This project studies the expectations and behaviour of investors in a very particular financial market–the market for venal offices in France before the Revolution. Venality was a popular investment outlet before 1789. Once sold by the government, offices could be traded, rented out, and even left in inheritance. The French state paid a fixed interest to the holder, who could also earn wages or collect fees. Venality is often mentioned in the literature, but mostly based on limited information. This project, in contrast, aims to compile a much larger cross-section of offices based on the records of a tax levied on their value in 1771. This tax was unusual in that it allowed officeholders to fix the tax base themselves. The particular nature of the tax allows us to learn about investors expectations. By using asset pricing models we can relate the expected income stream and capital gains to the values fixed in 1771. This project will also permit quantifying the extent of venality. Unlike most instances of rent-seeking, the capital invested in venal offices and their returns are observable, because the practice was legal. The evidence on these will be compared to other studies on corruption and rent-seeking.

By hand - the books were initially photographed in Paris and the data was then extracted by hand and coded into Excel spreadsheets