Unfair incentives: A behavioural note on sharecropping

We conducted a laboratory‐in‐the‐field experiment with real‐life tenants in Ethiopia to test the incentive effects of fixed wage, sharecropping, fixed rent, and ownership contracts. The experimental task resembles a common process in agricultural production. The sharecropping contract is a piece rate scheme framed as a profit‐sharing agreement. Sharecropping output was about 12 percent smaller than the fixed rent output. Surprisingly, it is statistically indistinguishable from the fixed wage output, despite substantial piece rates. This effect is driven by real‐life sharecroppers. Their sharecropping output was smaller than that of non‐sharecroppers, especially in a region where a controversial land reform took place. We argue that our subjects dislike sharecropping contracts because of the unfair profit sharing and the disputed allocation of land. Fairness concerns, therefore, may be another impediment to efficiency under the sharecropping contract.     

Post‐Malthusian Dynamics in Pre‐Industrial Scandinavia

Theories of economic growth hypothesize that the transition from pre‐industrial stagnation to sustained growth is associated with a post‐Malthusian phase in which technological progress raises income and spurs population growth while offsetting diminishing returns to labor. Evidence suggests that England was characterized by post‐Malthusian dynamics preceding the Industrial Revolution. However, given England's special position as the forerunner of the Industrial Revolution, it is unclear if a transitory post‐Malthusian period is a general phenomenon. Using data from Denmark, Norway, and Sweden, this research provides evidence for the existence of a post‐Malthusian phase in the transition from stagnation to growth in Scandinavia.     

Multicointegration in Stock-Flow Models

Multicointegration, in the sense of Granger and Lee (1990), frequently occurs in models of stock-flow adjustment and implies cointegration amongst I(2) variables and their differences (polynomial cointegration). The purpose of this article is two-fold. First, we demonstrate that based on a multicointegrated vector autoregression (VAR) two equivalent error correction model (ECM) representations can be derived; the first is expressed in terms of adjustments in the flows of the variables (the standard I(2) ECM), and the second is expressed in terms of adjustments in both the stocks and the flows. Secondly, we apply I(2) estimation and testing procedures for multicointegrated time series to analyze data for US housing construction. We find that stocks of housing units started and completed exhibit poly- nomial cointegration (and hence the flows are multicointegrated) and the associated ECM's are estimated. Lee (1992, 1996) also found multicointegration in this data set but without explicitly exploiting the I(2) property.     

“Psychological” elements in business cycle theories: old approaches and new insights

This paper identifies a number of “psychological” elements in business cycle theories and shows how these components contribute to the theories’ results. It proceeds by discussing (i) which assumptions on behaviour were used, laying particular stress on expectations and confidence, money illusion, social preferences and interaction, and individual character traits; (ii) how they influenced and determined the theories’ results; and (iii) how more recent behavioural research provides a better and empirically grounded understanding of these factors. For each element, the possibility of incorporating new insights into older models is discussed, and references to work which already does so are given.     

Bridging between the regional degree and the community approaches to rurality—A suggestion for a definition of rurality for everyday use

The territorial approach to rural development highlights the role of local actors, networks, culture, nature and landscape amenities. The Organization for Economic Co-operation and Development (OECD) definition of rurality is, however, not capable of dealing with local and community definitions of rurality, which vary from study to study. In everyday life, physical planners, rural policymakers and local rural actors need a consistent definition of rurality. The reason is that structural reforms have led to larger administrative units that have less experience-based knowledge about the individual rural communities within a municipality than do local authorities. In this article, we propose a consistent definition of rurality that is easy for physical planners, rural policy makers and local rural actors to understand and apply in everyday use. In addition, our definition will be able to deal with both the regional and the community approach to rurality. This definition is based on an interdisciplinary literature review that starts with land cover and geographical mapping. The definition is then applied to the case of Denmark.