Equity In Transactions Research Articles

The transactional asset pricing approach

Purpose The purpose of this paper is to present a methodology based on the transactional asset pricing approach (TAPA) and to illustrate the application of TAPA within the context of professional property valuation. Design/methodology/approach The TAPA is a novel analytical valuation methodology recasting the traditional derivations of the income approach techniques, including DCF, from a transactional perspective based on the principle of inter-temporal transactional equity, instead of the conventional investor-specific view originating from I. Fisher (1907, 1930). Findings The authors present DCF analysis as a specific case of a more general TAPA approach to valuation under the income method. This also leads to novel analytical derivations of the Direct income capitalization, Gordon, Inwood, Hoskold and Ring models. Based on the TAPA framework, the authors also research the value-enhancing effects of benchmark market volatility on the subject property value and conclude that such effects can be statistically significant depending on the DCF analysis period. Research limitations/implications The research has a direct bearing on time-variable discount rate forecasting capabilities, as it uses a time-variant structure for the discount rates. Practical implications Using the US Case-Shiller and BLS rental indices as a valuation benchmark, the paper contains an example of applying the general TAPA framework to value a notional property under a TAPA’s DCF version. Such property valuations can be easily replicated in practice – especially in the context of equitable/fair value determination under the International Valuation Standards Council valuation standards. Social implications TAPA is a deductive principles-based theory of asset valuation especially fit for the transactional and illiquid asset valuation contexts – thus enabling a more efficient pricing for such assets in a sense of reflecting the transactional interests of the parties more closely than achievable under the conventional valuation methods. Originality/value TAPA is an original filiation of research with roots going as far back as Aristotelian Catallactics. It contains analytical formalizations of certain transactional equity principles.

Effects of compensation for service recovery: From the equity theory perspective

Using equity theory, this study investigated the importance of consumers’ entire history of shared interactions with service organizations, in addition to fairness perceptions, when evaluating recovery efforts following service failure. Specifically, this study empirically tested the different consequences of compensation by manipulating the consumer relationship level. The relationship level determines the perspective of equity (transactional equity perception versus cumulative equity perception) and motivates consumers to follow different psychological processes to redress service failure. An online survey using hypothetical scenarios manipulating recovery efforts and relationship level conditions was conducted to collect data. Mediation tests showed that perceived equity fully mediates the effect of compensation on a consumer's future behavioral intentions. The results of analysis of variance (ANOVA) showed that when additional compensation is offered after a service failure, perceived equity was found to increase regardless of the consumer's relationship level. However, enhanced equity perception does not automatically mean that corresponding future behavioral intentions are also enhanced. When consumers have a high customer–organization relationship, there is no difference in behavioral intentions between those who are compensated and those who are not. Managerial implications for restaurant operations are also discussed.

Sustainability issues for biodiversity business

Biodiversity is acknowledged as one of the most important resources that helps to sustain life’s processes. Additionally, it is also one of the most important sources of livelihood for different kinds of stakeholders at various levels of resource markets—local, domestic, or international. With globalization and increasing sophistication in the methods of commercial trade in biological resources, various issues arise related to the sustenance of resources, of ecological balances, and equity in transactions. All of these are concerns to be addressed to achieve a state of ‘sustainability.’ This paper prescribes to the definition of ‘sustainability’ as the capacity to maintain a certain process or state for “improving the quality of human life while living within the carrying capacity of supporting eco-systems” (IUCN/UNEP/WWF, in Caring for the Earth: a strategy for sustainable living. Gland, Switzerland, 1991). This goes beyond ensuring inter- and intragenerational equity in access to resources and includes several other parameters, including equity among stakeholders to returns from biological resources, related knowledge, trade-offs, and ethical business practices related to these resources. Through the prism of an examination of a simplistic supply route(s) and value addition chain of biodiversity resources for commercial use, this paper reviews and highlights issues related to ‘sustainability’ at each stage. Evidence points to shortcomings in the sustainable use of biological resources at each stage of value addition, calling for focused and specific measures to address them.

Moral education in victim offender conferencing

Introduction If every crime represents a failure in moral learning-- on the part of the offender, his/her community, and possibly the surrounding society -- then every crime also presents an opportunity for moral learning. Just as the child accepting a treat is caught before running away and admonished to say thank you, the offender is caught in the act of turning away from moral and legal norms and punished. This analogy between moral learning and punishment breaks down, of course, if punishment is narrowly understood as excising an evil from the social body. The analogy holds, however, over a broad range of aims in criminal justice: correcting the offender, restoring social order and security, repairing harm to the victim, reaffirming moral values or rectifying a moral imbalance, and reminding all observers of the public will. All these aims are moral for morality includes both person and society, intention and act, correcting and healing, and values and goods. To the extent that moral aims are achieved -- incorporated into individual and/or communal life--some kind of moral learning is also accomplished. This paper argues that victim offender conferencing offers an opportunity to reevaluate and expand the educational potential of criminal justice. The reevaluation depends on the expansion: if the public response to crime can be more effective educationally, then the educational aims of criminal justice can be more reasonably and directly pursued. If victim offender conferencing offers more effective educational practice than does punishment alone, then the aims listed above can be reaffirmed more clearly as educational aims. That is, moral learning--in its various forms--can have more priority as an outcome of the criminal justice system. Victim Offender Conferencing and Restorative Justice Victim offender conferencing is part of the larger movement of restorative justice, which draws its inspiration from a wide variety of responses to conflict, all of which aim above all to restore what the conflict has damaged or threatened, to the extent possible. Thus, divorce mediation cannot restore the marriage, but it can restore the ability of parents to cooperate for the good of their children. Labor dispute mediation cannot restore all lost corporate profits or employees' health, but it can restore enough trust to resume operations and correct unjust conditions. Likewise, victim offender conferencing cannot completely erase the trauma of crime, but it can restore a sense of physical and emotional security, replace the value of material goods, and provide a pathway for reintegrating offenders. As Aristotle says, justice is a complex term meaning several things: complete virtue, legal order, transactional equity, political equality, proportional distribution of goods, rectification of harms, and equity as a modification where the letter of law would be too rigid.(1) Responding to crime with the aim of restorative justice incorporates elements of all of these. Crime is addressed as a violation of the legal order, but also as a violation of persons. Political equality and rights are reaffirmed, but in a context of personal conversation and even confrontation. The proportion between crime and consequences is maintained, but according to the perceptions of those most directly involved more than by the impersonal hand of the state. Harms are rectified in proportion to the damage done but especially in light of what is important to those harmed. Contracts are negotiated by consensus. Above all--and most pertinent to this paper--crime is addressed in a manner consistent with what Aristotle calls complete justice: an overall sense of what is right and good for individuals as well as the commonwealth, the combination of all the virtues of public life in the good person. It is this element of justice that especially marks the various forms of victim offender conferencing. Victim offender conferencing is a process of dialogue, negotiation, and problem solving involving those most directly affected by the crime. …