estimation of the tenants benefits residing in public rental housing with unit size constraint in korea summary hicksian income equivalent variation ev has often been used to measure tenants benefits in evaluating public housing programmes a number of papers have so far attempted to apply hicksian ev under the implicit assumption of no constraint on unit size of public housing as a result overestimation of tenants benefits probably occurs where unit size constraints exist as in korea s public housing programme thus the purpose of the paper is to measure hicksian ev with the constraint in unit size of public housing by formulating a revised hicksian ev equation and comparing the result with constraint free cases it is found that hicksian ev with constraint in unit size decreases relative to that of the constraint free cases the extent of ev decrease depends on the income elasticity of demand for housing and the difference between the optimum consumption of public housing under rent support demand wanted and the actual constraint of unit size demand fulfilled

land acquisition political intervention fragmentation and voice abstract this paper develops a simple dynamic framework of holdout in land acquisition both with and without political intervention where holdout arises because of the landowners inability to manage large sums of money and consequent lack of inter temporal consumption smoothing in case of sale formalized as landowners having sophisticated present biased preferences we then use this framework to analyze two issues of interest political intervention and fragmentation we find that politicization cannot improve efficiency if holdout is landowner induced and may even increase inefficiency if holdout is buyer induced further the extent of politicization depends on whether it involves voice for non members or not turning to the effects of fragmentation we find that while it increases holdout in the absence of politicization in the presence of politicization this effect may however be reversed

variance risk premium dynamics the role of jumps using high frequency stock market data and synthetic variance swap rates this paper identifles and investigates the temporal variation in the market variance risk premium the variance risk is manifest in two salient features of flnancial returns stochastic volatility and jumps the pricing of these two separate components is analyzed in a general semiparametric framework the key empirical results imply that investors fears of future jumps are especially sensitive to recent jump activity and that their willingness to pay for protection against jumps increase signiflcantly immediately after the occurrence of jumps this in turn suggests that time varying risk aversion as previously documented in the literature is primarily driven by large or extreme market moves the dynamics of risk neutral jump intensity extracted from deep out of the money put options conflrms these flndings jel c51 c52 g12 g13

identifying and addressing land governance constraints to support intensification and land market operation evidence from 10 african countries beyond concerns about agricultural productivity growth issues of land governance have attracted global interest as demand for land acquisition by outsiders has increased rapidly but most of the transfers failed to live up to expectations and instead disrupted local livelihoods we use the land governance assessment framework to identify key conceptual issues and identify how land governance in 10 african countries compares to global good practice results point towards weak protection of rights in practice large gaps in female land access and limited outreach and effectiveness of institutions to record rights and adjudicate disputes we note that programs to improve performance along these lines had significant impact in other contexts suggesting that efforts to improve land governance will be warranted and should be closely monitored and evaluated in an effort to identify models suited to african conditions and assess their impact and interaction with other factor markets

interest rates and currency prices in a two country world abstract this paper is a theoretical study of the determination of prices interest rates and currency exchange rates set in an infinitely lived two country world which is subject both to stochastic endowment shocks and to monetary instability formulas are obtained for pricing all equity claims nominally denominated bonds and currencies and these formulas are related to earlier closely related results in the theories of money finance international trade

option implied volatility factors and the cross section of market risk premia abstract the main goal of this paper is to study the cross sectional pricing of market volatility the paper proposes that the market return diffusion volatility and jump volatility are fundamental factors that change the investors investment opportunity set based on estimates of diffusion and jump volatility factors using an enriched dataset including s p 500 index returns index options and vix the paper finds negative market prices for volatility factors in the cross section of stock returns the findings are consistent with risk based interpretations of value and size premia and indicate that the value effect is mainly related to the persistent diffusion volatility factor whereas the size effect is associated with both the diffusion volatility factor and the jump volatility factor the paper also finds that the use of market index data alone may yield counter intuitive results

the redistributive effect of public housing in hong kong public housing programmes in hong kong affect half of the population directly and the other half indirectly this paper assesses the redistributive effect of public rental housing on income distribution it uses a subsidised to market rent ratio method and an imputed rent method to convert transfer in kind of public rental housing into equivalent monetary value empirical results show that the provision of public housing alleviates the income inequality problem however the amount of public expenditure required achieving the same improvements in gini coefficient and other inequality measures is small relative to the actual public expenditure on housing policy makers should thoroughly review the existing public housing programmes

residential hedonic models a rational expectations approach to age effects abstract this paper develops a rational expectations framework for interpreting the coefficient on age in a standard hedonic model the model demonstrates that there are two components to the age coefficient a pure cross sectional depreciation component and a demand side component that changes over time we also show that a constant quality price index with age constant can be estimated by using any repeat sales database that contains the year of construction or property age when fairfax county data are fitted to the model the time series of age coefficients is non stationary they change from negative in the early 1980s to positive in the late 1980s we infer that the demand side component dominated in the latter period

land reforms poverty reduction and economic growth evidence from india recognition of the importance of institutions that provide security of property rights and relatively equal access to economic resources to a broad cross section of society has renewed interest in the potential of asset redistribution including land reforms empirical analysis of the impact of such policies is however scant and often contradictory this paper uses panel household data from india together with state level variation in the implementation of land reform to address some of the deficiencies of earlier studies the results suggest that land reform had a significant and positive impact on income growth and accumulation of human and physical capital the paper draws policy implications especially from the fact that the observed impact of land reform seems to have declined over time

the taking of land when should compensation be paid the analysis focuses on the question of whether the payment of compensation for land taken by eminent domain is efficient when the taking decision is independent of land use zero compensation is efficient but full compensation is not when the project decision is no longer independent of land use and can be affected by investor decisions neither compensation rule is generally efficient because of the moral hazard problem with risk averse consumers and risk neutral firms the previous conclusions remain essentially unchanged however when the project decision rule involves a budgetary fiscal illusion additional compensation may be necessary to correct the incentives facing the project decision maker

jump and volatility risk premiums implied by vix abstract an estimation method is developed for extracting the latent stochastic volatility from vix a volatility index for the sp 2 the jump and volatility risks are priced 3 the popular square root stochastic volatility process is a poor model specification irrespective of allowing for price jumps or not our simulation study shows that statistical inference is reliable and not materially affected by the approximation used in the vix index construction

time changed levy processes and option pricing abstract the classic black scholes option pricing model assumes that returns follow brownian motion but return processes differ from this benchmark in at least three important ways first asset prices jump leading to non normal return innovations second return volatilities vary stochastically over time third returns and their volatilities are correlated often negatively for equities time changed levy processes can simultaneously address these three issues we show that our framework encompasses almost all of the models proposed in the option pricing literature and it is straightforward to select and test a particular option pricing model through the use of characteristic function technology

land acquisition for industrialization and compensation of displaced farmers this paper addresses the question of how farmers displaced by acquisition of agricultural land for the purpose of industrialization ought to be compensated prior to acquisition the farmers are leasing in land from a private owner or local government with a legally mandated sharecropping contract compensation rules affect the decision of the landlord to sell the land ex post to an industrial developer and ex ante incentives of tenants and landlord to make specific investments in agricultural productivity efficiency considerations are shown to require farmers be over compensated in the event of conversion

holdups standard breach remedies and optimal investment in bilateral trading problems the parties may be hesitant to make relationship specific investments without adequate contractual protection we postulate that the parties can sign noncontingent contracts prior to investing and can freely renegotiate them after information about the desirability of trade is revealed we find that such contracts can induce one party to invest efficiently when courts impose either a breach remedy of specific performance or expectation damages moreover specific performance can induce both parties to invest efficiently if a separability condition holds expectation damages on the other hand is poorly suited to solve bilateral investment problems forthcoming the american economic review please contact the program in law and economics at boalt hall school of law uc berkeley berkeley ca 94720 for a copy of this paper

testing between competing models of sharecropping the marshallian approach assumes a prohibitively high cost of monitoring the sharecropper s activities while the monitoring approach argues that landlords stipulate and effectively monitor sharecroppers activities i present new evidence using detailed data collected from eight indian villages most tenants own some land of their own this provides a controlled environment in studying the impact of contractual arrangements the differences in input and output intensities on owned minus sharecropped land of the same household are found to be sizable and significant suggesting a rejection of the monitoring approach and supporting the notion of the marshallian productive inefficiency of sharecropping

us presidential elections and implied volatility the role of political uncertainty abstract this paper focuses on the effects of political uncertainty and the political process on implied stock market volatility during us presidential election cycles using monthly iowa electronic markets data over five elections we document that stock market uncertainty as measured by the vix volatility index increases along with positive changes in the probability of success of the eventual winner the association between implied volatility and the election probability of the eventual winner is positive even after controlling for changes in overall election uncertainty these findings indicate that the presidential election process engenders market anxiety as investors form and revise their expectations regarding future macroeconomic policy

hedonic prices and public goods an argument for weighting locational attributes in hedonic regressions by lot size the hedonic price technique is frequently used for valuing attributes of housing in such an analysis a hedonic price function is specified p p x p is the price of a house and x is a vector of attributes of the house the attributes include structural features such as size age garage and fireplace and locational features such as neighborhood quality crime access to downtown and air quality the function is interpreted as an equilibrium price schedule for houses see rosen 5 its first derivative with respect to an element of x is an implicit price for that attribute the price function is estimated typically using cross sectional data from a housing market i argue that the measure of each locational attribute in a hedonic price function should be weighted by lot size and that the measure of each structural attribute should not be weighted the usual regression weights neither locational nor structural attributes by my argument if two houses are identical in every respect except that the measure of lot size of the first is twice that of the second then the measure for air quality access to parks and so on for the first should be twice that of the second i also argue that failure to weight locational attributes in a hedonic regression that should be weighted gives biased implicit price estimates for structural and locational attributes the direction and degree of bias depend on the correlations between the attributes and lot size in the housing market on the variance of lot size in the market and on the lot size of the observation for which implicit price is being estimated

the benefits of in kind government programs abstract in this paper i present a methodology to calculate the benefits of in kind programs such as public housing which restrict consumption of some goods to the levels offered by the government most previous studies begin with an a priori specification of the direct utility function i begin with the ordinary demand function and then integrate demand to recover the indirect utility function and the expenditure function i argue that this approach gives additional flexibility in choosing a functional form which best describes the data i then use this methodology to estimate the benefits of the u s government s section 8 housing program

the demand for housing characteristics in developing countries this paper develops and estimates an econometric model of the household demand for housing characteristics the model is estimated using data from five cities and three developing countries overall the procedures employed work well in a wide variety of circumstances more specifically it is found that 1 household willingness to pay for living space increases with income but at a less than proportionate rate 2 willlingness to pay for living space declines as household size increases 3 willingness to pay for several quality measures structural quality wall roof and floor quality is quite responsive to income

tenancy and family resources a model and some empirical analysis abstract in this paper we discuss with the help of a simple model the role of family resource endowments in determining the extent of land leased in or leased out by a household this becomes important when the market for some of these resources is either not functioning at all or is functioning imperfectly we focus on three such resources which have some relevance in indian agriculture these are 1 the family s managerial skill 2 its endowment of human labour and 3 its endowment of draft animal labour household level data from six villages of maharashtra and andhra pradesh are also utilized to test some of the hypotheses

tenure systems in traditional china i a general equilibrium model of tenure preference classical marginalists at least after john clark provide an unequivocal solution for the conventional factor market where people sell the productive services of their resources to producers the productexhaustion theorem says that if factors are priced according to their marginal products incomes of all resource owners will exactly exhaust the value of total products in the long run competitive equilibrium this holds true regardless of which factor is variable and which is fixed and regardless of which group of resource owners perform as producers who buy productive services of other resources in the market and claim residuals for themselves in an agrarian economy with land and labor as the inputs a land owner may cultivate his land and purchase the labor input from outside paying a wage rate in accordance with labor s marginal product the land owner is then the residual claimant alternatively he may lease out his land and receive a fixed rental rate per unit of area equal to the marginal product of land in this case the tenant is the producer and claims the residual income distribution between the two parties remains the same under each land arrangement wage and rent are therefore identical conceptually the classical marginal analysis has not presented a satisfactory theory of share tenancy which instead of being a seller buyer transaction in a conventional factor market is essentially a partnership arrangement between two persons who own complementary factors hence the term land renting will hereafter denote the fixed rent system exclusively in fact the direct application of marginal analysis to share tenancy has created considerable confusion in early economic literature only recently some general equilibrium models of land tenure systems have been developed for better understanding of the

contract choice in modern agriculture cash rent versus cropshare e conomists have expended enormous effort examining the rationale for various contractual arrangements in agriculture particularly sharecropping while economists have made considerable theoretical efforts to understand agricultural contracts few empirical studies have been undertaken the dearth of empirical analyses of agricultural contracts is particularly striking for modern western agriculture this is an important omission not only because the existing empirical work tends to focus on the question of efficiency but also because the theoretical models tend to examine contracts that bear little resemblance to those found in the united states today

credit layering in informal financial markets abstract informal lenders with access to markets or capital often find it attractive to delegate loan provision to downstream lenders who have an information or enforcement advantage in dealing with particular borrowers in this paper we examine the conditions under which such an arrangement is preferred by two informal lenders a landlord and a merchant who compete in loan provision to tenant farmers differentiated by wealth we show that credit layering is preferred only when tenants are sufficiently poor in this case the trader lends to tenant farmers via a contract with their landlord otherwise only the trader lends as a consequence a pattern of borrowing emerges in which relatively wealthy tenants borrow from merchants while poor tenants borrow mainly from their landlords interlinkage between land and credit thus arises only for a subset of tenants and purely as a consequence of credit layering this pattern is shown to be supported empirically

the long reach of cotton in the us south tenant farming mechanization and low skill manufacturing abstract this paper examines the long run impact of cotton agriculture on local development in the us south focusing on a novel aspect of structural change exploiting climate based variation in cotton production i show that cotton specialization in the late 19th century had a negative impact on local development that lasts through 2010 this negative relationship however only became evident in the second half of the 20th century i argue that the change was caused by the mechanization of cotton production which began in the 1950s after the mechanization local manufacturing absorbed displaced cotton tenants with low human capital in response to the inflow of cotton tenants labor productivity in manufacturing began to decline and the effects persisted in the long run the persistent decline in manufacturing productivity is explained by directed technical change that reduced demand for skills in manufacturing these results indicate that depending on the agricultural background structural change can negatively affect the evolution of technology and productivity in the industrial sector

long run impacts of land regulation evidence from tenancy reform in india agricultural tenancy reforms have been widely enacted but evidence on their long run impact remains limited in this paper we provide such evidence by exploiting the quasi random assignment of linguistically similar areas to different south indian states that subsequently varied in tenancy regulation policies given imperfect credit markets the impact of tenancy reform should vary by household wealth status allowing us to exploit historic caste based variation in landownership thirty years after the reforms land inequality is lower in areas that saw greater intensity of tenancy reform but the impact differs across caste groups tenancy reforms increase own cultivation among middle caste households but render low caste households more likely to work as daily agricultural laborers at the same time agricultural wages increase these results are consistent with tenancy regulations increasing land sales to relatively richer and more productive middle caste tenants but reducing land access for poorer low caste tenants

nonlinear budget constraints and consumer demand an application to public programs for residential housing abstract this study presents a methodology for exploiting the nonlinear hedonic nature of housing prices to estimate the compensated demands of households for particular housing attributes the methodology is employed to provide hicksian benefit measures of a particular housing subsidy program typical of those undertaken recently in developing countries

resistance redistribution and investor friendliness abstract poor communities sometimes resist private investment and destroy economic surplus even if the government has the willingness and ability to redistribute we interpret such acts of resistance as demands for redistribution destruction contains credible information about how the affected group values surplus and such information is used by the government in implementing the optimal redistribution policy the extent of destruction is increasing in the extent of political marginalization of the affected group resistance not only destroys economic surplus it also mutes the investor s incentives to create surplus the government uses a tax subsidy on the investor to maximize weighted social surplus and we show that the possibility of destruction may force the government to be too soft in its negotiations with the investor we discuss several policy instruments that have the potential to improve welfare these include compensation floor for the affected group legal or financial protection for the investor and licensing fees for the investor

alternative housing concepts and the benefits of public housing programs abstract almost all previous studies analyzing the benefits and consumption effects of public housing programs have used aggregation theorems to construct composite goods housing and all other goods in this paper we show that if it is more realistically assumed that households have preferences defined on housing characteristics benefits estimated using the composite approach are upward biased some empirical work suggests that the bias is large we therefore strongly advise to take into account the composition of the bundle of housing attributes provided under a public housing program when evaluating the program s economic effects

empowerment and efficiency tenancy reform in west bengal the paper analyzes the effect of agricultural tenancy laws offering security of tenure to tenants and regulating the share of output that is paid as rent on farm productivity theoretically the net impact of tenancy reform is shown to be a combination of two effects a bargaining power effect and a security of tenure effect analysis of evidence on how contracts and productivity changed after a tenancy reform program was implemented in the indian state of west bengal in the late 1970s suggests that tenancy reform had a positive effect on agricultural productivity there

stochastic risk premiums stochastic skewness in currency options and stochastic discount factors in international economies abstract we develop models of stochastic discount factors in international economies that produce stochastic risk premiums and stochastic skewness in currency options we estimate the models using time series returns and option prices on three currency pairs that form a triangular relation estimation shows that the average risk premium in japan is larger than that in the us or the uk the global risk premium is more persistent and volatile than the country specific risk premiums and investors respond differently to different shocks we also identify high frequency jumps in each economy but find that only downside jumps are priced finally our analysis shows that the risk premiums are economically compatible with movements in stock and bond market fundamentals

the choice of functional form and variables in the hedonic price model in seoul this study demonstrates that the important part of exploring the proper functional form of the hedonic price model would include investigating a dissimilar and unique hedonic price structure when the hedonic price model is applied to different housing markets based on the adjustment to the usual technique necessitated by the regional and cultural setting of seoul the criteria for significance of implicit price root mean square percentage error and the log likelihood ratio test are applied to the choice of a useful functional form we conclude that investigating the structure of a local housing market and choosing proper variables reflecting regional and cultural characteristics both key parts of such a study require significant adjustment to the reality of seoul

volatility components leverage effects and the return volatility relations abstract this paper investigates the risk return trade off by taking into account the model specification problem market volatility is modeled to have two components one due to the diffusion risk and the other due to the jump risk the model implies merton s icapm in the absence of leverage effects whereas the return volatility relations are determined by interactions between risk premia and leverage effects in the presence of leverage effects empirically i find a robust negative relationship between the expected excess return and the jump volatility and a robust negative relationship between the expected excess return and the unexpected diffusion volatility the latter provides an indirect evidence of the positive relationship between the expected excess return and the diffusion volatility