Race,Compensation and Contract Length in the NBA: 2001–2002*

We study race and pay in the NBA for 2001–2002. For players who were neither free agents nor on rookie scale contracts, there were large, statistically significant ceteris paribus nonwhite shortfalls in salary, total compensation, and contract duration. But for players under the rookie salary scale (first‐round draft picks) and free agents, race effects were small and insignificant. These results suggest discrimination against marginal nonwhite players.     

Private versus Public Ownership: Investment,Ownership Distribution,and Optimality

Examined in this paper is the choice between private and public incorporation of an asset for an entrepreneur (asset owner) who hires a manager with superior information about the asset's return distribution. Public sale of equity is shown to be the preferred alternative when (a) capital market issue costs are low or (b) the assest's idiosyncratic risk is high and the owner is either sufficiently risk averse or sufficiently “optimistic” about the asset's expected return. Thus, those assets deemed most valuable by their owners will tend to be publicly incorporated. The paper also explores the impact of incorporation mode—private versus public—and information structure on the firm's investment policy and ownership distribution.     

HONG KONG'S INDETERMINACY PUZZLE: INSTITUTIONALIST AND ECONOMETRIC APPROACHES*

During the free-issue regime (1974–1983), Hong Kong's money supply, price level and exchange rates were wholly governed by market forces. The system did not seem to have any nominal anchor. Theoretically its price level was indeterminate, engendering what is called an indeterminacy puzzle. The paper elaborates on the concept of price level indeterminacy and undertakes the question of empirical determination of the price level indeterminacy during the free-issue regime. The empirical investigation employs two distinct approaches - institutionalist and econometric. The results of the two approaches indicate the necessity of a broader approach to historical analyses. The paper also informs us about the relationship among money supply, price level and exchange rate in a regime of fiat money without a central bank.     

AN ECONOMETRIC APPROACH TO THE MEASUREMENT OF POVERTY

This paper presents a method for specifying and measuring povertydefined as relative deprivation. We base our measure of an individual'spoverty on the distance between his/her consumption experiencerelative to the norm. Consumption experience is defined in termsof events and the modal frequency of an event in the communitydefines the norm. Aggregation over events is made to capturethe objective as well as subjective nature of deprivation. Ourmeasure is related to that proposed by Townsend and econometricestimation is carried out using the Townsend data. Income isfound to be neither the sole nor the most important indicatorof deprivation.     

CHANGES IN WATER ALLOCATION MECHANISMS FOR CALIFORNIA AGRICULTURE

Existing institutions allocating water in California reflect prior appropriation water rights established when water was abundant. These allocation rules queue users and do not encourage water conservation. Increased water scarcity and growing valuation of water's environmental benefits are inducing a transition to water allocation mechanisms that increase water efficiency in agriculture. Transferable rights systems will lead to market-like water allocation, induce farmers to adopt water conservation technology, and may not face strong objection from senior water rights holders. One must weigh the efficiency gains associated with transition from water rights to water markets against the transaction costs associated with installing facilities that enable water exchange and trading .
Transition to water markets may preserve the agricultural sector's well-being while allowing the transfer of some water outside of agriculture—in particular, for environmental benefit. The cost of policies proposed to reduce agricultural water supply while encouraging water trading are inversely related to the extent of trading allowed. The more farmers trade water, the less costly reducing water supply is to agriculture. Policies reducing water supply to Central Valley Project contractors and allowing trading only among these contractors are much more expensive than are policies encouraging trading among all agricultural water users in California .     

EXPORT‐LED GROWTH HYPOTHESIS: FURTHER ECONOMETRIC EVIDENCE FROM SOUTH ASIA

This paper examines the export‐led growth (ELG) hypothesis for five South Asian countries through cointegration and multivariate Granger causality tests. Strong support for a long‐run relationship among exports, imports, and real output for all the countries except Sri Lanka were found. Feedback effects between exports and GDP for Bangladesh and Nepal and unidirectional causality from exports to output in the case of Pakistan were found. No causality between these variables was found for Sri Lanka and India, although for India GDP and exports did induce imports. A feedback effect between imports and GDP was also documented for Pakistan, Bangladesh, and Nepal, as well as unidirectional causality from imports to output growth for Sri Lanka. These and other findings are discussed from the standpoint of the export‐led growth hypothesis.     

A Noncooperative Quantity‐Rationing Theory of Transboundary Pollution

We study a remedy for the problem caused by international transfrontier pollution. Our results are derived from the analysis of a noncooperative game model of the determination of emissions in a quantity‐rationing setting. We model the emission capping negotiations using the best response dynamic process and provide natural conditions under which the process has a unique and globally asymptotically stable stationary point. We then analyze the link between type profiles and the stationary points of the negotiation process to derive various comparative statics results and the type‐contingent ordering of emission allocations. These results are used to study the investment strategies that nations can use prior to the negotiations in order to manipulate the equilibrium emission caps.