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Unformatted text preview: xed in quantity implies land price fully captures
marginal producer welfare. Need a parametric assumption to relate it
to average landowner welfare.
Proposition 5: If wages are exogenous, and F (α) is a Pareto
distribution with shape parameter b > 1 and scale parameter a < α∗ ,
then b−1 × dv is a suﬃcient statistic for the change in average
landowner welfare, Suresh Naidu (Guest Lecture) dW RW
dp . Political Economy in the Post-Bellum U.S. South October 28, 2009 28 / 29 Landowner Incidence
Estimate Tail Distribution of α from 1880 Ransom and Sutch data
Check distribution of capital values has a Pareto-tail: Gabaix and Ibragimov (2009) estimator gives a shape parameter of b = 2.33
× dv = .7 × .07 × 1.5 billion implies an aggregate increase in landowner wealth
of 79 million (overall)
1−b Discount back at .62 (.05 per year for 10 years) to get ﬂow value of 29.8 million to
landowners: 600 million today. Suresh Naidu (Guest Lecture) Political Economy in the Post-Bellum U.S. South October 28, 2009 29 / 29 The End of the Southern Equilibrium
What ended the “Southern equilibrium” was the juxtaposition of
several forces including black migration to northern cities after WWII,
the mechanization of cotton picking in the 1950s and 1960s, the
collective action of the civil rights movement and a sequence of
Supreme Court and government decisions, such as Brown versus
Board of Education in 1954, the Civil Rights Act of 1964 and the
Voting Rights Act of 1965.
Other potential explanations – dissemination of air conditioning,
eradication of hookworm (see Hoyt Bleakley (2003) “Disease and
Development: Evidence from the American South,” Journal of the
European Economic Association.)
These factors interacted to …nally change the institutions of Southern
agriculture and led to a rapid economic convergence to the rest of the
James A. Robinson (Harvard) The Emergence of Modern Economic Growth: A Comparative and2, 2008
November Historical Analysis
12 / 18 Sou...
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