The economic consequences of mortgage debt

Unsurprisingly, a great deal of attention has been paid to the economic consequences of the credit crunch. However, this paper shows that the credit crunch was preceded by a strong build-up of mortgage debt internationally, which, in the long run, could turn out to be more significant than the credit crunch itself. Indeed, the debt build-up suggests that the credit crunch is more likely to reoccur, because highly-indebted households have weaker buffers to withstand unexpected shocks to their incomes or to interest rates. The paper presents a model that can explain the debt build-up and changes to the distribution of debt between existing owners and first-time buyers, which hinders access to home-ownership for the latter, even amongst those households who would be considered as credit-worthy.

A method for the economic valuation of animal welfare benefits using a single welfare score

Unless the benefits to society of measures to protect and improve the welfare of animals are made transparent by means of their valuation they are likely to go unrecognised and cannot easily be weighed against the costs of such measures as required, for example, by policy-makers. A simple single measure scoring system, based on the Welfare Quality® index, is used, together with a choice experiment economic valuation method, to estimate the value that people place on improvements to the welfare of different farm animal species measured on a continuous (0-100) scale. Results from using the method on a survey sample of some 300 people show that it is able to elicit apparently credible values. The survey found that 96% of respondents thought that we have a moral obligation to safeguard the welfare of animals and that over 72% were concerned about the way farm animals are treated. Estimated mean annual willingness to pay for meat from animals with improved welfare of just one point on the scale was £5.24 for beef cattle, £4.57 for pigs and £5.10 for meat chickens. Further development of the method is required to capture the total economic value of animal welfare benefits. Despite this, the method is considered a practical means for obtaining economic values that can be used in the cost-benefit appraisal of policy measures intended to improve the welfare of animals.

Epic Sea Battle at Night: a Revolutionary Play with the Economic Thinking of Milton Friedman

The play Epic Sea Battle at Night was originally staged in 1967, to commemorate two of China’s People’s Liberation Army’s military triumphs over the Taiwanese navy two years previously. Produced at the height of the Chinese Cultural Revolution, the play is an example of the exploitation of the arts as an ideological instrument, celebrating military heroism and political conviction. Stills from the play were included in, China Pictorial 11, an English language propaganda pamphlet that was distributed to Western Imperialists in order to educate them in Maoist policy. Today, these images are clear representations of ideology. More than forty years after the Cultural Revolution, the ideology under which we live, neo-liberal late-capitalism, deliberately shirks from such blatant displays of propaganda. We have supposedly the freedom to believe whatever we like in a post-ideological age, and yet core beliefs about meritocracy, individualism and competitiveness frequently go unchallenged. By juxtaposing the visual language of ideology with the text of the capitalist manifesto, the re-enactment of a scene from Epic Sea Battle at Night harnesses the aesthetics of the past so as to allow us to reconsider the alleged neutrality of the present. The design of the stage, the positioning of the actors, costumes and props of the current production closely resembled those documented in China Pictorial 11, yet the actors’ monologues belong to a completely different context. No less heroic and utopian in tone than the speech given by the political instructor of gunboat 874 in the original play, the capitalist manifesto was an attempt to give a concrete language to the shapeless ideology of the present, and to force the invisible currents that govern life today, in China as in the West, to the surface. Neither a lecture on neo-liberal economics, nor a theatrical performance of a narrative, the piece appropriated the format of the propaganda play to re-evaluate the relationship between art and politics now.

Farm and socio-economic characteristics of smallholder milk producers and their influence on technology adoption in Central Mexico

In order to identify the factors influencing adoption of technologies promoted by government to small-scale dairy farmers in the highlands of central Mexico, a field survey was conducted. A total of 115 farmers were grouped through cluster analysis (CA) and divided into three wealth status categories (high, medium and low) using wealth ranking. Chi-square analysis was used to examine the association of wealth status with technology adoption. Four groups of farms were differentiated in terms of farms’ dimensions, farmers’ education, sources of incomes, wealth status, management of herd, monetary support by government and technological availability. Statistical differences (p < 0.05) were observed in the milk yield per herd per year among groups. Government organizations (GO) participated little in the promotion of the 17 technologies identified, six of which focused on crop or forage production and 11 of which were related to animal husbandry. Relatives and other farmers played an important role in knowledge diffusion and technology adoption. Although wealth status had a significant association (p < 0.05) with adoption, other factors including importance of the technology to farmers, usefulness and productive benefits of innovations together with farmers’ knowledge of them, were important. It is concluded that the analysis of the information per group and wealth status was useful to identify suitable crop or forage related and animal husbandry technologies per group and wealth status of farmers. Therefore the characterizations of farmers could provide a useful starting point for the design and delivery of more appropriate and effective extension.

The economic theory of international business: a supply chain perspective

This paper proposes a way of addressing unresolved issues in international business theory by modelling the multinational enterprise as a coordinator of supply chains. It identifies a new market seeking strategy that is an alternative to conventional strategies such as exporting, licensing and FDI, and analyses the conditions under which it will be adopted by firms. The new strategy involves the off-shoring of production and the out-sourcing of R&D, and is implemented through co-operation between a source country firm and a host country firm.

Designer buildings: an evaluation of the price impacts of signature architects

This study investigates whether commercial offices designed by signature architects in the United States achieve rental premiums compared to commercial offices designed by nonsignature architects. Focusing on buildings designed by winners of the Prizker Prize and the Gold Medal awarded by the American Institute of Architects, we create a sample of commercial office buildings designed by signature architects drawing on CoStar's national database. We use a combination of hedonic regression model and a logit model to estimate the various rent determinants. While the first stage measures the typical rental price differential above the typical building in a particular sub-market over a specific timeframe, the second stage identifies a potential price differential over a set of buildings closely matched on important characteristics (such as age, size, location etc.). We find that in both stages offices design by signature architects exhibit a premium. However these results are preliminary. The premium could be indeed an effect of the name of the architect, but others factors such as micro-market conditions might be the cause. Further tests are needed to confirm the validity of our results.

Farm-level economic impact of biotechnology: smallholder Bt cotton farmers in South Africa

This paper describes the method and findings of a survey designed to explore the economic benefits of the adoption of Bacillus thuringiensis (Bt) cotton for smallholder farmers in the Republic of South Africa. The study found reason for cautious optimism in that the Bt variety generally resulted in a per hectare increase in yields and value of output with a reduction in pesticide costs, which outweighed the increase in seed costs to give a substantial increase in gross margins. Thus, these preliminary results suggest that Bt cotton is good for smallholder cotton farmers and the environment.