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Valuing Medieval Annuities: Were Corrodies Underpriced?

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  • Adrian Bell

    (ICMA Centre, University of Reading)

  • Charles Sutcliffe

    (ICMA Centre, University of Reading)

Abstract

Medieval bishops condemned and restricted the sale of corrodies (a type of annuity), partly on the grounds of their perceived unprofitability. The available data on the profitability of corrodies is limited and little analysed, and the episcopal condemnation of corrodies has been adopted by modern researchers. After recognising the difficulties, this paper applies an annuity pricing model to study corrody pricing. Given various assumptions, contrary to the established view, it is argued that the sale of corrodies was financially profitable for institutions. Finally, some reasons are considered for the negative attitude of contemporary and historical opinion towards the sale of corrodies.

Suggested Citation

  • Adrian Bell & Charles Sutcliffe, 2007. "Valuing Medieval Annuities: Were Corrodies Underpriced?," ICMA Centre Discussion Papers in Finance icma-dp2007-15, Henley Business School, University of Reading, revised Jul 2009.
    • Handle: RePEc:rdg:icmadp:icma-dp2007-15
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    File URL: http://www.icmacentre.ac.uk/files/corrody.pdf
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    References listed on IDEAS

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    Cited by:

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    2. Chilosi, David, 2014. "Risky Institutions: Political Regimes and the Cost of Public Borrowing in Early Modern Italy," The Journal of Economic History, Cambridge University Press, vol. 74(3), pages 887-915, September.

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