Category: readings

The Editorial Process in Economics and Social Sciences

Marc Bellemare offers some thoughts about the editorial review process in economics and social sciences…from an editors perspective. His insights are helpful for new or younger scholars, and a good reminder for those more seasoned.

On May 1, I will become editor of Food Policy, replacing the University of London’s School of Oriental and African Studies’ Bhavani Shankar, and sharing the role of editor with the University of Bologna’s Mario Mazzocchi, serving for an initial term of three years.

Given that, I thought now would be as good a time as any to write my thoughts about the editorial process. This will allow me to go back to these thoughts once my term as editor ends, to see what else I might have learned. So here goes–in no particular order–some thoughts I’ve accumulated on the editorial process in the social sciences. I hope others with editorial experience can chime in with their own additional thoughts in the comments.

An Overview of US Food and Nutrition Programs

Hilary Hoynes (Berkley) and Diane Whitmore Schanzenbach (Northwestern) have a new NBER piece that provides a very useful overview of the four major food and nutrition programs in the U.S., including their histories, current statistics, potential benefits, and the current research on their effectiveness.  An ungated version of the piece is available here.

This chapter provides an overview of the patchwork of U.S. food and nutrition programs, with detailed discussions of SNAP (formerly the Food Stamp Program), WIC, and the school breakfast and lunch programs. Building on Currie’s (2003) review, we document the history and goals of the programs, and describe the current program rules. We also provide program statistics and how participation and costs have changed over time. The programs vary along how “in-kind” the benefits are, and we describe economic frameworks through which each can be analyzed. We then review the recent research on each program, focusing on studies that employ techniques that can isolate causal impacts. We conclude by highlighting gaps in current knowledge and promising areas for future research.

State Contract Law and Debt Contracts

An interesting paper by Colleen Honigsberg, Sharon Katz (both at Columbia) and Gil Sadka (Univ. of Texas at Dallas) in the November 2014 issue of the Journal of Law & Economics (available here) looks at differences in debt contract terms based on the state’s contract law which governs the debt contract. A number of papers have studied factors affecting the use of various types of covenants and contract terms for debt agreements, but none previously have accounted for variation in state contract laws. Below is the abstract:

This paper examines the relationship between debt contracts and state contract law. We first develop an index to evaluate whether each state’s law is favorable or unfavorable to lenders. We then analyze how the contract terms, the frequency of covenant violations, and the repercussions of covenant violations vary across states. We find that cash collateral is most likely to be used when the contract is governed by law that is favorable to debtors and that out-of-state borrowers who use favorable law pay higher yield spreads. In addition, when the law is favorable to lenders, there are significantly fewer covenant violations, and the repercussions of covenant violations—measured as changes in the borrower’s investment policy—are more severe. We also compare the characteristics of relevant parties across states, and the results provide support for the theory that there is a market for contracts similar to the market for incorporations.

Formula Pricing and Profit Sharing in Inter-Firm Contracts

Roger Blair and Francine Lafontaine have a new paper out on “Formula Pricing and Profit Sharing in Inter-Firm Contracts” (here). They explore the use of profit-sharing contracts for vertical relationships, particularly the case of successive monopoly or the double-marginalization problem. Naturally, their focus is on franchise relations. The abstract follows:

Ronald Coase viewed transaction cost minimization as a central goal of contracting and organizational decisions. We discuss how a solution to the traditional successive monopoly problem that has not been discussed in the literature can economize on such costs. Specifically, we show that when we allow for profit sharing between upstream and downstream firms, a simple formula pricing contract can be used to generate the vertically integrated level of profits. This simple contract, empirically, would take the form of the standard linear wholesale price contracts that are ubiquitous in vertical contexts, even those where we might expect successive monopoly to be an issue. We discuss the advantages of the proposed contract from a transaction cost perspective. We also discuss some of its limitations, in particular the likelihood of misrepresentation of costs, and ways in which such misrepresentation might be addressed in the contract.

A Review of Occupational Licensing

This week the US Supreme Court is hearing arguments in the case of North Carolina Board of Dental Examiners v. Federal Trade Commission, addressing the questions of whether (or under what terms) state occupational licensing boards are immune from antitrust scrutiny. This is the case I referred to last week and linked to the preview of the arguments on SCOTUSblog.

Today I ran across a review of Morris Kleiner’s recent book, Stages of Occupational Regulation: Analysis of Case Studies, on Econ Journal Watch. Uwe Reinhardt (Princeton) provides a great overview of the general issue and Kleiner’s treatment of it. Below is the abstract of Reinhardt’s review:

The licensing of occupations—a very forceful intervention in markets—is pervasive and growing in modern economies. Yet the attention paid to it by economists and economics textbooks has been small. Highly welcome, therefore, has been the extensive and intensive work on this subject by Morris Kleiner. Kleiner’s latest book, titled Stages of Occupational Regulation: Analysis of Case Studies (2013), explores the progression of occupational regulation, from mere registration to certification to outright licensing—three distinct stages. Kleiner carefully selects for his analysis a series of occupations representing the stages of regulation, devoting a chapter to each occupation. He uses a variety of statistical approaches to tease out, from numerous databases, what the impact of mild to heavy regulation on labor markets appears to be.

Kleiner’s work leads him to call for a pervasive review of occupational regulation in the United States, with a view towards replacing occupational licensure, which introduces the most inefficiency and welfare loss, with mere certification of occupations. That recommendation gains plausibility in an age where cheap computation and data mining makes it possible to protect consumers from low-quality and possibly dangerous services by providing robust, user-friendly information on the quality of services delivered by competing occupations, such as doctors and nurse practitioners.

You can access the full article here. I may need to add Kleiner’s book to my list of fun-things-to-read-when-I-get-a-chance.

Optimal Contract under Moral Hazard and Soft Information

Guillaume Roger has an interesting paper in the current American Economic Journal: Microeconomics looking at the case in which the agent must self-report the ex-post performance outcome. This is a worthwhile extension of the typical principal-agent model, since in many real world cases there is information asymmetry ex post between the agent (who has better information on actual outcomes) and the principal. The abstract follows:

I study a model of moral hazard with soft information: the agent alone observes the stochastic outcome of her action; hence the principal faces a problem of ex post adverse selection. With limited instruments the principal cannot solve these two problems independently; the ex post incentive for misreporting interacts with the ex ante incentives for effort. This affects the shape and properties of the optimal contract, which fails to elicit truthful revelation in all states. In this setup audit and transfer become strategic complements; this is rooted in the nonseparability of the problem.

The Ethics and Economics of Agrifood Competition

My colleague, Harvey James, recently edited a volume for Springer’s The International Library of Environmental, Agricultural and Food Ethics titled The Ethics and Economics of Agrifood Competition. The book is a collection of essays addressing the adequacy and fairness of agrifood competition and includes pieces from a variety of scholars, from philosophy to sociology to economics. The volume includes several essays addressing conceptual issues and questions around agrifood competition and several studies of specific agrifood sectors from around the globe.

One of the chapters, written by yours truly, is titled “The ‘Fallacy’ of Competition in Agriculture.” The abstract reads:

Agriculture has long been viewed by economists as the best example of an industry characterized by perfect competition. However, the history of modern agriculture is marked with differences about just how competitive the industry is and whether competition is in fact a desirable thing. Present debates about competition in agriculture rally discontent with the competitive environment around the mantra of “free and fair competition.” But this populist ideal presents problems of its own. First, what is the economic meaning of “free and fair” competition? Second, how does the argument about the need for free and fair competition meet with the facts of how the agricultural industry behaves? And finally, what are the ethical implications of arguments for government intervention in the agricultural economy?

A copy of an early draft of the chapter is available here. But by all means, buy the book!