Information and data are essentially the basic ingredients for the formulation of informed judgments and the making of rational decisions. In recent years, the inadequacy of business information and data available to the various segments of the economy has led them to advocate that business enterprises should disclose all their relevant and material information fully and comprehensively. Seldom, however, have they, who are outside the corporate management, given adequate consideration to the role that secrecy of business information can play in enabling competition among rival business enterprises. In this thesis, it is suggested that secrecy of some information, not full disclosure, is necessary if business enterprises are to be competitive against rivals. This study has found that the business enterprises interviewed in the field study are strongly opposed to disclosing fully and comprehensively all their information. In the views of some of the executives who are in the selected enterprises, secrecy of certain information is required not only in the maintenance of the competitive positions of their enterprises, but also as a necessary part of their competitive weaponry against rivals. Secrecy is also desired in the interests of their enterprises. Apparently, therefore, the exigencies of the various segments of the economy for business information and data cannot be met by voluntary full disclosure of information by business enterprises; certainly it is not attainable without opposition from the business community. / Business, Sauder School of / Graduate

Supervisor: Professor J. H. G. Smith The economic accessibility of the forest depends on the value of forest products in the market place and the total of all costs involved in getting them there. Where these costs equal the value of the products, the margin of economic operation occurs. At any point in time, a certain set of technological, social, and economic conditions prevail, which serves to define this boundary. However, it is not always clear just what the effect on the economic margin will be if a change in any of these factors takes place. This in turn increases the difficulty experienced by those who seek to plan for the most efficient and beneficial long term use of the forest, since neither the physical amount nor the monetary value of the forest resource can be adequately determined in economic terms. This thesis has examined the nature of technological change in the logging sector of the forest industry, taking particular notice of both the rate of change and of its effect upon economic accessibility of the forest. The resulting need for more factual information for resource planning was discussed, with the emphasis being placed upon the area of logging costs. A mathematical model of the highlead logging system, suitable for simulation on electronic computers, was developed to illustrate the type of information required, and how it may be used in the determination of forest accessibility. Also, economic analysis was applied to the problem of logging layout and road spacing, where it was shown that the value of the marginal return from each input activity must be equal for the optimum, or least cost condition, to exist. The usefulness of the cost analysis techniques was demonstrated in an example comparing the performance of the highlead and skyline logging systems on a standardized setting. This demonstrated that the latter system was competitive at a road construction cost of about $6 per lineal foot and over, while the former was the more economical below that value. Also, it brought out the fact that skyline systems can contribute in the future to an extension of the margin of operations in coastal British Columbia, and especially so if various technical improvements can be anticipated. A method for combining inventory data, logging productivity and cost relationships, and log market prices through the use of logging models was described, using an example from the University of British Columbia Research Forest. It was observed that refinements of this method could lead to a satisfactorily accurate and flexible definition of the economically accessible timber resource. / Forestry, Faculty of / Graduate

Prorationing is sometimes implemented when the producing capacity of an area exceeds the demand for that output at a price which many producers feel to be "fair" -when this situation occurs the price of course comes under pressure as producers compete with one another to sell their oil. It is in order to avoid such a possibility that operators are sometimes successful in persuading the government having jurisdiction to assume the responsibility of setting up and policing a prorationing plan. Under such a scheme the total demand for crude oil from the area, at the desired price, is alloted among all the producers of the area on a basis related to some measure of each producer's capacity - no producer has any Incentive to lower his price as he would not be awarded any larger share of the market for so doing. In simple words then the name of the game Is price fixing. Since December 1950 such a scheme for "prorationing production to market demand" has been in force in the province of Alberta and is administered by a board created by the provincial government. This practice of prorationing has had a great influence on the manner in which the Canadian oil industry has developed, not only in the province of Alberta (which is by far the largest producer of crude) but in the other oil producing provinces as well (these being mainly B.C., Sask., and Man.). It has in fact encouraged large amounts of excess expenditure to take place in the development of Canada's crude oil resource. Prorationing has encouraged this over expenditure in two ways - first through the maintenance of an artifically high price for crude oil which has encouraged the development of high cost sources at the expense of already existing low cost ones that must as a result suffer "shut-in" capacity, and secondly as a consequence of the regulations governing the method by which the demand is apportioned which has led to the over drilling of oil fields. A third cause of over expenditure have been field regulations outside of the prorationing plan such as provincial legislation dealing with minimum allowed well spacing, the manner in which maximum allowable rates of production for wells have been calculated, and the manner in which lease rights are allowed to be held. Our estimate is that poor field regulations, both inside and outside of prorationing, have led to excess expenditures of some $730 million in the period 1947 to 1965 inclusive. Over expenditure due to prorationing itself has amounted to some $1,000 million. Extensive amendments to the prorationing regulations in 1964 improved these markedly and largely removed them as a source of future waste. Prorationing itself however and the regulations governing the holding of leases remain, and so long as they do serious over expenditures will continue to be made. / Arts, Faculty of / Vancouver School of Economics / Graduate

This paper reports upon an investigation conducted into the movement of softwood lumber from British Columbia to the United States during the years 1955 to 1962. The principal method used in the course of the study was an examination of the briefs and statements submitted to the United States Tariff Commission during hearings held in Washington, D.C, in October 1962. In order to keep the material within the context of current events, some space was devoted to a brief summary of pertinent political and economic occurances in both the United States and Canada during the last part of 1962 and the first half of 1963. Thereafter six chapters are devoted to comparisons between forests and extraction, conversion, and distribution costs in the Pacific Northwest of the United States and in the province of British Columbia. Basically the same type of forest is found in these two regions, but the utilization and development of the areas have been different, as have been the competitive factors which have arisen in the areas. Many of the pertinent data have been put into tabular form for easy reference. The penultimate chapter summarizes the briefs and statements submitted by the interested United States lumber dealers, shippers, and producers, and by the Council of Forest Industries of British Columbia, which represented the British Columbia lumber men, at the United States Tariff Commission hearings. The conclusions reached as a result of this investigation were (1) there is a shortage of domestic softwood lumber in the United States which can best be filled by British Columbia lumber imports, (2) British Columbia lumber producers have an advantage over Pacific Northwest producers with regard to stumpage costs, (3) British Columbia lumber producers have no advantage over Pacific Northwest producers with regard to conversion costs, (4) Distribution costs greatly favour British Columbia lumber producers with regard to water-borne lumber, and slightly favour American Pacific Northwest lumber producers with regard to railborne shipments, (5) the exclusion of the Pacific Northwest lumber producers from the Puerto Rican lumber market illustrates the impact of the Jones Act restrictions on the United States lumber industry, (6) in addition to the cost advantages which the British Columbia producers have in the United States Atlantic Coast market, they enjoy intangible advantages which may be characterized as marketing techniques which have created good will for Canadian producers in the American markets, and (7) United States softwood lumber producers in the Pacific Northwest could improve their competitive position in the Domestic market by internal reforms, although they were unable to have imposed on their behalf prohibitive tariffs or quotas. Finally, several suggestions as to possible areas for internal reform are put forward. / Business, Sauder School of / Graduate

A research project was undertaken to thoroughly examine the underlying difficulties in the retail operation of the U.B.C. Bookstore and to resolve the question of optimal store location. Merchandising policy was examined and analyzed on the basis of data obtained from interviews with the store's management staff. At the same time three possible store sites were evaluated by collecting data relevant to the operation of a distance decay simulation model which was used to estimate the value of the sites in terms of total sales. The existing site was found to be the most suitable while the problems in retail management were diagnosed as more far-reaching than simply the function of space limitations. / Business, Sauder School of / Graduate

Most marketers and retailers agree that the location of a particular retail outlet may be instrumental in that outlet’s sales and profits. One of the proposed solutions to this problem of retail store location is Huff's gravity model. Using Huff's gravity model as a structural guide, the major purpose of this thesis is to analyse consumer patronage behaviour within an urban grocery system so as to assist the retail grocery store location analyst. The analysis centers around those consumer patronage behaviour variables suggested by the author as being important in the consumer's decision to patronize a retail grocery outlet. The analysis will also serve as a guide to retail grocery location analysis in specific and to the possible effects of particular consumer patronage behaviour variables on retail outlets in general. Relationships are tested using simple and multiple regression analyses and t-test analysis on data collected on all grocery stores in the Lower Mainland Area of Vancouver, British Columbia. Some of the more important findings are: 1) neither the number of customer checkouts nor the number of parking spaces provided can be employed to predict sales per square foot of supermarket selling area. 2) a discount price policy will not yield greater mean sales per square foot of supermarket selling area than a retail price policy. 3) in general a combination of good internal and external appearances yields greater mean sales per square foot of supermarket selling area than a combination of low internal and external appearances. 4) in general the addition of internal and/or external facilities yields greater mean sales per square foot of supermarket selling area than those encountered before the addition or additions of such facilities. The study also indicates that in some specific cases supermarket size should be accounted for in the analysis. / Business, Sauder School of / Graduate

Contractual arrangements have been the subject of a substantial body of economic research. In particular, economists have sought an explanation for the existence of share contracts. Under this kind of contract, two or more parties share in the output of the production process. These contracts present a problem to economists because they imply more than one residual claimant. Thus incentives are diluted and inefficiency is expected to result. But this type of contract has existed for centuries and continues to be used today. Why is that if they are inefficient? The answer is that under conditions of uncertainty and imperfect information, share contracts can be preferable to fixed-wage (vertical integration) or fixed-rent (market transaction) agreements. In fact, many explanations for the existence of share contracts and their coexistence with fixed-wage and rental arrangements are found in the theoretical literature. While the theoretical literature on the subject of share contracts has flourished over the last decade, empirical analyses of these models has lagged behind. This thesis aims to rectify the situation somewhat. More precisely, recent advances in the theoretical literature are applied to the analysis of franchise contracts. An empirical model of franchising based on profit-maximizing behavior is developed which makes it possible to examine whether the factors theorists have suggested as potential explanations for share contracts are relevant when it comes to explaining what one observes in the context of franchising, and whether their effects are consistent with predictions from the various theories. Both the contract mix, i.e. franchisors' decisions concerning the proportion of stores they want to operate and franchise, and the terms of the franchise contract, fixed and variable fees, are examined. In order to carry out the analysis, data on a cross-section of 548 individual franchisors in 1986 were gathered. These franchisors are involved in a variety of business activities in the U.S., such as Fast-food Restaurants, Business Aids and Services, Construction and Maintenance, and Non-food Retailing. Censoring problems arise from the fact that a number of franchisors in the sample franchise all of their outlets. Also, some firms require no variable or no fixed fee. For these reasons, the maximum likelihood Tobit estimator is used. Empirical work in an area such as this, where theories rely on concepts that are not easily quantifiable, can hardly provide unambiguous answers about the validity of the theories. Nevertheless, the following results emerge from the empirical analysis. First, the effect of risk, measured either by the proportion of discontinued outlets or by the variance of sales in the sector, is found to be the opposite of what pure risk-sharing and one-sided hidden-action models would predict. Second, firms resort to franchising more often when monitoring downstream operators becomes costlier, and use it proportionately less when the value of the inputs they themselves provide increases. This is consistent with two-sided hidden-action models. Results with respect to capital-market-imperfection arguments are rather inconclusive. It appears that franchising relaxes some form of constraint franchisors face in trying to expand their operations, since they use it more when they are growing faster, but whether this is a financial constraint remains unclear. The explanatory power of the model is greater with respect to the proportion of franchised stores than it is for any of the two fees. Thus, in response to changes in the exogenous variables considered here, franchisors, who have a choice between modifying the terms of their franchise contract or changing the proportion of stores they want to franchise, tend to do mostly the latter. Contrary to what one would have expected on a theoretical basis, the observed royalty rates and franchise fees are not negatively correlated in this data set. Combined with the fact that the model is less satisfactory relative to the fees, this suggests that there are considerations in the determination of the royalty rate and the franchise fee that have not been taken into account in the theories. One possibility in the case of the fixed fee is that it may include the price of services provided by the franchisors. It also appears that franchisors use input sales as another means to extract rent from franchisees. This may contribute to the lack of correlation between the two fees. Finally, the equation for the franchise fee was derived under the assumption that all remaining surplus at the downstream level, given the royalty rate, should be extracted through the franchise fee. The lack of relationship between the fees could be an indication that this assumption is incorrect, and that there are in fact rents left at the downstream level. This would be consistent with the existence of queues of potential franchisees in many franchise chains. / Arts, Faculty of / Vancouver School of Economics / Graduate

The purpose of this thesis is to explore the possibility of creating and maintaining a database in the public domain. The concepts considered, relate to general computerized storage of consumer goods information, allowing dissemination of this information to the public. The focus however, is on a Consumer Information System (CIS) in the grocery industry, with emphasis on price data. The major topics discussed include the advent of the Universal Product Code, the subsequent introduction of automated checkout and scanning systems in supermarkets, interest groups involved, one possible design of the CIS, and the feasibility of such a system. The system is designed to meet a minimum set of objectives of the interest groups. Based on the analysis, the development of a CIS is feasible, subject to the mutual cooperation of the interest groups involved. Suggestions are made with regard to the practical implementation of the ideas generated. Future implications and possible research constitute the final sections of the thesis. / Business, Sauder School of / Graduate

This thesis focuses on three aspects of long-run planning for mineral-dependent economies: (i) modelling mineral depletion for optimal capital accumulation; (ii) specification and estimation of a mining cost function and a non-mining production function; and (iii) measurement of capital and natural resource stocks. Zambia, a country totally dependent on copper, is used as a case study. The planning model integrates the Ramsey capital model with the Hotelling-Scott exhaustible resource model, utilizing recent advances in dynamic optimization and duality theory. The optimal rate of resource extraction requires that marginal variable cost plus user cost be equal to the world price of the mineral. The user cost of the resource grows at the rate of interest plus the rate of population growth minus the effect of depletion on extraction cost. The optimal allocation of resource revenues equates the marginal benefits from alternative uses: (i) current consumption to raise the standard of living of a growing population; (ii) mining investment to maintain production in the face of deteriorating resource quality; and (iii) non-mining investment to create an industrial base as an alternative to the depleting resource. A variable cost function (VCF) for the mining industry is derived from the assumption that the mining firm minimizes the variable cost of producing a given output. The parameters of a translog VCF for Zambian copper mining are estimated and found to be consistent with the underlying theory. It is also found that domestic labour is only imperfectly substitutable for imported machinery and that labour demand is not very responsive to changing wages. A substantial portion of the empirical contribution is the construction of comprehensive data series for Zambia using the perpetual inventory approach to capital stocks, Divisia, Indexes, and the neoclassical theory of rental prices. Production figures for individual mines are used to construct aggregate cumulative series to which a curve of diminishing increments is fitted to obtain andestimate of the Zambian copper resource. / Arts, Faculty of / Vancouver School of Economics / Graduate

This thesis discusses trade regulations throughout history.