point the field was more heavily theoretical. Personnel Economics is considered to be a branch of Labor Economics, in 1998, Edward Lazear described it as 'the use of economics to understand the internal workings of the firm'. Since new data has become more widely available, the field has evolved to have a more practical use. Econometric techniques have played a huge role in the development of the field, with data being used to analyze personnel records and other human resource data, this is known as Insider Econometrics. Theory, Testing, and Possible Uses Personnel economics began to emerge as a distinct field from a flurry of research in the 1970s that sought to answer the questions of how prices of goods and services traded within a firm are determined. An early difficulty that the subject addressed is possible differences between the interests of an employer considered as wanting cost-free output and employees as wanting cost-free income. The relationship is represented at a general level in the principal-agent problem whose solution is the firm modeled as a set of contracts for efficiently allocating risk and monitoring the performance of the production team and its members. Many questions about wage determination and the relationship between wages and productivity in a firm or government enterprise were raised as a result. The subject was developed in addressing those questions, including examination of pay structure and promotions within hierarchical organizations. Major theories of the subject developed in the late 1970s and 1980s from the research of Bengt Holmström, Edward Lazear, and Sherwin Rosen to name but a few. Research threads included analysis of: Compensation according to piece rate, that is contributions to output, both when output is easily measured or when only the worker knows the difficulty of the job and his own contribution, efficiency-improving contracts as constrained by noise in production contributions, moral hazard, and distribution of risk aversion, compensation based on principles of tournament theory as a possibly more efficient substitute for piece-rate compensation. From the later 1980s, researchers began to forge closer links with experimental economics, including generation of data to test the theories in the field. Other empirical studies conducted then utilized data from sports (e.g. golf tournaments and horse racing). and company records on their suppliers' performances (e.g. raising broiler chickens). From the 1990s, there was a further surge of empirical tests of the theory from wider availability of personnel records