The past century and a quarter can be divided into three successive eras for homeownership policy characterization. For the first four decades, the federal government pursued a…
Abstract
Purpose
The past century and a quarter can be divided into three successive eras for homeownership policy characterization. For the first four decades, the federal government pursued a laissez-faire policy that left housing issues to the individual states and private markets. For the next six decades, the federal government implemented a policy created as part of the Roosevelt New Deal program. Finally, the Clinton administration discarded the New Deal policy in favor of a more aggressive policy that has continued to the present day. The purpose of this study is to compare the performance of the respective policies.
Design/methodology/approach
The study introduces two metrics. The first metric, based on government homeownership rate data, enables comparison of the laissez-faire and New Deal policies. The second metric, based on financial frictions in the mortgage market, enables comparison of the New Deal and Clinton policies.
Findings
Analysis based on the first metric suggests the New Deal policy was successful in meeting its macroeconomic objectives and was more effective overall than the laissez-faire policy. Analysis based on the second metric suggests the New Deal policy was also more successful in both respects than the Clinton policy.
Practical implications
The findings suggest that the Clinton homeownership policy was the primary driver behind the recent US housing crisis and that vulnerability in the secondary mortgage market created by the Clinton policy represents systemic housing market risk.
Originality/value
The study introduces simple analytical tools to address problems related to systemic risk in the US housing and housing finance markets due to homeownership policy.
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The problem in alleviating homeowner mortgage distress through refinance is how to achieve meaningful alleviation without prospectively harming the financier. The problem revolves…
Abstract
Purpose
The problem in alleviating homeowner mortgage distress through refinance is how to achieve meaningful alleviation without prospectively harming the financier. The problem revolves around two parameters from real estate finance – the probability that the distress leads to foreclosure and resulting foreclosure loss severity for the financier if foreclosure does occur. Previous analysis focuses on reducing the probability that homeowner distress leads to foreclosure. By contrast, the purpose of this paper is to focus on reducing foreclosure loss severity.
Design/methodology/approach
The study develops a new intuitive formula for foreclosure loss severity to quantify its dependence on transaction costs. The study shows that foreclosure loss severity reduction is feasible by introducing a new refinancing instrument that lowers foreclosure transaction costs and applying property law to derive the structure of the refinancing instrument.
Findings
Foreclosure loss severity reduction can subsidize concessions on scheduled payments for homeowners with arbitrarily poor credit without prospective harm to the financier.
Research limitations/implications
Quantification of mortgage distress relief is limited to distressed mortgages described by representative parameter values from various government studies.
Practical implications
For most distressed homeowners, payment and principal reductions could exceed those available from the recent government programs.
Social implications
Implementation should significantly enlarge the pool of homeowners eligible for mortgage distress relief.
Originality/value
The mortgage refinance is qualitatively different from that available under existing government refinance programs because it is based on an arms-length exchange of property rights that makes market sense regardless of whether the refinancing results in subsequent homeowner default.
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The development of standardized fixed-income securities and organized secondary markets in which to price and trade the securities is a widely recognized factor in the emergence…
Abstract
Purpose
The development of standardized fixed-income securities and organized secondary markets in which to price and trade the securities is a widely recognized factor in the emergence of modern developed economies. However, the ongoing global financial crisis has exposed the existence of a fundamental and costly conflict between lender and borrower property rights when debt is securitized that has imperiled some fixed-income markets in their present form. This paper aims to suggest a new non-debt concept for fixed-income finance that avoids the conflict inherent in securitized debt.
Design/methodology/approach
The paper considers how to build the foundation of non-debt fixed-income technology on property law instead of contract law.
Findings
Fixed-income products based on the new technology expose investors to lower loss risk than investors incur with analogous debt-based products. Such products could lower the cost of fixed-income finance and contribute to the global restoration of fixed-income market liquidity.
Research limitations/implications
Variations in property law across venues imply that the new financial technology is not implementable in all legal systems.
Originality/value
The new financial technology could represent an opportunity for the Islamic financial industry to expand its fixed-income horizons in the global financial markets. The upside both within and beyond the Islamic community could be dramatic.
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‘Countrymindedness’ is a resonant but perhaps manufactured term, given wide currency in a 1985 article by political scientist and historian Don Aitkin in the Annual, Australian…
Abstract
‘Countrymindedness’ is a resonant but perhaps manufactured term, given wide currency in a 1985 article by political scientist and historian Don Aitkin in the Annual, Australian Cultural History. Political ideology was his focus, as he charted the rise and fall ‐ from the late nineteenth century to around the 1970s ‐ of some ideological preconceptions of the Australian Country Party. These were physiocratic, populist, and decentralist ‐ physiocratic meaning, broadly, the rural way is best. Aitkin claimed the word was used in Country Party circles in the 1920s and 1930s, but gave no examples. Since the word is in no dictionary of Australian usage, or the Oxford Dictionary, coinage may be more recent. No matter. Countrymindedness is a richly evocative word, useful in analysing rural populism during the last Australian century. I suggest it can usefully be extended to analyzing aspects of the inner history of Euro‐settlement in recent centuries.
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Abstract
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Richard Boateng, Richard Heeks, Alemayehu Molla and Robert Hinson
E‐commerce is diffusing into developing countries (DCs), and is assumed to help deliver the international development agenda. But how can the connection between e‐commerce and…
Abstract
Purpose
E‐commerce is diffusing into developing countries (DCs), and is assumed to help deliver the international development agenda. But how can the connection between e‐commerce and socio‐economic development be conceptualised? The aim of this paper is to analyse that connection by drawing from the development studies discipline to take a broader perspective on e‐commerce than that so far provided by firm‐level research.
Design/methodology/approach
The authors adopt a literature survey approach, drawing their conceptual foundations from development studies, and supplementing this from the e‐commerce literature.
Findings
The paper develops a new, integrated model that explains the way in which e‐commerce can contribute to socio‐economic development.
Research limitations/implications
This new model can help provide a foundation for future research on e‐commerce in DCs; research on e‐commerce policy as well as impact assessment research.
Practical implications
The discussion and model provide development agencies, governments, consultants and business people working in DCs with a clearer sense of the contribution e‐commerce can make; assisting them in prioritization, planning, and evaluation of e‐commerce projects.
Originality/value
The paper provides the first integrated perspective on the broader contribution of e‐commerce to the growth and development of DCs.
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Steven P. Devaney, Stephen L. Lee and Michael S. Young
The purpose of this paper is to examine individual level property returns to see whether there is evidence of persistence in performance, i.e. a greater than expected probability…
Abstract
Purpose
The purpose of this paper is to examine individual level property returns to see whether there is evidence of persistence in performance, i.e. a greater than expected probability of well (badly) performing properties continuing to perform well (badly) in subsequent periods.
Design/methodology/approach
The same methodology originally used in Young and Graff is applied, making the results directly comparable with those for the US and Australian markets. However, it uses a much larger database covering all UK commercial property data available in the Investment Property Databank (IPD) for the years 1981 to 2002 – as many as 216,758 individual property returns.
Findings
While the results of this study mimic the US and Australian results of greater persistence in the extreme first and fourth quartiles, they also evidence persistence in the moderate second and third quartiles, a notable departure from previous studies. Likewise patterns across property type, location, time, and holding period are remarkably similar.
Research limitations/implications
The findings suggest that performance persistence is not a feature unique to particular markets, but instead may characterize most advanced real estate investment markets.
Originality/value
As well as extending previous research geographically, the paper explores possible reasons for such persistence, consideration of which leads to the conjecture that behaviors in the practice of institutional‐grade commercial real estate investment management may themselves be deeply rooted and persistent, and perhaps influenced for good or ill by agency effects.
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Joshua Graff Zivin, Lisa B. Kahn and Matthew Neidell
In this chapter, we examine the impact of pay-for-performance incentives on learning-by-doing. We exploit personnel data on fruit pickers paid under two distinct compensation…
Abstract
In this chapter, we examine the impact of pay-for-performance incentives on learning-by-doing. We exploit personnel data on fruit pickers paid under two distinct compensation contracts: a standard piece rate plan and one with an extra one-time bonus tied to output. Under the latter, we observe bunching of performance just above the bonus threshold, suggesting workers distort their behavior in response to the discrete bonus. Such bunching behavior increases as workers gain experience. At the same time, the bonus contract induces considerable learning-by-doing for workers throughout the productivity distribution who presumably hope to one day hit the target, and these improvements significantly outweigh the losses to the firm from the bunching. In contrast, under the standard piece rate contract, we find minimal evidence of bunching and only small performance improvements at the bottom of the productivity distribution. Our results suggest that contract design can help foster learning on the job, underscoring the importance of dynamic considerations in principle-agent models.
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Much writing on dissenting intellectuals posits a uniform relationship between autonomy from the popular element and social influence. The case of U.S. poets from 1930 to 1975…
Abstract
Much writing on dissenting intellectuals posits a uniform relationship between autonomy from the popular element and social influence. The case of U.S. poets from 1930 to 1975 challenges this, as dissenting poets' sphere of influence grew during the hegemony of populist as well as antipopulist movements. In order to account for this, this chapter draws on the conceptualization of autonomy as a process whose parameters are mutually irreducible and potentially contradictory. Where these parameters are more or less fully synchronized, dissenting intellectuals face a united bloc of opponents that they cannot divide; therefore, they need to fight all of these opponents simultaneously. Where there is little such synchronization, in contrast, they can negotiate temporary alliances with some of their foes, use these alliances to secure gains in more important fronts, and revise their alliances as circumstances change. Twentieth-century United States, this chapter argues, was an example of the latter kind of setting. Dissenting poets were able to use universities and popular element against one another, depending on how they saw their overall situation. When autonomy from universities mattered most, they reclaimed the popular element; when autonomy from the popular element mattered most, they set aside their differences with university administrators and joined the academic ranks. This distinction between greater and less synchronization of the powers, the chapter argues, has implications for political sociology beyond the study of intellectuals.
Jonathan Elms, Catherine Canning, Ronan de Kervenoael, Paul Whysall and Alan Hallsworth
The purpose of this paper is to investigate the extent of retail change in the UK grocery sector over the last 30 years.
Abstract
Purpose
The purpose of this paper is to investigate the extent of retail change in the UK grocery sector over the last 30 years.
Design/methodology/approach
In 1980, a press article by Richard Milner and Patience Wheatcroft attempted to anticipate retail change by 1984. Taking that as a template, the paper examines how retail did, in fact, change over a much longer timescale: with some unanticipated innovations in place even by 1984. Reference is made to academic research on grocery retailing in progress at the time and which has recently been revisited.
Findings
Although Milner and Wheatcroft tackled the modest task of looking ahead just four years, the content of their article is intriguingly reflective of the retail structure and systems of the UK at the time. Whilst some innovations were not anticipated, the broad themes of superstore power and market regulation still command attention 30 years on.
Originality/value
Through reconsidering 30 years of retail change, the paper highlights that with time how do you shop has come to pose at least as interesting a question as where do you shop.