Market-hampering Land Speculation: Fiscal and Monetary Origins and Remedies

A bstract Market-hampering land speculation destabilizes and distorts development, and shifts income unjustly to landowners. Its fiscal origin is the lack of public collection of the site rent. The monetary origin is a centrally controlled money supply that injects excessive credit, fueling malinvestments in real estate. The remedies are both the public collection of land rent and a free market in money and banking, hence a money supply that responds flexibly to market demand while maintaining a stable unit of account. Rent collection option contracts could increase the scope of market-enhancing land speculation that spreads and reduces risk.     

Balancing Development Costs and Sales to Optimize the Development Time of Product Line Additions*

Development teams often use mental models to simplify development time decision making because a comprehensive empirical assessment of the trade‐offs across the metrics of development time, development costs, proficiency in market‐entry timing, and new product sales is simply not feasible. Surprisingly, these mental models have not been studied in prior research on the trade‐offs among the aforementioned metrics. These mental models are important to consider, however, because they define reality, specify what team members attend to, and guide their decision making. As such, these models influence how development teams make trade‐offs across the four metrics to try to optimize new product profitability. Teams with such an objective should manage to a development time that minimizes development costs and to a proficient market‐entry timing that maximizes new product sales. Yet many teams use mental models for development time decision making that focus either just on development costs or on proficiency in market‐entry timing. This survey‐based study uses data from 115 completed NPD projects, all product line additions from manufacturers in The Netherlands, to demonstrate that there is a cost to simplifying decision making. Making development time decisions without taking into account the contingency between development time and proficiency in market‐entry timing can be misleading, and using either a sales‐maximization or a cost‐minimization simplified decision‐making model may result in a cost penalty or a sales loss. The results from this study show that the development time that maximizes new product profitability is longer than the time that maximizes new product sales and is shorter than the development time that minimizes development costs. Furthermore, the results reveal that the cost penalty of sales maximization is smaller than the sales loss of development costs minimization. An important implication of the results is that, to determine the optimal development time, teams need to distinguish between cost and sales effects of development time reductions. To determine the relative impact of these effects this study also estimates the elasticities of development costs, new product sales, and new product profitability with regard to development time. Armed with this knowledge, development teams should be better equipped to make trade‐offs among the four metrics of development time, development costs, proficiency in market‐entry timing, and new product sales.     

A quarter of a century of Australian agricultural economics — some personal reflections

The late Fred Gruen (1921–1997) was asked to write these previously unpublished reflections for the twenty-eighth Annual Conference of the Australian Agricultural Economics Society in 1984; they were circulated in working paper format as Gruen (1986). In this paper, Fred, who made the transition from agricultural to general economics later in his career, offers a modest perspective on his contributions to agricultural analysis and policy. The unifying theme in this outstandingly productive life was his focus on public policy issues whose resolution would impact importantly on the lives of many — that is, his intellectual curiosity was driven ultimately by his philanthropy.     

Comments on "Echoes of Henry George in Modern Analysis"

A bstract .   These comments were presented at a session entitled "Echoes of Henry George in Modern Analysis" held at the 2002 meetings of the Southern Economic Association.     

Impact of Replacing a Defined Benefit Pension with a Defined Contribution Plan or a Cash Balance Plan

Abstract

Four pension plan conversions are examined to determine the impact on retirement benefits of workers. The study was based on interviews with top management, employee surveys, and actuarial analysis of retirement benefits under the old and new pension plans. In general, workers who leave the firm prior to the age of early retirement can expect increased benefits under the new defined contribution and cash balance plans, whereas older, more senior workers can expect to accrue smaller benefits after the plan conversions. Recognizing these potential adverse effects, the employers in our studies provided various types of transition benefits to existing workers or gave employees the choice of remaining in the old defined benefit plan. Employee surveys reveal that younger workers are more supportive of the new pension plans than are older workers. These case studies also indicate that communication by managements with their employees is very important to the successful implementation of plan conversions.     

Economic analysis of different options in integrated pest and soil fertility management in maize systems of Western Kenya

The major biotic constraints to the production of maize, the major staple food in Western Kenya, are field pests such as Striga and stem borers, and low soil fertility. To counter these constraints, new cropping systems have been developed, including “push‐pull,” rotations with promiscuous soybean varieties and green manure crops, and imidazolinone resistant‐ (IR‐) maize. To analyze the technical and economic performance of these technologies, both with and without fertilizer, on‐farm researcher‐managed long‐term trials were implemented over six seasons in two sites each in Vihiga and Siaya districts of Western Kenya. The economic results, based on marginal analysis using a multioutput, multiperiod model, show that the new cropping systems with fodder intercropping (push‐pull) or soybean rotations were highly profitable. Push‐pull is more profitable but requires a relatively high initial investment cost. Green manure rotation, IR‐maize, and fertilizer all increased yields, but these investments were generally not justified by their increased revenue. We argue that research on rotation and cropping systems to tackle pest and soil fertility problems in Africa deserve more attention. This will require increased collaboration between agronomists and economists to set up long‐term experiments with new cropping systems to develop proper economic models.     

U.S. corn exports: the role of the exchange rate

Time series econometric methods are applied to monthly observational data over the period 1978-1942 on real exchange rates, real corn prices, corn export sales, and corn export shipments for the United States. In-sample fit and out-of-sample forecast results are used to discern whether exchange rates have elicited systematic responses in U.S. corn prices, sales and shipments, and whether the dynamic transmission mechanisms tying these variables together have changed over time. A structural break appears to have occurred in early 1985. No cointegration is found between exchange rates, price, sales, and shipments in either sub-period. Influences are all short-run or between stationary variables. The role of the exchange rate appears to have moderated in the post-1985 period. Implications for policy analysis are discussed.