Howard N. Bodenhorn

STUDENT
PROJECTS

EXCEL:

Dimitar Milenov Marmarov. "The Efficiency of New Jersey's Oyster Fleet in the Late Nineteenth Century."

Using detailed firm-level data from New Jersey in the 1890s, this project considers the efficiency of the state's oyster fleet. Oystermen in the late nineteenth century had access to several distinct technologies, including differences in ship size and type, seeding methods, and ownership of underwater beds. Using this information, this study will determine whether oystering was subject to economies of scale and to what extent average technology diverged from best-practice technology.

Student. "A Longitudinal Study of African Americans in the Mid-nineteenth Century."

This study is part of a larger project on the economic well-being of manumitted and free-born African Americans in the mid-nineteenth century. Using data recorded in the censuses of 1850 and 1860, this part of the project will link a large representative sample of black and white individuals between the two census years. In doing so, we will gain an understanding of the geographic and economic mobility of blacks relative to whites. There is much anecdotal evidence suggesting that black mobility was severely circumscribed, but this study will provide some much-needed evidence to the debate.

Denitsa Karadzhova. “Industrial Unemployment and Compensating Differentials in Early Twentieth Century Connecticut.”

This project investigates the existence of compensating wage differentials for unemployment risk in an era before unemployment insurance. Using information gathered from surveys of manufacturing workers conducted in Connecticut between 1900 and 1905, we will look to see if workers who faced higher probabilities of predictable unemployment spells received a wage premium to offset the disutility associated with unemployment. The results of this research will be of interest to labor economists because the debate about the existence of compensating differentials dates back to Adam Smith’s Wealth of Nations. Even Smith doubted the existence of compensating differentials in manufacturing due to the regularity of employment, relative to agriculture and construction. But previous work by Professors Averett and Bodenhorn uncovered differentials in manufacturing in late-nineteenth century New Jersey.

Martha Osier. “A Longitudinal Analysis of African American in the Mid-nineteenth Century”

This research is part of a larger project considering the economic condition of African-Americans living in the shadow of Slavery.  Federal censuses of 1850 and 1860 will be used to track free blacks over the intervening decade.  Few such longitudinal studies exist, mostly due to the difficulty of locating people in censuses a decade apart.  However, genealogists have scanned the censuses onto disk and made them searchable.  These genealogical resources will be used to track individuals between censuses to determine their geographic and economic mobility.

Veronica Hart. “Crime, Punishment, and Race in Antebellum Maryland.”

In the early twenty-first century, Americans incarcerate a far larger percentage of their own citizens than any other developed country. Moreover, Americans incarcerate more African-Americans, as a percentage of the African-American population, than any other racial group. Discussions of the modern experience attribute racial differences in incarceration rates to differences in education, employment, family structure, substance abuse, recidivism, and blatant racism. This research will not address the modern experience, but will place it within an historical context. I have transcribed information on about 500 male criminal imprisoned in the Maryland penitentiary between 1843 and 1860. The data include information on each prisoner’s crime; age; occupation; length of sentence; literacy; whether he attended church school as a youth; whether he was orphaned and, if so at what age; whether he had apprenticeship training; whether he was temperate (abused alcohol); marital status; the number of prior convictions; place of birth; and race.

Several issues will be addressed of interest to social scientists. Once the data is in machine-readable form, multivariate statistical analysis will be employed to estimate the relationship between the type of crime committed and each prisoner’s social and demographic characteristics. Second, we can determine if blacks were incarcerated at greater rates than whites, and whether there were racial disparities in the length of sentences. Finally, there are a number of technical issues raised in the economics of crime literature about the effectiveness of punishment as a deterrent. The data may be brought to bear on these issues as well.

Justus Staisiunas. “Unemployment and Compensating Differentials in Late Nineteenth Century New Jersey”

We test for the existence of compensating differentials for unemployment risk in an era before unemployment insurance. Using information gathered from manufacturing worker surveys conducted during the 1880s in New Jersey, we find that workers who faced higher probabilities of predictable unemployment spells received a small compensating differential. Low-skill laborers and operatives were partially compensated for unemployment risks; skilled craftsmen were not. Although workers were not fully compensated for the unemployment risks they accepted, the results are of interest because most previous writers, dating back to Adam Smith, doubted the existence of compensating differentials in manufacturing. Differentials are typically believed to arise in employments with pronounced seasonal components, such as agriculture and construction.

Trish Tozzi.  “Did Shareholders Monitor?: Evidence from Early Twentieth Century Banks”

The theoretical literature on corporate governance suggests that the turnover of corporate executives, directors, and managers is negatively related to accounting and market measures of firm performance.     That is, if a corporation’s share prices fall sharply relative to the market, or if earnings growth is lower than anticipated, we are more likely to observe a change a firm’s upper management or board of directors. However, if top managers are also shareholders with a significant stake in the firms, their incentives to replace under-performing managers is muted and they may undermine outside directors. Thus, although the turnover of managers and directors is typically negatively related to firm performance, the probability of turnover is negatively related to equity ownership.

A second problem arises when a firm is controlled by large shareholders, particularly when controlling shareholders are related family members. On one hand, controlling shareholders tend to take an active interest in a firm’s activities, which should diminish managerial slack and improve performance.  On the other, controlling shareholders may adopt policies or practices detrimental to minority shareholders.  While a bloc of controlling shareholders mitigates the agency problem between managers and shareholders, its existence creates a new agency problem between majority and minority shareholders.  Proper discipline of controlling shareholders depends on the operation of an effective market for corporate control.   A few studies, in fact, find that familial dominance is most pervasive in less financially developed countries, typically LDCs.

Previous studies of corporate governance tend to focus on modern events and, with the exception of the few studies of LDC markets, large publicly traded corporations.This study addresses issues of effective corporate governance with two differences. First, it steps back in time, to the last decade of the 19 th through the first half of the 20th century. Second, it investigates the effectiveness of corporate governance among small, often closely-held corporations. Specifically, this project will look for the postulated negative correlation between several accounting-based measures of firm performance and turnover among CEOs and directors at banks incorporated in New York state.

Josh Sullivan.  “Early American Financial Markets and International Capital Flows: Evidence from Boston, 1801-1819.” 

Globalization is not new.  In fact, globalized financial markets may be nearly as old as financial markets themselves. Several studies of early modern financial markets show how Italian merchants established trading and financial networks throughout the Mediterranean region. Others have dated long-distance financial transactions nearly to the time of Christ.  Recent studies have defined the boundaries of an eighteenth and nineteenth century financial network that initially included the major ports of northern Europe and England.  Larry Neal (1990) provides a detailed study of the integration of Amsterdam, London, and Paris securities markets that date to the early 1700s. Bodenhorn (1992, 2000) and Sylla (1998) also argue that early American financial markets were internally integrated by the early to mid-nineteenth century. This study proposes to extend our understanding of the geographic scope and operation of early American financial markets.

I recently uncovered a source of prices for various financial instruments for the Boston, New York, and Philadelphia markets between 1801 and 1820. Several contemporary newspapers reported prices on a handful of traded equity securities, government bonds, U.S.-English exchange rates, and interest rates on short-term borrowings. The historiography holds that English investment funds flowed into New England during the first decade of the nineteenth century, which encouraged the formation of various banks, insurance companies, and manufacturing firms (mostly textile mills). With the inflow of funds, the local stock market should have seen rising share prices. Offsetting this effect was the fact that the United States ran a continuing current account deficit with Great Britain.  Because imports exceeded exports, exchange rates often turned against the United States, which forced American traders to ship gold to Britain to cover the trade imbalance. These outflows should have had a depressing effect on share prices and initial public offerings.   Whether the Boston stock market was rising or falling should depend on which of these two effects predominated. And, if it did, shows that early U.S. financial markets were early integrated into a large Atlantic trading and financial network.

This research proposes to test these hypotheses. Using information on share prices in the Boston market and constructing a market index comparable to the Dow-Jones or NASDAQ indices, we can perform sophisticated analyses to check on the connection of the U.S. market to the older, larger, more sophisticated European markets. Specifically, if the U.S. markets were effectively integrated with European markets, exchange rates, and the stock market index should move in opposite directions.

Shivani Malhotra.  “The Comparative Economic Well-Being of Antebellum Virginia’s Free African Americans: Evidence from State Tax Records”

Nearly three centuries after the arrival of the first Africans at Jamestown, W.E.B. Du Bois (1903) could still write that the “problem of the twentieth century is the problem of the color line.” Historians, sociologists, political scientists, and economists spent the century documenting the extent and operation of the color line. Myrdal (1944) found segregation troubling and, like Du Bois, warned of its pernicious effects.  Farley and Allen (1989) detailed the color line in nearly every facet of life, documenting sharp racial differences in mortality, family formation, schooling, employment, occupational achievement, earnings, income, and wealth.     Alston and Ferrie (1998), Lieberman (1998) and Brown (1999) argue that, through racially motivated exclusionary provisions in the 1935 Social Security Act, the color line became institutionalized. Great Society legislation reduced racial biases, but Aid to Dependent Children programs (and later incarnations) disproportionately benefited black Americans and remained a political flashpoint through the 1990s. Overt racism has diminished in the last half-century, but the black and white experience remains fundamentally different. The color line left an indelible imprint on the twentieth century.

Although economic historians, including Whatley (1990), Sundstrom (1994), and Collins (2000), have traced the outlines of the color line in the twentieth century, they have yet to fully document its nineteenth-century origins in southern America. Wright (1986) shows that many industrial occupations were highly segregated in the late nineteenth century South, but slaves freed by the Emancipation Proclamation and the Thirteenth Amendment did not establish the first black communities.  Un the antebellum era, manumitted slaves and their free-born offspring insinuated themselves into the larger society. They found employment, bought land, built homes, paid taxes, established churches, and other social organizations. In short, they constructed communities.

Liberalized manumission laws in the Upper South, nobly Maryland and Virginia, encouraged private emancipations and the free African-American population exploded.  From a few thousand free blacks in the 1790s, Maryland’s free population in 1850 totaled nearly 75,000; Virginia’s free population reached nearly 55,000. Although this change in the population in no way compares to the dramatic demographic and social dislocations brought about by the Civil War, it presaged the massive post-emancipation shift. During the first sic decades of the nineteenth century, the Upper South faced many of the same social and racial pressures experienced by the Lower South after the war. The Upper South’s experience, then, may provide telling evidence on the ability and willingness of white southerners to incorporate African Americans into the larger society and economy.

Historians have discussed the dynamics of the antebellum color line without much useful quantification. Using contemporary sources, this research will generate a new view of economic achievement among Virginia’s free African American population. Beginning in the 1850s, Virginia taxed various components of personal property, including slaves, horsed, mules, hogs, sheep, cattle, watches, clocks, pianos, gold and silver plated furnishings, and financial assets. This previously unexploited data set provides valuable information on the comparative accumulations of whites and blacks. The tax lists identified blacks, either through the designation “fn” (free Negro) following their name, or by grouping them together at the end of the tax list. 

HONORS:

Veronica Hart, “The Role of Women in the Economy, Culture and Literature of Spain from Dictatorship to Democracy (1970-1980).” [Joint with Department of Spanish]

Shivani Malhotra, “The Racial Wealth Gap in Antebellum Virginia.”

Crystal Taylor, “Pareto Efficient Exchange and Urban Development.”

Josh Shannon, “Getting to the Core of America’s Chernobyl: The Long-Term Effects of the Accident at Three Mile Island on Residential Housing Values.”

Matt Goodman, “Customer Demand and Discrimination in the Baseball Memorabilia Market.”

Boris Mandich, “Increasing Market Participation of Women in Late-Nineteenth Century England:  A Product of Political or Economic Reform?”

Josh O’Harra, “The Living Standards of Free Blacks in the Antebellum South, 1770-1840.”

Melissa Roe, “Differential Tolerances and Accepted Punishments for Disobedient Indentured Servants and Their Masters in Colonial Courts.”

Brad Tips, “America’s Economic (Non) Decline in Historical Perspective.”

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