Ecosystem Service Value and Agricultural Conversion in the Amazon: Implications for Policy Intervention

We explore the welfare implications of agricultural expansion in the Brazilian Amazon by comparing spatially explicit estimates of soybean rents and the value of ecosystem services. Although these estimates are generated from different datasets, models, and estimation techniques, the values are comparable, such that the value of ecosystem services is greater than soybean rents for about 61% of the total area and 24% of the area where soybean rents are positive if protected areas are well enforced. Based on the balance between the benefits and costs of conversion, failure to value ecosystem services reduces total social welfare by 7.13 billion dollars annually relative to an optimum. Policy instruments that internalize the value of ecosystem services via protected lands, land conversion taxes, conservation subsidies, or excise taxes can avoid much of this loss. Regardless of intervention regime, policy makers should be cognizant of the diminishing net benefits of converting natural ecosystems to agriculture. Realizing the final 3.8% requires the conversion of an additional 15% natural ecosystems to soybean production.     

DO PARENTAL INVOLVEMENT LAWS REDUCE ADOLESCENT ABORTION RATES?

This study assesses the impact of parental involvement laws on adolescent abortion rates and pregnancy rates. The analysis estimates abortion rate and pregnancy rate models using state-level data pooled over time for adolescents aged 15–17 compared to older teens aged 18–19 and adults aged 20–44. The results indicate that parental involvement laws reduce adolescent abortion rates and may, to a lessor degree, reduce adolescent pregnancy rates. Thus, the findings imply that enforcement of parental involvement laws will increase adolescent fertility rates.     

Capital market equilibrium with moral hazard and flexible technology

(Magill, M., Quinzii, M., 2002. Capital market equilibrium with moral hazard. Journal of Mathematical Economics 38, 149–190) showed that, in a stockmarket economy with private information, the moral hazard problem may be resolved provided that a spanning overlap condition is satisfed. This result depends on the assumption that the technology is given by a stochastic production function with a single scalar input. The object of the present paper is to extend the analysis of Magill and Quinzii to the case of multiple inputs. We show that their main result extends to this general case if and only if, for each firm, the number of linearly independent combinations of securities having payoffs correlated with, but not dependent on, the firms output is equal to the number of degrees of freedom in the firm’s production technology.     

Measuring a boom and bust: The Sydney housing market 2001–2006

The Sydney housing market peaked in 2003. The period 2001–2006 is, therefore, of particular interest since it captures a boom and bust in the housing market. We compute hedonic, repeat-sales and median price indexes for five regions in Sydney over this period. While the three approaches are in broad agreement regarding the timing of the turning point in the housing market, some important differences also emerge. In particular, we find evidence of sample selection bias in our hedonic and repeat-sales data sets (with the former focusing more on better quality dwellings and the latter more on lower quality dwellings). These sample selection biases could in turn cause bias (in opposite directions) in our hedonic and repeat-sales indexes. Median indexes may likewise be biased as a result of an apparent decline in the average quality of dwellings sold in the latter part of the sample. We also find evidence of convergence in prices across regions during the boom and divergence in the subsequent bust.     

Social Capital and Social Influence on the Board of Directors

It is often assumed that directors with human capital such as prior management experience or independence from the company are the most influential board members. By contrast, in a survey of all the board members in 14 companies we found that ties to others in a network of strong ties among those who meet outside of board meetings were more important predictors of social influence than human capital or ties across boards. These ties within the board represent the social capital of members in the form of prior relationships with other directors, ties to others on the board, and membership in cliques within the board's network of ties. These results support a social capital perspective on influence that emphasizes relationships with others on the board as important factors in the social dynamics of board decision-making.     

What moves housing markets: A variance decomposition of the rent–price ratio

We apply the dynamic Gordon growth model to the housing market in 23 US metropolitan areas, the four Census regions, and the nation from 1975 to 2007. The model allows the rent–price ratio at each date to be split into the expected present discounted values of rent growth, real interest rates, and a housing premium over real rates. We show that housing premia are variable and forecastable and account for a significant fraction of rent–price ratio volatility at the national and local levels, and that covariances among the three components damp fluctuations in rent–price ratios. Thus, explanations of house-price dynamics that focus only on interest rate movements and ignore these covariances can be misleading. These results are similar to those found for stocks and bonds.     

Sudden Unintended Used‐Price Deceleration? The 2009–2010 Toyota Recalls

Using data from the vehicle resale market, I test consumer responsiveness to large‐scale product recalls that are caused by safety problems. The used‐vehicle prices of Toyotas are compared to the used‐vehicle prices of the other major domestic and foreign manufacturers. The results quantify the losses suffered by Toyota vehicle owners in secondary markets due to the 2009–2010 safety recalls of more than 9 million Toyota Motors vehicles. The treatment effect of a recall is measured using panel data with a difference‐in‐differences estimation approach that allows for time‐varying treatment effects and serial correlation. I find that this recall episode had negative effects in the resale market for automobiles that were quantitatively small (less than 2% of the vehicle’s resale value), statistically indistinguishable from zero, and short lived (did not persist beyond December 2009). A comparison with Audi’s recalls in the 1980s of vehicles with sudden unintended acceleration suggests that the extent to which a company’s reputation is established is more important than whether or not a company has a reputation for producing high‐quality products.     

Performance Management in Universities: Effects of the Transition to More Quantitative Measurement Systems

The measurement of research and teaching performance is increasingly common within universities, driven probably by the rise of New Public Management (NPM). Although changing over time and varying from country to country, NPM involves the use of private sector methods in the public sector. Traditionally, performance measurement in universities has had a developmental role – helping individuals to improve their (future) performance. However, the new systems seem more judgemental – i.e. seeking to quantitatively evaluate (past) performance. We study performance measurement in two Accounting and Finance groups – one in the Netherlands and one in the UK. In both we see an increasing use of judgemental forms of performance evaluation and, in particular, the use of more quantitative performance measures. The use of these more judgemental quantitative systems is seen to have various effects. Although these systems emphasise objective quantitative measures, they relocate subjectivities (usually at a greater distance from the subject), rather than remove them. This creates uncertainty and anxiety about how the systems are used. There is a danger that the new systems could inhibit creativity in teaching and limit contributions to the world outside the university. Furthermore, they could damage creativity and innovation in accounting research – as researchers play safe in getting the publications they need. As we are both researchers and practitioners in this area, we should be challenging these trends and pointing to the dangers for research (and teaching) in our field.