Land


17
May 12

Replication, Publication Bias, and Negative Findings

I came across fascinating read on some of the important problems that plague the scientific process in the social sciences and elsewhere. From an article by Ed Yong in the May 2012 edition of Nature:

Positive results in psychology can behave like rumours: easy to release but hard to dispel. They dominate most journals, which strive to present new, exciting research. Meanwhile, attempts to replicate those studies, especially when the findings are negative, go unpublished, languishing in personal file drawers or circulating in conversations around the water cooler. “There are some experiments that everyone knows don’t replicate, but this knowledge doesn’t get into the literature,” says Wagenmakers. The publication barrier can be chilling, he adds. “I’ve seen students spending their entire PhD period trying to replicate a phenomenon, failing, and quitting academia because they had nothing to show for their time.” (…)

One reason for the excess in positive results for psychology is an emphasis on “slightly freak-show-ish” results, says Chris Chambers, an experimental psychologist at Cardiff University, UK. “High-impact journals often regard psychology as a sort of parlour-trick area,” he says. Results need to be exciting, eye-catching, even implausible. Simmons says that the blame lies partly in the review process. “When we review papers, we’re often making authors prove that their findings are novel or interesting,” he says. “We’re not often making them prove that their findings are true.”

I have briefly discussed the lack of replication in economics here, but in short, the issue is that once a finding is published, there are practically no incentives for people to replicate those findings.

There are two reasons for this. The first is that journals tend to want to publish only novel results, so even if you manage to confirm someone else’s findings, there will be few takers for your study unless you do something significantly different… in which case you’re no longer doing replication.

The second is the tendency to publish only studies in which the authors find support for their hypothesis. This is known as “publication bias.”

For example, suppose I hypothesize that the consumption of individuals increases as their income increases, and suppose I find support for that hypothesis using data on US consumers. This result eventually gets published in a scientific journal. Suppose now that you decide to replicate my finding using Canadian data and you fail to replicate my findings. Few journals would actually be interested in such a finding. That’s because failing to reject the null hypothesis in a statistical test is not surprising (after all, you’ve staked 90, 95, or 99 percent of the probability mass on the null hypothesis that consumption is not associated with income), but also because, as Yong’s article highlights, that would not exactly be an “exciting, eye-catching” result.

I am currently dealing with such a “negative finding” in one of my papers, in which I find that land titles do not have the positive impact on productivity posited by the theoretical literature in Madagascar, a context where donors have invested hundreds of millions of dollars in various land titling policies. Perhaps unsurprisingly, the paper has proven to be a very tough sell.

(HT: David McKenzie.)


18
Apr 12

Land and Politics

From a new article by Jean-Marie Baland and Jim Robinson in the American Journal of Political Science:

In this article, we argue that when patron-client relations are grounded in economic relationships, such as between landlord and worker, we should expect clientelism to influence not just how public policy, the state, and the political system work, but also how the economy works. We develop a simple model of the economic consequences of electoral clientelism when voting behavior can be observed. Landlords/patrons provide economic rents to workers, and in exchange workers vote for parties favored by landlords. As votes are used by the landlords to accumulate political rents, vote control increases the demand for labor and for land. The model implies that the introduction of the Australian ballot, which destroys this form of clientelism, should lead to a fall in the price of land in those areas where patron-client relationships are strongest. We test the predictions of the model by examining in detail the evolution of land prices in Chile around May 31, 1958, for which we collected original data. A characteristic of rural Chile at this time were patron-client relations based on the inquilinaje system, by which a worker, the inquilino, entered into a long-term, often hereditary, employment relationship with a landlord and lived on his landlord’s estate. We show that the introduction of the Australian ballot in 1958 led to a fall of about 26% in land prices in the areas where these patron-client relationships were predominant.

This article is a followup of sorts to Baland and Robinson’s 2010 American Economic Review article, in which they show that the introduction of the secret ballot in 1958 in Chile led to greater support for labor-friendly political parties.


27
Feb 12

Speeding Fines That Vary With Income: Absolute vs. Relative Risk Aversion and Public Policy

Where there are posted restrictions, most European countries take speeding very seriously and levy hefty fines. The latest case in point is a 37 year-old Swedish man who was clocked at 180 miles per hour on a motorway between Bern and Lausanne in Switzerland.

Unfortunately for this driver of a new Mercedes-Benz SLS AMG, Switzerland doesn’t have fixed fines for speeding. Instead they use a formula similar to that in Finland where the fine is calculated based on the vehicle’s speed and the driver’s income. Back in 2002, Nokia executive Anssi Vanjoki had to pay a fine of $103,600 for going 47 mph in a 31 mph zone.

A student in my Law, Economics, and Organization seminar mentioned the article quoted above last week when I was explaining the difference between the twin concepts of absolute and relative risk aversion.

In economics, risk is not so much about what most people call risk as it is about gambles over income. In other words, risk preferences are defined over income or wealth. See here for an excellent discussion starting on page 64 in chapter 6 of David Friedman’s Law’s Order. So why would Switzerland and Finland have speeding fines that vary with income? Continue reading →


11
Jan 12

Insecure Land Rights, Land Tenancy, and Sharecropping

Lac Alaotra, the "Rice Bowl" of Madagascar.

My job-market paper — for nonacademics, that’s the paper I presented when giving recruitment seminars when I was on the job market back in 2006 — is finally published.

From the latest issue of Land Economics:

Most studies of tenurial insecurity focus on its effects on investment. This paper studies the hitherto unexplored relationship between tenurial insecurity and land tenancy contracts. Based on distinct features of formal law and customary rights in Madagascar, this paper augments the canonical model of sharecropping by making the strength of the landlord’s property right increasing in the amount of risk she bears within the contract. Using data on landlords’ subjective perceptions in rural Madagascar, empirical tests support the hypothesis that insecure property rights drive contract choice but offer little support in favor of the canonical risk sharing hypothesis.

After working on this on and off for almost ten years, I am glad to finally see this article in print. Continue reading →


22
Nov 11

The Cost of Complex Land Titles and Ellickson’s Must-Read Book for Development Folks

Chinese customs and law have traditionally prevented a land seller from conveying outright title to a buyer. The ancient custom of dian, which persisted until the 1949 revolution, gave a land seller and his lineage an immutable option to buy back sold land at the original sale price. This little-analyzed custom discouraged soil conservation and land improvements, and, especially after 1600, contributed to China’s inability to keep pace with England. After calamitous experiences with land collectivization between 1951 and 1981, China’s Communist government began to confer private land-use rights. But, instead of making outright sales, it chose to award contractual rights only for a fixed-term, for example, 50 years in the case of an industrial parcel. For the same reasons dian did, this policy threatens to impair China’s prospects of economic development.

This is the abstract of Robert C. Ellickson’s latest paper. Land rights have been very much on my mind lately, as I am revising a paper studying their effect on rice productivity in Madagascar.

If you have an interest in development and are not familiar with Ellickson’s work, you are seriously missing out.

Ellickson is Walter E. Meyer Professor of Property and Urban Law at the Yale Law School. The first half of his book Order Without Law – which ranks among my the top five social science books — develops a theory of social norms, the essence of which is that social norms emerge and evolve in a way that maximizes the welfare of the community. This is the informal-sector equivalent to Posner’s hypothesis that the common law evolves in a way that is wealth-maximizing.

The second half of Order Without Law illustrates that theory by presenting a case study of the many social norms observed by the cattle ranchers of Shasta County, CA.

If you think you might be interested in reading Ellickson’s book but aren’t sure about purchasing the book and would like a teaser, read Ellickson’s 1989 Journal of Legal Studies article titled “A Hypothesis of Wealth-Maximizing Norms: Evidence from the Whaling Industry.” That article presents Ellickson’s theory of social norms and applies it to the norms that emerged to regiment New England’s whaling industry in the 18th and 19th centuries.