for attenuation bias, when needed. In two applications, we find that it is unnecessary to correct for the LWE bias because it is so small.

Testing for competitive balance

We present two tests for the hypothesis that a league is competitively balanced, identifying in each case the appropriate statistic as well as its sampling distribution. We then apply these tests to Major League Baseball and the National Football League. We demonstrate how these tests can be applied to full sports leagues, or to just intradivisional play, and to both single season and multiple season outcomes. We also show how one of our statistics is related to existing measures of competitive balance, and note the possibility that, because our statistics have known sampling distributions, knowledge may ultimately allow them to be transformed into measures that are comparable between leagues of different sizes and season lengths.

Budget priorities and community perceptions of service quality and importance

The increasingly important issues of transparency and citizen involvement have challenged public administrators in the budget process. This paper adopts a contingent valuation approach, surveying citizens in the city of Oshkosh, Wisconsin, on their preferred allocations of both a large city budgetary increase and a large city budget reduction. The results are then used to examine how citizen assessment of service quality and importance are related to their desired changes in net budget allocations. We believe that this is a major improvement in the contingent value approach, and can serve as a useful tool to public administrators for identifying the public’s budget priorities.

‘The best defence…’ or optimal offence/defence spending ratios in the NFL

An original data set built from all 32 National Football League (NFL) teams, covering 2000–2009, is used to produce a production function for professional football. We use spending on salaries, divided between offensive and defensive players, as inputs to produce season wins. Our data suggest that the optimal strategy is simply to have a strategy, meaning teams with balanced spending tend to do worse than those with a more strategic allocation towards either offence or defence.

Invariant Resource Supply and Tax Incidence in a Lifecycle Growth Model

The incidences of wage, income, interest, output, and expenditure taxes are examined in a dynamic general equilibrium growth model. It is shown that a flat-rate income tax and a general sales tax have the same incidence; if the production function is Cobb-Douglas (unit elasticity of substitution), both are borne entirely by labor income. Feldsteins finding that a proportional capital income tax is partly shifted onto labor income is shown to hold even when saving elasticities are zero. A proportional wage tax reduces after tax wage income by more than the tax, while increasing interest income, demonstrating that labor bears more than a 100% share of this taxs burden. These results are compared to the incidence results of static general equilibrium analysis. It is shown that the general equilibrium results hold in the long run only if the production elasticity of substitution is infinite.

A parametric “parent metric” approach for comparing maximum‐normalized journal ranking metrics

This article proposes a parametric approach for facilitating inter‐metric and inter‐field comparisons of citation‐based journal ranking metrics. The mechanism is simple to apply and adjusts for metric magnitude differentials and distributional asymmetries in the rank‐score curves. The method is demonstrated using h‐index, AWCR‐index, g‐index, and e‐index data from journals in Accounting, Economics, and Finance.

Specifying the Price Impacts of Utility Easements

This paper proposes a nonlinear econometric specification for estimating the hedonic land value impact of dis-amenities that affect only a portion of a property’s value. This specification allows for the possibility that the price-acreage relationship is nonlinear, and assumes that the dis-amenity’s price impact is some product of overall land value. It is based on an assumed data-generating process in which sellers and buyers adjust their asking and bid prices by adjusting what they perceive to be the net property acreage – i.e., the effective usable acreage, after accounting for any use loss associated with the dis-amenity.

The economic distortions of a border-adjusted corporate cash flow tax

This paper explores the efficiency distortions under two types of destination-based corporate cash-flow taxes. Auerbach and Devereux (2015) have shown that a sales-apportioned cash-flow tax will distort consumer prices; this paper shows that those distortions are generally quite small, and are limited solely to industries in which economic profits are earned, and consump- tion is already significantly distorted. This paper also shows that a border-adjusted cash-flow tax will distort consumption decisions that cross borders, such as travel, higher education, and retirement location. In addition, it would affect labor migration decisions, especially for mi- grants who plan either to migrate only temporarily, or to remit a substantial fraction of their earning back to their home country.

The Distinct Advantages of a Sales-Apportioned Corporate Cash Flow Tax

This paper explores the impacts of adopting two corporate income tax reforms simultaneously: the conversion to a cash-flow tax, that would allow the expensing of investment while disallowing interest deductions, and the switch to sales-based formula apportionment, that would tax worldwide profits in proportion to domestic sales revenue. I find that the two reforms are complementary, each eliminating different distortionary impacts of the corporate income tax. Worldwide adoption of both reforms would result in the taxation of supernormal profits with only minimal tax distortions.However, just as multinational corporations can easily manipulate separate accounting to minimize tax burdens, by shifting profits across national boundaries, sales-formula-apportionment is also potentially vulnerable to tax avoidance, through shifting profits across industry boundaries. Thus, the attractiveness of the combined reform probably hinges on how well sales-formula-apportionment’s natural boundaries, between unrelated economic activities, can be established and maintained.