tenure land rights and farmer investment incentives in china the goal of this paper is to understand the nature of the property rights associated with china s land tenure systems and to study the impact of these property rights on agricultural production efficiency the results show that land tenure and associated property rights in rural china affect the production behavior of farmers the most robust finding is that the right to use land for long periods of time encourages the use of land saving investments while the results show that land tenure affects agricultural production decisions the difference between collective and private plots however is small compared to the private plotcommunal productivity gap that existed in the pre reform period 1998 elsevier science b v all rights reserved

financial firm production of monetary services a generalized symmetric baroett variable profit function approach an alternative monetary production model of financial firms is employed to investigate supply side monetary aggregation financial firms are conceived to produce monetary services as outputs through financial intermediation a new method for testing the existence of consistent monetary output aggregates in financial firms production technology is developed in terms of a multiproduct firm s variable profit function and the method does not require homotheticity of the aggregator function we use a generalized symmetric barnett flexible functional form that specification satisfies global curvature conditions and retains its flexibility under the null hypothesis of weak separability neither of those properties is possessed by other flexible functional forms

rural nonfarm employment and incomes in latin america overview and policy implications abstract rural nonfarm employment rnfe and incomes rnfi are crucial to latin american rural households the 11 rural household income studies in this volume reviewed in this paper use 1990s data and show that rnfi averages 40 of rural incomes rnfi and rnfe have grown quickly over the past three decades the review of evidence provided some surprising departures from traditional images of nonfarm activities of latin american rural households in terms of shares of rural incomes 1 nonfarm wage incomes exceed self employment incomes 2 rnfi far exceeds farm wage incomes 3 local rnfi far exceeds migration incomes 4 service sector rnfi far exceeds manufactures rnfi these findings suggest the need for more development program attention to wage employment in the service sector versus the traditional focus on small enterprise manufactures moreover poor households and zones tend to have higher shares in their incomes but lower absolute levels of rnfi as compared to richer households and zones the rnfe of the poor tend to be the low paid nonfarm equivalent of semi subsistence farming raising the capacity of the poor to participate in the better paid types of rnfe is crucial via employment skills training education infrastructure credit finally rnfe has grown fastest and been most poverty alleviating where there are dynamic growth motors in particular in the agricultural sector but also in tourism links to urban areas mining and forestry this means that developing rnf jobs cannot be done at the expense of programs promoting agricultural development

credit market constraints consumption smoothing and the accumulation of durable production assets in low income countries investments in bullocks in india in this paper we formulate and estimate a finite horizon structural dynamic model of agricultural investment behavior that incorporates the major features of low income agricultural environments income uncertainty constraints on borrowing and rental markets and the use of investment assets to generate income and smooth consumption the model is fit to longitudinal indian household data on farm profits bullock stocks and pump sets the estimated structural parameters are used to assess the effects on the life cycle accumulation of bullocks agricultural profits and welfare associated with complete markets and bullock liquidity and with second best policies that provide assured sources of income to farmers and weather insurance

farm growth and survival econometric evidence for individual farms in upper austria this article investigates survival and growth of more than 50 000 upper austrian farm households within a maximum likelihood sample selection framework the results suggest that age schooling and sex of the farm operator size of the farm family and off farm employment status as well as initial farm size significantly influence farm growth and survival the present study provides support for the notion of a disappearing middle in the size distribution the process of polarization is closely related to the off farm employment status of farms correcting for sample attrition bias is important when analyzing the performance of part time farms

tenure security and land related investment evidence from ethiopia the authors use a large data set from ethiopia that differentiates tenure security and transferability to explore determinants of different types of land related investment and its possible impact on productivity while they find some support for endogeneity of investment in trees this is not the case for terraces transfer rights are unambiguously investment enhancing the large productivity effect of terracing implies that even where households undertake investments to increase their tenure security this may not be socially efficient in ethiopia government action to increase tenure security and transferability of land rights can significantly enhance rural investment and productivity

growth of firms in developing countries evidence from cote d ivoire the paper presents evidence in support of a particular growth process of firms that is consistent with a missing middle in the size distribution of manufacturing firms in african countries firm growth is explained by size and age effects as a result of efficiency exploiting through scale enlargements and learning but is strongly moderated by reputation effects and formal legitimation which facilitate access to output markets and resources complementing the model with data on growth obstacles as perceived by the owners of firms medium sized firms are found to be strongly hurt by insufficient access to infrastructure and financial services

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

money demand variability a demand systems approach this article tests the fourier flexible form on quarterly u s monetary data the data have been prescreened for consistency with the general axiom of revealed preference and subindexes are formed using the divisia approach in this article the global fourier model fits well although there is a potential problem of overfitting and certain data points exhibit behavior inconsistent with the model the elasticities are variable over time particularly around business cycle troughs it appears that financial asset demand surfaces are highly nonlinear and the many unsuccessful existing attempts to estimate money demand may not have worked well for this reason

exchange market pressure in paraguay 1963 88 monetary disequilibrium versus global and regional dependency the relevance of the monetary approach to exchange market pressure for paraguay s small open economy is compared to that of two competing keynesian structural approaches which emphasize respectively global and regional dependency effects estimation results for the three models including formal comparisons using nonnested hypothesis tests and forecast accuracy staistics suggest that the explanatory power of the monetary model is dominated by that of the regional dependency model with the global dependency model having an intermediate degree of applicability this result is intuitive given the extreme dependency of the paraguayan economy on argentina and brazil

rural industrialisation and internal migration in china to avoid the problems of overcrowding and urban unemployment that are associated with overurbanisation observed in other developing countries china has since the late 1970s actively pursued a st

can land market reform mitigate the exclusionary aspects of rapid agro export growth abstract agro export growth has been associated with land concentration and employment instability in the wake of exclusionary agro export booms land market reform has been proposed as a way to improve peasant land access through the market developing a model of the economic competitiveness of different classes of producers this paper evaluates the likely effectiveness of land market reform while the model itself gives ambiguous answers numerical simulation identifies a large gap between market price and peasants abilty to pay for land among the components of land market reform policy progressive land taxation appears unlikely to close that competitiveness gap while farm land mortgage banks appear more likely to mitigate exclusionary aspects of growth

the growth of family farms in hungary the article investigates the validity of gibrat s law for hungarian family farms using fadn data collected between 2001 and 2007 gibrat s law states that the growth rate of firms will be independent of their initial size regression results allow us to reject gibrat s law for all quantiles evidence suggests that smaller farms tend to grow faster than larger ones results do not support the hypothesis of disappearing middle in hungarian agriculture we study a number of socio economic factors that can help to explain farm growth we find that total subsidies received by a farm and the farm operator s age are the most significant factors correlated with farm growth

local versus global separability in agricultural household models the factor price equalization effect of land transfer rights commonly employed global tests for separability between production and consumption decisions are theoretically inappropriate when the market failures creating non separabilities differentially constrain some but not all households simulated maximum likelihood estimates using chinese panel data reject the restrictions implied by a global separability test in favor of regime specific or local separability tests the estimates also show that a global approach to separability obscures the significant effect that less encumbered land transfer rights would have on shadow factor price equalization across households and allocative efficiency the findings on transfer rights suggest a resolution to the debate in china on further property rights reform copyright 2002 oxford university press

do overlapping property rights reduce agricultural investment evidence from uganda the need for land related investment to ensure sustainable land management and increase productivity of land use is widely recognized however there is little rigorous evidence on the effects of property rights for increasing agricultural productivity and contributing toward poverty reduction in africa whether and by how much overlapping property rights reduce investment incentives and the scope for policies to counter such disincentives are thus important policy issues using information on parcels under ownership and usufruct by the same household from a nationally representative survey in uganda the authors find significant disincentives associated with overlapping property rights on short and long term investments the paper combines this result with information on crop productivity to obtain a rough estimate of the magnitudes involved the authors make suggestions on ways to eliminate such inefficiencies

behavioral responses to risk in rural china does risk perpetuate poverty in a credit constrained economy jalan and ravallion study portfolio and other behavioral responses to measured risk using household panel data for rural china one quarter of wealth is held in unproductive liquid forms but only a small share of this appears to be a precaution against income risk the authors estimate that eliminating income risk would reduce the share of wealth held in liquid form by less than 1 percentage point moreover that effect is confined largely to middle income groups high income households do not it seems need to hold unproductive cautionary wealth and the poor probably cannot afford to do so the authors find no evidence that income risk discourages schooling but risk does inhibit the out migration of labor generally the results provide only limited support for the idea that uninsured risks promote unproductive portfolio behavior in this setting there is such an effect but it is small in magnitude and cannot be deemed an important cause of poverty

an analysis of substitution bias in measuring inflation 1959 851 we analyze the substitution bias in laspeyres type price indexes such as the cpi using 1959 1985 nipa consumption data for 101 commodities we employ two methodological approaches to calculation of the bias first we construct the tightest theoretical bounds on the col by applying nonparametric methods using algorithms developed by afriat and by varian second following diewert we construct superlative price index formulas namely tomqvist and fisher s ideal indexes under a chain as well as a fixed base specification homothetic preferences are found to be consistent with the data and sensitivity tests indicate that this result is not vacuous if the hypothesis of homotheticity is maintained the col bias has upper and lower limits of 0 22 and 0 14 percent per year respectively using the superlative indexes as the measure of the col the bias is about 0 18 percent per year for the period 1959 85 this estimate is somewhat larger than found in earlier studies our use of more disaggregated data is found to be responsible for part of the difference with the size of the estimated bias directly related to the extent of the aggregation

a comparison of nonparametric tests of weak separability for annual and quarterly data on consumption leisure and money among the most fundamental assumptions made in economics are utility maximization and the separability of the arguments in the representative consumer s utility function these assumptions are important for theoretical and empirical applications of economics in this article we present results from nonparametric tests of these assumptions of consumer behavior we find that utility maximization generally obtains with either annual or quarterly per capita data on consumption goods leisure and relatively liquid monetary assets annual data on consumption goods leisure and all monetary assets are consistent with utility maximization there is some evidence in support of using partial adjustment models when estimating quarterly data models of the demand for monetary assets further annual data on consumption goods and leisure and on liquid monetary assets meet the necessary and sufficient conditions for weak separability these results support the notion of a monetary aggregate more broadly based than cu

dimensions and diversity of property rights in rural china dilemmas on the road to further reform abstract this paper contributes to the debate over land tenure in rural china by conceptualizing and measuring multiple dimensions of property rights in a way that elucidates the competing interests that are affected by the property rights regime utilizing a unique village level data set this paper argues that the regional and temporal variation in rural property rights signals a pattern in which decentralized institutional innovation occurs in response to the competing interests of the national state of local authorities and of present and possible future individual land users unlike the earlier debate concerning the household responsibility system the current property rights dilemma is intrinsically more complex because the potential conflicts of interest between individuals local collectives and the state are greater resolution of that debate will ultimately require careful exploration of the reality and substance of the tradeoffs and competing interests that make further reform of rural property rights so difficult

the relationship between firm growth size and age estimates for 100 manufacturing industries this study uses a sample of all firms operating in 100 manufacturing industries to examine some aspects of firm dynamics it finds that firm growth the variability of firm growth and the probability that a firm will fail decrease with firm age it also finds that firm growth decreases at a diminishing rate with firm size even after controlling for the exit of slow growing firms from the sample gibrat s law therefore fails although the severity of the failure decreases with firm size copyright 1987 by blackwell publishing ltd

a semi nonparametric approach to the demand for uk monetary assets we estimate an asymptotically ideal model of the demand for uk personal sector monetary assets we use data that are consistent with utility maximizing behaviour and find that uk monetary assets are generally substitutes in use the estimated elasticities of substitution during the 1980s and the early 1990s indicate that a relatively broad monetary aggregate should be used in economic studies the results also suggest that any policy based on interest or user cost elasticities of substitution between financial assets should be based on the morishima elasticities as the allen uzawa calculation can give misleading results

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

monetary aggregation and the neutrality of money zisimos koustas this article tests the long run neutrality of money proposition using quarterly u s data over the period from 1960 1 to 1996 2 and the methodology suggested by king and watson 1997 paying particular attention to the integration and cointegration properties of the variables comparisons are made among simple sum divisia and currency equivalent ce monetary aggregates using the anderson et al 1997a 1997b series of divisia and ce monetary aggregates jel e40 e50 c32 i introduction the aim of this article is to investigate a long run question about the role of money in monetary policy whether changes in the conduct of monetary policy influence the growth rate of output as lucas 1996 p 661 puts it so much thought has been devoted to this question and so much evidence is available that one might reasonably assume that it had been solved long ago but this is not the case in fact recently fisher and seater 1993 and king and watson 1997 contribute to the literature on testing quantity theoretic propositions by developing tests using recent advances in the theory of nonstationary regressors and show that meaningful long run neutrality and superneutrality tests can only be constructed if both nominal and real variables satisfy certain nonstationarity conditions and that much of the older literature violates these requirements in this paper in the spirit of serletis and koustas 1998 and koustas and serletis 1999 we test the long run neutrality and superneutrality of money using the king and watson 1997 methodology paying particular attention to the gains that can be achieved by rigorous use of microeconomic and aggregation theoretic foundations in the construction of money measures this is accomplished by making comparisons among simple sum divisia and currency equivalent ce monetary aggregates using the anderson et al 1997a 1997b data see anderson et al 1997a 1997b for more details we also pay attention to the integration and cointegration properties of the variables because meaningful neutrality and superneutrality tests critically depend on such properties the organization of the article is as follows the next section briefly discusses the problem of the definition aggregation of money in section iii we investigate the univariate time series properties of the variables as these properties are relevant for some problems of potential importance in the practical conduct of monetary policy as well as for estimation and hypothesis testing in section iv we test the long run neutrality and superneutrality of money propositions using the king and watson 1997 structural bivariate autoregressive methodology paying particular attention to the integration and cointegration properties of the data the final section concludes ii the many kinds of money the monetary aggregates currently in use by the federal reserve are simple sum indices in which all monetary components are assigned a constant and equal unitary weight this index is m in 1 m sigma sup n sub i 1 x sub i where x sub i is one of the n monetary components of the monetary aggregate m this summation index implies that all monetary components contribute equally to the money total and it views all components as dollar for dollar perfect substitutes there is no question that such an index represents an index of the stock of nominal monetary wealth but cannot in general represent a valid structural economic variable for the services of the quantity of money over the years there has been a steady stream of attempts at properly weighting monetary components within a simple sum aggregate with no theory however any weighting scheme is questionable barnett 1980 derived the theoretical linkage between monetary theory and aggregation and index number theory he applied economic aggregation and index number theory and constructed monetary aggregates based on diewert s 1976 class of superlative quantity index numbers

risky monetary aggregates for the uk and us abstract we extend the scope of monetary aggregation beyond capital certain assets that make up central bank data sets and identify groups of assets that form monetary aggregates composed of both capital certain and risky capital uncertain assets we construct monetary aggregates for the us and uk using a superlative index and relax a key assumption of the consumption capital asset pricing model ccapm a one year planning horizon by using forecasted returns on risky assets our new risky monetary aggregates perform well in var tests we recommended exploring risky assets as providers of liquidity services in future research on this topic

wto accession rural labour migration and urban unemployment in china this paper evaluates the rural urban migration and urban unemployment effects of china s wto accession based on the china us bilateral agreement on market accession the evaluation is conducted by

access to capital and agrarian production organisation there are two problems both universal that entrepreneurs in any economy must contend with firstly an agent generally has access only to a limited amount of working capital secondly workers hired by an agent are subject to moral hazard and this necessitates their supervision this paper models for an agrarian economy the constraints imposed on entrepreneurs activities by these two problems and endogenously determines the various organisational forms of production as well as the allocation of resources that will obtain with a simple model we endeavour to explain a diverse set of empirical observations pertaining to the less developed countries in terms of the general processes that determine the distribution of income among the various agents and the hierarchical relationships that develop among them agricultural production typically involves a period of several months between the time the inputs are purchased and the time the output is marketed access to working capital and hence to the credit market thus plays an important role in a farmer s production decisions the distribution of access to credit in turn tends to be an important determinant of income distribution in poor agrarian economies credit is invariably rationed according to the ability to offer collateral the amount of working capital a farmer can mobilise therefore depends on the amount of land he owns which is often a good proxy for his overall wealth and thus his ability to offer collateral further since hired hands have a propensity to shirk they need to be supervised and therefore the

the impact of market friendly reforms on credit and land markets in honduras and nicaragua summary this article explores the impacts on credit access and agrarian structure of land market liberalization policies undertaken in honduras and nicaragua during the 1990s like liberalization efforts pursued in many latin american countries these market friendly reforms were designed to activate land transfers and enhance agricultural efficiency in large part by improving the access of the rural poor to both credit and land markets panel data sets gathered in honduras and nicaragua are used to compare title credit and land access patterns before and after the reforms descriptive nonparametric regression analyses show that despite major gains in titling across the land size spectrum and some increase in land market activity the other hoped for improvements in credit and land access did not occur and appear unlikely to occur without further policy attention to credit markets

the substitutability of equities and consumer durable goods a portfolio choice approach the stock market crash of october 1987 led many economists to lower their forecast of gnp growth for 1988 the rationale was that the loss of wealth that resulted from the crash would force asset holders to reduce their consumption expenditures yet a major slowdown in economic growth was not realized in the months following the crash gamer 11 explains this fact in terms of the life cycle hypothesis of consumption he argues that the potential adverse effect of stock market losses on planned consumption would be spread out over the entire lifetime of asset holders so that the immediate effect of the crash on the level

bounding an economic monetary aggregate under nonhomothetic preferences we construct nonparametric bounds on true quantity indexes for the realistic case of nonhomothetic preferences these bounds do not require assumptions about the form of the underlying aggregator function we construct these bounds using monetary assets that meet necessary conditions for the existence of an aggregate we find that a tornqvist index of these monetary assets falls within the nonparametric bounds on true quantity indexes almost all of the time whereas a simple sum of these monetary assets falls outside these bounds more than one third of the time

differential human capital and structural evolution in agriculture abstract the growth of market capitalism and the technological advances of the last two centuries underlie the relentless process of structural change in agriculture substantial occupational migration out of farming and geographical migration from rural to urban areas is a characteristic of most if not all economies in the 20th century the process of rural urban migration and the resulting urban problems have received considerable attention the fate of the residual farm population has received less scrutiny and is less well understood in the united states we observe considerable farm poverty increasing farm size inequality and a disturbing decay of rural communities for the last half century the problem of low farm incomes has been perceived as a farm problem amenable to solutio by appropriate farm policy in this paper a model is proposed which suggests that farm poverty and inequality are inevitable consequences of a rural urban migration process in which two types of human capital play a fundamental role general human capital determines a person s expected nonfarm income while farming specific human capital determines his her productivity in farming it is argued that inadequate human capital combined with positive rural urban migration cost positive farm technology adoption costs and inelastic demand for farm output can explain persistently high levels of farm poverty and increasing farm size inequality the model suggests that traditional farm policies are inappropriate programs that directly address the problems of inadequate human capital are advocated

nonlinear portfolio selection using approximate parametric value at risk abstract as the skewed return distribution is a prominent feature in nonlinear portfolio selection problems which involve derivative assets with nonlinear payoff structures value at risk var is particularly suitable to serve as a risk measure in nonlinear portfolio selection unfortunately the nonlinear portfolio selection formulation using var risk measure is in general a computationally intractable optimization problem we investigate in this paper nonlinear portfolio selection models using approximate parametric value at risk more specifically we use first order and second order approximations of var for constructing portfolio selection models and show that the portfolio selection models based on delta only delta gamma normal and worst case delta gamma var approximations can be reformulated as second order cone programs which are polynomially solvable using interior point methods our simulation and empirical results suggest that the model using delta gamma normal var approximation performs the best in terms of a balance between approximation accuracy and computational efficiency

nonparametric demand analysis of u k personal sector decisions on consumption leisure and monetary assets a reappraisal this paper utilizes a new data set to test for utility maximizing behavior and weakly separable subutility functions in the context of a utility function comprising durables nondurables services leisure and monetary asset holdings for the u k personal sector all the data sets analyzed demonstrated consistency with respect to utility maximizing behavior the weak separability results prove to be relatively invariant to the degree of aggregation over goods but highly sensitive to the assump tion made regarding the representative consumer per household scaling of the data produced a utility function that is weakly separable in goods services and leisure and in monetary assets

property rights labour markets and efficiency in a transition economy the case of rural china we investigate the consequences of imperfect factor market development for farm efficiency in north china we estimate the extent to which an inverse relationship in farm productivity can be attributed to the administrative as opposed to market allocation of land combined with unevenly developed off farm opportunities using a new household survey we find considerable inefficiency in the use of labour this inefficiency is alleviated by external labour markets and to a limited degree by administrative reallocations the reallocations do not go far enough however which raises important questions about con straints on rental activity and property rights formation more generally jel classification q15 012

equilibrium credit rationing of small farm agriculture it is often argued that externally imposed contractual restrictions lead to inequitable credit rationing this paper argues that unrestricted laissez faire markets may also inequitably ration credit a formal model which grants borrowers autonomy in credit application and use demonstrates that adverse incentive and selection effects may cause banks to endogenously impose interest rate restrictions and ration small farms out of the credit market consequently liberalization of financial markets may be insufficient to guarantee small farms access to credit

information and the operation of markets tests based on a general equilibrium model of land leasing in india abstract this paper develops an estimable general equilibrium model of land leasing to test the extent to which information is commonly held in a village and whether village markets are efficient information regarding the relative farming skill of households is found to be widespread but the assumption of perfectly efficient markets within the village is rejected these results have ramifications for the estimation of agricultural household models and for our understanding of rural institutions the model is derived from the primitives of the production technology the extent of information and the distributions of assets and several household unobservables simultaneity and selection issues are dealt with explicitly in a two stage maximum likelihood estimation procedure using panel data from india

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

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

portfolio optimization through kriging methods abstractthis article presents a new methodology for optimizing financial asset portfolios the proposed methodology based on the kriging method allows for approximating the risk surface and thus the optimal solution to the problem in a generalized fashion relaxing every restrictive hypothesis inherent to the available methods and with the ability to estimate the error in the risk surface approximation illustratively the proposed methodology is applied to the portfolio problem with the variance var and cvar as objective functions the results are compared to those obtained using the khun tucker technique for the former and the rockafellar method for the latter

land tenure security and investment incentives puzzling evidence from burkina faso abstract the commonsense logic associating higher land security and higher incentives to invest has been recently called into question in the case of african agriculture to be meaningful empirical tests have to be carefully designed so as to take account of the possible endogeneity of the land rights variable this is done in this paper by applying suitable econometric methods to the original data collected in burkina faso the results obtained cast doubt on the existence of a systematic influence of land tenure security on investment by reviewing the justifications for scepticism in the recent literature we are able to conclude that the traditional village order where it exists provides the basic land rights required to stimulate small scale investment

the development of the land lease market in rural china this paper examines the development of the land lease market in rural china special attention is paid to productive heterogeneity among farmers and the openness of the labor market in activating the land lease market a theoretical model is employed to explore the underlying connections an econometric model is implemented using a two period panel data set gathered in three counties of china s zhejiang province the results show that productive heterogeneity and a freer labor market do promote more land leases the implications for the institutional change literature are discussed

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

land distribution and international agricultural productivity the unequal distribution of agricultural land is often cited as a source of inefficiency in agriculture previous cross country studies of agricultural productivity differences though have not considered land inequality this article addresses this issue by using cross country data on inequality in operational holdings of agricultural land from deininger and squire 1998 in an estimation of an agricultural production function the gini coefficient for land holdings is found to have a significant negative relationship with productivity this is consistent with the existence of heterogeneity in productivity by farm size within countries a one standard deviation drop in the gini coefficient implies an increase in productivity of 8 5

homothetic efficiency theory and applications we provide a nonparametric revealed preference approach to demand analysis based on homothetic efficiency homotheticity is widely assumed often implicitly because it is a convenient and often useful restriction however this assumption is rarely tested and data rarely satisfy testable conditions to overcome this we provide a way to estimate homothetic efficiency of consumption choices the method provides considerably higher discriminatory power against random behavior than the commonly used afriat efficiency we use experimental and household survey data to illustrate how our approach is useful for different empirical applications and can provide greater predictive success

the potential of land rental markets in the process of economic development evidence from china abstract we develop a model of land leasing with agents characterized by unobserved heterogeneity in ability and presence of an off farm labor market in this case decentralized land rental may contribute to equity and efficiency goals and may have several advantages over administrative reallocation the extent to which this is true empirically is explored using data from three of china s poorest provinces land rental markets and administrative reallocation reallocate land to those with lower endowments but the former are more effective in doing so and have a bigger productivity enhancing effect information on hypothetical market participation suggests that reducing transaction costs in land rental markets could help to realize significant additional productivity gains

an econometric analysis of the effects of human capital on size and growth among dairy farms the analysis of size distributions of firms has long been important both inside and outside of agriculture the study of farm size has focused on economies of scale optimal efficient size technical change descriptions of distributions and informal considerations of policy outside of farming the emphasis has been on the relationships between size and growth in both literatures there has been some awareness of the role of the firm operator in firm size and growth in this paper we examine herd size and herd growth for a large sample of southern dairy farms our emphasis is on the relationship of human capital of the operator to the crosssectional size and growth patterns other related work considers size growth issues in more detail sumner and leiby our research relates to several literatures that have evolved along distinct paths these include the analysis of the size distribution of farms see stanton the role of human capital in agriculture and earnings distributions and the analysis of the size distribution of business firms

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

nonparametric tests of utility maximization and weak separability for consumption leisure and money some of the most fundamental assumptions of economics are utility maximization and weak separability of the arguments in the represen tative consumer s utility function this paper contains results from nonparametric tests of these assumptions about consumer behavior the authors find that quarterly per capita data on consumption goods le isure and monetary assets are consistent with utility maximization further consumption goods and leisure meet necessary and sufficient conditions for weak separability additionally one grouping of relat ively liquid monetary assets meets the necessary conditions for weak separability they also test and find no evidence of homothetic prefe rences copyright 1987 by mit press

farm size and growth in canada in this paper we empirically examine the relationship between farm size and growth in canada over the period 1966 81 the analysis is undertaken by testing gibrat s law of proportionate effect gibrat offered the hypothesis that the percentage growth rates of firms are independent of their initial size thus growth is a purely stochastic process that arises from the cumulative effect of the random operation of a multitude of forces acting independently of each other an important outcome of models based on gibrat s law is that the stochastic process results in a size distribution of firms which is skewed and not unlike the size distribution actually observed in particular it is well known that depending on the precise formulation the operation of gibrat s law leads to a skewed size distribution which is either log normal prais or pareto steindl ijiri and simon although it is difficult to determine the exact form of observed size distributions it is generally agreed that either of the above provides a reasonable approximation to reality depending on the industry or sector being observed by contrast a deterministic model of firm growth based strictly on standard cost theory either predicts the facts incorrectly or it makes no prediction at all ijiri and simon p 10 although there are models combining cost theory with assumptions about the adjustment process which result in skewed size distributions e g lucas the testing of gibrat s law remains as an important point of departure for the analysis of firm growth an additional feature of models based on

robust optimization of conditional value at risk and portfolio selection abstract this paper deals with a portfolio selection model in which the methodologies of robust optimization are used for the minimization of the conditional value at risk of a portfolio of shares conditional value at risk being in essence the mean shortfall at a specified confidence level is a coherent risk measure which can hold account of the so called tail risk and is therefore an efficient and synthetic risk measure which can overcome the drawbacks of the most famous and largely used var an important feature of our approach consists in the use of techniques of robust optimization to deal with uncertainty in place of stochastic programming as proposed by rockafellar and uryasev moreover we succeeded in obtaining a linear robust copy of the bi criteria minimization model proposed by rockafellar and uryasev we suggest different approaches for the generation of input data with special attention to the estimation of expected returns the relevance of our methodology is illustrated by a portfolio selection experiment on the italian market

are the poor less well insured evidence on vulnerability to income risk in rural china the authors test how well consumption is insured against income risk in a panel of sampled households in rural china they estimate the risk insurance models by generalized method of moments treating income and household size as endogenous insurance exists for all wealth groups although the hypothesis of perfect insurance is universally rejected those in the poorest wealth decile are the least well insured with 40 percent of an income shock being passed on to current consumption by contrast consumption by the richest third of households is protected from almost 90 percent of an income shock the extent of insurance in a given wealth stratum varies little between poor and nonpoor areas

the translog utility function and the demand for money in the united states in recent years considerable effort has been directed towards establishing the nature of the relationship between money and nearmonies but with mixed success the approaches vary from multi interest rate single equation studies to the careful simultaneous equations studies summarized and amended by feige and pearce 1977 and extended recently by donovan 1978 offenbacher 1979 and barnett 1980 the empirical results also vary with numerous studies favoring only one interest rate see the surveys in fisher 1978 1983 some claiming that a variety of entities are close substitutes for money e g chetty 1969 and others showing that weak substitution or even complementarity may be the result of the measurement of elasticities of substitution between money and a number of other assets e g feige and pearce 1977 offenbacher 1979 and barnett 1980 the debate seems to have overshadowed a second and equally intriguing issue which centers on the establishment of an acceptable definition of money the basic idea of this study is to take an approach that takes account of the different degrees of moneyness possessed by the various monetary assets this paper produces quantitative estimates of the degree of substitutability of other monetary assets for money in the context of a flexible functional form model with a

ratings migration and the business cycle with application to credit portfolio stress testing the turmoil in the capital markets in 1997 and 1998 has highlighted the need for systematic stress testing of banks portfolios including both their trading and lending books we propose that underlying macroeconomic volatility is a key part of a useful conceptual framework for stress testing credit portfolios and that credit migration matrices provide the specific linkages between underlying macroeconomic conditions and asset quality credit migration matrices which characterize the expected changes in credit quality of obligors are cardinal inputs to many applications including portfolio risk assessment modeling the term structure of credit risk premia and pricing of credit derivatives they are also an integral part of many of the credit portfolio models used by financial institutions by separating the economy into two states or regimes expansion and contraction and conditioning the migration matrix on these states we show that the loss distribution of credit portfolios can differ greatly as can the concomitant level of economic capital to be assigned

institution building multilateral development banks and state owned enterprises abstract despite the increasing popularity of privatization in latin america many large and important firms will remain in the public sector and for those firms improved economic performance is essential if a constant drain on developing country treasuries is to be avoided this paper analyzes the improvements in enterprise performance that may occur as a result of cooperation between state owned enterprise soes and multilateral development banks and argues that the combination of softer terms and harder conditions may help soe management increase the operational efficiency of their firms the experience of the paraguayan state firm ande and the inter american development bank is examined and found to provide evidence in support of this hypothesis

land accumulation dynamics in developing country agriculture abstractunderstanding land accumulation dynamics is relevant for policy makers interested in the economic effects of land inequality in developing country agriculture we thus explore and simultaneously test the leading theories of micro level land accumulation dynamics using unique panel data from paraguay the results suggest that farm growth varies systematically with farm size a formal rejection of stochastic growth theories that is gibrat s law and that titled land area may have considerable influence on land accumulation furthermore our estimates indicate that a dualistic agrarian structure is the likely product of the unfettered operation of land markets

the composition and construction of monetary aggregates an economic monetary aggregate is composed from a set of monetary goods that are at least weakly separable from other goods in the optimizing agent s utility function we construct such an aggregate using a divisia index number we demonstrate that through the middle of the 1980s forecasts of the inflation rate based on our economic monetary aggregate are superior to forecasts based on the simple sum monetary aggregates m1 or m2

are risky assets substitutes for monetary assets i introduction financial innovation over the past couple of decades has enhanced the liquidity of many financial assets particularly noncapital certain risky assets further financial assets previously not regarded as monetary assets such as mutual funds and particularly money market mutual funds now provide monetary services such as liquidity and transactions services l given the increased liquidity of such funds the question arises as to whether risky assets are substitutes for capital certain monetary assets if noncapital certain assets are indeed substitutes for capital certain assets and are also being used for transactions purposes then agents may be treating risky assets as money although this issue has been addressed in the united states in the context of the addition of bond funds to m2 by for example duca 1995 no such research has yet been conducted in the united kingdom including risky assets in the analysis contradicts the work of ando and shell 1975 spencer 1986 appendix i pp 184 93 and spencer 1994 broadly they argue that since some nonrisky assets provide monetary services and probability also liquidity individuals would not hold risky assets for these purposes 2 in contrast hicks 1935 states that falling transaction costs and rising wealth encourages individuals to increase the proportion of risky assets in portfolio holdings most studies generally assume that risky assets fail to provide significant monetary services and for example have been excluded from the asset demand analysis of barr and cuthbertson 1991a drake fleissig and swofford 1997 and money demand studies such as taylor 1987 belongia and chrystal 1991 drake and chrystal 1994 and drake 1996 alternatively barr and cuthbertson 1991b use only risky assets in their asset demand system analysis the degree of substitution between risky assets and capital certain assets is an empirical issue while noncapital certain risky assets mutual funds and other financial assets may well be becoming closer substitutes for what people are using as money they are in no way perfect substitutes for the highly liquid cash assets to evaluate the role of noncapital certain assets we construct a noncapital certain risky divisia aggregate consisting of equities government bonds and unit trusts the divisia index allows for less than perfect substitution between assets and weights component assets according to their differing degrees of moneyness which may vary over time due to many factors for example financial innovation see barnett 1980 this methodology has been widely applied to monetary aggregation and money demand studies in a number of countries as in belongia 1996 drake 1996 drake and chrystal 1997 and anderson jones and nesmith 1997 to determine whether risky assets are substitutes for capital certain assets we use two other divisia aggregates constructed from traditional measures of money the first of these is an aggregate of highly liquid zero yield cash assets given that the component assets all have zero own rates of return however divisia aggregation is equivalent in this case to simple summation the second aggregate is a divisia aggregate of interest bearing capital certain assets including risky assets complicates the analysis because the degree of risk aversion will affect the estimates of substitution between capital certain and noncapital certain assets thus we also analyze how different degrees of risk aversion affect the results the substitution relationship between assets is estimated from an asymptotically ideal model aim the choice of an aim is in line with the recommendation of barnett fisher and serletis 1992 that flexible systems of demand equations should be used that allow for nonlinear optimizing behavior by economic agents furthermore this paper can be seen as an extension of the recent application of this model to u

theft gift giving and trustworthiness honesty is its own reward in rural paraguay in developing countries lacking legal enforcement villagers may use implicit contracts to minimize crime i construct a dynamic limited commitment model in which a thief cannot commit to forego stealing but is induced to steal less by the promise of future gifts combining survey data on production theft gifts and trust with experiments measuring trustworthiness i provide supporting evidence farmers living near more relatives or with plots that are difficult to steal from give fewer gifts and trust more and those living near more relatives also experience less theft giving increases when trust is lower and the threat of theft is greater

expansion of the economic frontier paraguayan growth in the 1970s abstract the rapid growth of the paraguayan economy over the last decade is analyzed in terms of the expansion of agricultural production and an increase in construction activity construction of the itaipu dam the world s largest hydroelectric project has provided employment and spurred private construction a government colonization programme and spontaneous brazilian immigration has brought new land into production favourable international prices for paraguayan exports and funds from the itaipu project swelled foreign reserves and served to maintain the paraguayan currency at an already overvalued rate the paper argues that the overvaluation combined with extensive smuggling undermined incentives for investment in manufacturing and deprived the government of revenues needed to finance infrastructure for sustained economic growth and development

the pareto zipf and other power laws abstract many empirical size distributions in economics and elsewhere exhibit power law behaviour in the upper tail this article contains a simple explanation for this it also predicts lower tail power law behaviour which is verified empirically for income and city size data