Posts tagged 'Cows'

In defence of cows as safe assets

You’ll remember this from last year, we’re sure:

Our main finding is that, on average, [rural Indian] households earn negative returns on their investments in cows and buffaloes if labor is valued at market wages: we estimate average returns of negative 64% and negative 39% for cows and buffaloes respectively. If we value the household’s own labor at zero, estimated average returns increase, to negative 6% for cows and positive 13% for buffaloes… if cows and buffaloes earn such low, even negative, economic returns, why would rural Indian households continue to invest in them?

That, from Anagol, Etang and Karlan, led to a host of speculation about various economic and cultural factors which might explain India’s ability to slide past the “central tenets of capitalism”… h/t’s to the Onion all round. Read more

Cows as safe assets

Our word for capital famously comes from the French for livestock, cheptel. And people are generally bullish about milking investments, and finding cash cows. Still, watch out for herd mentality (herd in Latin, pecus, giving us pecuniary).

Sadly none of those puns made it into a Gates Foundation-backed NBER paper released on Monday (H/T Modeled Behavior):

CONTINUED EXISTENCE OF COWS DISPROVES CENTRAL TENETS OF CAPITALISM?

(Update: which refers to… this)

But no matter. The paper has found something astonishing about cattle as an investment in rural India, with implications for financial liberalisation across the developing world: Read more