Productivity and Market Integration in American Communal Dairying, 1830-1875

In our late twentieth century experience, survival of an economy seems critically dependent on well established rights to private property and a return to labor that rewards greater effort. But that need not be so. History provides examples of micro-socialist economies that internally, at least, allow for little private property for participants and a constant return to labor that is independent of effort. Some such economies may even be termed 'successful,' if success is taken to mean survival over several generations. If these communities survived without conditions that are generally thought to be necessary for success, a question worth asking is how this occurred, for we can then shed some light on what really is necessary for economic survival. Addressing this issue emphasizes the critical role of time, for even if the microsocialist economies that we study here eventually became the merest shadow of their former selves, the fact that they did flourish for so long makes them a valuable counterexample, and hence, a phenomenon in need of explanation. We consider here the dairy industry of the Shakers, which was characterized by intensive efforts to increase productivity, in part through the use of market signals, but efforts that were also limited by the ideological goals of the community. The Shakers were (and are, but since it is the historical Shakers that concern this paper, the past tense will be used) a Christian communal group. Some of their distinctive beliefs included the existence of a male and female Godhead, from which followed sexual equality, and active communication between Believers (a Shaker term for members of the sect) and denizens of the spirit world. Practices of the Society (their official name is the United Society of Believers in Christ's Second Appearing, the second appearing being in the body of their foundress, an illiterate Englishwoman named Ann Lee) included pacifism, celibacy, confession of sins to elders, and joint or communal ownership of the Society's assets. Each Shaker received the same return for his or her labor: room, board, clothing, and the experience of divine proximity in a community of like minded Believers (Stein 1992).

Empirical Analysis of Credit Risk Regime Switching and Temporal Conditional Default Correlation in Credit Default Swap Valuation: The Market liquidity effect

In this paper, we extend the debate concerning Credit Default Swap valuation to include time varying correlation and co-variances. Traditional multi-variate techniques treat the correlations between covariates as constant over time; however, this view is not supported by the data. Secondly, since financial data does not follow a normal distribution because of its heavy tails, modeling the data using a Generalized Linear model (GLM) incorporating copulas emerge as a more robust technique over traditional approaches. This paper also includes an empirical analysis of the regime switching dynamics of credit risk in the presence of liquidity by following the general practice of assuming that credit and market risk follow a Markov process. The study was based on Credit Default Swap data obtained from Bloomberg that spanned the period January 1st 2004 to August 08th 2006. The empirical examination of the regime switching tendencies provided quantitative support to the anecdotal view that liquidity decreases as credit quality deteriorates. The analysis also examined the joint probability distribution of the credit risk determinants across credit quality through the use of a copula function which disaggregates the behavior embedded in the marginal gamma distributions, so as to isolate the level of dependence which is captured in the copula function. The results suggest that the time varying joint correlation matrix performed far superior as compared to the constant correlation matrix; the centerpiece of linear regression models.

Technical Efficiency and Stock Market Reaction to Horizontal Mergers

This study examines the relationship between stock market reaction to horizontal merger announcements and technical efficiency levels of the participating firms. The analysis is based on data pertaining to eighty mergers between firms in the U.S. manufacturing industry during the 1990s. We employ Data Envelopment Analysis (DEA) to measure technical efficiency, which capture the firms. competence to produce the maximum output given certain productive resources. Abnormal returns related to the merger announcements provide the investor.s re-evaluation on the future performance of the participating firms. In order to avoid the problem of nonnormality, heteroskedasticity in the regression analysis, bootstrap method is employed for estimations and inferences. We found that there is a significant relationship between technical efficiency and market response. The market apparently welcomes the merger as an arrangement to improve resource utilizations.