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Sequential Sales as a Test of Adverse Selection in the Market for Slaves

Published online by Cambridge University Press:  23 May 2013

Jonathan Pritchett  and
Mallorie Smith
Jonathan Pritchett
Affiliation:
Associate Professor, Department of Economics, Tulane University, New Orleans, Louisiana 70118. E-mail: jprit@tulane.edu.
Mallorie Smith
Affiliation:
Research Assistant, Department of Economics, Tulane University, New Orleans, Louisiana 70118. E-mail: mallorie.e.smith@gmail.com.
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Abstract

When imported slaves were first sold in New Orleans, buyers were unaware of the slaves’ unobservable characteristics. In time, the new owners learned more about their slaves and may have resold the “lemons.” Previous research suggests that buyers anticipated such adverse selection and reduced their bids for these slaves. Consequently, we should observe lower prices for resold slaves. We test this proposition by linking the sequential sales records of 568 slaves. Through a comparison of initial and resale prices, we find little evidence to support the hypothesis that adverse selection lowered the price of resold slaves.

Type
Articles
Information
The Journal of Economic History , Volume 73 , Issue 2 , June 2013 , pp. 477 - 497
Copyright
Copyright © The Economic History Association 2013 

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Footnotes

The authors acknowledge the support of the National Science Foundation award SMA-1004569 entitled, “Research Experience for Undergraduates.” Jessica Hayes and the staff of the Notarial Archives Division Research Center provided able research assistance. We benefit from the helpful comments and suggestions of James Alm, Alan Barreca, Joe Ferrie, Paul Rhode, Judy Schafer, and two anonymous referees. An earlier version of this article was presented at the meetings of the Cliometrics Society, January 7, 2011.

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