The “new” view of investment decisions and public policy analysis: An application to green lights and cold refrigerators

Recent research in investment theory emphasizes the importance of sunk investment costs, uncertainty in returns, and flexibility in investment timing. Allowing for the presence of these characteristics alters traditional discounted cash flow rules for when to invest. Those rules will recommend investing at lower rate-of-retum thresholds than is optimal. This article describes this research and suggests the range of potential situations to which the theory applies. It also discusses the implications for policy analysis and suggests that government programs to encourage investment may, in some cases, be inappropriate. After discussing a wide array of possible applications, we focus on one in particular: programs to encourage energy-efficient investment. The examples suggest the importance of applying the new investment theory for economic analysis of investment in energy-efficient technologies.     

Crime and the Czech Republic: Summary observations

Increased levels of street and organized crime activity have accompanied the transition from totalitarian rule to a freer political climate both in the Soviet Union and in its former east European satellites. A conference in the Czech Republic involving officials from the host country and visiting practitioners and academics largely from the United States considered methods for dealing with burgeoning crime issues. The article summarizes the tone and content of the discussions as well as the substantive issues addressed. This revised version was published online in July 2006 with corrections to the Cover Date.     

Structural determinants of union activity in hospitals

This study uses national data from the American Hospital Association and the National Labor Relations Board in a multivariate framework to assess the impact of various structural factors on union activity in hospitals. The theoretical framework includes both management and union perspectives in evaluating (1) whether the hospital had a signed collective-bargaining contract in 1980; (2) whether a union election had been held; and (3) whether the union won the election. The results indicate that certain structural characteristics (hospital size, ownership, teaching status, and location) have had a significant impact on union activity in hospitals, while other characteristics (third-party reimbursement and area factors) have not. The results also show that prospective reimbursement has a positive impact on union activity.     

Truman's revenge: Social control and corporate crime

Many criminologists have found that corporate crime does more harm than street crime, whether measured by property lost, money stolen, or lives taken. Yet, public concern about crime is almost exclusively focused on street crime and “just deserts” for the offender. The authors argue that corporate criminality is more likely than individual criminality to be planned and subjected to cost/benefit analysis than street crime and therefore more likely to be deterred by raising the costs of corporate criminality. The Model Penal Code is used to demonstrate that both individual and corporate crime produce a comparable array of avoidable harms. Public policies that demand just deserts for individual offenders (natural persons) are revealed as highly inconsistent with policies that protect corporations (juristic persons) from accountability for the harms they create. A philosophical and legal foundation for corporate crime control strategies is provided. The authors propose a sanctions regime for corporate criminals comparable to the sanctions regime imposed on natural persons for street crimes. Strategies to avoid risk shifting by corporations are suggested. This revised version was published online in July 2006 with corrections to the Cover Date.