formally testing the present value model of farmland prices this paper applies recent statistical developments in the study of stock market price movements to study the plausibility of the constant expected returns version of the present value model as an explanation of farmland prices using iowa farmland price and rent data over the 1921 86 sample period formal test results indicate that although farmland price and rent movements are highly correlated price movements are not consistent with the implications of this model there appear to be persistent predictable excess positive and or negative returns in the iowa farmland market

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

efficiency in the nfl betting market modifying and consolidating research methods modifying and consolidating previous research methods to generate more reliable estimates some fairly weak evidence is found of inefficiency in the nfl betting market resulting from a bias favouring home underdog against away favourite teams in contrast to previous research no evidence is found that momentum strategies generate significant returns in this market

the theoretical effects of farm policies on optimal leverage and the probability of equity losses the degree to which the use of debt is increased in response to risk reducing and income augmenting farm policies is studied theoretically a mean variance model is used to determine the optimal leverage adjustment then the effects of policies on the cumulative probability of earning very low rates of return on equity are examined the evidence suggests that farm policies induce a large enough increase in financial leverage to increase the probability of farmers having negative returns to equity

the late season bias explaining the nfl s home underdog effect this article examines price efficiency and out of sample predictability in the nfl point spread betting market our main contribution to the existing literature is the identification of a persistent increase in bias magnitude during the final few weeks of each season we demonstrate that this anomaly causes the much documented home underdog effect we also offer evidence that the limits of arbitrage have enabled this phenomenon to persist for decades finally we use several regression models to confirm our univariate analysis and show that these models can be used to implement profitable betting strategies the predictive models presented differ from those in the prior literature by taking into account both short term and aggregate biases

the determinants of aggregate creditors voluntary liquidations this article investigates the determinants of creditors voluntary liquidations cvls an area of research that has received comparatively scant attention in the literature despite the fact that at least in the uk this form of insolvency has consistently comprised the majority of company failures it develops an equilibrium correction model ecm to explain variations in the aggregate number of cvls in england and wales between 1963 and 1995 this is then subjected to out of sample testing over the subsequent 10 year period the results indicate that in both the short run and the long run changes in the level of liquidations can be explained by two main explanatory variables namely the nominal after tax cost of borrowing and changes in the overall level of economic activity in addition confirmatory evidence is provided for the dampening effect of the 1986 insolvency act on the number of liquidations the model retains its forecasting accuracy in the out of sample period although there is possibly s

theory based measurement of the saving investment correlation with an application to norway i introduction the findings of feldstein and horioka 19c 0 have led to numerous theoretical and empirical papers on the close correlation between domestic saving and domestic investment and its supposed implications for international capital mobility feldstein and horioka 1980 317 state that with perfect world capital mobility there should be no relation between domestic saving and domestic investment saving in each country responds to the worldwide opportunities for investment while investment in that country is financed by the worldwide pool of capital however in a cross country regression using period averaged saving and investment figures for sixteen oecd countries they obtain a significant coefficient close to unity and conclude that capital is rather immobile this result constitutes the feldstein horicka puzzle as it contradicts the widely held perception that capital is highly mobile across countries subsequent empirical work confirmed the close correlation though its implication for the degree of capital mobility is a moot point see tesar 1991 this paper contributes to the understanding of the puzzle on both theoretical and empirical counts first we present a theory based econometric specification for estimating saving investment correlations second we discuss the possible usefulness of the estimates for detecting capital mobility third we provide empirical results for the interesting case of norway we argue that feldstein and horioka s basic idea that the saving investment correlation contains information about international capital mobility is correct but that the interpretation of the estimated correlation value must be altered substantially in view of the results derived from modern macroeconomic models our research is motivated by the observation that various regression equations have been used to measure the saving investment correlation but that none of them has a firm theoretical foundation this in turn raises questions about the interpretation and comparability of the existing empirical results we propose an econometric specification that is founded in intertemporal general equilibrium models in which agents optimize under intertemporal budget constraints we show that time series studies have estimated misspecified equations and that cross section studies are seriously flawed because they neglect dynamics as a result the puzzle may turn out to be an artifact caused by measurement errors however the significance of reliable measurement of saving investment correlations goes beyond solving the feldstein horioka puzzle because they represent stylized facts open economy models should explain norway serves as a suitable example to cement our methodological arguments with empirical evidence thanks to its system of capital controls which were phased out during the 1970s and 1980s the oil discoveries and its small size we demonstrate that the failure to take structural breaks into account seriously distorts the picture making a strong case for careful diagnostic testing our main empirical result is that the feldstein horioka puzzle does not exist for norway the paper proceeds as follows in section ii we briefly summarize the state of the discussion regarding feldstein and horioka s findings in section iii we derive our specification from the theory compare it to the previous specifications and discuss how to make inferences about capital mobility in section iv we sketch major developments in the post war norwegian economy notably the abolition of capital controls and the emergence of the important oil sector section v presents the empirical results section vi summarizes and concludes ii the feldstein horioka puzzle many authors have confirmed feldstein and horioka s result of a high and stable correlation of saving and investment for oecd countries both in cross country studies and in time series studies

socialist cities without land markets abstract how does the spatial dynamics of the socialist city compare with that of the market city what happens when all investment decisions are made administratively in the absence of land markets russian development is the longest socialist experiment on record its outcome is of paramount interest to urban economists this paper reports the first analysis of the structure of russian cities after 70 years of soviet development the main finding is a perversely positive population density gradient the soviet city also has a disproportionate share of industrial land often in prime locations free property trading started in russia in 1992 the emerging negative price gradient contrasts totally with the positive population gradient that is the legacy of administrative land allocation these two conflicting gradients highlight the land misallocation and inefficiency of the socialist city

real interest rates and the savings and loan crisis the moral hazard premium real interest rates shifted upwards by four or five percentage points in approximately 1980 the question is why in this paper we review some of the more popular explanations and point out that they are somewhat inconsistent with the facts we then present a new explanation which may partially account for the dramatic increase we suggest that the upward shift in rates may be directly connected with the decade long crisis in the savings and loan industry and the federal government s handling of that crisis owners and managers of troubled thrifts responded to the incentives provided by underpriced deposit insurance by offering higher and higher rates in an attempt to attract new funds depositors anticipating that the government would protect their investments actively sought out higher yields in local and national markets the end result was that the rates offered by treasury securities rose to compete with these quasi risk free substitutes sold by savings and loans this added and indeed continues to add significantly to the federal government s borrowing costs we calculate this increased cost under various assumptions about the effect of the s l crisis on real interest rates

economic failure and the role of plant age and size this paper introduces a large scale administrative panel data set on corporate bankruptcy in germany that allows for an econometric analysis of involuntary exits where previous studies mixed voluntary and involuntary exits approximately 83 of all bankruptcies occur in plants with not more than 10 employees and 61 of all bankrupt plants are not older than 5 years the descriptive statistics and regression analysis indicate substantial negative age dependence with respect to bankruptcy risk but confirm negative size dependence for mature plants only our results corroborate hypotheses stressing increasing capabilities and positional advantage both predicting negative age dependence with respect to bankruptcy risk due to productivity improvements the results are not consistent with the theories explaining age dependence via imprinting or structural inertia

land leasing and local government behaviour in china evidence from beijing since 2004 two auction mechanisms listing auctions and tender auctions have played a dominant role in land lease arrangements for real estate development in beijing listing auctions in land markets are similar to general english auctions where bidders offer the highest price to win however in tender auctions winners are determined by the bidding price and the bidder s financial capability and reputation based on granted land parcels from 2006 to 2012 in beijing this paper attempts to examine the price differences between the two auctions and the role of land auction in urban development and price stabilisation we find that land policy in beijing which aims to stabilise land prices and to provide low price residences has been integrated with urban development planning in terms of spatial and density pattern land leasing in beijing is not only a land policy but also a part of the strategy framework of local development

why do farmers fail farm bankruptcies 1910 78 econometric analysis of aggregate time series farm sector data suggests that prior to world war ii the farm bankruptcy rate appears to be associated with financial risk variables while postwar data show a strong association with business risk variables there does not appear to be any evidence that agricultural support payments since world war ii have induced deferred or reduced farm failures

company bankruptcies and births matter this paper constructs a simple supply orientated model of the economy in which company bankruptcies which lead to a loss of capital and births have impacts on macroeconomic variables bankruptcies will reduce output increase unemployment worsen the balance of payments and also impact upon inflation empirical work based on data from both the usa and the uk finds a significant granger causality relationship between bankruptcies and births and these four macroeconomic variables the standard granger causality regression is supplemented by non linear granger causality tests

reasons for insolvency amongst small firms a review and fresh evidence the growing and diverse literature on insolvency is comprehensively and critically reviewed the limited portfolio that small firms represent in particular as regards their managerial capabilities is suggested as an added reason for the strong inverse correlation of probability of insolvency with firm size the evidence from a hitherto largely untapped source of data the reports of the british official receiver is analysed using contingency tables the most important reason for their failure given by the owners of insolvent firms is weaknesses in operational management particularly in the adequacy of their capital marked inter temporal and interregional differences are evident within the data

do firms maximize evidence from professional football this paper examines a single narrow decision the choice on fourth down in the national football league between kicking and trying for a first down as a case study of the standard view that competition in the goods capital and labor markets leads firms to make maximizing choices play by play data and dynamic programming are used to estimate the average payoffs to kicking and trying for a first down under different circumstances examination of actual decisions shows systematic clear cut and overwhelmingly statistically significant departures from the decisions that would maximize teams chances of winning possible reasons for the departures are considered

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

urban spatial development in the land policy reform era evidence from beijing this paper examines the characteristics of urban spatial development in beijing and identifies the extent to which these characteristics can be attributed to the emerging land market in beijing as

good day sunshine stock returns and the weather psychological evidence and casual intuition predict that sunny weather is associated with upbeat mood this paper examines the relationship between morning sunshine in the city of a country s leading stock exchange and daily market index returns across 26 countries from 1982 to 1997 sunshine is strongly significantly correlated with stock returns after controlling for sunshine rain and snow are unrelated to returns substantial use of weather based strategies was optimal for a trader with very low transactions costs however because these strategies involve frequent trades fairly modest costs eliminate the gains these findings are difficult to reconcile with fully rational price setting

farm debt default and foreclosure an economic rationale for policy action economic analysis of farm programs typically focusses on economic costs here we show that because of market failures and imperfections there are possible economic benefits to be derived from programs which reduce or eliminate the threat of default and foreclosure a production model of an indebted firm is developed and serves as a basis for an aggregate model which identifies possible costs and benefits from a program of transfers to indebted farmers the challenge facing policy makers is to design programs which capture the benefits of reducing the probability of default while minimizing perverse incentive effects of such programs

betting market inefficiencies are short lived in german professional football abstractin this article we argue that potential inefficiencies on betting markets are more likely to exist at the very beginning of a season when the available information on the teams playing strength is difficult to evaluate this lack of reliable information should be particularly large in the case of recently promoted teams that have typically undergone major changes in the composition of their roster following their promotion without any information on the latter teams potential performance they are particularly difficult to evaluate which may eventually lead to inefficiencies and positive returns on investment in the betting market we analyse odds from german first division bundesliga soccer for the seasons from 2002 03 to 2015 16 to find betting market inefficiencies at the start of the season as expected betting on recently promoted team wins generates temporarily positive returns especially for away games these results suggest bookmakers to underestimate promoted teams ability to fam

the degree of inefficiency in the football betting market statistical tests abstract this paper tests the hypothesis that the football betting market is efficient our statistical tests are stronger than those in previous studies and we examine both nfl and college data over a sample period of fifteen years our statistical tests detect two specific biases in the nfl market and an unspecified bias in the college market we examine the year to year consistency and magnitudes of the biases and find that the nfl bias against home teams has been nearly eliminated while the bias against underdogs has increased profitable exploitation of the biases depends upon transaction costs

interpreting the movements in short term interest rates this article uses modern asset pricing theory to examine the behavior of short term nominal interest rates over the past twenty five years the analysis investigates whether variation in the stochastic behavior of consumption growth and inflation can explain movements in the rate of interest the model estimated allows for taste shocks to utility the authors results reveal that much of the month to month movement in nominal interest rates reflects changes in the real rate and the risk premia in addition to inflationary expectations copyright 1992 by university of chicago press

effects of sustained financial stress on the financial structure and performance of the farm sector financial stress in agriculture as indicated by the problems identified in jolly et al s paper can be caused by many factors farm failures can be the result of everything from poor individual management decisions to weather conditions in other countries differences in the causes of failures have different implications for the analysis of the effects of continuing stress if for example all of the farmers who are failing today are simply poor managers then the effects of continued stress are likely to be minimal in fact the elimination of poor managers might bring about net social benefits by reducing the cost of food if good managers are being forced out of agriculture because of public policies however the effects may be substantially different thus while the central purpose of this paper is to describe the measurable effects of sustained financial stress on the farm sector identifying the causes of today s difficulties is an integral part of the research recent literature hughes and penson perry et al knutson richardson and jolly grant et al suggests three principal reasons for farmers difficulties macroeconomic policies farm policies and individual management decisions the economic environment facing farmers has certainly played a central role in the current cash flow difficulties and or resulting business failures characterizing american agriculture macroeconomic policies of recent years have generated prices and interest rates that have skewed economic returns in the economy away from capital intensive and export sensitive industries such as farming farm policies have also helped to shape current conditions although farm programs under the 1977 and 1981 farm bills were sufficient to mask the early stages of the current decline in farm profitability the resources needed to continue to offset other factors have not been nor are they likely to be forthcoming finally some farmers and farm lenders have contributed to their own problems many of the producers currently confronted with financial difficulties overcommitted themselves during the 1970s assuming continuation of favorable economic conditions as noted by king and sonka because longterm debt and variable interest rates are often used to gain control of assets managers need to consider the viability of a specific decision for several policy and macroeconomic scenarios in addition to the current policy the rest of this paper is presented in three parts first discussion is focused on the aggregate effects of pursuing different macroeconomic policies through the end of this decade the next section deals with the impacts of continued stress on different types of farms given different beginning leverage positions and farm policies finally some of the effects of continued farm financial distress beyond the farm gate are discussed

the effect of the thatcher government on company liquidations an econometric study the findings from an econometric study of company liquidations in teh uk economy are presented the aim is to build on previous macroeconomic analysis of business failure in order to explore to what extent the impact of the thatcher government did represent a clear break in the determination of company liquidations while it is possible to construct a model which performs reasonably well in statistical terms prior to 1980 clear evidence is found of a structural break associated with the new attitude towards business failure brought in by the conservative government there is also strong evidence that company liquidations have become much more sensitive to the state of the business cycle the model estimated gives a prominent role to the current level of company profitability and to the growth in liquidity liquidity is measured by two alternative proxy variables the rate of growth of broad money and the flow of bank lending to the company sector the model is consistent with a cash flow that short term

decoding urban land governance state reconstruction in contemporary chinese cities in the rapidly growing literature on urban development in china many authors have emphasised the salient features of economic decentralisation and the increasingly significant role of the local state however such arguments neglect a counter trend in which the central state has deterritorialised and rehierarchised some key functions using the case of land governance this paper argues that facing the complication of changing urban conditions there is a resurgence of the state s regulatory power the decentralisation of economic governance is now counter balanced by the rise of state strategies to control the articulation of scales through which a more centrally consolidated power can be achieved the central government still serves as an important level of economic regulation in this sense new interpretations of commoditised urban transformation especially commoditised production of the built environment should be understood by underscoring the interplay between trends of decentralisation and terr

the time varying behaviour of real interest rates a re evaluation of the recent evidence a time varying parameter model with markov switching conditional heteroscedasticity is employed to investigate two sources of shifts in real interest rates 1 shifts in the coefficients relating the ex ante real rate to the nominal rate the inflation rate and a supply shock variable and 2 unconditional shifts in the variance of the stochastic process the results underscore the importance of modelling continual change in the ex ante real rate in terms of other economic variables rather than relying on a statistical characterization that permits only a limited number of discrete jumps in the mean of the process copyright 1999 john wiley sons ltd

a second look at the bangkok land and housing market an earlier paper by the present author published in this journal in 1989 reported on a detailed analysis of the bangkok land and housing market carried out in 1987 88 based on a recent reassessment this paper compares the performance of bangkok s land and housing markets in 1974 84 and 1988 90 the results of the comparative analysis are striking despite rapid increases in land conversion pressure and price increases bangkok s housing developers are still providing considerable amounts of affordable housing unconstrained by zoning they have decentralised development projects and increased project densities dramatically

nonstationarity of regressors and tests on real interest rate behavior this article reexamines tests on the behavior of real interest rates in light of recent results that indicate that regressors are nonstationary and not strictly exogenous strong rejections of constancy of real interest rates that have been found previously in the literature are confirmed here although there is some evidence here that real rates are negatively correlated with expected inflation this result is not as strong as has been indicated by previous research in addition results that found a significant negative correlation between real rates and nominal rates before 1979 are not supported here although there is evidence for a positive correlation of real and nominal interest rates after 1979

insolvency in agriculture bad managers or the common agricultural policy bad management is often blamed for the failure of firms yet an empirical investigation of the annual rate of insolvency in agriculture and horticulture in england and wales revealed a relationship with the price of land the rate of insolvency was negatively related to the current price of land but the lag structure estimated suggests that the rate of insolvency could be positively related to the land price two years previously this result is in accordance with a theoretical model which shows that the optimal gearing strategy under rising land prices induces farmers to increase their indebtedness since common agricultural policy price support has become capitalized into land prices this suggests that some of the insolvency in agriculture and horticulture was the result of previous agricultural policy the results do however underline farm management advice that farmers should beware of relying on capital gains to remain in business

the impact of farmland price changes on farm size and financial structure a modified vickers model is used to show that farmland capital gains provide incentive to increase farm acreage and debt use farmland capital losses have the opposite effect the model indicates that part of the current financial vulnerability of the u s farm sector can be traced to management decisions made in response to the farmland capital gains of the 1970s the effects are not purely tax driven though taxes can affect the magnitude of incentives the vickers model is modified to allow a finite horizon taxes and the recognition of unrealized capital gain or loss

understanding real interest rates this paper outlines an approach to measuring real interest rates and testing hypotheses on their behavior it then describes what we know about real interest rates in the aggregate economy and provides estimates of real interest rates for the agricultural sector the evidence presented in this paper indicates that real interest rates for the agricultural economy have been extremely high in the l98ds and that their behavior seems to be linked to that found for real rates in the aggregate economy what has been the source of these high real rates the answer seems to be that it was a result of a concerted effort by the monetary authorities to disinflate the economy however the brunt of the fed s disinflationary policy has fallen more heavily on the farm sector which has had to face far higher reel rates than the rest of the economy although breaking the back of inflation was certainly a worthy goal for the fed farmers have had to pay a heavy price they have had to suffer for the sins of an economy that was excessively inflationary which then had to be brought back into line with disinflationary policy this abstract was borrowed from another version of this item

an innovative approach to national football league standings using bonus points we investigate the inclusion of bonus points in the national football league nfl using a prediction model built on league points both touchdown based and narrow loss bonuses are shown to be significant determinants of match outcomes this implies that including bonus points in league standings generates a more accurate ranking of teams from best to worst than a system that only rewards wins and ties our preferred system awards four points for a win two for a tie one point for scoring three or more touchdowns and one point for losing by seven or fewer points such a system would also make it easier for supporters to identify playoff contenders and place importance on otherwise meaningless end of game plays in some matches which would increase spectator interest

changing land policy and its impact on local growth the experience of the shenzhen special economic zone china in the 1980s having elaborated the transformation of land policy in the wake of chinese economic reform and the background to the formation of a new land policy in the shenzhen special economic zone china thi

macroeconomic determinants of corporate failures evidence from the uk previous studies on the relationship between macroeconomic aggregates and business failures have been restricted to the description of the short run relationships among the variables this paper uses an error correction model ecm to investigate the determinants of uk corporate failures by modelling the short run and long run behaviours of corporate failure rates in relation to macroeconomic phenomena over the period 1966 1999 the findings indicate that failure rates are associated with interest rates credit profits price and corporate birth rates both in the short run and in the long run of these macroeconomic variables interest rate appears to be an important factor influencing failure rates and can be used as a feasible policy instrument to reduce the incidence of corporate failures the impact of the insolvency act 1986 has also been examined and its mitigating effect on corporate failures has been identified

the price of land for housing in jakarta in spite of its potential value to governments detailed information as to how land prices vary spatially within third world cities is usually lacking this paper discusses the distribution of land prices in jakarta using information provided on a neighbourhood basis by experienced real estate brokers appraised prices were given for different types of residential plot distinguished by tenure and infrastructural provision analysis of the data in jakarta shows the relative importance of infrastructural provision and tenure land title for land prices examination of such data over time makes it possible to test whether and where there has been a spiralling of land prices and in the case of jakarta it is found that recent price increases have been consistently greater in suburban areas and in informal sector plots arising from the massive demand from low income households for affordable housing the paper concludes by drawing out policy implications

the political economy of farmland ownership regulations and land prices one of the most ubiquitous forms of agricultural regulation is a restriction on farmland ownership one canadian example of a farmland ownership restriction is the saskatchewan farm security act fsa passed in 1974 the purpose of this article is to explain using a political economy framework why the fsa was implemented and to estimate the effect of the fsa on saskatchewan farmland values a present value pv model is used to estimate the relationship between land values rents and the regulation the hausman endogeneity test reveals that the regulation variable is endogenous with the land price the sign of the regulation variable is negative which fits with the theory i e the more stringent the regulation the lower the land value we estimate that the regulation lowered saskatchewan farmland prices by an average of 4 to 34 us acre depending on whether ordinary least squares ols or two stage least squares tsls is employed in the estimation over the period of 1974 2001

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