testing the efficient redistribution hypothesis an application to japanese beef policy we discuss and model the structure of the political economy of japanese beef markets and we apply bullock s statistical test of the efficient redistribution hypothesis to our model to study the pareto efficiency of japanese beef policy in 1990 and 1991 we found that under the hypothesis that our modeled political economy adequately reflects the true japanese beef political economy we could not reject at the 5 significance level that japanese beef policy was inefficient in 1990 and in 1991 however we could reject inefficiency in 1991 at a 7 level of significance

farmers and the u s congress rethinking basic institutional assumptions about agricultural policy abstract an assumption shared by most agricultural economists is that as farm numbers decline in a democratic government farm policy attention from rule makers will decline as well this assumption despite important work to the contrary in institutional economics is often voiced in federated governing units especially the u s where constituents are locally organized and the commitment of rule makers to nationwide policy is limited while significant theoretical literature challenges that majoritarian view from the perspective of interest group theory this is the first empirical test and explanation of the behavior of rule makers the findings of this analysis indicate that classic majoritarian expectations are not met in the u s congress instead unexpectedly large numbers of legislators seek favorable policy action for farmers as distinct minorities within their districts however these same legislators balance their attention to farmers by also taking policy action in agriculture on behalf of other types of contituents legislators explain these actions as the result of their own electoral needs to satisfy vocal minorities from their political districts plus the ease with which they can marginally adjust a large base of u s farm programs thus a kind of neo majoritarianism emerges these results are especially important given the growing attention to federated governance in the european union east europe in north america through free trade agreements and with the gatt they indicate that farmers will continue despite shrinking numbers to be influential in those governing structures that have historically strong farm programs and the capacity to diversify from that policy base

the demand for and impact of learning hiv status this paper evaluates an experiment in which individuals in rural malawi were randomly assigned monetary incentives to learn their hiv results after being tested distance to the hiv results centers was also randomly assigned without any incentive 34 percent of the participants learned their hiv results however even the smallest incentive doubled that share using the randomly assigned incentives and distance from results centers as instruments for the knowledge of hiv status sexually active hiv positive individuals who learned their results are three times more likely to purchase condoms two months later than sexually active hiv positive individuals who did not learn their results however hiv positive individuals who learned their results purchase only two additional condoms than those who did not there is no significant effect of learning hiv negative status on the purchase of condoms

competition in political and economic markets do anomalies play an important role in explaining economic and political choices are political decisions more prone to anomalies irrationality and inefficiency than economic decisions in their integration of results derived from experimental psychology and applied political economy frey and eichenberger 1990 argue that social scientists ought to answer these questions in the affirmative after examining a large body of choice data frey and eichenberger conclude that individuals deviate from the axioms of rational choice in their view the resultant anomalies in individual behavior are unaffected by the aggregation which occurs in the economic marketplace they conclude that political decision making systems correct no larger a proportion of these anomalies than are corrected by the economic market in many institutional settings outlined in their paper decision making systems can be expected to magnify individuals deviations from rational behavior system wide irrational behavior will then produce less frequent trading and a less efficient allocation of resources in this note we examine two components of frey and eichenberger s argument first we reconsider their evidence for irrational behavior in light of a larger body of experimental data which includes choices made in market settings second we argue that competition in political markets will tend to eliminate aggregate anomalies just as it does in economic markets experimental economists often generate data which distinguish between choices individuals indicate in unstructured environments and transactions individuals consummate in markets initial statements regarding choices are often inconsistent with subsequent trading behavior these data indicate that the economist s maximization paradigm based on tenets of rational choice is

promotion of the agricultural sector and political power in austria in most industrialized countries farmers as a small and well orgnized group are ableto influence government decisions to get rent creating proposals enacted two different viewsare presented to explain why the chicagoan view efficient redistribution hypothesis and the virginian view inefficient outcome of political bargaining a vertically structuredempirical model of the austrian farm sector is employed to test both hypotheses quantitativeresults of the welfare transfers from consumers taxpayers to farmers and agribusiness firmsare derived and the political weights of these groups are presented

rents from in kind subsidy charity in the public sector public choice analysis usually focuses attention on the behaviour of self interested individuals but this paper considers rent seeking when some taxpayers are motivated by altruism redistribution policies initiated by self interested rent seekers require taxpayer approval even if taxpayers are fully informed their resistance to inefficient schemes is reduced when public sector schemes are the only means available to pursue altruistic goals altruism serves to broaden the scope within which rent seekers may operate a discussion of international tied aid illustrates the impact which rent seeking can exert on public sector charity

redistributing income back to european community consumers and taxpayers through the common agricultural policy a multiple policy instrument generalization of gardner s surplus transformation curve analysis is applied to an empirical model of the ec wheat sector to compare welfare effects of policy change proposals a production quota support price combination is estimated as the most efficient means of making relatively small transfers from ec agriculture to consumers taxpayers a coresponsibility levy support price combination is estimated as the most efficient means of making larger transfers the importance of accounting for income transfer size distortions in related markets and the structure of markets when comparing welfare effects of policy change proposals is demonstrated

predatory versus productive government the case of u s agricultural policies this essay will argue that agricultural policy in the united states has led to both the enhancement of efficiency through productive policies and the transfer of wealth and income to special interests through redistributive or predatory policies these two activities can be labeled as pests and perts pest policies or political economic seeking transfers are meant to redistribute wealth from one social group to another and are not explicitly concerned with efficiency in contrast perts or political economic resource transactions are intended to correct market failures or to provide public goods these policies have neutral distributional effects at least in design a review of the history of public policy in agriculture reveals not only tension between the pert and pest roles of the public sector but also some coordination between these two types of activities as different interest groups pressure the political process the government trades off pests and perts in its attempts to acquire balance and secure political power at times this has led to combinations of programs that appear incoherent in such a world the challenge for economists is to design and advocate policies that are both economically productive and politically sustainable

political economy of public policies insights from distortions to agricultural and food markets the agricultural and food sector is an ideal case for investigating the political economy of public policies many of the policy developments in this sector since the 1950s have been sudden and transformational while others have been gradual but persistent this paper reviews and synthesizes the literature on trends and fluctuations in market distortions and the political economy explanations that have been advanced based on a rich global data set covering a half century of evidence on commodities countries and policy instruments the paper identifies hypotheses that have been explored in the literature on the extent of market distortions and the conditions under which reform may be feasible

deregulation redux does mandating access to bottleneck facilities necessarily improve welfare we demonstrate that deregulation in the form of vertical separation of network components into natural monopoly and potentially competitive markets does not truly represent a lessening of regulatory burdens that is vertical separation is not synonymous with deregulation more competitors is not equivalent to more competition we assume a public interest regulator that is constrained to set a unit price that maximizes expected welfare subject to a break even constraint we show that under both symmetric and asymmetric information cases the information demands on the regulator of the vertically integrated system are no greater than those in the case of vertical separation

economic development institutional change and the political economy of agricultural protection an econometric study of belgium since the 19th century this empirical study uses 100 years of annual data on 11 agricultural commodities from belgium to measure the impact of structural changes coinciding with economic development and changes in political institutions on agricultural protection the analysis shows that changes in agricultural protection are caused by a combination of factors governments have increased protection and support to farmers when world market prices for their commodities fell and vice versa offsetting market effects on producer incomes other economic determinants were the share of the commodities in total consumer expenditures negative effect and in total output of the economy positive effect with belgium a small economy there was no impact of the trade position changes in political institutions have affected agricultural protection democratic reforms which induced a significant shift in the political balance towards agricultural interests such as the introduction of the one man one vote system led to an increase in agricultural protection the integration of belgian agricultural policies in the common agricultural policy in 1968 coincided with an increase in protection ceteris paribus both institutional factors related to changes in access to and information about the decision making at the eu level and structural changes in the agricultural and food economy may explain this effect

regulating prostitution a health risk approach abstract we build an equilibrium model of prostitution where clients and sex workers choose to demand and supply sex under three legal regimes prohibition regulation and laissez faire the key feature is the endogenous evolution of the risk as a consequence of policy changes we calibrate the model to empirical evidence from italy and then compare the effect of different policies on the equilibrium quantity of prostitution and on the harm associated with it a prohibition regime that makes it illegal to buy sex but not to sell it is more effective than the opposite regime in reducing quantity taxes are one inducement to go illegal and prevent some of the less risky individuals from joining the market leaving it smaller but riskier a licensing system that prevents some infected individuals from joining the legal market reduces the risk and is therefore associated with an increase in quantity prohibition is preferable to minimize quantity only if a high expected fine is feasible regulation is best to minimize harm

measuring the social costs of suboptimal combinations of policy instruments a general framework and an example abstract since most agricultural programs employ two or more policy instruments simultaneously it is notable that little research has attempted to find optimal instrument combinations and no research exists which evaluates the social costs unrealized benefits of combining instruments suboptimally in our paper we report a simple and feasible method to find optimal policy instrument combinations and we provide the first general formal approach to measuring the social costs of suboptimal policy instrument combinations our approach is illustrated in an analysis for five major u s crops corn feed grains wheat rice cotton the simple model we employ for the illustration suggests that except for the feed grains program the observed programs combined policy instruments quite suboptimally we conclude that agricultural economics research now can and should begin placing increased emphasis on studying optimal policy instrument combinations

the subsidization of farming households in china s agriculture concerned about national food self sufficiency and rural household incomes in 2004 china decided to reverse its longstanding policy of taxing farm households and instead began to provide them with subsidies since 2004 annual announcements have trumpeted rises in subsidies despite the historic turnaround of policy and likely implication of this subsidy policy to china s food economy there has been little household level survey based research that has sought to understand the nature of china s subsidy programs from the viewpoint of the farmer using data from two sets of household based surveys covering tens of thousands of households and most major producing provinces and survey data from government in this paper we examine the subsidies that are directly given to farmers one of the newest and relatively high profiles components of china s subsidy programs we focus on china s grain input seed and machinery subsidy programs according to the survey based findings we show that although agricultural subsidies per farm are low on a per hectare basis the rate of subsidies is high almost all producers are receiving them subsidies are mostly being given to the land contractor not the tiller most of grain input and seed subsidies are non distorting but machinery subsidy is based on farmers actual purchase of machineries

the political economy of u s wheat legislation bruce a babcock colin a carter and andrew schmitz both taxpayer subsidies to u s wheat producers and domestic deadweight losses increased as a result of the u s wheat program adopted in 1985 a calculation of the costs and benefits of alternative wheat policies shows that mandatory production controls with no taxpayer expense could have made wheat producers as well off as the adopted policy becker s theory of competition among interest groups and peltzman s theory of the equilibrium amount of regulation are shown to be consistent with the observed policy choice if the list of affected interest groups includes agricultural input suppliers and grain marketing firms i introduction every five years congress drafts new farm legislation dictating the provisions of commodity programs for cotton and the major food and feed grains for the subsequent five years from 1973 through 1985 the primary features of the commodity programs were guaranteed farm prices and government stockholding activities deadweight losses from the programs during this time were minimal market prices were generally higher than the government defended price floors because of a booming export market legislated increases in commodity support prices combined with a severe drop off in the demand for agricultural exports beginning in 1982 increased the economic costs of the commodity programs the u s price floor became the world price for wheat cotton and corn grain stocks accumulated while government payments to u s farmers grew to unprecedented levels most agricultural interest groups in 1984 agreed that an overhaul of agricultural policy was necessary supporters of large levels of production and exports wanted to stimulate the demand for exports by eliminating price floors others felt that the united states should reduce budgetary costs by using direct supply controls to raise farm prices the clear winners in the new 1985 farm bill were the proponents of maintained production levels and expanded exports the new policy froze the relatively high supply prices received by farmers while simultaneously lowering price floors becker 1983 argues that two forces mainly determine the outcome of policy debates the first following stigler 1971 and peltzman 1976 is the relative efficiency with which interest groups exert political pressure interest groups that are efficient in exerting political pressure can increase the subsidization or decrease the tax burden of their constituents the second force is the extent of deadweight losses associated with proposed policies those policies with lower deadweight losses are ceteris paribus more likely to be adopted for the simple reason that less tax needs to be collected from losing interest groups for given transfers to winning groups gardner 1987 finds empirical evidence that both the ability to redistribute efficiently and the effectiveness of political organizations help explain which farm commodities have received the most government support since 1930 his study provides little insight however into which force is more important in determining the type of redistribution policies that are ultimately adopted for a given commodity an examination of the wheat program adopted in the 1985 farm bill and alternative policies that were rejected provides an opportunity to determine whether the efficiency of programs or the political prowess of interest groups is more important in determining policy outcomes this task requires a calculation of the magnitudes and the distribution of costs and benefits of the chosen policy and alternative policies costs and benefits are calculated for 1 a continuation of the 1981 farm bill policies through 1986 1990 2 the adopted 1985 farm bill policies and 3 mandatory production controls all three alternatives are examined relative to a laissez faire policy whereby the u s government has no direct involvement in agriculture

war migration and the origins of the thai sex industry this paper analyzes the determinants behind the spatial distribution of the sex industry in thailand we relate the development of the sex industry to an early temporary demand shock i e u s military presence during the vietnam war comparing the surroundings of thai military bases used by the u s army to districts close to unused thai bases we find that there are currently 5 times more commercial sex workers in districts near former u s bases the development of the sex industry is also explained by a high price elasticity of supply due to female migration from regions affected by an agricultural crisis finally we study a consequence induced by the large numbers of sex workers in few red light districts the hiv outbreak in the early 1990s

consequences of discretion in the formation of commodities policy abstract in a simple model of endogenous primary commodity price support policy i policy is affected by private inventories and ii private inventories are affected by speculative attempts to forecast policy the interaction between these two forces is rich yielding bubbles and extrinsic volatility thus helping to explain some odd episodes observed in commodity markets in addition under some conditions a government that wishes to support the price but is unable to commit to future action may be impotent and a government that does not want to support the price may be trapped into doing so by speculative activity

sexually transmitted infections sexual behavior and the hiv aids epidemic forty million people are infected with hiv worldwide twenty five million of them are in sub saharan africa this paper addresses the question of why africa has been so heavily affected by hiv and what explains the variation within africa i present a model that decomposes epidemic level into differences in sexual behavior and differences in viral transmission rates i argue using evidence drawn from the existing medical literature that africa has very high hiv transmission rates likely due to high rates of other untreated sexually transmitted infections while transmission rates in the united states are low the difference in transmission rates is large enough to explain the observed difference in prevalence between the united states and sub saharan africa the model also provides a good fit to cross country data within africa and suggests that in contrast to the intracontinental results differences within that continent can be attributed to differences in sexual behavior and epidemic timing the results suggest that cost effective policy interventions would focus on decreasing transmission rates within africa possibly by treating other untreated sexually transmitted infections authors

costs and benefits to taxpayers consumers and producers from u s ethanol policies the u s ethanol industry is lobbying hard for an extension of existing ethanol import tariffs and blenders tax credits before they expire at the end of 2010 the purpose of this study is to examine the likely consequences on the u s ethanol industry corn producers taxpayers fuel blenders and fuel consumers if current policy is not extended impacts of different ethanol policies in both 2011 and 2014 were estimated estimates were obtained by developing a new stochastic model that calculates market clearing prices for u s ethanol brazilian ethanol and u s corn the model is stochastic because market clearing prices are calculated for 5 000 random draws of corn yields and wholesale gasoline prices key assumptions in this study are that the strong growth in flex fuel vehicles in brazil continues intermediate ethanol blends with few restrictions are implemented in u s markets in 2014 u s ethanol production capacity reaches 15 billion gallons in 2014 and brazilian ethanol production increases by at least 45 by 2014 projected strong demand for ethanol in brazil combined with a largely saturated u s ethanol market means that elimination of ethanol import tariffs would have almost no impact on u s corn and ethanol markets in 2011 elimination of the tax credit would impact markets modestly with ethanol production declining by an average of about 700 million gallons this reduction in ethanol production would cause corn prices to drop by an average of 23 cents per bushel ethanol prices would drop by 12 cents per gallon elimination of the tax credit would shift the burden of meeting mandates from taxpayers to blenders and consumers taxpayers would save more than 6 billion through elimination of the tax credit or almost 7 00 per gallon of ethanol produced in excess of mandated amounts the impacts of a change in u s ethanol policy in 2014 are larger than 2011 impacts because brazil has a chance to respond by ramping up its ability to export in response to trade liberalization but because of strong domestic demand growth in brazil and limits on how fast brazilian ethanol production can increase the impacts of a change in policy are still modest as long as the mandate is maintained u s ethanol production drops by no more than 500 million gallons corn prices drop by no more than 16 cents per bushel and ethanol prices drop by no more than 35 cents per gallon if the impact of intermediate blends is not as strong as assumed in this study then there will be less incentive for brazil to export ethanol and the impacts of tariff elimination would be even more modest

optimal strategies for a three level contract farming supply chain with subsidy abstract we consider a three level contract farming supply chain with a risk averse farmer a risk neutral supplier and a risk neutral distributor in which the farmer faces a yield uncertainty and the government offers agricultural subsidy to the farmer the cvar criterion is used to describe the risk averse behavior of the farmer we derive the optimal strategies of the supply chain and perform some sensitivity analysis to investigate the effects of the government subsidy and other factors the results indicate that as the subsidy increases the farmer s total target production increases further analysis shows that the total production increase is mainly from the increased farm size and the farmer s endeavor actually decreases in addition the results indicate that the profits of the supplier and the distributor both increase with respect to the subsidy however the impact of the subsidy on the farmer s profit depends on the farmer s degree of risk averse in particular the impact of the subsidy to the farmer s profit tends to be positive for farmers with high degree of risk averse and the impact tends to be negative for those with low degree of risk averse the sensitivity analysis is also performed for the level of yield uncertainty in term of the standard deviation

determinants of the u s wheat producer support price do presidential elections matter the paper s focus is on the determinants of the u s wheat producer support price the results of the time series analysis suggest that this price is largely determined by the previous price the expected u s share in world exports and expected program costs presidential elections also influence u s wheat price policies all other things being equal the support price tends to be lower in election years than in other years this suggests that small interest groups relative political economic power may be less pronounced in election years if they do not succeed in positioning themselves on the political economic market such that they contain the potentially decisive voter

stop and go agricultural policies with a land market this article studies the design of farm policy in the presence of asymmetric information about farmers productivity a government objective to insure farmers a minimum parity income an endogenous land rent and diminishing returns on alternative nonprogram crop land uses in this setting acreage set asides are never part of an optimal farm policy although compensated acreage limits are when there are new farmer entrants who cannot be excluded from farm programs optimal policy takes the form of a pure voluntary acreage limitation or buyout program in which high cost producers participate and low cost producers do not copyright 2003 oxford university press

rent seeking in natural resource quota allocations this paper examines the incentives for rent seeking in the allocation of natural resource quotas to competing user groups by political bodies the political body has discretion in making the allocation and competing user groups rent seek to influence the allocation we investigate ways in which the governmental body can affect the behavior of the players by setting the ground rules for the competition a political body can affect an allocatively pareto efficient outcome by choosing an appropriate default pre rent seeking policy surprisingly an allocatively efficient default policy is unlikely to minimize social costs however winner take all default policies are likely to maximize not minimize rent seeking a competitive post allocation market reduces rent seeking but is not either itself or in combination with an efficient default policy capable of minimizing social costs however forcing winners in political redistributions to fully compensate losers both lowers the rent seeking levels relative to a potential compensation criterion and when used together with an efficient default policy is capable of obtaining the first best solution of an allocatively efficient allocation with zero rent seeking

china s food economy to the twenty first century supply demand and trade this paper accounts for the structural changes now taking place in china and suggests that china is not likely to become either an enormous importer or exporter of grain ultimately though china s grain balances will depend on decisions made by chinese policymakers rather than natural resource constraints p v this abstract was borrowed from another version of this item

mortality risk and human capital investment the impact of hiv aids in sub saharan africa abstract over the past several decades the hiv aids epidemic has dramatically altered patterns of morbidity and mortality in sub saharan africa with potential consequences for human capital investment and economic growth using data from demographic and health surveys for fifteen countries in sub saharan africa i estimate the relationship between regional hiv prevalence and the change in individual human capital investment over time consistent with a simple model of human capital investment incorporating mortality risk i find that areas with higher levels of hiv experienced relatively larger declines in schooling

crop insurance in a political economy an alternative perspective on agricultural policy lawmakers often subsidize farmers in times of financial distress this article models this political impulse as a constraint on government farm policy describing how ex ante government farm insurance can deter ex post disaster relief and improve production incentives by countering the moral hazard that otherwise prevails absent ex ante government policy ex post relief takes the form of revenue insurance which prompts excessive entry into farm production and under production by operating farmers ex ante government policy can raise economic and political welfare by buying out low productivity farmers and offering profitable farmers a combination of revenue insurance price supports and a program participation fee copyright 2003 oxford university press

the growth of agricultural protection in europe in the 19th and 20th centuries 1247 johan f m swinnen dramatic changes took place in agricultural policies in europe in the 19th and 20th centuries in the 1860s european nations agreed on a series of trade agreements which spread free trade across the continent in the 1960s european nations concluded an international agreement which spread heavy government intervention and protection against imports across the continent this paper quantifies these changes in protection over the course of a century relates them to changes in policies and offers a political economy explanation for the growth in agricultural protection in europe

lobbying and agricultural trade policy in the united states the authors study whether political campaign contributions influence agricultural protection in the united states in the manner suggested by the political economy model of grossman and helpman 1994 this is the first attempt to test this model using agricultural data the authors test the model using a detailed cross sectional data set of agricultural protection subsidies and political action committee pac contributions in the late 1990s the model is qualitatively affirmed by the data they make a novel attempt to solve a puzzle about the model s quantitative implications also found in recent studies this solution makes the simple model consistent with the complicated decisionmaking process in real world government the results imply the underpinnings of a political economy equilibrium that will be hard to dislodge

rationing and rent dissipation in the presence of heterogeneous individuals this paper discusses the implications of rationing by waiting when consumers have different time costs and personal valuations the joint distribution function of time costs and personal valuations is used to characterize market equilibrium it is argued that under certain conditions an increase in the variance of time costs will reduce the dissipation of rent furthermore it is shown that introducing a secondary market for a rationed good does not necessarily improve welfare because total surplus under rationing by waiting depends more on the variance than on the level of time costs and personal valuations the model is also used to discuss other institutions that involve rent seeking activities such as the patent system and import quotas

risky sex in a risky world sexual behavior in a hiv aids environment in spite of increased awareness of hiv aids unprotected casual sex is still widespread in many hiv infected countries in this paper a two period model for sexual decisions under uncertainty is d

on the form of transfers to special interests an important question in political economy concerns the form of transfers to special interests the chicago view is that political competition leads politicians to make such transfers efficiently the virginia position is that lack of information on the part of voters leads politicians to favor inefficient sneaky methods of redistribution this paper analyzes the form of transfers in a model of political competition in which politicians have incentives to make transfers to special interests it shows that when voters have imperfect information about both the effects of policy and the predispositions of politicians inefficient methods of redistribution may be employed

the political ideology of food abstract using data from a survey of over 700 americans we sought to measure and investigate the nature of citizen s political ideologies in relation to food results reveal that a majority of respondents can be classified as food statists desiring more government action in the realm food and agricultural relative to the status quo people s ideologies with regard to food were multidimensional falling along lines related to food health and quality food safety and farm subsidies respondents were most in favor of additional government action related to food safety food ideology was related to conventional measures of political ideology with for example more liberal respondents desiring more government involvement in food than more conservative respondents but the relationship was far from determinative suggesting food ideology represents a unique construct in its own right

causes of u s farm commodity programs this paper i s an attempt to explain variations by commodity in producer protection afforded by farm price support programs since the1930s particularly emphasized are theideas that these programs are essentially income redistributional measures and that given political forces the programs are attempts to redistribute efficiently variables associated with the cost to producers of generating political pressure and the social cost deadweight losses of redistribution are both found to be empirically important copyright 1987 by university of chicago press

a political economic analysis of u s rice export programs to japan and south korea a game theoretic approach the uruguay round agreement on agriculture ur has contributed to the increase in u s and world rice trade since 1994 despite this the japanese and korean rice markets continue to be characterized by high levels of trade intervention this paper attempts to analyze both import markets incorporating econometric estimates and public choice theory in a game theoretic framework various scenarios are analyzed the results show that the overall nash equilibrium occurs with a 4 tariff reduction for japan and korea under the u s market development program which includes the market access program and foreign market development program

appropriate health r d and intellectual property rights reform in developing countries welfare implications of imposing intellectual property rights ipr protection on health goods in developing countries are analysed using a north south model consumption of health goods counteracts adverse effects of region specific diseases on labour supply health needs differ between consumers in innovating and imitating countries weakening the benefits of southern ipr enforcement for the north and strengthening the benefits for the south southern regions with unique health needs are more likely to benefit from ipr enforcement if healthcare infrastructure is adequate and the southern market is large enough to stimulate sufficient innovation there is then also interregional income convergence

what drives china s new agricultural subsidies summary china s agricultural policy has undergone a fundamental transformation in the four decades since the introduction of market reforms in 1978 and now involves a wide array of policy instruments that range from output and input subsidies to public infrastructure expenditures this article analyzes the political economic determinants of china s agricultural subsidy changes using producer subsidy equivalents pses drawn from annual data from 1984 to 2015 on 16 agricultural commodity sectors that include multiple policy instruments empirical results indicate that national factors such as high rates of economic growth and a lower share of agriculture in the economy have been the primary drivers of increases in pses and that larger more geographically concentrated agricultural sectors are more likely to be subsidized at a higher pse rate finally china s joining the world trade organization in december 2001 led to significant increases in pses that were not already explained by internal national or commodity specific factors in essence china s agricultural subsidy programs and levels increasingly resemble those of developed countries primarily as a result of economic transformation and the ability to structure agricultural policies within the wto rules moreover this article predicts that agricultural subsidies will trend slightly upward in the next decade and that the strongest opportunities to export to china will be in animal products or grains that are utilized for feed or processed foods where the levels of subsidies are predicted to increase but remain lower than for traditional food crops

income shocks and hiv in africa we examine how variation in local economic conditions has shaped the aids epidemic in africa using data from over 200 000 individuals across 19 countries we match biomarker data on individuals serostatus to information on local rainfall shocks a large source of income variation for rural households we estimate infection rates in hiv endemic rural areas increase by 11 for every recent drought an effect that is statistically and economically significant income shocks explain up to 20 of variation in hiv prevalence across african countries suggesting existing approaches to hiv prevention could be bolstered by helping households manage income risk better the relationship between income and health has long been of interest to economists and a lengthy literature documents strong linkages between economic conditions and many important health outcomes currie 2009 there has been much less progress however in understanding the economic foundations of the hiv aids epidemic one of the most important global health challenges such an understanding might yield particular dividends in sub saharan africa ssa where over a million people continue to become newly infected with the disease each year unaids 2010 in this article we explore the role of negative income shocks in shaping the

what do campaign contributions buy deciphering causal effects of money and votes in the 1987 1988 election cycle political action committees pacs spent 176 6 million on candidates who competed for a seat in the house of representatives what do pacs buy when contributing this money if campaign contributions are rational allocations of a contributor s income campaign expenditures could increase both the probability that the contributor s preferred candidate is elected and the likelihood that if elected the candidate will vote in the interest of the contributor most studies do not find that incumbents expenditures have a significant positive effect on the number of votes incumbents receive 11 14 15 17 29 the evidence that contributions influence congressional votes is mixed most studies find weak or no support for this hypothesis for example kau rubin and keenan 17 find that contributions from businesses mattered in only two of the eight votes they analyzed others argue that campaign expenditures play no important role in the voting decision of congressmen 5 9 12 31 the lack of finding of significant effects of money on votes has been explained with the need for better models to explain campaign contributions 5 however the theoretical developments of for example ben zion and eyton 4 bental and ben zion 3 and baron 2 have not been incorporated in the empirical analysis of the effect of campaign contributions on the voting behavior of legislators empirical models that test this relationship must allow for the endogeneity of campaign contributions for the dichotomous nature of the dependent vote variable and the nonnegativity constraint of campaign contributions most empirical work in this area utilize models that do not incorporate these restrictions in this study i plan to incorporate these aspects of the data generating process into a more detailed model of the effects of campaign contributions on congressional votes of all the reported empirical studies on this issue only chappell 5 uses a model which can properly assess the impact of money on votes chappell finds that campaign contributions do not affect votes in congress when his more detailed econometric technique is used the best test of the theory results if votes have a clear economic payoff to contributors benefits of the votes are concentrated and costs are

a critical assessment of the political preference function approach in agricultural economics abstract the policy preference function ppf approach has become popular with economists seeking to explain the origin of government policies in this paper a distinction between positive and normative work with the ppf concept is made positive work is shown to suffer from a variety of shortcomings including the misspecification of traditional ppfs and the failure to consider the importance of institutions constraints and the interaction between different commodity policies these weaknesses are reflected in the counter intuitive results of a simple ppf model designed to reflect the interaction between the ec s wheat and barley policies furthermore it is demonstrated that ppf weights change as a result of both political preferences and market parameters hence changes in ppf weights cannot be attributed to changes in preferences alone test of the axioms of revealed preference theory are used to demonstrate that even though ppf weights derived for the ec s wheat and barley markets have fluctuated considerably since the early 1970s we are not able to conclude that there has been a shift in political preferences the paper concludes with some comments about the use of ppfs in a normative framework the underlying assumption that policy makers optimise seems not surprisingly often to lead practitioners to the conclusion that observed policies are not so bad after all economists should also beware of the tendency to overlook possible differences between the ppf and the social welfare function

a roll call analysis of the endangered species act amendments public choice economics view legislative process as a transaction in the political market interest groups demand regulation in their favor and lobby lawmakers the lawmakers analyze an assortment of factors and supply legislation to the winning group thereby maximizing their rent from the political market this article examines endangered species act esa amendments from a public choice perspective congressional voting on the esa amendments are assessed using a model based on political incentive and ideology the results show that the lawmakers voting behavior is correlated with their party affiliation ideology and several characteristics of their home state such as number of endangered species proportion of urban population contribution of the natural resources and construction sectors in gross state product and geographical location copyright 2001 oxford university press

education hiv and early fertility experimental evidence from kenya a seven year randomized evaluation suggests education subsidies reduce adolescent girls dropout pregnancy and marriage but not sexually transmitted infection sti the government s hiv curriculum which stresses abstinence until marriage does not reduce pregnancy or sti both programs combined reduce sti more but cut dropout and pregnancy less than education subsidies alone these results are inconsistent with a model of schooling and sexual behavior in which both pregnancy and sti are determined by one factor unprotected sex but consistent with a two factor model in which choices between committed and casual relationships also affect these outcomes

intervention bias in agricultural policy abstract this paper re examines the motivation for government intervention in agriculture to support farm prices and incomes a model is outlined in which the government has a preference for higher farm incomes but fails to provide farmers with the socially optimal level of price support even when one accepts the government s income redistribution goals as a valid reflection of social preference it is shown that agricultural policy has an intervention bias government price supports generally are higher than would be socially optimal the source of the intervention bias is a time inconsistency in optimal agricultural policy formation caused by the government s inability to precommit to a rule for setting future price support levels simulation results indicate that in some circumstances the intervention bias in agricultural policy can be substantial

the political economy of public research investment and commodity policies in agriculture an empirical study the paper tests a political economy theory of simultaneous government decision making on income redistribution through commodity policies and on public research investment in agriculture we use data from 37 countries on agricultural protection and public agricultural research expenditures pari the empirical results are consistent with the political economy hypotheses the analysis suggest that structural changes in the economy have important effects on the political incentives for governments not only to subsidize or tax farmers but also to invest in public agricultural research furthermore the analysis supports the hypotheses that the impact of such structural changes on government decision making on pari is non linear and conditional on other factors regarding the impact of political institutions the results suggest that more democracy neither leads to more distortionary transfers agricultural protection nor to lower investment in public goods pari

the cotton influence index an examination of u s cotton subsidies given the lack of a bill or amendment specific to cotton we introduce a cotton influence index to capture legislators influence in championing the cause of the cotton growers during the hearings of the farm security and rural investment act of 2002 regression analyses reveal a relationship between cotton influence index and campaign contributions cotton farmland party affiliation and ideology tobit analysis indicates a significant relationship between different actions and participations by representatives to advance the interest of cotton that is components of this index and their future cotton political action committees pacs contributions to them copyright 2006 oxford university press

renewable resource policy when distributional impacts matter the standard assumption in bioeconomic resource models is that optimal policies maximize the present value of economic surplus to society this assumption implies that regulatory agencies should not be concerned with the distributional consequences of management strategies both contemporary welfare theoretic and rent seeking approaches suggests distributional issues are important in designing resource management policies this paper explores resource management when the managing agency has preferences defined over the economic welfare of various groups with a direct economic interest in the use of resources policy schemes consistent with this approach are derived and compared with standard results

a benefit cost analysis of u s agricultural trade promotion subsidies for nonprice export promotion can harm domestic consumers by increasing price in the domestic market and by diverting funds from domestic market promotion taking these consumer impacts into account we find that federal expenditures for nonprice export promotion of farm products may be too high

the evolution of farm programs and their contribution to agricultural land values the economic environment of agricultural producers has been influenced by formal u s agricultural policy for more than seventy years among the first pieces of new deal legislation proposed by incoming president franklin d roosevelt was a farm program designed to address declines in crop prices and net farm income key features of the agriculture act of 1933 included mandatory price support for specified commodities direct subsidy payments to farmers and supply controls farm programs once viewed as temporary and supplementary to agricultural earnings are increasingly viewed as permanent and of major proportion gardner examined the relationships between u s farm commodity programs and u s farm structure while others see sumner for concept evidence and implications have examined farm programs and specific crops gardner 2002 and weersink et al analyzed the effects of farm program programs upon land values these studies examined various aspects of agricultural policy including whether farm program payments have enhanced land prices and landowner wealth rather than the welfare of producers while it would seem logical that revenueenhancing farm programs would increase land values reliably estimating the magnitudes of farm program effects upon land values is an empirically challenging task both statistical and budgeting based methodologies have been used to estimate the share of land prices generated by farm program payments statistically based studies are complicated by the fact that both real per acre crop receipts

the fable of the bees revisited causes and consequences of the u s honey program abstract in his 1973 paper steven cheung discredited the fable of the bees by demonstrating that markets for beekeeping services exist and function well although economists heeded cheung s lessons policy makers did not the honey program has operated for over 50 years supporting the price of honey through a variety of mechanisms its effects were minor before the 1980s but then became important with annual government expenditures near 100 million for several years reforms of the program in the late 1980s reduced its market effects and budget costs returning it to its original role as a minor commodity program although the 1996 farm bill formally eliminated the honey program it was reinstated in the 2002 farm bill we measure the historical welfare effects of the program during its various incarnations examine its frequently stated public interest rationale the encouragement of honeybee pollination and interpret its history in light of economic theories of regulation

the economic effects of supply controls the simple analytics of the u s peanut program a gricultural commodity programs employ a wide variety of policy tools to regulate u s agriculture price supports are the most common form of intervention but rights to sell at the supported price are allocated very differently under different commodity programs under recent feed grain programs for example the right to sell at the supported price is linked to acreage set asides agreements not to produce on certain acres in other programs sales by individual farmers are controlled under marketing orders sponsored by the u s department of agriculture usda 2 a third method is through permanent maketing quotas that directly limit output only two major commodity programs those for tobacco and peanuts currently allocate the right to sell in this way the peanut program is the subject of this article 3

partial market liberalization and the efficiency of policy reform the case of the european dairy sector this article analyzes the efficiency of partial market liberalization and policy reform with an application to the european dairy sector in a second best world partial moves toward market liberalization are not always efficiency improving we develop a general equilibrium model to investigate the efficiency implications of discrete changes in government policy the analysis covers price and quantity instruments used in both domestic and trade policy we derive simple conditions under which partial market liberalization is efficiency improving we apply the approach to agricultural policy reform in the european dairy sector and identify market liberalization scenarios that are not efficiency improving

a policy preference function for government intervention in the u s wheat market this paper estimates a policy preference function that explains the government s choices of target prices government held wheat stocks and public wheat research funding the policy preference function depends on producers surplus consumers surplus and budget expenditures an important innovation in this paper is the inclusion of interactions between public research expenditures and other public policy variables results indicate that the government places a premium of 25 to 45 on the welfare of wheat producers of relative to budget expenditures while wheat consumers welfare is discounted as much as 50 relative to budget expenditures the purpose of this paper is to provide an explanation of government commodity programs stock accumulations and research expenditures in the u s wheat sector the explanation is based on a policy preference function ppf that depends on producers surplus consumers surplus and budget expenditures it is assumed that target prices reductions in or additions to government stocks and public research expenditures are chosen to maximize the policy preference function the central contribution of the paper is the estimation of a function that is consistent with the observed government interventions in the u s wheat market that is the paper explains the observed target prices government sales and public research expenditures as rational behavior by a government which seeks to maximize the estimated policy preference function the approach in this paper is based on the political interest group theories of peltzman and becker applications of these ideas to agriculture include rausser and freebairn s description of the beef industry gardner s 1985 analysis

efficient redistribution through commodity markets efficiency in redistribution is measured in terms of deadweight loss generated per dollar of economic surplus transferred between consumers and producers of a commodity by means of market intervention the implications of supply and demand elasticities for efficiency in redistribution are examined with special attention to the comparison of production control and deficiency payment programs the results may be used to aid in the evaluation of commodity programs and as a basis for consideration of the hypothesis that observed policies are efficient given the political power of interest groups

collectivization and china s agricultural crisis in 1959 1961 the agricultural crisis in china in 1959 61 after the initial success of the collectivization movement resulted in 30 million extra deaths in this paper a game theory hypothesis proposes the main cause of this catastrophe i argue that because of the difficulty in supervising agricultural work the success of an agricultural collective depends on a self enforcing contract in which each one promises to discipline oneself a self enforcing contract however can be sustained only in a repeated game in the fall of 1958 the right to withdraw from a collective was deprived the nature of the collectivization was thus changed from a repeated game to a one time game as a result the self enforcing contract could not be sustained and agricultural productivity collapsed the empirical evidence is consistent with this hypothesis

environmental regulations transfers and trade theory and evidence abstract this paper develops a theory of compensation of producers for the costs associated with environmental regulations we show that the existence of transfers can give counter intuitive effects of environmental policy on both output and trade flows in particular the compensation obtained by producers neutralizes the effect of environmental policy on output and consequently on trade flows this may help explain why previous empirical research has found weak evidence that environmental regulations affect trade patterns the theory is tested using agricultural sector data the evidence supports the hypothesis that environmental regulations and transfers are positively correlated

structure of agricultural protection in industrial countries abstract the nominal rates of agricultural protection in ten industrial countries from 1955 to 1980 are estimated with the same commodity coverage and data definitions a regression analysis is conducted to explain variations in the measured level of agricultural protection in terms of political as well as economic factors nearly 80 percent of the variations is accounted for by differences in agriculture s comparative advantage agriculture s share in total economy the international terms of trade between agricultural and manufactured commodities regionalism eec and food security consideration associated with non military alliance

evaluating the behavior of international cartel members some phenomena of interest in international trade can be understood by looking at only one country pushing others into the background sometimes though to preserve the essence of a problem one must attempt to take explicit account of the interaction of nations this viewpoint invites one to treat a collective body in this case a group of countries as a deciding unit there is no shortage of applications that call for such thinking among them are the gatt negotiations and nafta international commodity agreements and international cartels in each of these the idea of treating the collective as an organic decision maker is alluring and to be sure much has been gained in this fashion there are also dangers that attend adopting such a modeling strategy our purpose is to lay out these dangers their source and effects and then to introduce briefly some remedies that have become available lately does a group optimize the essence of the methodology of economics inheres in the treatment of decision makers as optimizers attributing to them an objective criterion and the impulse to behave optimally can this methodology be used in studying group decision making arrow showed that in a certain formal sense it can

legal origins and female hiv more than one half of all people living with hiv are women and 80 percent of all hiv positive women in the world live in sub saharan africa this paper demonstrates that the legal origins of these formerly colonized countries significantly determine current day female hiv rates in particular female hiv rates are significantly higher in common law sub saharan african countries compared to civil law ones this paper explains this relationship by focusing on differences in female property rights under the two codes of law in sub saharan africa common law is associated with weaker female marital property laws as a result women in these common law countries have lower bargaining power within the household and are less able to negotiate safe sex practices and are thus more vulnerable to hiv compared to their civil law counterparts exploiting the fact that some ethnic groups in sub saharan africa cross country borders with different legal systems we are able to include ethnicity fixed effects into a regression discontinuity approach this allows us to control for a large set of cultural geographical and environmental factors that could be confounding the estimates the results of this paper are consistent with gender inequality the feminization of aids explaining much of its prevalence in sub saharan africa

opportunity for profitable investments in cellulosic biofuels research efforts to allow large scale conversion of cellulose into biofuels are being undertaken in the us and eu these efforts are designed to increase logistic and conversion efficiencies enhancing the economic competitiveness of cellulosic biofuels however not enough attention has been paid to the future market conditions for cellulosic biofuels which will determine whether the necessary private investment will be available to allow a cellulosic biofuels industry to emerge we examine the future market for cellulosic biofuels differentiating between cellulosic ethanol and drop in cellulosic biofuels that can be transported with petroleum fuels and have equivalent energy values we show that emergence of a cellulosic ethanol industry is unlikely without costly government subsidies in part because of strong competition from conventional ethanol and limits on ethanol blending if production costs of drop in cellulosic biofuels fall enough to become competitive then their expansion will not necessarily cause feedstock prices to rise as long as local supplies of feedstocks that have no or low valued alternative uses exist then expansion will not cause prices to rise significantly if cellulosic feedstocks come from dedicated biomass crops then the supply curves will have a steeper slope because of competition for land

implicit policy preferences and the assessment of negotiable trade policy reforms abstract formal multilateral trade negotiations increase the pressure brought to bear on protectionist economies by foreign interests this paper explores the hypothesis that successful negotiations yield mixes of policy reforms which contribute to internationalist objectives but which minimally disturb the prior domestic political market equilibrium this disturbance is measured using weighted objective functions the weights in which embody revealed policy preferences governments are assumed to reflect these preferences in a strategic trade policy formation process which uses empirically based conjectures as to the responses of other governments and private agents the approach is applied to the negotiations on agricultural trade policy and in particular to the protectionist common agricultural policy of the european community

a theory of competition among pressure groups for political influence this paper presents a theory of competition among pressure groups for political influence political equilibrium depends on the efficiency of each group in producing pressure the effect of additional pressure on their influence the number of persons in different groups and the deadweight cost of taxes and subsidies an increase in deadweight costs discourages pressure by subsidized groups and encourages pressure by taxpayers this analysis unifies the view that governments correct market failures with the view that they favor the politically powerful both are produced by the competition for political favors

market power and cartel formation theory and an empirical test abstract antitrust enforcement makes it difficult to test theories of cartel formation because most attempts to form cartels are blocked or kept secret however federal laws allow u s produce growers to operate marketing cartels through devices called marketing orders these cartels use quantity controls and quality standards to raise prices of fresh produce some growers have adopted marketing orders and others have not this paper develops and tests a positive theory of the adoption of marketing orders the theory suggests that growers in a region are more likely to adopt a marketing order if the demand for fresh produce is inelastic the growers market share in the fresh market is large there are barriers to entry and expansion the fraction of the output the growers ship to the fresh market is not too large or too small growers are homogeneous and large cooperatives exist probit analyses support these hypotheses

from senators to the president solve the lumber problem or else we use key events associated in the two decade long u s canada softwood lumber trade dispute to present the dynamic relationship between u s congress and the administration in the formation of international trade policy we find that the executive branch of the u s government responded quickly to several letters from a group of u s senators demanding a solution to the lumber problem a roll call analysis is used to identify factors influencing senators willingness to sign these letters and pressure the president on behalf of the u s lumber industry the results show that the economic importance of the lumber industry in a senator s home state is positively correlated with signatory on these letters and that the presence of a large housing industry in a state makes a senator less likely to sign these letters

economic activity and the spread of viral diseases evidence from high frequency data viruses are a major threat to human health and given that they spread through social interactions represent a costly externality this article addresses three main questions i what are the unintended consequences of economic activity on the spread of infections ii how efficient are measures that limit interpersonal contacts iii how do we allocate our scarce resources to limit the spread of infections to answer these questions we use novel high frequency data from france on the incidence of a number of viral diseases across space for different age groups over a quarter of a century we use quasi experimental variation to evaluate the importance of policies reducing interpersonal contacts such as school closures or the closure of public transportation networks while these policies significantly reduce disease prevalence we find that they are not cost effective we find that expansions of transportation networks have significant health costs in increasing the spread of viruses and that propagation rates are pro cyclically sensitive to economic conditions and increase with inter regional trade jel codes i12 i15 i18 h51 c23

political institutions and international patterns of agricultural protection this paper analyzes the influence of political systems and rights in patterns of agricultural protection across commodities countries and over time four political systems and a qualitative index of political rights account for differences in political institutions the analysis incorporates the effects of development of constraints on tax collection feasibility and of comparative advantages and terms of trade pluralistic systems are associated with higher agricultural protection levels although in a nonlinear fashion access to pluralism appears to be important although further democratization partly dissipates protection copyright 1994 by mit press

agricultural policies in the presence of distorting taxes this article analyzes how distortionary factor taxes affect the welfare impacts of production subsidies production quotas acreage controls subsidies for acreage reductions and cash transfers to farmers pre existing taxes substantially raise the costs of all these policies these additional costs reflect the welfare losses from financing certain policies by distortionary taxes they also reflect interactions with factor markets caused by changes in the costs of producing agricultural output previous studies ignore the latter types of effect consequently they significantly overstate the costs of production subsidies and understate the costs of production quotas acreage controls and subsidies for acreage reductions

politics and social costs estimating the impact of collective action on hazardous waste facilities firms that generate negative externalities may consider the effects of their location on the surrounding environment because of the right of their prospective neighbors to demand compensation for pollution and raise the transaction costs of location since communities vary both in the value individuals place on the environment and in the ability of residents to organize politically locations that generate the least political opposition may not be the locations that result in the lowest externalities this article tests whether the degree to which firms internalize their externalities depends on the ability of affected communities to engage in collective action the results indicate that firms processing hazardous waste when deciding where to expand capacity do take into account variations in the potential for collective action to raise their costs

reconciling chinese meat production and consumption data with more than one fifth of the world s population and only 7 of the world s arable land china has the potential to become a major importer of land intensive products such as feed grains this development would be of particular interest to the united states and canada which together have more than 17 of the world s arable land but only 5 of the world s population 1 per capita private consumption in china has been increasing at an average annual rate of 6 8 over the past decade given the low average income level in china consumption of feedgrain intensive products such as meat dairy products and alcohol can be expected to increase with continued income growth these factors take on greater significance given the fact that china has applied to join the world trade organization and trade liberalization may soon occur use of grain intensive products should increase if china liberalizes its agricultural markets and china should eventually reverse the current trade situation and begin to import large quantities of feed grains and meats the combination of these observations has stimulated interest in china s agricultural data and the research and policy prescriptions based on these data are greatly affected by the data s quality to understand why this is important consider the following examples official chinese and u s data show that per capita pork consumption in china is about 5 kilograms per person greater than it is in the united states 2 if this is true then it might be argued that chinese pork consumption is reaching a saturation level alternatively one might argue that the enormous increase in per capita pork consumption in the past several years implies a large expenditure elasticity any attempt to use this expenditure elasticity for projection of future meat demand in conjunction with strong growth in projected per capita income would imply a large percentage increase in consumption from a base that is already very high because feed grain consumption is directly dependent on livestock

explaining state bans on corporate farming state laws banning corporate farming present a puzzle for a rent seeking explanation of political outcomes since family farmer proponents may receive no direct benefit from these bans an explanation developed here is that these farmers benefit indirectly forestalling corporate entry preserves the farm political coalition structured around those cooperatives patronized by family farmers and so indirectly preserves federal subsidies and supply restrictions that the incidence of state bans is positively related to the importance of federal farm programs the importance of cooperatives and the homogeneity of farmers within a state is consistent with this indirect rent seeking explanation

interest group competition over policy outcomes dynamics strategic behavior and social costs this paper analyzes a two period model of interestgroup competition between two groups to affect thepolicy outcome the paper characterizes the subgameperfect equilibrium and considers the welfareimplications of the model the subgame perfectequilibrium to this game is allocatively efficient ifand only if the initial equilibrium is allocativelyefficient and interest groups are equally adept atproducing political pressure when rent seeking isconstitutionally protected the notion of rent seekingconstrained efficiency is defined as the cooperativesolution to the rent seeking game it is shown that arent seeking constrained efficient equilibrium isattainable by forcing winners in political competitionto fully compensate losers

eu agri environmental programs and the restaurant table effect the share of agricultural area enrolled in eu agri environmental programs varies significantly between eu member states these national differences are explained based on a model that reflects both that these programs internalize externalities and the political economy we identify six factors that affect the extent to which agri environmental programs are implemented environmental benefits opportunity costs of participation budgetary pressure the share of program expenditures financed by the eu the political weight attributed to farmers at the national and the political influence of each country at the eu level in addition we demonstrate that if the policy decision making process is noncooperative at the eu level countries that contribute less to the eu budget will ceteris paribus implement more programs using data of four years and feasible generalized least square methods we are able to confirm our theoretical results including a noncooperative behavior of eu member states

food vs fuel the effect of biofuel policies the rise in food commodity prices since 2004 which reached record highs in 2008 has coincided with the tripling of corn ethanol production from 15 billion liters bl to 50 bl over the 2004 2010 period this has spurred the food vs fuel debate and raised questions about the extent to which biofuels have contributed to the increase in food crop prices estimates of the impact of observed levels of biofuel production differ widely across studies and lie between 20 and 60 hochman et al 2011 biofuel production in the united states us has surged as a result of government policies like the renewable fuel standard rfs volumetric ethanol excise tax credit veetc for blenders of ethanol and tariffs that restrict the imports of sugarcane ethanol the rfs authorized by the energy independence and security act eisa of 2007 has set ambitious targets of increasing biofuel production sixfold to 136 bl by 2022 with over 60 of it to be met by advanced biofuels produced using non corn starch based feedstocks a 0 12 liter veetc is provided to blenders of ethanol to reduce their costs of meeting the rfs while a tariff of 0 14 liter and an ad valorem tariff of 2 5 were enacted to prevent transfer of the tax credit to ethanol producers in brazil the current veetc and import tariff expired in 2011 with increasing federal debt and concerns about the impact of these policies on food and feed prices political support for the

an empirical analysis of participation in us government farm programmes factors affecting the participation of individual kansas farms in government programmes are considered a sample drawn from over 1600 kansas farms for nine years is used in the context of a simultaneous equation tobit regression to investigate the effects of various factors on the probability and expected level of participation in farm programmes the results suggest that differences in farm sizes incomes types and farming practices influence participation in government programmes small sole proprietor livestock operations with low debt levels receive the lowest levels of support conversely large corporate crop farms receive the highest levels of government support

stochastic dominance and uncertain price prospects since the seminal and simultaneous publications of hadar and russell 6 and hanoch and levy 8 there has been a virtual explosion of papers investigating implications of stochastic dominance rules for decisions under uncertainty dominance principles have important applications to portfolio choice capital budgeting and financial intermediation stochastic dominance can also be applied to investment and production decision problems under uncertainty in these areas both overall and marginal impacts of uncertainty have received wide attention 2 the emphasis in consumer welfare analysis under uncertainty has been on the ranking of different price prospects ranking of price prospects is more complicated than that of income prospects for two related reasons first due to differences in ordinal preferences among consumers the second degree stochastic dominance rule on price prospects does not yield a unanimous ranking among risk averse consumers thus waugh 17 massell 12 and samuelson 14 have focused on the ranking of price prospects for a single consumer or consumers with identical ordinal preferences second there is no a priori reason for income risk averse consumers to exhibit aversion to fair price risks specifically the indirect utility function of an income risk averse consumer is neither concave nor convex in prices indirect ways of comparing consumer welfare under alternative price prospects via expected consumer surplus expected compensating variation or expected equivalent variation have thus been investigated in the literature expected consumer surplus ecs has been particularly popular for ranking certain and uncertain price prospects 3 however turnovsky shalit and schmitz 16 showed that the ranking

on the political economy of state highway expenditures some evidence of the relative performance of alternative public choice models this paper explores the extent to which the public demand for roads and or power of special interest groups determines road expenditures at the state level using an extension of the methodology developed in congleton and shughart 1990 reduced form models of median voter demand special interest group equilibria and a combined model are estimated using cross sectional state data from the united states we generally find support for the hypothesis that voting matters the pure median voter models have a better fit than the pure special interest group models moreover in our combined model we find that variables from the median voter model can not be dropped without significantly reducing the combined model s fit