The relative efficiency of slave agriculture: a comment

In their book Time on the Cross, Fogel and Engerman (FE) present evidence that average factor productivity was greater for larger Southern slave farms in 1860 than for both free farms and smaller slave farms. In a recent article, Field (1988) lends support to the FE theory by finding that an upward shift in the production function occurs for slave farms at 15 slaves, the size at which FE propose that gang labour became feasible. In a more recent article, Grabowski and Pasurka (GP) contradict both FE and Field by finding that there was no relationship between the size of slave farms and their efficiency. The present paper extends both GP's and Field's work and refines a point made by FE. We distinguish between a technological advantage due to the gang labour system and revenue inefficiency due both to the incentive structure of slavery and the repugnance of gang labour, two factors which foster rational shirking and resistance by slaves. That is, we propose that relative to small slave farms, large slave farms may have enjoyed a higher revenue frontier but that actual output and revenue fell farther below their frontier. Our construction is consistent with the historical view that emphasizes the harshness of slavery, the repugnance of the gang labour system, and the rational resisting behaviour of the slaves. We test this hypothesis with the stochastic frontier function approach as did GP. However, our findings contradict them. We find, consistent with both FE and Field, that large slave farms exhibited superior technology over small farms. More importantly, we find empirical confirmation of our theory that large slave farms suffered greater revenue inefficiency than smaller slave farms.     

Biology, Diseases, and Economics: An Epidemiological History of Slavery in the American South

The economic history of antebellum southern slavery has been and is the subject of ongoing debates among scholars. The literature includes assessments about the efficiency of slavery as well as about the adequacy of slave living standards and diets. Yet this literature under appreciates the important biologic and historical role that parasitic diseases played in the history of slavery. Recognizing the role of parasitic diseases calls into question some prevailing interpretations of slavery. Lacking direct evidence on slave diets, scholars turned to anthropometric evidence as proxies for the living standards of slaves, leading to the prevailing view that adult slaves were given adequate sustenance, but slave infants and children were severely malnourished. We argue it was not slave diets, but the combination of the plantation system and diseases that caused abnormally small slave children. The diseases that concern us, primarily hookworm and malaria, affected slaves ('blacks') and free labor ('whites') differently. Many slaves were concentrated on large plantations with infants and younger children crowded into 'nurseries.' This system allowed the maintenance and spread of diseases that adversely affected younger slaves. Southern white children however were less likely to be raised in conditions so conductive to parasitic diseases. The disease ecology of the antebellum South has implications for the prevailing view that slavery was more efficient than free labor. Biologic evidence indicates that people of tropical West African ancestry are more resilient to the effects of hookworm and malaria than European descendents. Thus when whites did contract these diseases, they were more afflicted than blacks. When slaves entered the adult work force they were taken from disease breeding grounds (slave nurseries) and sent into relatively (for blacks) healthy fields, while whites that went into the fields found a disease environment that was typically worse than that of their childhood. If black adults were more productive than were white adults because of a greater resilience to parasitic diseases, then part of any measured difference in productivity between slave and free farms should be attributed to the disease resistance of African descendents, rather than to any inherent efficiencies of slavery.     

Does crime deter South Africans from self-employment?

The very high crime rate in South African cities is often argued to be the main reason for the country's small share of business ownership and self-employment. This paper revisits this hypothesis. We estimate the effect of crime on business ownership and performance using a matched dataset of census, survey and police data. In contrast to previous studies, which take into account perceived rather than actual crime and often focus on specific geographic areas, we do not find robust evidence that high crime rates have a negative impact on business ownership. Even though our estimate of the effect of crime is statistically significant and negative, it is economically small. Further, we find no evidence for a negative effect of actual crime on sales, profits and investment of informal businesses. This may imply that the low share of business ownership and self-employment in South Africa must have other reasons. These results may also suggest that crime may not be in general a serious threat for small businesses in low and middle-income countries, however, this needs further empirical research.     

The Productivity of US States since 1880

This study uses state-level variation in labor productivity levels at twenty-year intervals between 1880 and 1980 to examine the relative importance of institutional and geographical influences in explaining observed and persistent differences in standards of living over time and across regions. Focusing on fundamental rather than proximate influences, we find that both institutional characteristics and some physical geography characteristics account for a high proportion of the differences in state productivity levels: states with navigable waterways, a large minerals endowment, and no slaves in 1860, on average, had higher labor productivity levels throughout the sample period. However, we find little support for two other influences that have previously received attention—climate and latitude.     

Interfirm learning in environmental safety: evidence from the bakken

This paper examines whether firm learning economies lead to reduced environmental incidents in Bakken unconventional oil drilling. We model the relationship between environmental safety and learning in preventing environmental incidents. We do not find evidence that firm or interfirm learning leads to increased environmental safety. We do find evidence that idiosyncratic quality of matches between firms and subcontractors is associated with improved environmental safety.     

The European origins of economic development

Although a large literature argues that European settlement outside of Europe during colonization had an enduring effect on economic development, researchers have been unable to assess these predictions directly because of an absence of data on colonial European settlement. We construct a new database on the European share of the population during colonization and examine its association with economic development today. We find a strong, positive relation between current income per capita and colonial European settlement that is robust to controlling for the current proportion of the population of European descent, as well as many other country characteristics. The results suggest that any adverse effects of extractive institutions associated with small European settlements were, even at low levels of colonial European settlement, more than offset by other things that Europeans brought, such as human capital and technology.     

Does the presence of professional football cause crime in a city? Evidence from Pontiac,Michigan

Using daily panel data from Detroit, we empirically explore the relationship between the National Football League (NFL) and crime in a city. We exploit the natural experiment of the Detroit Lions’ move from Pontiac, Michigan, to downtown Detroit in 2002. Pontiac is used as the treatment city and non-game day crime, other suburban cities, and other cities outside Detroit MSA are used as the comparison groups. Employing a difference-in-difference approach, we find decreases in assaults and vandalism on home game days in Pontiac relative to the control cities after the Lions’ move. We find weak evidence of a net decrease in larceny and vandalism in Pontiac on home game days following the loss of professional football. No changes in assaults and auto theft are reported. While not conclusive, our results suggest that professional football leads to additional larceny and vandalism incidents but no effects on assaults and auto theft.     

SLAVERY,FREEDOM, AND SEN

Amartya Sen's Development as Freedom argues that the ability to make choices is fundamental to economic development, and that the evaluation of outcomes can provide misleading answers. He uses the example of the high material consumption of US slaves relative to some free whites to illustrate this contrast. This paper discusses some of the implications of such comparisons and the problem of evaluating what might be regarded as favorable outcomes which come from unfavorable institutions (e.g., slavery). It appears that all good things do not necessarily go together. The past relation of enslavement to the need for subsistence is discussed. Differences in gender roles under slavery and after emancipation are also examined.     

Droughts,conflict, and the African slave trade

Historians have frequently suggested that droughts helped facilitate the African slave trade. By introducing a previously unused dataset on 19th century rainfall levels in Africa, I provide the first empirical examination of this hypothesis. I find a strong negative relationship between rainfall shocks and the number of slaves exported from a given region. I also find that extreme temperature shocks in either direction increase slave exports. Building on the detailed qualitative work of Dias (1981), Miller (1982), and others, I provide quantitative evidence for interethnic group conflict and more localized forms of violence being likely mechanisms through which these additional slaves were acquired. These results contribute to our understanding of the underlying economic conditions of the African slave trade.     

TRANSATLANTIC CAPITAL MARKET PRICE DISCOVERY DURING A FINANCIAL CRISIS

Previous results show relatively small amounts of time variation in the Hasbrouck (1995) information share across international markets. Using data from a security that was cross‐listed on the New York and London Stock Exchanges in the 1860s, we find that the information share changes dramatically during a financial crisis that began in the foreign market.     

Inclusive institutions and economic growth: comparative perspective and policy implications for China

ABSTRACT

This paper examines the empirical relationship between the presence of inclusive institutions and the pattern of economic growth in a cross-country setting. We find evidence that the presence of inclusive institutions, indicated by political democracy, positively affects consumption share. In turn, the increase of the latter in the preceding year is associated with a significantly higher rate of total factor productivity (TFP) growth. The link from democracy to TFP growth via consumption is stronger for countries of higher levels of income. These findings suggest that institutional inclusiveness may have become increasingly important for economic growth when the level of income rises. We also provide preliminary evidence that consumption may have facilitated productivity growth via the channels of increasing innovations and reducing social conflicts. The findings shed lights on the structural transformations toward a more inclusive and sustainable model of growth in China today.

Abbreviations: FE: GMM: Generalized method of moments PWT: TFP: Total factor productivity     

Causal Effects of Paternity Leave on Children and Parents

Reserving a share of the parental leave period for fathers is considered necessary in order to induce fathers to take leave, and to increase men's participation in child‐rearing. We investigate how a parental leave reform directed towards fathers affected leave‐taking, and, in turn, children's and parents' long‐term outcomes. A paternal leave quota greatly increases the share of men taking paternity leave. We find evidence that children's school performance improves as a result, particularly in families where the father has higher education than the mother. We find no evidence that paternity leave counters the traditional allocation of parents' labor supply.     

Crime during the business cycle: urban–rural differences

Despite the abundant literature on how crime evolves over the business cycle, no consensus has arisen whether crime increases or decreases during recessions. The literature provides both positive and negative associations between the crime rate and the unemployment rate, a commonly used proxy for the business cycle. This study revisits this issue and uses county-level data from 1990 to 2013. It allows for differences as to how unemployment relates to both property crime and violent crime depending on the size of the counties. We find evidence of a positive association between unemployment and property crime that strengthens with county size. The results show the same pattern for violent crime but are statistically weaker. Our findings suggest that the positive association between property crime and unemployment that others have found is largely driven by more populous areas.     

TRADE LIBERALIZATION AND RACIAL ANIMUS

Since the year 2000, the number of recorded hate groups in the United States has increased by more than 50 %. Some argue that the strain caused by unemployment or other socioeconomic stressors can play a critical role in the prevalence of extremist groups and crimes. We examine whether a change in U.S. policy to normalize trade relations with China, which fueled a surge in import competition that led to higher levels of unemployment, affected the presence of hate crimes. Using a difference‐in‐differences model and an event‐study framework, we find that areas most exposed to import competition experienced an increase in the number of anti‐Black hate crimes. We also find a qualitatively similar effect on the number of active hate groups in response to import competition. This result holds pre‐ and post‐the Great Recession and is consistent across levels of aggregation. The results are consistent and robust to various controls and specifications. (JEL F13, F16, Z13)     

PRICES OF SLAVES IN WEST AND WEST-CENTRAL AFRICA: TOWARD AN ANNUAL SERIES, 1698–1807

Currently available price series for slaves during the eighteenth century need to be treated with much caution, and it seems unlikely that large quantities of new evidence will be unearthed. Further progress toward the creation of more reliable price series will thus require new methods of estimation. In this paper, a new price series for slaves at the African coast is calculated using data relating to the number of slaves shipped from the coast by British traders and the value of trade goods bartered for them.     

Inequality and criminality revisited: further evidence from Brazil

The objective of this study is to shed light on the determinants of criminality rates in Brazil. A panel data model was estimated using Brazilian states’ data. Our main result suggests that income inequality plays an important role in the determination of the crime rate. Furthermore, there are evidence suggesting that both unemployment and urbanization rates are positively related to crime. Based on a GMM approach we find the existence of an “inertial effect” on criminality. Besides that, the GMM results show that public security spending is effective in reducing criminality rates. Contrary to the common wisdom, we could not find evidence that poverty increases violent crimes. Finally, we have evidence that income inequality Granger causes crime, but not the reverse.     

VIDEO GAMES AND CRIME

Psychological studies find that video game play is associated with markers for violent and antisocial attitudes. It is plausible that these markers indicate either whetted or sated preferences for antisocial behavior. I investigate whether a proxy for video gaming is associated with the prevalence of various crimes and find evidence that gaming is associated with significant declines in crime and death rates. These results are robust to various alternative specifications. Other youth‐related leisure activities—sports and movie viewing—generate smaller or no effects. These results cast doubt on the desirability of proposed restrictions on video game marketing. (JEL L86, D18, I18)     

中国股市是弱式有效的吗-基于一种新方法的实证研究

该文采用一种新的统计方法来检验中国股票市场的有效性,结果表明沪市和深市都尚未达到弱式有效,尽管它们的有效程度随着时间的推移有所改善.我们还发现,A股市场比B股市场有效性相对更高,但没有系统的证据显示沪深股市谁的有效性更高.与大部分研究中国股市有效性的文献不同,我们采用的检验方法适合高频金融数据的特点(如允许任意形式的波动聚类的存在),因而结论更有说服力.这些实证结果,对于中国股市中股票收益的预测、资本资产定价和金融资源配置效率等问题的研究都具有重要的现实意义.     

Financial reform and the efficiency of credit allocation in Korea

This study analyzes some of the structural problems associated with the Korean financial sector, and investigates the efficiency of credit allocation by the financial system over the period from 1970 to 1996. Using data at the level of 32 industrial branches, we find no evidence that credit flows were directed sectors that were more profitable, either before or after financial reforms were initiated in the 1980s. We also find that the financial support did not contribute to improve the performance of the favored industries over time.     

Foreign direct investment and industry response to organized crime: The Mexican case

Organized crime is a disincentive for investment and business activity. We use murders as a proxy for presence of regional organized crime and study the relation between direct foreign investment and organized crime for different industries in Mexico. Our contribution is the focus on sectoral differences. The data is for net foreign direct investment from 116 countries into the 32 Mexican states from 2004 to 2010. Imputing causality, we find that organized crime deters foreign investment in financial services, commerce, and agriculture, but not oil and mining sectors for which we find increased crime associated with increased investment. There is no effect of organized crime on foreign investment in manufacturing.