Flood Hazards and Urban Housing Markets: The Effects of Katrina on New Orleans

This study examines the impacts on consumers’ willingness to pay for certain characteristics of housing in greater New Orleans before and after the flooding of Hurricane Katrina. Single-family home sales from January 2004 to August 2006 are collected and used in a hedonic price function to estimate the changes in the value of amenities, and structural, neighborhood and geographic characteristics, including the mean elevation of each property. Elevation, which buyers did not know for certain prior to the storm, but may now be inferred from water level marks in most neighborhoods, is found to have a positive relationship with selling prices. Results indicate that pre-Katrina, there was a premium of only 1.4% per foot in flood-prone areas, and was insignificant in areas not subject to flooding. This increased to 4.6% for flooded areas after Katrina. These findings are attributed to not only the perceived risk of flooding, but also to the potential of higher compliance costs associated with rebuilding under more stringent National Flood Insurance Program (NFIP) guidelines.     

THE POTENTIAL IMPACT OF ENVIRONMENTAL CROSS-COMPLIANCE ON ARABLE FARMING

It is argued that the ongoing CAP/GATT reforms provide a basis for the introduction of environmental cross-compliance (ECC). ECC enables policymakers to restrict output-related direct support payments to those farmers who comply with specified environmental guidelines aimed at reducing the external damage effects of agricultural production. This paper is an exploratory investigation of ECC and presents the results of a farm-level linear programming analysis of 15 North-West England arable farms. The environmental guidelines, which relate to permanent as opposed to rotational set-aside and to levels of fertiliser use, are widely applicable to the extent that ECC can be implemented as a voluntary policy system. They are clearly effective in achieving policy goals since all but one of the farmers investigated would comply with the full range of restrictions considered. Within this range, gross margins are reduced by up to 10 per cent while area and output of seed crops are reduced by around 22 per cent and 12 per cent respectively. Row crops area and output are more robust, each falling by just under 4 per cent.     

Bringing the Future Forward: The Effect of Disclosure on the Returns-Earnings Relation

This paper studies how firm disclosure activity affects the relation between current annual stock returns, contemporaneous annual earnings and future earnings. Our results show that firms with relatively more informative disclosures "bring the future forward" so that current returns reflect more future earnings news. We also find that changes in disclosure activity are positively related to changes in the importance of future earnings news for current returns. These results suggest that a firm's disclosure activity reveals credible, relevant information not in current earnings, and that this information is incorporated into the current stock price.     

The coevolution of rent appropriation and capability development

Extant approaches to rent appropriation are static in that they explore bargaining power at a fixed point in time. This article contributes by examining how capabilities and bargaining power coevolve. As capabilities are developed, those who are favored by knowledge asymmetries make decisions that balance value creation potential against the rent appropriation regime, such as the organizational form in which the capability will be embedded. Using the example of Apple's development of the iPod, this article illustrates how stakeholders plan for rent appropriation as they assemble new capabilities—well before any value is actually created. Given that firm performance is an outcome of both capability development and rent appropriation, a robust theory must incorporate an understanding of how they coevolve. As such, the article highlights the need to integrate property rights theory with theories of value creation and governance costs as actors constantly make trade‐offs along these dimensions. Copyright © 2010 John Wiley & Sons, Ltd.     

Book reviews

The Co-operation Phenomena: Prc)spects for Small Firms and the Small EconomiesDermont O'Doherty (Ed.)London, Irish Science and Technology Ajrency, Graham & Trotman, 1990, 270pp.

Flexible Manufacturing Technologies & International Competitiveness J. Tidd London, Pinter, 1991, ll3pp., £35.00.

Technology Strategy and the Firm: Management and Public Policy Mark Dodgson (Ed.)London, Longman, 1990, 252pp., £25.00 pb.

Computerization in Developing Countries: Model and Reality Per Lind London, Routledge, 1990, 175pp., £35.00 hb.

The Fifth Branch—Science Advisers as Policy Makers Sheila Jasonoff Cambridge, MA, Haroard University Press, 1990, 302pp., £22.50.