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Research Seminars & Workshops @ IRES

Professor Geoffrey K. Turnbull
Georgia State University

Antichresis Leases: Theory and Empirical Evidence from the Bolivian Experience


22 July 2009 (Wed)


3.30 pm - 5.00 pm


IRES Seminar Room, SDE1 #04-24


The antichresis lease appears in many civil law countries. It requires a lump sum tenant payment that is to be returned in full at the end of the lease, where the custody of the lump sum is the property owner’s compensation in the property lease. This paper develops a theory of the antichresis emphasizing the countervailing effects of the tenant liquidity risk and owner input supply moral hazard. The model predicts that the antichresis dominates when tenant activities are largely independent of owner supply of inputs whereas the periodic rent contract dominates when tenant activities depend upon the owner inputs. At the same time, the antichresis insulates owners from tenant liquidity risks while rent contracts do not, making antichresis leases more attractive for tenant populations with greater liquidity risk. The empirical evidence from Bolivian property leases supports the main theoretical predictions regarding property type and neighborhood population characteristics.

About The Speaker

Professor Turnbull was a member of the faculty of Louisiana State University for 17 years before joining the Department of Economics at Georgia State in Fall 2001. His recent research interests include urban land use, the urban development process, property rights and land use regulation, housing and real estate brokerage markets, as well as issues in local government finance. His articles appear in a variety of journals, including the Journal of Urban Economics, Journal of Legal Studies, Journal of Public Economics, Journal of Regional Science, Southern Economic Journal, Regional Science and Urban Economics, International Economic Review, Real Estate Economics, Economic Inquiry, Journal of Real Estate Finance and Economics, and Journal of Labor Economics.
Turnbull is currently on the editorial boards of the Journal of Urban Economics, Real Estate Economics, Journal of Real Estate Finance and Economics, and Journal of Housing Economics.

For full paper, download here

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