are the self employed really jacks of all trades testing the assumptions and implications of lazear s theory of entrepreneurship with german data using a large representative german data set and various concepts of self employment this paper tests the jack of all trades view of entrepreneurship by lazear am econ rev 94 2 208 211 2004 consistent with its theoretical assumptions we find that self employed individuals perform more tasks and that their work requires more skills than that of paid employees in contrast to lazear s assumptions however self employed individuals do not just need more basic but also more expert skills than employees our results also provide rather limited support for the idea that human capital investment patterns differ between those who become self employed and those ending up in paid employment

does there exist a relation between inflation and relative price change variability the effect of the aggregation level abstract the actual magnitude of relative price change variability is dependent on the level of aggregation this note demonstrates the effect of this dependence when we try to estimate a relation between inflation and relative price change variability and when we perform a decomposition analysis of this variability

the economics of smallholder organic contract farming in tropical africa summary the paper examines the revenue effects of certified organic contract farming for smallholders and of adoption of organic agricultural farming methods in a tropical african context the comparison in both cases is with farming systems that are organic by default survey data from a large organic coffee contract farming scheme in uganda are reported and analyzed using a standard ols regression and a full information maximum likelihood fiml estimate of the heckman selection model the analysis finds that controlling for a range of factors there are positive revenue effects both from participation in the scheme and more modestly from applying organic farming techniques

further evidence on the variability of inflation and relative price variability abstract using a sample of monthly observations of both a 12 category group and a 203 category group of personal consumption expenditures we furnish evidence that relative price variability is positively related to both the inflation rate and inflation variability the relation is robust to oil price shocks

the proper scope of government theory and an application to prisons when should a government provide a service in house and when should it contract out provision we develop a model in which the provider can invest in improving the quality of service or reducing cost if contracts are incomplete the private provider has a stronger incentive to engage in both quality improvement and cost reduction than a government employee has however the private contractor s incentive to engage in cost reduction is typically too strong because he ignores the adverse effect on noncontractible quality the model is applied to understanding the costs and benefits of prison privatization

determinants and impacts of rural land market activity evidence from nicaragua summary use of data from nicaragua to examine the performance of land rental and sales markets during 1995 98 which coincide with the implementation of major macroeconomic and sectoral reforms leads to three main conclusions first even though the data point toward an inverse farm size productivity relationship and large differences in land productivity between large and small producers land markets have not led to an equalization of returns among the groups considered second both in 1995 and in 1998 land sales markets have contributed to land concentration suggesting that credit market imperfections impeded demand in land sales markets third the policy reforms undertaken after 1995 have led to a structural shift in the performance of the land rental market instead of transferring land to large owners as it did in 1995 the land market now moves land from large to small producers the quantities involved however remain limited we conclude that if it is to contribute to equity and efficiency liberalization of land sales markets has to be complemented by measures to reduce the attractiveness of speculative land accumulation furthermore measures to reduce the transaction costs of land rental e g titling and to increase effective demand from small producers e g technical assistance and credit will be needed 2003 elsevier ltd all rights reserved

management ownership and market valuation an empirical analysis we investigate the relationship between management ownership and market valuation of the firm as measured by tobin s q in a 1980 cross section of 371 fortune 500 firms we find evidence of a significant nonmonotonic relationship tobin s q first increases then declines and finally rises slightly as ownership by the board of directors rises for older firms there is evidence that q is lower when the firm is run by a member of the founding family than when it is run by an officer unrelated to the founder

the distribution of dairy farm size in poland a markov approach based on information theory this article sets out to analyse the evolution of the dairy farm structure of poland during the post socialist period after focusing on how the farm structure has changed over time an instrumental variable generalized cross entropy estimator is used to develop and estimate a markov model in order to explore how farm structure will probably develop in the coming decade the estimator exploits both sample data and prior information including general and plausible information on farm mobility and structural adjustments based on independent literature next several statistical indicators are computed for farm mobility and for which farms are likely to survive finally milk projections are made and related to policy scenarios the projections show that the number of dairy farms will continue to decline but the number of medium and large farms will increase in the coming decade subsistence dairy farms are expected to leave the sector slowly milk projections show that under the status quo milk quotas w

money and the dispersion of relative prices a price dispersion equation is tested with data from the german hyperinflation the equation is derived from a version of lucas s and barro s partial information localized market models in this extension different excess demand elasticities across commodities imply a testable dispersion equation in which the explanatory variable is the magnitude of the unperceived money growth in order to test this hypothesis a price dispersion series is constructed and a measure of the unperceived part of money growth is estimated the model receives support from the empirical analysis although it is evident that unincluded variables have important effects on price dispersion

economica coase lecture reference points and the theory of the firm i argue that it has been hard to make progress on coase s theory of the firm agenda because of the difficulty of formalizing haggling costs i propose an approach that tries to move things forward using the idea of aggrievement costs and apply it to the question of whether a transaction should be placed inside a firm in house production or in the market place outsourcing

small farmers and big retail trade offs of supplying supermarkets in nicaragua summary in nicaragua and elsewhere in central america small scale farmers are weighing the risks of entering into contracts with supermarket chains we use unique data from cooperatives supplying supermarkets to study the effect of supply agreements on producers mean output prices and price stability we find that prices paid by the domestic retail chain approximate the traditional market in mean and variance while mean prices paid by walmart are significantly lower than the traditional market however the walmart contract is found to systematically reduce price volatility we find some evidence however that farmers may be paying too much for this contractual insurance against price variation

a theory of firm scope the formal literature on firm boundaries has assumed that ex post conflicts are resolved through bargaining in reality parties often simply exercise their decision rights we develop a model based on shading in which the use of authority has a central role we consider two firms deciding whether to adopt a common standard nonintegrated firms may fail to coordinate if one firm loses an integrated firm can internalize the externality but puts insufficient weight on employee benefits we use our approach to understand why cisco acquired stratacom a provider of new transmission technology we also analyze delegation

the reference point approach to the theory of the firm an introduction there is a small but growing literature on the reference point approach to incomplete contracts as formulated by hart and moore the reference point approach has begun to be applied to the theory of the firm in 3 recent papers this introduction reviews the main theoretical aspects of each of these papers it then discusses the relationship between the reference point approach to the firm the transaction cost approach and the property rights approach here it is argued that the reference point approach is a step back towards ex post inefficiencies away from reliance on ex ante inefficiencies

farm size land yields and the agricultural production function an analysis for fifteen developing countries abstract the paper analyzes the relationship between factor inputs land yields and labor productivity for farms of different size on the basis of fao farm management data for 15 developing countries for all but three countries a strong negative correlation is found between farm size on the one side and factor inputs and yields per hectare on the other the fitting of unconstrained production functions to the above data suggests that in only few cases the decline in yields for increasing farm size can be attributed to decreasing returns to scale the higher yields observed in small farms are mainly to be ascribed to higher factor inputs and to a more intensive use of land therefore where conspicuous labor surpluses exist the superiority of small farming provides solid arguments in favor of land redistribution such an agrarian reform would determine higher output higher labor absorption and a more equitable income distribution thus contributing in a decisive manner to the alleviation of rural poverty the paper also provides estimates of cross sectional production functions for the 15 countries analyzed empirical relations are found between the output elasticities of land labor and intermediate inputs and physical indicators of their scarcity the paper concludes by proposing a simple method for deriving a long term production function for agriculture

an analysis of contract farming in east java bali and lombok indonesia this article examines the emergence and benefits of contract farming in east java bali and lombok indonesia after a general review of contract farming in these regions three contracts for seed corn in east java seed rice in bali and broilers in lombok are described and analyzed using key informant interviews and household survey data a review of the contracts suggest that there is a wide array of contract types and this is related to the technical requirements of production and the associated costs probit analysis is used to identify factors contributing to smallholder participation in farm contracts and a two stage estimation process used to measure the effects of farm contracts on gross margins and labor use results indicate participation in contracts is influenced by farm size and other factors such as smallholder s age education and participation in farm groups contracts increased returns to capital for the seed corn and broiler contracts but not for the seed rice contract all three contracts influenced the types of labor used however none of them influenced total farm employment

a confirmation of the relation between inflation and relative price variability richard parks s 1978 analysis of the relationship between inflation and relative price variability has already become something of a classic in the applied macroeconomics literature the paper is widely cited for its multimarket model from which a quadratic relationship between the variance in relative price changes vp on the one hand and the variance of the unexpected rate of inflation dp dp and real income growth dy dp on the other hand heretofore only specified in ad hoc fashion was rigorously derived nevertheless since the empirical relationship between these variables had already been well established in the literature not only for the united states but also for such countries as argentina australia canada japan and other organization for economic cooperation and development oecd countries parks s relatively weak empirical results may have or should have seemed somewhat disappointing specifically while the explanatory power of parks s empirical model was quite high r2 896 for one of his two sample periods namely the relatively short prewar period 1930 41 it was considerably lower r2 667 for the other sample period namely the relatively long postwar period 1948 75 although hercowitz 1981 and others refer to the results as providing a strong positive correlation between unexpected inflation and price dispersion closer inspection reveals that no more than one of the three terms involving the unexpected rate of inflation is significant at the 5 percent level either in the individual subperiods or in their combination moreover in the case of the postwar sample the results of which for convenience are reproduced in column 1 of table 1 even the single coeffi

state intervention for food price stabilisation in africa can it work abstract although its arguments may have more general applicability this paper discusses the desirability and options for the stabilisation of staple food prices principally in eastern and southern africa it addresses three broad questions i why is stabilisation of food grain prices desirable ii what is technically feasible and iii can the governance and trade issues thrown up by suggested mechanisms be solved it considers a number of options for price stabilisation assessing the strengths and weaknesses of each and suggesting situations in which each may be appropriate

vertical integration and firm boundaries the evidence since ronald h coase s 1937 seminal paper a rich set of theories has been developed that deal with firm boundaries in vertical or input output structures in the last twenty five years empirical evidence that can shed light on those theories also has been accumulating we review the findings of empirical studies that have addressed two main interrelated questions first what types of transactions are best brought within the firm and second what are the consequences of vertical integration decisions for economic outcomes such as prices quantities investment and profits throughout we highlight areas of potential cross fertilization and promising areas for future work

transaction costs institutional arrangements and inequality outcomes potato marketing by small producers in rural peru summary we explore the distributional effects of lowering transaction costs to allow access to improved market opportunities for small farmers in the peruvian highlands we find that when new marketing opportunities arise those that have more land are better educated and are well organized are able to deal with the complexities that the new contractual arrangements entail although this on average implies an increase in net income for small farmers it also affects the distribution of earnings generating a more polarized small farmer economy to counteract this effect and reduce inequality in the opportunities of less endowed small farmers complementary policies need to be put in place

new ways of looking at old issues inequality and growth abstract the paper uses new cross country data on income and asset land distribution to show that i there is a strong negative relationship between initial inequality in the asset distribution and long term growth ii inequality reduces income growth for the poor but not for the rich and iii available longitudinal data provide little support for the kuznets hypothesis policies that increase aggregate investment and facilitate acquisition of assets by the poor might thus be doubly beneficial for growth and poverty reduction

structural transformation and smallholder agriculture an information theoretic analysis of the nicaraguan case in light of continued debate regarding the capacity of small scale agricultural producers to compete amidst globalization and or liberalization we examine recent trends in the distribution and use of agricultural landholdings in developing nations via refined exploration of the nicaraguan case with nationally representative living standards measurement survey type data for the years 1998 2001 and 2005 we employ markov chain methods within an information theoretic framework in an attempt to advance the analysis of structural transformation in developing countries beyond the examination of trends in mean farm sizes or gini coefficients approaches ill suited to the detection of the apparent complexities of structural change further while markov chain analysis has witnessed relatively widespread application in the investigation of structural transformation in developed nations we offer a novel methodological extension by allowing for the simultaneous exploration of structural transformation across multiple dimensions namely structural change in both the distribution and use of agricultural landholdings as well as the incorporation of microlevel determinants of farm size and land use change the results of the inquiry above all suggest that nicaragua s agricultural and livestock sector is characterized by a definitive persistence of smallholders while a moderate tendency toward bifurcation in the distribution of landholdings would appear to obscure any immediate relationship between operational landholdings and land productivity we contend that such trends are in fact consistent with the often observed inverse farm size productivity relationship

not for profit entrepreneurs abstract entrepreneurs who start new firms may choose not for profit status as a means of committing to soft incentives such incentives protect donors volunteers consumers and employees from ex post expropriation of profits by the entrepreneur we derive conditions under which completely self interested entrepreneurs opt for not for profit status despite the fact that this status limits their ability to enjoy the profits of their enterprises we also show that even in the absence of tax advantages unrestricted donations would flow to non profits rather than for profit firms because donations have more significant influence on the decisions of the non profits

endogenous institutional innovation and agroindustrialization on the peruvian coast this paper presents an analysis of endogenous institutional innovations that have recently emerged in the agroindustrial zone of chincha on the coast of peru these innovations include 1 contracts between agroindustrial firms and large farmers introduced by the firms themselves to assure timely delivery and compliance with strict requirements implied by the emerging demanding quality and safety standards for agro export of processed asparagus 2 management services exchanged for labor supervision and land collateral in share tenancy contracts between a management company and farmer companies of small cotton farmers these contracts introduced by the management company illustrate those described theoretically by eswaran and kotwal am econ rev 75 3 352 367 the nature and importance of these institutional changes are twofold 1 they were induced institutional innovations driven by the requirements of agroindustrialization itself 2 together they had ambiguous employment and income impacts tending to the negative on the one hand the emergence of asparagus and firm farm contracts reduced employment through exclusion of small farms and shifts to capital intensive crops on the other hand the reinforcement of smallholder cotton and the emergence of farmer companies increased employment and income of smallholders the institutional innovation allowed them to reduce risk and increase profits and thus access some of the benefits of agroindustrialization and globalization while processing firm farm contracts are common in peru as is the presence of ngos bringing subsidized credit the private management firm innovation is rare and new in peru and apparently also in the region and of great interest in fact policymakers and ngos have recently discovered that this innovation is taking place and are asking hard questions about whether this innovation can and will be diffused the interest in the private for profit institutional change is sharpened by growing doubts about how economically sustainable and widespread a response ngo help can be to small farmers in maintaining their participation in income enhancing agroindustrialization moreover with changes in land laws and markets the fluidity of the situation is apparent with agroindustrial firms even starting to ask themselves whether contracts with large farms are necessary and best 2000 published by elsevier science b v

transaction costs and the property rights approach to the theory of the firm the standard property rights approach is focused on ex ante investment incentives while there are no transaction costs that might restrain ex post negotiations we explore the implications of such transaction costs prominent conclusions of the property rights theory may be overturned a party may have stronger investment incentives when a non investing party is the owner and joint ownership can be the uniquely optimal ownership structure intuitively an ownership structure that is unattractive in the standard model may now be desirable because it implies large gains from trade such that the parties are more inclined to incur the transaction costs

the governance of exchanges members cooperatives versus outside ownership the paper compares co operative governance structure to outside ownership the distinction between the two lies in who has residual rights of control it is found that a co operative becomes relatively less efficient as the environment becomes more competitive and the interests of members become more skewed these ideas are applied to the governance of exchanges this abstract was borrowed from another version of this item

six characters and a few more in search of an author how to rescue rural development before it s too late rural development has not received the priority and attention warranted by the present and future concentration of poverty in rural areas is this perhaps because rural development agencies present conflicting narratives a framework is presented within which to answer that question and is then applied to the recent policy statements of the european union eu food and agriculture organization fao international fund for agricultural deveopment ifad and the world bank each policy statement is compelling in its own way but the strategies are not consistent a narrative is needed which recognizes the rapid pace of change in rural areas acknowledges the need for diversification out of agriculture builds market institutions for growth and works effectively within the current international consensus on poverty reduction emphasising opportunity empowerment and security

contract farming smallholders and rural development in latin america the organization of agroprocessing firms and the scale of outgrower production abstract this paper demonstrates how contract farming functions as an economic institution and explores the causes of the observed variation in the scale of outgrower production in latin america we outline how market imperfections and transaction costs influence the decision of agroprocessing firms to contract out vertically integrate or use spot markets to obtain raw product the paper demonstrates how market conditions are likely to be associated with particular outgrower characteristics under contract farming an analysis of the mexican frozen vegetable industry illustrates determinants of successful and unsuccessful small scale contracting and suggests alternative policies to promote contract farming with smallholders

a dynamic capabilities based entrepreneurial theory of the multinational enterprise this paper develops a dynamic capabilities based theory of the multinational enterprise mne it first reviews scholarship on the mne with a focus on what has come to be known as internalization theory one prong of this theory develops contractual transaction cost informed governance perspectives and another develops technology transfer and capabilities perspectives in this paper it is suggested that the latter has been somewhat neglected however if fully integrated as part of a more complete approach it can buttress transaction cost governance issues and expand the range of phenomena that can be explained in this more integrated framework dynamic capabilities coupled with good strategy are seen as necessary to sustain superior enterprise performance especially in fast moving global environments entrepreneurial management and transformational leadership are incorporated into a capabilities theory of the mne the framework is then used to explain how strategy and dynamic capabilities together determine firm level sustained competitive advantage in global environments it is suggested that this framework complements contract based perspectives on the mne and can help integrate international management and international business perspectives

thinking about the firm a review of daniel spulber s the theory of the firm in this review i describe how economists have moved beyond the firm as a black box to incorporate incentives internal organization and firm boundaries i then turn to the way that the theory of the firm is treated in daniel spulber s book the theory of the firm microeconomics with endogenous entrepreneurs firms markets and organizations spulber s goal is to explain why firms exist how they are established and what they contribute to the economy to accomplish this spulber defines a firm to be a transaction institution whose objectives differ from those of its owners for spulber this separation is the key difference between the firm and direct exchange between consumers i raise questions about whether this is a useful basis for a theory of the firm jel d21

wealth weather risk and the composition and profitability of agricultural investments despite the growing evidence that farmers in low income environments are risk averse there has been little empirical evidence on the importance of risk in shaping the actual allocation of production resources among farmers differentiated by wealth the authors use panel data on investments in rural india to examine how the composition of productive and nonproductive asset holdings varies across farmers with different levels of total wealth and across farmers facing different degrees of weather risk income variability is a prominent feature of the experience of rural agents in low income countries the authors report evidence based on measures of rainfall variability that the agricultural investment portfolio behavior of farmers in such settings reflects risk aversion due evidently to limitations on consumption soothing mechanisms such as crop insurance or credit markets the authors results suggest that uninsured weather risk is a significant cause of lower efficiency and lower average incomes a one standard deviation decrease in weather risk measured by the standard deviation of the timing of the rainy season would raise average profits by up to 35 percent among farmers in the lowest wealth quartile moreover rainfall variability induces a more unequal distribution of average incomes for a given distribution of wealth wealthier farmers are willing to absorb significant risk without giving up profits to reduce production risk smaller farmers have to invest their limited wealth in ways that reduce their exposure to risk at the cost of lower profit rates the authors found that at high levels of rainfall variability differences in rates of profit per unit of agricultural assets were similar across classes of wealth but over the sample range of rainfall variability these rates of profit were always higher for the poorer farmers than for the wealthier ones suggesting that the disadvantages of small farmers in risk diffusion are more than offset by their labor cost advantage

land reform as commenced business the evidence against stopping abstract in the new paradigm institutions are long term endogenous thus the aims of land reform must be compatible with replace or substitute for initial incentives and power structures many reforms e g compulsory collectives are not redefinition of land reform is therefore needed yet the case for private land redistribution with ceilings remains the inverse relationship rests firmly on lower cost labor transactions in small farms though large but competitive transport or processing firms which enjoy lower cost capital transactions may be needed crucial is the impact of the postreform structure on livelihoods especially for the growing rural majority near landless workers new style market based reforms have potential probably best combined with old style ceilings substantial compensation with urban taxpayers sharing costs alternative off farm prospects and progressive taxes on large landholdings or bequests

governance and trade in fresh vegetables the impact of uk supermarkets on the african horticulture industry production of fresh vegetables for export has grown rapidly in a number of countries in sub saharan africa over the last decade this trade brings producers and exporters based in africa together with importers and retailers in europe large retailers in europe play a decisive role in structuring the production and processing of fresh vegetables exported from africa the requirements they specify for cost quality delivery product variety innovation food safety and quality systems help top determine what types of producers and processors are able to gain access to the fresh vegetables chain and the activities they must carry out the control over the fresh vegetables trade exercised by uk supermarkets has clear consequences for inclusion and exclusion of producers and exporters of differing types and for the long term prospects for the fresh vegetables industry in the two major exporting countries studied kenya and zimbabwe

inflation and relative prices a decomposition analysis abstract the variability of relative prices is decomposed into a component due to real effects technical change real income growth and so on and a component due to inflation using quarterly australian data inflation is shown to account for 24 percent of the total relative price variability

the future of small farms trajectories and policy priorities summary while smallholder development has in the past led to reductions in poverty and hunger does this still apply in today s more globalized world this paper reviews the debates on the contemporary role of agriculture in development and the case for small farms in light of the rise of supermarkets lower commodity prices and liberalized trade agricultural research funding environmental change hiv aids and changing policy ideas although the answers vary greatly by context for many low income countries smallholder development remains a key option the policy agenda however has changed in addition to providing public goods the growing challenge is to overcome market failures which is largely a matter of institutional innovation

when does coordination require centralization this paper compares centralized and decentralized coordination when manag ers are privately informed and communicate strategically we consider a multi divisional organization in which decisions must be adapted to local conditions but also coordinated with each other information about local conditions is dispersed and held by self interested division managers who communicate via cheap talk the only available formal mechanism is the allocation of decision rights we show that a higher need for coordination improves horizontal com

the future of small farms summary interest in agriculture for growth and poverty reduction reawakened in the early 2000s made all the keener by the sudden rise in cereals prices on world markets in 2007 08 but is it still possible to drive agricultural growth through small farms as happened in the green revolution whether small farms have a future was debated at a workshop held in wye united kingdom in june 2005 it concluded that small farm development is not just desirable for poverty reduction but also feasible even in changing circumstances and particularly those of more concentrated supply chains with more demanding buyers that said while much that needs to be done is straightforward such as provision of public goods fostering the institutional innovations to allow small farmers to deal with the emerging supply chains will require patient work tailored to specific circumstances the future of all smallholders may well not lie in farming but the measures to stimulate the rural nonfarm economy and provide jobs for those leaving farming a favorable rural investment climate provision of public goods institutional development are largely the same as those for agricultural development as well

the time and budget constraints of the firm this short paper surveys some recent research on the internal organization of firms with an emphasis on task allocation and synchronization it focuses on an organization facing no incentive problems but time constraints and costs of communication it highlights two motives for communication concern for delay and concern for throughput it also considers the interaction between the time and budget constraints of the firm and its implication for organization design

why has economic growth been more pro poor in some states of india than others abstract we use 20 household surveys for india s 15 major states spanning 1960 1994 to study how the sectoral composition of economic growth and initial conditions interact to influence how much growth reduced consumption poverty the elasticities of measured poverty to farm yields and development spending did not differ significantly across states but the elasticities of poverty to urban and rural non farm output varied appreciably and the differences were quantitatively important to the overall rate of poverty reduction states with higher elasticities did not experience higher rates of non farm growth the non farm growth process was more pro poor in states with initially higher literacy higher farm productivity higher rural living standards relative to urban areas lower landlessness and lower infant mortality

trade standards and poverty evidence from senegal summary in the debate on trade and poverty it is argued that standards act as trade barriers and cause marginalization of the poor this paper quantifies income and poverty effects of high standards trade and integrates labor market effects by using company and household survey data from the vegetable export chain in senegal we find that exports grew sharply despite increasing standards contributing importantly to rural incomes and poverty reduction tightening standards induced a shift from smallholder contract farming to integrated estate production altering the mechanism through which poor households benefit through labor markets instead of product markets

from policy aims and small farm characteristics to farm science needs this paper examines the agricultural science needs of small farms the green revolution successfully negotiated two tightropes agricultural productivity increases were larger than the fall in prices that resulted from producing more food and output per hectare rose faster than output per worker thus increasing the demand for labor the current challenge is to generate technology that helps poor farmers in low potential areas since research capacity is increasingly private incentives to produce the needed technology are needed perhaps through contracts to produce varieties with specific characteristics development of seeds needs complementary work on water for which economists plant scientists and engineers need to pool their skills

supermarkets wholesalers and tomato growers in guatemala the article shows the asset related determinants and the impacts of the participation of small farmers in supermarkets versus traditional market channels in guatemala compared to farmers selling only to the traditional market channels farmers selling to supermarket channels are larger but are in the upper tier of the small farmer category have more capital and are much more specialized in commercial horticulture in general and in tomatoes in particular while they have higher yields they also have higher input use including use of chemicals in fact they severely overuse pesticides and fungicides moreover these greater input expenditures mean that their profit rates are roughly similar to those of farmers in the traditional market channel supermarket channel farmers prefer the more demanding wholesale supermarket channel because it offers lower risks and lower transaction costs to market a variety of quality grades of tomatoes all year long in turn the supermarkets who do not buy direct but rather source from a few specialized dedicated wholesalers rely on this year round supply lower transaction costs and consistency of quality

inflation and relative price variability effect of temporal aggregation abstract the effect of temporal aggregation on the relation between inflation and variability of relative price changes in the united states is studied by using monthly consumer price index cpi data as well as quarterly observations derived by averaging the monthly series estimates from monthly and quarterly data show major differences for the periods 1973 1986 and 1980 1986

the firm as a communication network this paper analyzes how organizations can minimize costs of processing and communicating information communication is costly because it takes time for an agent to absorb new information sent by others agents can reduce this time by specializing in the processing of particular types of information when these returns to specialization outweigh costs of communication it is efficient for several agents to collaborate within a firm it is shown that efficient networks involve centralization that individuals delegate tasks to subordinates only if they are overloaded and that the number of transits to the top tends to be equalized across individual information items

profit sharing and the role of professional partnerships when it is hard to assess service quality firms will suboptimally hire low ability workers we show that organizing as a profit sharing partnership can alleviate these problems our theory explains the relative scarcity of partnerships outside of professional service industries such as law accounting medicine investment banking architecture advertising and consulting it also sheds light on features of partnerships such as up or out promotion systems the use of noncompete clauses and recent trends in professional service industries

inflation and relative prices a system wide approach abstract the paper introduces a system wide model for the analysis of the effects of inflation on relative prices this enables the identification of those commodities whose relative prices are distorted by inflation the model provides measures of the natural rate of relative price variability which is associated with zero inflation and the inflation rate which minimizes relative price variability an illustrative application with australian data is provided

the panel study of income dynamics after fourteen years an evaluation this article considers the representativeness of the panel study of income dynamics psid over its 14 year history from 1968 to 1981 given the dynamics of entry and exit from the panel by 1981 40 of the original members had left the sample and were replaced by new entrants who joined either existing households or new households being formed by members of the original sample we consider the distribution of demographic characteristics and earnings equations over time and we compare the psid with the current population survey cps by either approach we find little evidence that the psid has become unrepresentative

an analysis of sample attrition in panel data the michigan panel study of income dynamics by 1989 the michigan panel study on income dynamics psid had experienced approximately 50 percent sample loss from cumulative attrition from its initial 1968 membership we study the effect of this attrition on the unconditional distributions of several socioeconomic variables and on the estimates of several sets of regression coefficients we provide a statistical framework for conducting tests for attrition bias that draws a sharp distinction between selection on unobservables and on observables and that shows that weighted least squares can generate consistent parameter estimates when selection is based on observables even when they are endogenous our empirical analysis shows that attrition is highly selective and is concentrated among lower socioeconomic status individuals we also show that attrition is concentrated among those with more unstable earnings marriage and migration histories nevertheless we find that these variables explain very little of the attrition in the sample and that the selection that occurs is moderated by regression to the mean effects from selection on transitory components that fade over time consequently despite the large amount of attrition we find no strong evidence that attrition has seriously distorted the representativeness of the psid through 1989 and considerable evidence that its cross sectional representativeness has remained roughly intact

contracting out solutions political economy of contract farming in the indian punjab abstract this paper examines the rationale practice and problems of contract farming in vegetable crops in the agriculturally developed indian punjab which has faced the problem of sustainability of growth since the early 1980s it is found that agribusiness firms deal with relatively large producers and their contracts which are biased against the farmer perpetuate the existing problems of the farm sector such as high chemical input intensity and social differentiation contracting has however led to higher farm incomes and more employment for labor there seems to be an inherent contradiction in the objectives of the contracting parties and those of the local economy

inflation and relative price variability the effect of commodity aggregation using quarterly us data for 1948 89 we study the effect of the level of commodity aggregation on the relation between inflation and relative price variability the effect is assessed for the full period and the subperiods 1948 73 and 1974 89 the relationship is investigated for actual inflation as well as its expected and unexpected components although the parameter estimates show sizeable differences across the two aggregation levels the qualitative picture is the same for both levels in all cases one of the by products of the exercise is the observation that unexpected inflation shows a much stronger positive covariation with relative price variability than the expected component

aggregation and linearity in the provision of intertemporal incentives we consider the problem of providing incentives over time for an agent with constant absolute risk aversion the optimal compensation scheme is found to be a linear function of a vector of n accounts which count the number of times that each of the n kinds of observable events occurs the number n is independent of the number of time periods so the accounts may entail substantial aggregation in a continuous time version of the problem the agent controls the drift rate of a vector of accounts that is subject to frequent small random fluctuations the solution is as if the problem were the static one in which the agent controls only the mean of a multivariate normal distribution and the principal is constrained to use a linear compensation rule if the principal can observe only coarser linear aggregates such as revenues costs or profits the optimal compensation scheme is then a linear function of those aggregates the combination of exponential utility normal distributions and linear compensation schemes makes computations and comparative statics easy to do as we illustrate we interpret our linearity results as deriving in part from the richness of the agent s strategy space which makes it possible for the agent to undermine and exploit complicated nonlinear functions of the accounting aggregates

the theory of moral hazard and unobservable behaviour part i principal agent models are studied in which outcomes conditional on the agent s action are uncertain and the agent s behaviour therefore unobservable for a model with bounded agent s utility conditions are given under which the first best equilibrium can be approximated arbitrarily closely by contracts relating payment to observable outcomes for general models it is shown that the solution may not always be obtained by using the agent s first order conditions as constraint general conditions of lagrangean type are given for problems in which contracts are finite dimensional 1 the moral hazard situation

investments in physical capital relationship specificity and the property rights approach abstract we reconsider the property rights approach to the theory of the firm based on incomplete contracts we explore the implications of different degrees of relationship specificity when there are two parties a and b who can make investments in physical capital instead of human capital if relationship specificity is exogenously given it turns out that joint asset ownership can be optimal only if the degree of relationship specificity is sufficiently small if relationship specificity can be freely chosen and if party a s investments are more productive then the parties deliberately choose a strictly positive level of relationship specificity and they always agree on sole ownership by party a

behavioural and material determinants of production relations in agriculture in this essay we develop a framework for analysing the major institutions governing the production and exchange of output and the primary factors of production in rural areas the analysis incorporates general considerations of risk and information constraints jointly with the principal material attributes of agriculture and of agricultural production factors the framework is used to analyse barriers to the existence of the major intertemporal and factor markets it is applied specifically to land scarce environments for which it provides an internally consistent explanation for many of the well documented institutional features of such settings in addition the analysis provides new implications for among other phenomena the inter relationships among ownership holdings operational scale family size and factor productivity for the scarcity of animal rental markets and use of animals as collateral for the renting out of land by small landowners and for the existence of plantations for certain crops

level playing fields and laissez faire postliberal development strategy in inegalitarian agrarian economies focusing on the rural sector in latin america this paper explores the microeconomic linkages between distribution and growth which drive the possible reproduction of rural poverty over time the result of this exploration is a neostructuralist perspective which argues that actually existing laissez faire agrarian economies do not present a level playing field and that low wealth farms face disadvantages which tend to reproduce or even deepen sectoral inequality the paper then tries to identify the sorts of public policy and collective action which might modify the nature of growth and distribution in post liberalization agrarian market economy

supermarkets farm household income and poverty insights from kenya summary the expansion of supermarkets in developing countries may have important implications for poverty and rural development while previous studies have compared farm profits between participants and non participants in supermarket channels wider income effects have hardly been analyzed moreover most existing studies do not account for structural differences between the two groups we address these issues by using endogenous switching regression and building on a survey of vegetable farmers in kenya participation in supermarket channels is associated with a 48 gain in average household income which also contributes to poverty reduction to realize these benefits on a larger scale will require institutional support

the impact of structural adjustment and property rights conflicts on nicaraguan agrarian reform beneficiaries abstract in nicaragua structural adjustment policies under the new government have led to sharply reduced agricultural producer credit and tighter conditions for its use along with conflicts over property rights that emerged from the sandinista era land confiscations the effect has been to speed a process of parceling and land sales among the population of agrarian reform beneficiaries which was the main recipient of redistributed lands faced with imperfect capital markets and tenure uncertainty small scale producers have resorted to distress sales of their parcels that could lead to a restratification of land ownership patterns

the future of small farms new directions for services institutions and intermediation summary efficient pre and post harvest services are essential if small farms in high potential areas are to intensify production contribute to economic growth and reduce poverty they also matter if small farms in marginal areas are to manage their natural resource base in the face of growing population pressure and climate change difficulties that smallholders face in accessing services are reviewed showing how incentives for commercial delivery of services to smallholders differ between staple food traditional cash crop and high value product supply chains the major challenge in service delivery to smallholders in much of africa concerns coordination of service development and delivery different forms of intermediary institution for achieving such coordination are examined

changing locus of agricultural research will the poor benefit from biotechnology and privatization trends over the past decade the locus of agricultural research and development has shifted dramatically from the public to the private multinational sector three interrelated forces are transforming the system for supplying improved agricultural technologies to the world s farmers the first is the strengthened and evolving environment for protecting intellectual property in plant innovations the second is the rapid pace of discovery and growth in importance of molecular biology and genetic engineering finally agricultural input and output trade is becoming more open in nearly all countries these developments have created a powerful new set of incentives for private research investment altering the structure of the public private agricultural research endeavor particularly with respect to crop improvement

rural market imperfections and the farm size productivity relationship evidence from pakistan the subject of this article is the relationships between farm size and productivity and between farm size and profitability in the developing countries the recent controversies over the inverse size output relationship are reviewed and a framework is provided that explains the inverse relationship based on plausible assumptions about imperfections in the markets for labor land credit and risk from this framework a set of testable hypotheses are derived the hypotheses are tested on recent farm level panel data from pakistan a strong inverse relationship between farm size and yield is present in the sample even when household fixed effects are used to account for unobserved heterogeneity moreover the suggested market imperfections framework is consistent with the data