In the first chapter of this dissertation, rates of return derived from the institution of slavery are adjusted for risk and compared with other antebellum investments through the directional distance function. Since multiple investments often occupy the efficient frontier, bootstrap confidence intervals of the directional distances fail to indicate a statistically significant difference between the investments unless one choice dominates in both risk and return or more restrictive assumptions concerning the relationship between risk and rate of return are adopted. Through the use of super-efficiency scores, we find that the institution of slavery outperformed the other investments for the periods 1830-1835 and 1848-1860, but slavery did not perform as well as the other investments during the severe economic downturn following the Panic of 1837. We conclude that the institution of slavery was a superior antebellum investment but was more cyclical than other investments.
In the second chapter, the number of bidders in New Orleans slave auctions is estimated by period. Auctions were legally required in New Orleans estate sales during the 1800s. Since records of slave transactions were carefully documented, we are afforded the opportunity to test whether the number of bidders increased or decreased during this period using well-developed empirical methods. Auction theory tells us that the winning bid in a private-value auction will increase if an additional bidder is added. Therefore, if the number of bidders increased between 1840 and 1860, this would suggest that westward expansion was influential in the increase in average price of slaves during the same period. If the number of bidders decreased, the only remaining argument would be that slaves were simply becoming more valuable assets. We find that the number of bidders did not increase over the period, so we can argue that slaves were becoming more valuable and that the increase in price was not merely a frontier effect that could not be sustained. Our results fortify the conclusion that slavery was not going to die due to economic obsolescence, and that the Civil War was a necessity to settle the future of slavery in the United States.