measuring excess capital capacity in agricultural production we introduce the concept excess capital capacity and employ a stochastic input requirement frontier to measure excess capital capacity in agricultural production we also propose a two step estimation method that allows endogenous regressors in stochastic frontier models the first step uses generalized method of moments to get consistent estimates of the frontier parameters in the presence of endogenous regressors the second step uses maximum likelihood to measure excess capital capacity and evaluate the factors that influence it the empirical application to dutch cash crop farms found varying degrees of excess capital capacity the policy implications of excess capital capacity are discussed

empirical evaluation of bureaucratic models of inefficiency two separate but related strands of literature exist regarding the efficiency of public sector service provision the theoretical base developed in the bureaucratic models of supply and the methodological base developed in the operations research and economic literatures most analyses focus exclusively on either the measurement or causes of inefficiency this paper seeks to empirically test bureaucratic models of supply by drawing on the measurement literature in anticipation of the results it is found that there does exist empirical evidence supporting some of the implications of these models

the impact of usury ceilings on consumer credit usury regulation is a topic with a long history of discussion nevertheless the debate over the merits of usury regulation continues to the present day in the early part of the 1980s the rapid rise in nominal interest rates swung the debate in favor of the opponents of usury ceilings during this period a quarter of the states enacted legislation which largely eliminated their usury ceilings on consumer credit however with the return of lower interest rates in the middle part of the decade the argument for low usury ceilings gained increasing support and as a result several states lowered their usury ceilings on some types of credit the first formal economic model of the impact of usury ceilings was outlined by blitz and long 8 their insightful analysis has led researchers to focus on two hypotheses concerning the impact of usury ceilings on consumer credit hypothesis 1 usury ceilings reduce the quantity of credit obtained by high risk borrowers

the option to wait to invest and equilibrium credit rationing stiglitz and weiss 1981 show that firms considering risky projects have higher reservation interest rates and hence it is optimal for a bank to reduce loan supply in this note we show that when the risk involved in an investment will be resolved in the future investors with riskier projects have a greater return from waiting more risky projects have lower reservation interest rates and hence there is no motive for banks to ration credit demand

collateral in credit rationing in markets with imperfect information note in their 1981 article joseph stiglitz and andrew weiss analyze adverse selection and incentive effects in the loan market the models considered are based on two crucial assumptions borrowers are subject to limited liability and lenders cannot distinguish borrowers projects of different risk stiglitz and weiss show that a bank that raises its interest rate may suffer adverse selection because only risky borrowers will be willing to borrow at the higher rate thus lenders may choose not to raise the interest rate to eliminate excess demand resulting in the possibility of a credit rationing equilibrium stiglitz and weiss also consider briefly the role of collateral in such credit rationing models they conclude that lenders may choose not to use collateral requirements as a rationing device an increase in collateral requirements like an increase in the interest rate potentially leads to a decrease in the lender s expected return on loans because of resulting adverse incentive and selection effects the purpose of this note is to further investigate the role of collateral in these models stiglitz and weiss discussion in section iii establishes that adverse selection effects can result from increases in collateral when borrowers are risk averse i will show by returning to a model they discussed earlier in section i that the adverse selection effects can also occur when borrowers are risk neutral stiglitz and weiss outline a model to consider the use of collateral as a rationing device section iii in that model all potential borrowers face the same array of risky projects each potential borrower chooses at most one of those projects to undertake the individuals are by assumption risk averse with decreasing absolute risk aversion and possess different amounts of initial wealth thus choice of project if any to undertake and the method of finance selffinance from initial wealth or loan finance will differ from one individual to the next stiglitz and weiss show that among those who undertake risky projects and who choose borrowing as the method of finance wealthier individuals undertake riskier projects an increase in collateral has two effects on the market for loans those individuals who remain in the market will choose to undertake less risky projects and those individuals who drop out of the market are less wealthy low risk borrowers if the second effect is sufficiently strong then increased collateral requirements will mean decreased expected returns for the lender thus a credit rationing equilibrium may occur since lenders may not choose to use collateral requirements or the interest rate to eliminate excess demand the adverse selection effect just described does not occur in this model if the individuals are risk neutral consequently the potential for a credit rationing equilibrium is limited to cases where borrowers are risk averse to see that increases in collateral requirements can also result in adverse selection if borrowers are risk neutral consider the model stiglitz and weiss used to analyze the adverse selection effects of increases in the interest rate section i pp 395 99 it differs from the section iii model discussed above in three ways first borrowers are risk neutral second all projects ar loan financed the analogy to the section iii model is that no individuals have sufficient wealth to self finance projects third in the section

design and rating of risk contingent credit for balancing business and financial risks for kenyan farmers abstractweather related agricultural risks and limited access to credit are serious impediments to agricultural productivity and growth in developing countries this paper describes a novel insuran

competitive equilibrium in the credit market under asymmetric information abstract we study a competitive credit market equilibrium in which all agents are risk neutral and lenders a priori unaware of borrowers default probabilities admissible credit contracts are characterized by the credit granting probability the loan quantity the loan interest rate and the collateral required the principal result is that in equilibrium lower risk borrowers pay higher interest rates than higher risk borrowers moreover the lower risk borrowers get more credit in equilibrium than they would with full information no credit is rationed and collateral requirements are higher for the lower risk borrowers

the role of collateral in credit markets with imperfect information abstract the paper analyzes the structure of credit market equilibrium under imperfect information collateralization and credit rationing are compared as alternative means to cope with problems of adverse selection and moral hazard it is shown that lenders may use collateral as a self selection and incentive mechanism rationing occurs only if the borrowers collaterizable wealth is too small to allow perfect sorting or to create sufficiently strong incentives whenever there is rationing in an equilibrium some borrowers are charged the maximum amount of collateral

determinants of the low sme loan approval rate in croatia the paper proposes a new methodological framework for investigating consistency in loan assessment decisions and determinants of loan approval based on structural equation modelling and covariance structure analysis we focus on a governmental sme loan programme in croatia and investigate possible reasons for low loan approval rate that occurred in spite of interest rates subsidisation and sufficient supply of the loan funds the novelty of the methodological approach taken is that it enables simultaneous investigation of the determinants of the loan approval and testing for consistency in the loan assessment decisions which need not be assumed we test several hypotheses about consistency in the loan approval decisions and lending preferences in croatia the empirical findings reject overall consistency of criteria but indicate a preference toward smaller loans among all sme loan requests banks preferred smaller firms that requested smaller loans the results suggest that individual banks differ in their criteria and in their loan size preferences and that there is no positive correlation between the bank s size and its loan size preference

risk based pricing of interest rates for consumer loans abstract by focusing on observable default risk s role in loan terms and the subsequent consequences for household behavior this paper shows that lenders increasingly used risk based pricing of interest rates in consumer loan markets during the mid 1990s it tests three resulting predictions first the premium paid per unit of risk should have increased over this period second debt levels should have reacted accordingly third fewer high risk households should have been denied credit further contributing to the interest rate spread between the highest and lowest risk borrowers for people obtaining loans the premium paid per unit of risk did indeed become significantly larger after the mid 1990s for example for a 0 01 increase in the probability of bankruptcy the corresponding interest rate increase tripled for first mortgages doubled for automobile loans and rose nearly six fold for second mortgages additionally changes in borrowing levels and debt access reflected these new pricing practices particularly for secured debt borrowing increased most for the low risk households who saw their relative borrowing costs fall furthermore while very high risk households gained expanded access to credit the increases in their risk premiums implied that their borrowing as a whole either rose less or sometimes fell

school district consolidation market concentration and the scale efficiency tradeoff consolidation is often proposed as a strategy for increasing school district quality without increasing educational funding however if consolidation reduces competition in the local school market and reduces efficiency any savings from exploiting economies of scale may be lost to increased inefficiency we use a stochastic cost function to investigate these effects for districts in texas we find important economies of scale but we also find that increased market concentration leads to increased cost inefficiency finally we illustrate the practical importance of these two potentially offsetting factors in a simulation that considers consolidating texas school districts to county level districts we find that failure to consider the effect on competition can lead to large overestimates of the benefits of consolidation

symbiosis vs crowding out the interaction of formal and informal credit markets in developing countries abstract it is a common observation in many developing countries that enterprises are active borrowers in both formal and informal credit markets we propose a model in which the formal sector s superior ability in deposit mobilization is traded off against the informational advantage that lenders in the informal sector enjoy the formal sector can screen borrowers by providing only partial financing for projects thereby forcing borrowers to resort to the informal sector for the remainder of the loan we use the model to predict how the market structure responds to changes in the environment and we consider the policy implications of various forms of government intervention

capital accumulation and the growth of aggregate agricultural production abstract this report empirically examines the role which capital accumulation plays in the growth of agricultural production potential the report assumes that the degree towhich available technology can be implemented in a nation s agricultural sector depends on accumulated investments that have been made in the sector results from estimating aggregate agricultural production functions show the primary importance of rural labor in accounting for agricultural gdp and crop production capital accumulation is the dominant explainer of livestock production estimation results support the conjecture that capital tends to save scarce land resources substitute relationship and use rural labor complementarity relationship output supply elasticities derived from the estimated equations tend to be large the large elasticities imply that price distortions have had large impacts on resource use and production

on the determinants of school district efficiency competition and monitoring abstract a number of researchers have asserted that inefficiency in the u s school system arises from a lack of incentives for public schools to behave efficiently this paper uses a shephard input distance function to model educational production and a switching regressions estimation to explore the relationship between school district efficiency and two existing incentive mechanisms competition and voter monitoring we find evidence that ease of monitoring enhances both technical and allocative efficiency of urban school districts and that increased competition reduces allocative inefficiency in communities above a competitive threshold we find no evidence that competition is related to technical inefficiency

profit margins and the business cycle evidence from uk manufacturing firms this paper presents some empirical models of profitability using panel data covering 709 large u k companies ove r the 1970s and 1980s focusing specifically on the role of aggregate demand shocks in shaping firm level profitability in basic regressi ons and in quite complex econometric models the results suggest that firm level profit margins fell heavily during the deep manufacturing recession of the early 1980s and as such are consistent with model s predicting the procyclical nature of profit margins this result hol ds across different product groups producer goods consumer durables a nd nondurables though the timing of the impact of aggregate shocks appears to differ copyright 1993 by blackwell publishing ltd

financial intermediation and regime switching in business cycles the authors study a one sector growth model where capital investment is credit financed and there is an adverse selection problem in credit markets the presence of adverse selection creates an indeterminacy of equilibrium many equilibria display permanent fluctuations characterized by transitions between walrasian regimes and regimes of credit rationing cyclical contractions involve declines in real interest rates increases in credit rationing and withdrawals of savings from banks for some configurations of parameters all equilibria display cyclical fluctuations the authors provide sufficient conditions for deterministic cycles consisting of m periods of expansion followed by n periods of contraction to exist copyright 1998 by american economic association

repossession and the democratization of credit we exploit a 2004 credit reform in brazil that simplified the sale of repossessed cars used as collateral for auto loans we show that the reform expanded credit to riskier self employed borrowers who purchased newer more expensive cars the legal change has led to larger loans with lower spreads and longer maturities although the credit reform improved riskier borrowers access to credit it also led to increased incidences of delinquency and default our results shed light on the consequences of a credit reform and highlight the crucial role that collateral and repossession play in the liberalization and democratization of credit

does competition among public schools benefit students and taxpayers tiebout choice among districts is the most powerful market force in american public education naive estimates of its effects are biased by endogenous district formation i derive instruments from the natural boundaries in a metropolitan area my results suggest that metropolitan areas with greater tiebout choice have more productive public schools and less private schooling little of the effect of tiebout choice works through its effect on household sorting this finding may be explained by another finding students are equally segregated by school in metropolitan areas with greater and lesser degrees of tiebout choice among districts

is relationship lending special evidence from credit file data in germany the german financial market is often characterized as a bank based system with strong bank customer relationships the corresponding notion of a housebank is closely related to the theoretical idea of relationship lending it is the objective of this paper to provide a direct comparison between housebanks and normal banks as to their credit policy therefore we analyze a new data set representing a random sample of borrowers drawn from the credit portfolios of five leading german banks over a period of five years we use credit file data rather than industry survey data and thus focus the analysis on information that is directly related to actual credit decisions in particular we use bank internal borrower rating data to evaluate borrower quality and the bank s own assessment of its housebank status to control for information intensive relationships the major results of our study support the view that housebanks are able to establish a distinct behavioral pattern consistent with the idea of long term commitment we find that housebanks do provide liquidity insurance in situations of unexpected deterioration of borrower ratings with respect to loan pricing we find no evidence for intra or intertemporal price differentiation related to housebanking

single name credit risk portfolio risk and credit rationing this paper introduces non diversifiable risk in the stiglitz weiss adverse selection model so that an increase in the average riskiness of the borrower pool causes higher portfolio risk this opens up the possibility of equilibrium credit rationing comparative statics analysis shows that an increase in risk aversion turns a two price equilibrium into a rationing equilibrium a two price equilibrium is more inefficient than a rationing equilibrium and a usury law that rules out the higher of the two interest rates can be welfare improving contrary to the common result the equilibrium may be characterized by over investment

an analysis of returns to scale in public production with an application to fire protection abstract this paper analyzes returns to scale in public production existing studies fail to differentiate among three dimensions of scale service quality the level of governmental activity and the number of people served a fourth dimension economies of scope is need for agencies that provide multiple services this paper provides a formal definition of returns to scale for each dimension this framework is applied to fire protection using a translog cost function with two services fire prevention and fire suppression the results indicate economies of scope increasing returns to quality scale and constant returns to population scale

robust financial contracting and the role of venture capitalists we derive a role for inside investors such as venture capitalists in resolving various agency problems that arise in a multistage financial contracting problem absent an inside investor the choice of securities is unlikely to reveal all private information and overinvestment may occur an inside investor however always makes optimal investment decisions if and only if he holds a fixed fraction contract where he always receives a fixed fraction of the project s payoff and finances that same fraction of future investments this contract also eliminates any incentives of the venture capitalist to misprice securities issued in later financing rounds in this article we develop a model of financial contracting with multiple investment decisions and show how conflicts of interest and informational asymmetries can be effectively resolved by an inside investor i e an investor who not only provides capital but also works closely with the firm monitors it frequently and is generally very well informed about the firm s prospects and investment opportunities venture capitalists are obvious examples of inside investors and their function has been an important motivation for this article banks especially in japan and germany are also involved in monitoring and can be viewed as playing the role of inside investors in this article we examine the potential benefits of inside investors in a context where there are no restrictions beyond limited liability on the type of financial contracts that can be written we address a basic financial contracting problem involving an entrepreneur who has an idea for a project but does not have sufficient capital to fund it an important assumption is that there are several stages in the project s development and that a decision must be made at each stage whether the project should be continued or abandoned if the project is continued the amount of additional capital to be invested must also be determined we assume that the entrepreneur as an insider observes private information about the project s profitability at each stage this information is not

in defense of usury laws usury law is often criticized by economists for curtailing lending and thus creating deadweight costs this paper shows that if moral hazard leads to credit rationing a just binding usury law creates a deadweight gain this property also holds in most market clearing equilibria independent of social insurance benefits or curbing present biased preferences interest rate caps have merit

productivity in education the quintessential upstream industry using consistent test score data from the national assessment of educational progress and data on per pupil spending i show that the productivity of american public schools fell by approximately half from 1970 to 2000 the most reliable international data also suggest that productivity in american public schools is lower than that of numerous other industrialized countries including the remaining english speaking ones i explore explanations for the decline in productivity including changing sociodemographics baumol s cost disease rising wages of female college graduates the increasing emphasis on educating disadvantaged children rising market power and the education sector s relative decrease in pay for performance i review evidence that suggests that schools raise their productivity and use of pay for performance when they face competition i also describe results that indicate that individual teachers have important distinctive effects on achievement

international supply response abstract long run aggregate agricultural supply elasticities obtained from conventional supply functions fitted to time series data tend to be relatively inelastic in the range of 0 1 to 0 4 i argue that these estimates substantially understate the true long run supply response in agriculture because of the lack of international input price data implicit output input price ratios are estimated from a production function assuming profit maximization the estimation of an aggregate supply function utilizing these price ratios yields long run aggregate supply elasticities in the range of 0 90 to 1 19 these figures are substantially larger than those obtained from conventional supply functions fitted to time series data but correspond closely to estimates reported in an earlier cross country study that used different price data for different points in time the results imply that policies which distort domestic and or world market prices of agricultural products cause greater output distortions in both the dcs and ldcs than are predicted by the small supply elasticities obtained from conventional supply estimation

too much investment a problem of asymmetric information this paper shows that under plausible assumptions the inability of lenders to discover all of the relevant characteristics of borrowers results in investment in excess of the socially efficient level raising the rate of interest above the free market level will restore optimality this conflicts with generally held views and is contrasted with the stiglitz weiss model it is shown that the assumptions which yield overinvestment support debt as the equilibrium method of finance however under the stiglitz weiss assumptions used to derive an underinvestment result equity is shown to be the equilibrium method of finance

credit rationing something s gotta give equilibrium credit rationing in the sense of stiglitz and weiss is shown to imply that the marginal cost of funds to the borrower is infinite so entrepreneurs have an overwhelming incentive to cut their loans by a dollar and so avoid rationing ways of doing this include scaling down the project decreasing consumption or delaying the project to accumulate more savings credit rationing emerges for indivisible projects only when delay causes sufficient deterioration borrowers then apply for funds at the first opportunity but counterfactually once denied a loan they never reapply conditions for credit rationing are stringent indeed

does competition among public schools benefit students and taxpayers comment school choice policies promise to align the incentives of school administrators with the demands of parents and may therefore lead to more efficient educational production milton friedman 1962 geoffrey brennan and james buchanan 1980 john chubb and terry m moe 1990 absent a large scale school voucher program in the united states however this prediction has been difficult to test several authors e g melvin v borland and roy m howsen 1992 clive r belfield and henry m levin 2002 have suggested studying the effects of tiebout choice the use of the residential location decision to select among local monopoly education providers the idea here is that fragmented governance induces competition among school districts analogous to that which would occur among schools with nonresidential choice in an influential paper caroline m hoxby 2000 points out that current governance structures are potentially endogenous to school productivity and proposes that variation in topography which may have influenced optimal jurisdiction size before modern transportation technologies provides a source of exogenous variation she estimates instrumental variables regressions of individual test scores and school spending on a metropolitan level tiebout choice index defined as one minus a herfindahl concentration index with districts enrollments as their market shares using as excluded instruments the number of larger and smaller streams in the area she reports substantial positive effects of district fragmentation on student test scores and negative effects on spending this comment presents a reanalysis of hoxby s test score results which form the core of her empirical analysis these results turn out to be quite sensitive to plausible alterations to hoxby s specification in particular the large significant effect of choice on achievement obtains

adverse selection and moral hazard effects in the mortgage market an empirical analysis with imperfect information prices may have sorting and incentive effects that confound the received theory of market behavior these effects are more likely to be observed in situations where transactions extend over a lengthy period of time as in credit and labor markets hence one may observe equilibrium credit rationing or equilibrium unemployment in labor markets even though these markets are competitive and free of government regulation 7 8 in credit markets higher interest rates may adversely sort good credit risks from bad credit risks similarly higher interest rates may induce borrowers to invest in riskier projects and not to exercise due diligence in the minimization of risks moral hazard either the adverse selection or the moral hazard effects can lead to a reduction in expected profits as the interest rate rises the supply of loanable funds is an increasing function of expected profits if expected profits decline over some interval of rising interest rates then the supply of loanable funds will be concave and backward bending with regard to interest rates over that interval stiglitz and weiss identify the interest rate at which the supply function bends backward as the bank optimal interest rate 8 394 the purpose of this paper is to test the empirical implications drawn from the growing adverse selection and moral hazard literature in the home mortgage market a recent citation search reveals that the stiglitz and weiss 8 paper has been cited over one hundred and fifty times in the last nine years in his survey of the literature stiglitz notes that most of this derivative literature is theoretical and that the models have not been the subject of extensive empirical testing 7 42 the paper is organized as follows in section ii we review the adverse selection and moral hazard literature consider the characteristics peculiar to the mortgage market and identify the empirical implications section iii gives our estimates for the empirical model of the mortgage market among other results we find that mortgage supply is a concave function of the rate of

evaluation of credit guarantee policy using propensity score matching in this article we evaluate the effect of the credit guarantee policy by comparing a large sample of guaranteed firms and matched non guaranteed firms from 2000 to 2003 the sample firms are compared with respect to growth rates of different performance indicators including productivity sales employment investment r d wage level and the survival of firms in the post crisis period in order to avoid the selectivity problem propensity score matching methodologies are adopted results suggest that credit guarantees influenced significantly firms ability to maintain their size and increase their survival rate but not to increase their r d and investment and hence their growth in productivity moreover due to the adverse selection problem firms with lower productivity were receiving guarantees

optimal saving under general changes in uncertainty a nonexpected utility maximizing approach there has been an extensive discussion of optimal consumption saving behavior of expected utility maximizing risk averse individuals 6 7 there are however two limitations of such works first the widely used time additive von neumann morgenstern vnm preferences may not be suitable for analyzing choice problems in a dynamic context since for this class of preferences the coefficient of relative risk aversion turns out to be the reciprocal of the elasticity of intertemporal substitution these preferences fail to distinguish between the importance of intertemporal substitution and risk aversion in determining the optimal choice for the individual decision maker secondly in analyzing the comparative static effect of an increase in risk the increase in risk has been usually captured by the mean preserving spread of the distribution of the underlying random variable but since the mean of the distribution is stipulated to be unchanged the mean preserving spread undoubtedly provides a restrictive characterization of an increase in risk the limitation of the vnm preferences has motivated researchers to look for an alternative framework to analyze dynamic choices under uncertainty it was selden 8 9 who developed a nonexpected utility maximizing approach by proposing the ordinal certainty equivalent oce preferences to distinguish between intertemporal substitution and risk aversion since then a number of other authors have further examined the implications of the nonexpected utility maximizing framework not surprisingly in the literature of nonexpected utility maximizing analysis a considerable attention has been given to the individual saving decision under capital risk in a clear departure from the expected utility maximizing analysis under the nonexpected utility maximizing approach optimal saving tends to be determined by the elasticity of intertemporal substitution as well as the risk aversion parameter however even in the nonexpected utility maximizing framework the increase in capital risk has usually been characterized in terms of a mean preserving spread of the random rate of return it has been shown by selden 9 and weil 10 that the effect of an increase in capital risk on the level of saving depends only on the elasticity of intertemporal substitution and not on the risk

sharing contracts marginalisation adverse selection and markup calculation this paper proposes a new approach to explain the dominance in the islamic banking market of markup contracts at the expense of sharing ones we show that the dual pricing practised in this market produces an additional or artificial dimension of adverse selection which is causing the sharing contracts marginalization we suggest specialized use of two islamic contractual categories as a device for eliminating artificial adverse selection we suggest also an endogenous calculation of the markup that is independent of the interest rate based on the financing cost unification this approach allows the deduction of default and liquidity risk premiums

on the determinants of credit rationing firm level evidence from transition countries abstract using survey data for firms from eastern european transition economies we investigate the determinants of credit rationing our rationing definition incorporates firms whose loan application was rejected but also discouraged potential borrowers we employ a bivariate probit with censoring approach that accounts for the underlying selectivity since rationed firms are a subset of those without a loan we include firm specific attributes related to the alleviation of informational asymmetries and therefore expected to affect credit rationing we find that credit rationing depends on firm size profitability sales growth ownership type legal status sectoral heterogeneity and the country specific level of domestic credit

frontier estimation and firm specific inefficiency measures in the presence of heteroscedasticity the purpose of this article is to illustrate a straightforward and useful method for addressing the problem of heteroscedasticity in the estimation of frontiers a heteroscedastic cost frontier model is developed and estimated using bank cost data similar to that used by ferrier and lovell our results show dramatic changes in the estimated cost frontier and in the inefficiency measures when accounting for heteroscedasticity in the estimation process we find that the rankings of firms by their inefficiency measures is affected markedly by the correction for heteroscedasticity but not by alternative distributional assumptions about the one sided error term

on the possibility of credit rationing in the stiglitz weiss model contrary to what is consistently assumed in the literature the return function cannot be hump shaped in the stiglitz weiss 1981 model this has important consequences for the possible occurrence of credit rationing and redlining with a single class of borrowers banks offer credit in two stages demand possibly exceeds supply in stage one but not in stage two with several observationally distinguishable borrower classes the firms in a borrower class are redlined only under circumstances which imply that they would not get credit in a perfect capital market either die rendite funktion kann im stiglitz weiss 1981 modell nicht so wie das in der literatur durchgangig angenommen wird hugelformig sein das hat wichtige implikationen fur die moglichkeit von kreditrationierung einerseits und fur die moglichkeit des ausschlusses ganzer kreditnehmergruppen vom kapitalmarkt andererseits mit nur einer klasse von kreditnehmern erfolgt die kreditvergabe in zwei stufen wahrend auf der ersten stufe eine ubernachfrage vorliegen kann herrscht auf der zweiten stufe marktraumung bei mehreren unterscheidbaren kreditnehmerklassen wird eine klasse nur unter den bedingungen vom kreditmarkt ausgeschlossen bei deren vorliegen sie auch in einem vollkommenen kreditmarkt keinen kredit erhalten wurde

long term crop productivity response and its interaction with cereal markets and energy prices abstract crop yields are endogenous as long as economic agents adjust to permanent changes in expected prices the literature however does not offer a definitive value of how much yield would change in response to sustained price changes to fill the gap we use available scientific findings and data to estimate yield elasticities that enable agricultural commodity and food policy analysis using a world market model with short to long run yield response we show the impacts of sustained energy price shocks on global cereal supply and demand the results highlight substantial differences in quantity and price effects depending on the yield elasticities these results demonstrate the need to recognize yield response when assessing impacts of energy prices or biofuel production on food uses or more generally on food security in the face of income and population growth evolving dietary patterns climate change implications or other long run pressures

on the use of collateral this paper surveys existing explanations for the pervasive use of collateral in credit markets and relates them to the empirical evidence on the subject collateral may be used as a screening or an incentive device in markets characterized by various forms of asymmetric and biased information the evidence is incompatible with the use of collateral as a signal of projects quality while broadly consistent with explanations based on its incentive properties and asymmetric evaluation of projects copyright 2000 by blackwell publishers ltd

some evidence on the empirical significance of credit rationing this paper examines the credit rationing debate using detailed contract information on over one million commercial bank loans from 1977 to 1988 while commercial loan rates are sticky consistent with rationing this stickiness varies with loan contract terms in ways that are not predicted by equilibrium credit rationing theory in addition the proportion of new loans issued under commitment does not increase significantly when credit markets are tight despite the fact that borrowers without commitments can be rationed whereas commitment borrowers are contractually insulated from rationing overall the data suggest that equilibrium rationing is not a significant macroeconomic phenomenon

credit rationing reply john riley has made a further remark on section iv observationally distinguishable borrowers of our 1981 paper in this review in that paper we defined two types of rationing criterion a rationing occurs when among observationally identical borrowers some get loans and others do not and the rationed borrowers cannot get credit at any interest rate a second type of rationing criterion b rationing occurs when entire types cannot get credit at any interest rate although they would get credit if the supply of funds were sufficiently large this type of rationing is often termed redlining we showed that given the special simplifying assumptions of our model and disregarding the incentive effects of loan contracts if there are many types of observationally distinguishable borrowers only one type is subject to criterion a rationing riley goes on to conclude that rationing becomes of insignificant importance as the number of observationally distinct groups becomes large more specifically the conclusion that one might be tempted to draw from section iv of the 1981 paper is that given the special simplifying assumptions of the paper and ignoring the incentive effects of interest rates delineated in the paper as the number of observationally distinct groups increases the proportion of the population subject to criterion a rationing decreases while the proportion subject to criterion b rationing decreases or increases depending on how the population is partitioned we did not include this conclusion or even a less verbose version in that paper because we feared it might mislead readers in either of two ways first the reader might not have been aware that the conclusion is very sensitive to the special assumptions of the adverse selection sections of our 1981 paper by the time we published our 1981 paper our research extending that model for example to multiperiod settings and to situations where collateral and interest rates were both employed had made it amply clear that the conclusion that type a rationing disappeared in importance as the number of types in the economy increased was not in fact generally valid second even within the special context of those special simplifying assumptions the conclusions would mislead a reader who was not aware that criterion b rationing redlining has consequences for allocative efficiency and macroeconomic policy that are as important as the consequences of criterion a rationing we are not so presumptuous as to believe that the assumptions we made in our 1981 paper should be interpreted as a literal description of the economy those assumptions were made to provide the simplest model in which the market equilibrium would be characterized by credit rationing if one is interested as we are in understanding the importance of rationing in the economy as opposed to its importance within a specific model one should investigate the nature of rationing in more general models that are formulated to more closely resemble the actual economy this we have done in a series of papers which show that with many observationally distinguishable groups there may be rationing of several or even of all groups for

measurement of technical efficiency in public education a stochastic and nonstochastic production function approach 1 introduction efficiency in the public education system is a significant issue in the united states nationwide real expenditure per student in public education increased more than 3 per year between 1960 and 1998 but output as generally measured by standardized test scores has not increased and in some cases e g the verbal sat score has declined one explanation is that resources are not being utilized efficiently there may be productive or technical inefficiency and or allocative or price inefficiency i e given the relative prices of inputs the cost minimizing input combination is not used this paper focuses on the former by evaluating technical inefficiency in public education using data from utah school districts the pioneering work by farrell in 1957 provided the definition and conceptual framework for both technical and allocative efficiency although technical efficiency refers to failure to operate on the production frontier allocative efficiency generally refers to the failure to meet the marginal conditions for profit maximization considerable effort has been made in refining the measurement of technical efficiency the literature is broadly divided into deterministic and stochastic frontier methodologies 2 the deterministic nonparametric approach that developed out of mathematical programming is commonly known as data envelopment analysis dea and the parametric approach that estimates technical efficiency within a stochastic production cost or profit function model is called the stochastic frontier method both approaches have advantages and disadvantages as discussed in forsund lovell and schmidt 1980 dea has been used extensively in measuring efficiency in the public sector including education where market prices for output generally are not available for example levin 1974 bessent and bessent 1980 bessent et al 1982 and fare grosskopf and weber 1989 used this method to estimate efficiency in public education the stochastic frontier methodology was used by barrow 1991 to estimate a stochastic cost frontier using data from schools in england wyckoff and lavinge 1991 and cooper and cohn 1997 estimated technical efficiency using school district data from new york and south carolina respectively grosskopf et al 1991 used the parametric approach to estimate allocative and technical efficiency in texas school districts the recent literature has seen a convergence of the two approaches and their complementarity is being recognized 3 however there is a lack of empirical evidence in the literature about the proximity of these two approaches in measuring technical efficiency policy formulations based on only one of these efficiency estimates may not be accurate because of the inherent limitations of each before any correctional measures are taken the stability of the technical efficiency estimates obtained from a parametric method should be evaluated by comparing them against those found when using the nonparametric method in this study the technical efficiency estimates for each school district using the stochastic frontier method and tobit residuals from the two stage dea model are compared in the twostage dea model technical efficiency scores obtained from dea using controllable inputs are regressed on student socioeconomic status and other environmental factors the residuals of this regression measure pure technical efficiency after accounting for fixed socioeconomic and environmental factors the empirical analysis uses data from the 40 school districts in utah for the academic year 1992 1993 the standardized test score for 11 th grade students is used as a measure of school output and two classes of inputs are included the first class is considered to be subject to control by school administrators and includes the student teacher ratio the percentage of teachers having an advanced degree and the percentage of teachers with more than 15 years of experience