social networks in the boardroom this paper provides empirical evidence consistent with the facts that 1 social networks may strongly affect board composition and 2 social networks may be detrimental to corporate governance our empirical investigation relies on a unique dataset on executives and outside directors of corporations listed on the paris stock exchange over the 1992 2003 period this data source is a matched employer employee dataset providing both detailed information on directors ceos and information on the firm employing them we first find a very strong and robust correlation between the ceo s network and that of his directors networks of former high ranking civil servants are the most active in shaping board composition our identification strategy takes into account 1 differences in unobserved directors abilities and 2 the unobserved propensity of firms to hire directors from particular networks irrespective of the ceo s identity we then show that the governance of firms run by former civil servants is relatively worse on many dimensions former civil servants are less likely to leave their ceo job when their firm performs badly secondly ceos who are former bureaucrats are more likely to accumulate directorships and the more they do the less profitable is the firm they run thirdly the value created by acquisitions made by former bureaucrats is lower all in all these firms are less profitable on average

capitalization of government support in agricultural land prices what do we know abstract the objective of this paper is to provide an overview of existing literature both theoretically and empirically on the extent to which agricultural subsidies do translate into higher land values and rents and finally benefit landowners instead of agricultural producers our review shows that agricultural support policy instruments contribute to increasing the rental price of farmland and that the extent of this increase closely depends on the level of the supply price elasticity of farmland relative to those of other factors inputs on the one hand and on the range of the possibilities of factor input substitution in agricultural production on the other hand the empirical literature shows that land prices and rents have in general a significant positive and inelastic response to government support such inelastic response is thought to reflect the uncertain future of the farm programmes and in general studies have indicated that land prices are more responsive to government based returns than to market based returns

dynamic adverse selection a theory of illiquidity fire sales and flight to quality we develop a dynamic equilibrium model of asset markets with adverse selection there exists a unique equilibrium in which better quality assets trade at higher prices but with a lower price dividend ratio in less liquid markets sellers of high quality assets signal quality by accepting a lower trading probability we show how the distribution of sellers private information affects an asset s price and liquidity how a change in that distribution can cause a re sale and a ight to quality and how asset purchase and subsidy programs may raise prices and liquidity and reverse the ight to quality jel d82 g12 this paper develops a dynamic equilibrium model of asset markets with adverse selection the owners of heterogeneous assets are privately informed about the quality of their assets sellers set prices for their assets recognizing that sales may be rationed at high prices buyers set prices recognizing that the quality of available assets may depend on the price selected in equilibrium sellers of high quality assets are willing to set a high price despite the low sale probability because the continuation value from failing to sell a high quality asset is high conversely sellers of low quality assets opt for a low price buyers are indifferent between paying a low price for a low quality asset and a high price for a high quality asset we prove these results in a deliberately stylized dynamic general equilibrium framework assets are perfectly durable and pay a constant dividend each period some amount of a perfectly perishable consumption good better quality assets pay a higher dividend but only the asset s current owner observes the dividend this is the source of private information and the root of the adverse selection problem as in akerlof 1970 the only permissible trades are between the consumption good and the asset individuals are risk neutral and have a discount factor that changes over time independently across individuals creating gains from trade finally discount factors are observable which ensures that patient individuals never sell assets since there are no gains from trade we believe this framework is useful for capturing

the economic value of farm program base mixed integer programming and dynamic programming models were used to obtain the implicit economic value of the initial endowment of base acreage on a cotton farm while low levels of initial base have almost no impact on land value high levels can be worth a considerable premium with the implicit value of additional initial base endowment increasing at an increasing rate this pattern of increasing implicit value can be explained by provisions of the farm program allowing base to be created by a landowner who develops a planting history in a program commodity

a comprehensive analysis of farmland value determination a county level analysis this study develops a comprehensive model of farmland value determination to analyze the effects of various economic variables such as net farm income government payments macroeconomic factors and demographic conditions on farmland values for the counties along the snake river valley in idaho land values net farm income and population show considerable variation among the counties therefore use of county level cross sectional and time series data helps to assess the impacts of various factors on land values more accurately the empirical results show that net farm income wheat yield population and credit availability have positive effects and property tax rates interest rates and debt to asset ratio have negative effects on farmland values

a liquidity based model of security design we consider the problem of the design and sale of a security backed by specified assets given access to higher return investments the issuer has an incentive to raise capital by securitizing part of these assets at the time the security is issued the issuer s or underwriter s private information regarding the payoff of the security may cause illiquidity in the form of a downward sloping demand curve for the security the severity of this illiquidity depends upon the sensitivity of the value of the issued security to the issuer s private information thus the security design problem involves a tradeoff between the retention cost of holding cash flows not included in the security design and the liquidity cost of including the cash flows and making the security design more sensitive to the issuer s private information we characterize the optimal security design in several cases we also demonstrate circumstances under which standard debt is optimal and show that the riskiness of the debt is increasing in the issuer s retention costs for assets

optimal farm size in an uncertain land market the case of kyrgyz republic this article applies a real options model to the problem of land development making use of the 1998 2001 kyrgyz household budget survey we show that when the hypothesis of decreasing return to scale holds the relation between the threshold value of revenue per hectare and the amount of land cultivated is positive in addition the relation between the threshold and the amount of land owned is positive in the case of continuous supply of land and negative when there is discontinuous supply of land the direct consequence is that in the first case smaller farms will be more willing to rent land and exercise the option where in the second case larger farms will exercise first the results suggest three main conclusions i the combination of uncertainty and irreversibility is an important factor in land development decisions ii farmer behavior is consistent with the continuous profit maximization model and iii farming unit revenue tends to be positively related to farm size once uncertainty is properly accounted for

the allocation of credit and financial collapse this paper examines the allocation of credit in a market in which borrowers have greater information concerning their own riskiness than do lenders it illustrates that 1 the allocation of credit is inefficient and at times can be improved by government intervention and 2 small changes in the exogenous risk free interest rate can cause large discontinuous changes in the allocation of credit and the efficiency of the market equilibrium these conclusions suggests a role for government as the lender of last resort

management of bureaucrats and public service delivery evidence from the nigerian civil service we study how the management practices bureaucrats operate under relate to the quantity and quality of public services delivered we do so exploiting data from the nigerian civil service for 4700 public sector projects we have hand coded independent engineering assessments of project completion rates and delivered quality we supplement this with a survey eliciting management practices for bureaucrats in the 63 civil service organizations responsible for these projects building on bloom and van reenen 2007 management practices matter a one standard deviation increase in bureaucrat s autonomy signi cantly increases project completion rates by 18 a one standard deviation increase in practices related to incentives monitoring of bureaucrats signi cantly lowers project completion rates by 14 we show the negative impacts of incentive provision monitoring arise because bureaucrats multi task and incentives are poorly targeted and because these management practices capture elements of subjective performance evaluation that leave scope for dysfunctional responses from bureaucrats to support a causal interpretation of our ndings we document the determinants of management practices and examine channels through which organizations might endogenously adjust management practices our results provide novel insights into how changes in how bureaucrats are managed can have potentially large impacts on public service delivery in a developing country context jel classi cation j33 j38 o20

dynamics of a rural land market experiencing farmland conversion to acreages the case of saunders county nebraska this study analyzes an urban influenced real estate market that is experiencing land use transitions evaluating a three year period of unimproved real estate sales in saunders county nebraska has identified components that contribute to farmland values applying these components illustrates that buyers having special motivations often pay premiums to obtain agricultural land a model based on farmland productivity determines a crossover point where it becomes economically justifiable to convert farmland into acreage tracts illustrating productivity levels where concerns over development hold merit areas experiencing farmland development will obtain valuable information for land use and planning decisions from applying this research

who really benefits from agricultural subsidies evidence from field level data if agricultural subsidies are largely capitalized into farmland values then expanding support for agriculture may not benefit farmers who rent the land they farm suddenly reducing subsidies may be problematic to the extent that land values already embody expectations about future subsidies existing evidence on the incidence of subsidies on land values is mixed identification is obscured by unobserved or imprecisely measured factors that tend to be correlated with subsidies especially land quality and time varying factors like commodity prices and adverse weather events a problem that has received less attention is the fact that subsides and land quality on rented land may differ from owned land since most farms possess both rented and owned acreage farm level measures of subsidies land values and rental rates may bias estimated incidence using a new field level data set that for the first time precisely links subsidies to land parcels we show that this bias is considerable where farm level estimates suggest an incidence of 20 to 79 cents of the marginal subsidy dollar field level estimates from the same farms indicate that landlords capture just 10 25 cents the size of the farm and the duration of the rental arrangement have substantial effects incidence falls by 5 15 cents per acre when doubling total operated acres and the incidence falls by 0 1 1 2 cents with each additional year of the rental arrangement low incidence of subsides on rents combined with the farm size and duration effects suggest that farmers renting land have monopsony power

determinants of land value volatility in the u s corn belt understanding land value volatility and its reaction to exogenous shocks helps land owners investors and lenders assess risk land value volatility the variance of the unpredictable component of

information revelation and market incompleteness this paper introduces a theory of market incompleteness based on the information transmission role of prices and its adverse impact on the provision of insurance in financial markets we analyse a simple security design model in which the number and payoff of securities are endogenous agents have rational expectations and differ in information endowments and attitudes toward risk when markets are incomplete equilibrium prices are typically partially revealing while full relevation is attained with complete markets the optimality of complete or incomplete markets depends on whether the adverse selection effect the unwillingness of agents to trade risks when they are informationally disadvantaged is stronger or weaker than the hirshleifer effect the impossibility of trading risks that have already been resolved as new securities are issued and prices reveal more information when the hirshleifer effect dominates an incomplete set of securities is preferred by all agents and generates a higher volume of trade hirshleifer 1971 was the first to point out that revelation of information can reduce risksharing opportunities in insurance markets resulting in a welfare loss in this paper we build on hirshleifer s insight to develop a theory of endogenous market incompleteness we show that in an economy with asymmetric information in which agents learn from prices an incomplete financial structure may be optimal the reason is that less information is revealed by prices when markets are incomplete than in an otherwise identical economy with complete markets 1 paradoxically a greater degree of incompleteness may result in better risk sharing since the only risks that can be traded are those whose resolution is not common knowledge at the time of trade for the same reason incompleteness of markets may also foster a higher volume of trade the connection between security design asymmetric information trading volume and welfare in financial markets is a subtle one and it is important to isolate its various facets the efficacy of security markets in aggregating and transmitting private information depends on the characteristics of the financial structure and especially on the number of tradeable assets indeed within the rational expectations paradigm informational differences disappear in equilibrium generically when the price vector has

agricultural land values and the value of rights to future land development we investigate the inuence of fu ture land development on current agricultural land values from a theoretical model of land markets we derive a reduced form expression for agricultural land values in terms of observable variables this result dictates the speci cation of our econometric model and we nd strong sup port for the model in an application to new york state the estimated model together with a spa tial interpolation algorithm is used to generate a surface of estimated development rights values for orange county this approach overcomes several problems that arise with the use of stan dard appraisal methods to value conservation easements jel q24

boom bust cycles and ricardian rent north american agriculture has been characterized by many as a boom bust industry for example between 1973 and 1983 prairie farmers experienced the most prosperous period of grain farming ever known in western canada had the golden age finally arrived for prairie agriculture prosperity came to a grinding halt in the mid 1980s and in the late 1980s prairie grain farmers entered into one of the worst economic situ

leverage cycles and the anxious economy ing opportunities for emerging economies their access to international markets has turned out to be very volatile with frequent periods of market closures even worse as we will show emerging economies with sound fundamentals are the ones that issue less debt during these closures the goal of this paper is to present a theory of asset pricing that will shed light on the problems of emerging assets like emerging markets that are not yet mature enough to be attractive to the general public their marginal buyers are liquidity constrained investors with small wealth relative to the whole economy who are also marginal buyers of other risky assets we will use our theory to argue that the periodic problems faced by emerging asset classes are sometimes symptoms of what we call a global anxious economy rather than of their own fundamental weaknesses

bank competition and credit standards this article offers an explanation for the substantial variation of credit standards and price competition among banks over the business cycle as the economic outlook improves the average default probabilities of borrowers decline this affects the profitability of screening and causes bank screening intensity to display an inverse u shape as a function of economic prospects low screening activity in expansions creates intense price competition among lenders and loans are extended to lower quality borrowers as the economic outlook worsens price competition diminishes and credit standards tighten significantly deposit insurance may contribute to the countercyclical variation of credit standards copyright 2004 oxford university press

the origins of state capacity property rights taxation and politics economists generally assume that the state has sufficient institutional capacity to support markets and levy taxes this paper develops a framework where policy choices in market regulation and taxation are constrained by past investments in legal and fiscal capacity it studies the economic and political determinants of such investments demonstrating that legal and fiscal capacity are typically complements the results show that among other things common interest public goods such as fighting external wars as well as political stability and inclusive political institutions are conducive to building state capacity some correlations in cross country data are consistent with the theory

the impacts of different farm programs on cash rents county level annual observations for iowa from 1996 through 2000 were used to measure the impacts of farm program payments on cash rental rates the econometric analysis explicitly incorporates spatial autocorrelation cash rental rates were found to increase by almost one dollar per acre for each additional dollar per acre paid for market loss assistance and production flexibility contracts whereas conservation reserve program payments appear to exert no effect on cash rental rates a counterintuitive finding that warrants further examination is the small but negative impact of deficiency payments on cash rental rates

financial expertise as an arms race we show that firms intermediating trade have incentives to overinvest in financial expertise in our model expertise improves firms ability to estimate value when trading a security expertise creates asymmetric information which under normal circumstances works to the advantage of the expert as it deters opportunistic bargaining by counterparties this advantage is neutralized in equilibrium however by offsetting investments by competitors moreover when volatility rises the adverse selection created by expertise triggers breakdowns in liquidity destroying gains to trade and thus the benefits that firms hope to gain through high levels of expertise

my running mate the mayor political ties and access to public sector jobs in ecuador abstract we show that local politicians probability of being employed by a municipality increases when they have a strong party connection to its mayor using a regression discontinuity design we compare the employment outcomes of individuals connected to the winner vis a vis those connected to the runner up in close mayoral races in ecuador among candidates to local councils who lose their bid the probability of getting a job in the municipality increases tenfold when their own party s mayoral nominee is elected the effect is very strong for low ranking positions which suggests that it is the result of political patronage three additional results shed light on where patronage is more likely to emerge first the effect is stronger in poorer municipalities where public sector jobs are more valuable second benefits go largely to politicians better positioned within the party structure third the effect is concentrated among younger mayors who have a longer career ahead of them to capitalize clientelist arrangements

the timing of information in a general equilibrium framework abstract traditional multiperiod models of asset markets assume that traders take the information filtration as given this paper explores the effect of endogenizing the arrival of information on the dynamic completeness of markets it is shown that if an agent is allowed to release information at a sufficiently small cost which prevents traders from dynamically completing the market she might choose to do so furthermore we show that in economies with enough heterogeneity it is always possible to find an agent who would choose to release information thus with endogenous timing of information markets are unlikely to be dynamically complete journal of economic literature classification numbers d52 d82 g14

bureaucratic structure and bureaucratic performance in less developed countries abstract we argue that several easily identifiable structural features constitute the key ingredients of effective state bureaucracies and should help to predict ratings of bureaucratic performance competitive salaries internal promotion and career stability and meritocratic recruitment we collect a new dataset on these features for bureaucracies of 35 less developed countries controlling for country income level of education and ethnolinguistic diversity we find that our measure of meritocratic recruitment is a statistically significant determinant of ratings supplied by two of three country risk agencies the importance of competitive salaries and internal promotion and career stability could not be clearly established

linking the price of agricultural land to use values and amenities the recent appreciation in agricultural land values across the united states has raised a number of important questions for farmers farmland owners lenders and policy makers while traditional economic theory suggests that farmland values are determined by the discounted stream of expected returns previous research has shown that agricultural land values are actually driven by a complex set of factors this study leverages the unique characteristics of a national land based usda survey on farmland values and cash rents to estimate broad national level determinants of the market value of cropland and pastureland our results support past research findings that indicate farmland values are only partially explained by agricultural returns we find that multiple nonagricultural attributes of farmland also contribute to the market value

the effect of agricultural policies on land use and environmental quality in this paper i consider the environmental quality gains that may be achieved by reducing agricultural income supports a new methodology is developed to estimate land use shares in an application to wisconsin milk price support reductions result in shifts of marginal agricultural land to forest reducing soil erosion and providing off site water quality improvements the environmental benefits are estimated to be at least as large as the decreased welfare burden on consumers and taxpayers indicating a central role for environmental quality considerations in motivating policy reforms and a more efficient means of achieving the environmental quality goals of land retirement programs

on farmland prices and rents in japan historically the japanese farmland market has been strongly regulated although fundamental changes in policy were introduced in 1967 and 1980 this article examines the relationship between farmland prices and rents in japan for 1955 2000 using the cointegration procedure of johansen et al 2000 which admits structural breaks results show the presence of a cointegrating relationship with a significant break in 1980 there is granger causality from prices to rents which suggests that rents are determined within an institutional setting according to farmland prices the rent price elasticity is unity which supports the notion of efficiency in the farmland market

a dynamic analysis of land prices a dynamic model of land prices is developed it derives arbitrage asset prices under nonadditive dynamic preferences risk aversion and transaction costs the model nests as special cases risk neutrality time additive preferences the static capital asset pricing model capm as well as the dynamic consumption based capm the model is applied to the analysis of u s land prices for the period 1950 96 the econometric results provide evidence showing that u s land price patterns are inconsistent with risk neutrality or with the static capm model no strong evidence was found against time additive preferences the econometric findings indicate that both risk aversion and transaction costs have significant effects on land prices

fear of rejection tiered certification and transparency product quality certifiers may not reveal the identity of unsuccessful applicants sellers for three reasons first they respond to the desire of individual sellers to avoid the stigma from rejection second nontransparency helps a certifier to increase his market power by raising the stigma from lower tier certification third transparency does not help screen among heterogeneous sellers strategic complementarities arise as sellers move down the certification pecking order and lead to the stigmatization of the lower tiers mandating transparency benefits the sellers but has an ambiguous impact on buyers who actually become less informed about product quality

financial intermediaries and liquidity creation trading losses associated with information asymmetries can be mitigated by designing securities which split the cash flows of underlying assets these securities which can arise endogenously have values that do not depend on the information known only to informed agents bank debt deposits is an example of this type of liquid security which protect relatively uninformed agents and we provide a rationale for deposit insurance in this content high grade corporate debt and government bonds are other examples implying that a money market mutual fund based payments system may be an alternative to one based on insured bank deposits

valuation adverse selection and market collapses we study a market for funding real investment where valuation meaning investors devoting resources to acquiring information about future payoffs creates an adverse selection problem unlike previous models more valuation is associated with lower market prices and so greater returns to valuation this strategic complementarity in the capacity to do valuation generates multiple equilibria with multiple equilibria the equilibrium without valuation is most efficient despite funding some unprofitable investments switches to valuation equilibria valuation runs look like credit crunches a large investor can ensure the efficient equilibrium only if it can precommit to a price and potentially only if subsidized

the costs of patronage evidence from the british empire i combine newly digitized personnel and public finance data from the british colonial administration for the period 1854 1966 to study how patronage affects the promotion and incentives of governors governors are more likely to be promoted to higher salaried colonies when connected to their superior during the period of patronage once allocated they provide more tax exemptions raise less revenue and invest less the promotion and performance gaps disappear after the abolition of patronage appointments patronage therefore distorts the allocation of public sector positions and reduces the incentives of favored bureaucrats to perform

who becomes a politician can a democracy attract competent leaders while attaining broad representation economicmodels suggest that free riding incentives and lower opportunity costs give the less competent a comparative

friends with benefits patronage networks and distributive politics in china abstract existing research on distributive politics mainly focuses on the influence of electoral competition between political parties but less is known about non electoral mechanisms of resource allocation inside a dominant party this study examines how informal patron client networks within the ruling communist party shape the distribution of intergovernmental transfers in china a major one party regime using a new dataset on city level fiscal transfers and a novel method to infer informal political connections through past promotions we show that provincial leaders allocate significantly more transfers to localities governed by officials who are part of their networks this bias persists even when we use a specification that only exploits variations in connection caused by exogenous turnovers of higher level leadership we evaluate two plausible motivations behind this bias network based policy coordination and collective corruption and find evidence in stronger support of the former our findings suggest that private networks may function as an important albeit costly tool of mobilization in one party systems

factors influencing illinois farmland values a hedonic model of illinois farmland values is estimated using county level cross section time series data explanatory variables include land productivity parcel size improvements distances to chicago and other large cities an urban rural index livestock production through swine operation scale and farm density measures population density income and inflation the inclusion of spatial and serial correlation components substantially improves the model fit farmland values decline with parcel size ruralness distance to chicago and large cities and swine farm density and increase with soil productivity population density and personal income

understanding farmland price changes this paper develops a structural model of land prices which includes the multidimensional effects of inflation on capital erosion savings return erosion and real debt reduction as well as the effect of changes in the opportunity cost of capital the results show that inflation and changes in the real returns on capital are major explanatory factors in farmland price swings in addition to returns to farming additionally the effects of credit market constraints and expectations schemes are considered explicitly in the analytical model

land prices and farm based returns the theoretical and empirical relationship between farm based residual returns the opportunity cost of farmland and farmland prices is developed temporal hypotheses concerning the source of land price movements are tested using a variant of granger causality in the aggregate farmland prices are found to be unidirectionally caused by residual farm based returns the findings support the hypothesis that farmland prices are determined mainly within the farm sector and lend credence to the use of extrapolative expectations processes in structural farmland price models

land price volatility in a geographically dispersed market historical evidence and theory lead to a hypothesis that land price variation increases with distance to market this hypothesis is tested with county data from five cornbelt states during the period 1969 to 1987 when price changes were unusually large our data support the hypothesis in the 70s prices increased more in the western cornbelt than in the eastern cornbelt in the 80s the western cornbelt experienced the more precipitous price declines our hypothesis explains why great plains farmers have experienced greater financial problems during times of stress than have many other farmers

the economics of career concerns part ii application to missions and accountability of government agencies the paper uses a simple multitask career concern model in order to analyse the incentives of government agencies officials incentives are impaired by the agency pursuing multiple missions a lack of focus is even more problematic in the case of fuzzy missions that is when outsiders are uncertain about the exact nature of the missions actually pursued by the agency consequently agencies pursuing multiple missions receive less autonomy the paper further shows that professionalization creates a sense of mission for the agency and that the specialization of officials raises their incentives last the paper compares its predictions with the stylized facts on government bureaucracies 1999 the review of economic studies limited

two tier land tenure system and sustained economic growth in post 1978 rural china abstract the two tier land tenure system has been widely blamed for the problems in land allocation and in land specific investment observed in the postreform rural china greater privatization of property rights in land has been proposed to enable productive farmers to acquire more land to promote land circulation to improve farmers access to credit and to encourage farm investment it is argued here that in the presence of multiple market distortions land privatization is unlikely to provide a solution to the agricultural problems rather an approach which refines the existing framework of the two tier ownership system offers more promise

tax farming redux experimental evidence on performance pay for tax collectors performance pay for tax collectors has the potential to raise revenues but might come at a cost if it increases the bargaining power of tax collectors vis a vis taxpayers we report the first large scale field experiment on these issues where we experimentally allocated 482 property tax units in punjab pakistan into one of three performance pay schemes or a control after two years incentivized units had 9 4 log points higher revenue than controls which translates to a 46 higher growth rate the scheme that rewarded purely on revenue did best increasing revenue by 12 9 log points 64 higher growth rate with little penalty for customer satisfaction and assessment accuracy compared to the two other schemes that explicitly also rewarded these dimensions the revenue gains accrue from a small number of properties becoming taxed at their true value which is substantially more than they had been taxed at previously the majority of properties in incentivized areas in fact pay no more taxes but instead report higher bribes the results are consistent with a collusive setting in which performance pay increases collectors bargaining power over taxpayers who have to either pay higher bribes to avoid being reassessed or pay substantially higher taxes if collusion breaks down

the changing roles of urban influence and agricultural productivity in farmland price determination between 2000 and 2010 inflation adjusted u s farmland values increased by over 80 this period of rapid price appreciation coincided with both the agricultural commodity price boom and the broader financial crisis this paper examines the degree to which the determinants of farmland prices changed over this period using a panel of farmland transfer declarations from 98 illinois counties hedonic price analysis demonstrates that the relative importance of urban influence decreased over this period while the relative importance of agricultural productivity increased the study carries important implications for farmers farmland owners and policy makers

the impacts of business cycles on returns to farmland investments expected performance and valuation of investments in farmland are examined in relation to prevailing business cycle conditions over a period that includes both the 1970s farm boom and 1980s farm recession information on risk premia in debt equity and land markets are shown to significantly affect conditional expected returns to farmland and consequently farmland values further conditional expected land returns diverge significantly in some years from returns conditionally required on the basis of systematic risk overall implications are that expected land returns are dependent not only on local sector conditions but also on time varying macroeconomic conditions related to business cycles

strengthening state capabilities the role of financial incentives in the call to public service we study a recent recruitment drive for public sector positions in mexico different salaries were announced randomly across recruitment sites and job offers were subsequently randomized screening relied on exams designed to measure applicants intellectual ability personality and motivation this allows the first experimental estimates of i the role of financial incentives in attracting a larger and more qualified pool of applicants ii the elasticity of the labor supply facing the employer and iii the role of job attributes distance attractiveness of the municipal environment in helping fill vacancies as well as the role of wages in helping fill positions in less attractive municipalities a theoretical model guides each stage of the empirical inquiry we find that higher wages attract more able applicants as measured by their iq personality and proclivity towards public sector work i e we find no evidence of adverse selection effects on motivation higher wage offers also increased acceptance rates implying a labor supply elasticity of around 2 and some degree of monopsony power distance and worse municipal characteristics strongly decrease acceptance rates but higher wages help bridge the recruitment gap in worse municipalities

the glittering prizes career incentives and bureaucrat performance bureaucracies are configured differently to private sector and political organizations across a wide range of civil services entry is competitive promotion is constrained by seniority jobs are for life and retirement occurs at a fixed age this implies that older entering officers who are less likely to attain the glittering prize of reaching the top of the bureaucracy before they retire may be less motivated to exert effort using a nationwide stakeholder survey and rich administrative data on elite civil servants in india we provide evidence that i officers who cannot reach the senior most positions before they retire are perceived to be less effective and are more likely to be suspended and ii this effect is weakened by a reform that extends the retirement age together these results suggest that the career incentive of reaching the top of a public organization is a powerful determinant of bureaucrat performance

land markets and the value of water hedonic analysis using repeat sales of farmland author s buck s auffhammer m sunding d abstract the lack of robust water markets makes it difficult to value irrigation water because water rights are appurtenant to land it is possible to infer the value of water from observed differences in the market price of land we use panel data on repeat farmland sales in california s san joaquin valley to estimate a hedonic regression equation with parcel fixed effects this controls for sources of omitted variables bias and allows us to recover the value of irrigation water to landowners in our sample we show that a more traditional cross sectional regression results in an artificially low value of irrigation water the author 2014

asset markets with heterogeneous information this paper studies competitive equilibria of economies where assets are heterogeneous and traders have heterogeneous information about them markets are defined by a price and a procedure for clearing trades and any asset can in principle be traded in any market buyers can use their information to impose acceptance rules which specify which assets they are willing to trade in each market the set of markets where trade takes place is derived endogenously the model can be applied to find conditions under which these economies feature fire sales contagion and flights to quality

competitive pooling rothschild stiglitz reconsidered we build a model of competitive pooling which incorporates adverse selection and signaling into general equilibrium pools are characterized by their quantity limits on contributions households signal their reliability by choosing which pool to join in equilibrium pools with lower quantity limits sell for a higher price even though each household s deliveries are the same at all pools the rothschild stiglitz model of insurance is included as a special case we show that by recasting their hybrid oligopolistic competitive story in our perfectly competitive framework their separating equilibrium always exists even when they say it does not and is unique

traveling agents political change and bureaucratic turnover in india abstract we develop a framework to empirically examine how politicians with electoral pressures control bureaucrats with career concerns and the consequent implications for bureaucrats career investments unique microlevel data on indian bureaucrats support our key predictions politicians use frequent reassignments transfers across posts of varying importance to control bureaucrats high skilled bureaucrats face less frequent political transfers and lower variability in the importance of their posts we find evidence of two alternative paths to career success officers of higher initial ability are more likely to invest in skill but caste affinity to the politician s party base also helps secure important positions

the impact of decoupled payments on u s cropland values an extensive literature has shown that various farm programs may influence the value of farmland but other studies have not examined the cropland price effects of direct or decoupled payments separate from countercyclical payments this study uses nationally representative confidential field level panel data with farmer reported per acre land values we analyze the impact of decoupled and other farm program payments on farmland values using a fixed effects model and controlling for various factors that influence farmland values we find that an additional dollar of decoupled payments has a large and statistically significant impact on farmland values of about 18 per acre these results are comparable with similar studies undertaken in europe

the joint influence of agricultural and nonfarm factors on real estate values an application to the mid atlantic region county level farmland and residential housing values are estimated for the mid atlantic region as a function of farm returns developed land values household incomes population densities and location results are based on the hypothesis that farmland owners anticipate land development and that nonfarm factors are important determinants of farmland prices response of farmland prices to change in farm returns is found to be inelastic and relatively uniform in rural and urban counties response to nonfarm factors is found to be more elastic and substantially greater in rural counties copyright 2001 oxford university press

the effect of agricultural policy on farmland values the extent to which agricultural support programs have been capitalized into farmland prices has been examined in this study a present value land price model was developed which decomposes returns to the land base into its two possible sources farm production and government subsidies and allows the discount rates associated with these two income sources to vary the empirical results indicate that government payments are discounted less than marketbased returns in ontario thus government payments have been viewed as a more stable source of income to ontario farm operators during the last half century than market based returns

collateral constraints and the amplification mechanism abstract kiyotaki and moore j polit economy 105 1997 211 have offered a theory for how common shocks to credit constrained firms are amplified through changes in collateral values and transmitted as fluctuations in output i clarify and extend their model by showing that their collateral amplification mechanism is not robust to the introduction of markets that allow these firms to hedge against common shocks a theory of incomplete hedging is proposed in which the supply of hedging available in the economy is constrained by the aggregate value of collateral i illustrate how the constraint reinstates amplification effects and discuss empirical implications of this new mechanism

transaction costs and the present value puzzle of farmland prices 1 introduction farmland is by far the dominant asset in the u s agricultural sector s balance sheet accounting for about two thirds of the value of all farm assets usda various years the value of u s farmland was estimated at 593 billion on december 31 1994 or roughly 10 of total market capitalization for firms in the sp clark fulton and scott 1993 tegene and kuchler 1993 this is a puzzling result because the cdr pvm has been widely accepted and generally used for land appraisal purposes beyond this however there is surprisingly little consensus regarding the determinants of farmland prices pope et al 1979 robison and koenig 1992 stare 1995 a major reason for this lack of consensus may be the heterogeneity of the data sets used for empirical analysis different studies use different levels of aggregation different time periods and different land value and rent series hanson and myers 1995 for example use country level data whereas tegene and kuchler 1993 use regional data and just and miranowski 1993 use state level data hanson and myers 1995 use data from 1910 to 1990 shiha and chavas 1995 use data from 1949 to 1990 and brown and brown 1984 use data from 1968 to 1981 falk 1991 examines farmland values and gross cash rents whereas hanson and myers 1995 examine farm real estate values and residual returns to farm real estate another possible explanation for the lack of consensus about farmland pricing and the focus of the present study is the presence of market frictions our motivation for exploring the role that market frictions might play in determining farmland prices is both theoretical and empirical on the theoretical level market frictions drive a wedge between the price at which outsiders wish to buy land and that at which farmers wish to sell it the market price can be anywhere within this wedge and thus can easily deviate from its frictionless present value one can interpret this wedge as a band of inaction delta sup l delta supu inside which farmers neither buy nor sell land even in the face of changing expected returns the band is centered on the price that would prevail in the absence of transaction costs and its width is determined by the size of these costs on the empirical level a review of the literature reveals that the frictionless market assumption is not a realistic representation of how farmland is actually traded although the costs associated with trading many financial assets are small costs incurred in transferring ownership of farmland typically exceed 7 5 of the purchase price to explore the role of market frictions we use the pvm recently used by lence and miller 1999 which explicitly incorporates proportional transaction costs

endogenous information acquisition in coordination games in the context of a beauty contest coordination game in which payoffs 1 depend on the quadratic distance of actions from an unobserved state variable and 2 from the average action players choose how much costly attention to pay to vari 3 ous informative signals each signal has an underlying accuracy how precisely it 4 identifies the state and a clarity how easy it is to understand the unique linear 5 equilibrium has interesting properties the signals which receive attention are the 6 clearest available even if they have poor underlying accuracy the number of sig 7 nals observed falls as the complementarity of players actions rises and if actions 8 are more complementary the information endogenously acquired in equilibrium 9 is more public in nature the consequences of rational inattention constraints on 10

bargaining with endogenous information two ex ante identically informed agents play a double auction over the division of a trading surplus with endogenous information and common values this paper shows that if information acquisition is not observable three types of inefficiencies can arise if the information cost is in an intermediate range no pure strategy equilibrium with trade exists although the agents maintain symmetric information if the information cost is low any trading equilibrium exhibits costly information acquisition if the agents face asymmetric information cost the akerlof s lemons problem arises as a self fulfilling equilibrium and only partial trade occurs

econometric modeling of the capitalization formula for farmland prices an econometric model is formulated to explain the dynamic behavior in farmland prices a second order rational distributed lag on net crop share rents received by landlords captures the dynamic movements of prices and performs well in conditional post sample forecasts the adjustment path of land prices in response to a perturbation in rents is a protracted dampened cycle the implicitly estimated tax free capitalization rate on rent associated with equilibrium land price is 4 0 neither the expected rate of inflation nor an exponential trend on rent expectations has a significant effect on land prices