$12\mathrm{.}76$ Deferred tax allowance study. A study was conducted $to$

identify accounting choice variables that influence a man$-$

ager's decision $to$ change the level $of$ the deferred tax asset

allowance $at$ the firm $(The$ Engineering Economist, Jan$\frac{.}{?}$

Feb. $2004).$ Data were collected for a sample $of329$ firms

that reported deferred tax assets $in2000.$ The dependent

variable $of$ interest $(DTVA)is$ measured $as$ the change $in$

the deferred tax asset valuation allowance divided $by$ the

deferred tax asset. The independent variables used $as$ pre$-$

dictors $of$ DTVA are listed $as$ follows:

LEVERAGE: $x_1=$ ratio $of$ debt book value $to$ share$-$

holder's equity

BONUS: $,x_2=1if$ firm maintains a management

bonus plan, $0if$ not

MVALUE: $,x_3=$ market value $of$ common stock

BBATH: $,x_4=1if$ operating earnings negative and

lower than last year, $0if$ not

EARN: $,x_5=p-$values $inparentheses{R}_a^2=\mathrm{.}280$

hat$(y)=\mathrm{.}044+\mathrm{.}006x_1-\mathrm{.}035x_2-\mathrm{.}001x_3+\mathrm{.}296x_4+\mathrm{.}010x_5$

$(\mathrm{.}070)$

$(\mathrm{.}228)$