A major portion of the opinion in Libya-Malta is devoted to an elaborate discussion of the factor of proportionality, which arises from the equitable principle that nature must be respected.(181) First, the ICJ rejected Libya's far-reaching and novel proposition that proportionality be used as independent criterion, thus leaving it in an auxiliary status.(182) However, the ICJ suggested that where disproportion is very great, as here, proportionality may be employed not only at the end to test the result obtained on other grounds, but also in the initial stage of seeking the overall methodology.(183) It is, however, significant that a good number of judges questioned the relevance of proportionality altogether, especially in this context.(184) In St.
Following Friedman's methodology, hospitals will adapt their expenditures to be a given proportion of their expected (or permanent) revenues, where the factor of proportionality is highly stable.
Third, the factor of proportionality is treated somewhat differently.
If the permanent-income hypothesis analogy holds exactly, [k.sub.1] will be 1 (as it was assumed to be in equation 1) and [K.sub.o] the factor of proportionality. In addition, following Friedman and assuming the transitory deviation in consumption to be approximately proportional to its size, I express the model using Friedman's double-log specification (Friedman, 1957).
The necessary and sufficient condition in both cases is that (8) [Mathematical Expression Omitted] where z is an arbitrary factor of proportionality. The equality of the observed and minimum cost functions given (8) can be demonstrated by substituting (8) in (3) and noting that the observed cost function reduces to the minimum cost function.