cash transfer programs with income multipliers procampo in mexico abstract cash transfer programs create multiplier effects when recipients put the money they receive to work to generate further incomes when this is the case the ultimate income effects are multiples of the amounts transferred we analyze the procampo program in mexico that was introduced to compensate farmers for the anticipated negative effect of nafta on the prices of basic crops the transfer rules and the timing of the panel data collected allow unique control of biases in this impact analysis we find that the multiplier among ejido sector recipients is in the range 1 5 2 6 multipliers are higher for households with medium and large farms low numbers of adults in the household nonindigenous backgrounds and located in the center and gulf regions high multipliers reflect income opportunities that had remained unrealized due to liquidity constraints that are relaxed by the transfers opportunities come from the asset endowments that these households received through the land reform particularly irrigated land and they are enhanced by access to technical assistance

the theory of mixed demand functions abstract the properties of samuelson s mixed demand functions which express demand as a function of a mixed set of prices and quantities are derived by analyzing compensated or substitution effects and uncompensated effects the relationships between mixed demand functions and conditional or rationed demands are examined this provides insights on the behavioral implications of consumer theory for alternative demand specifications

size and productivity in the u s milling and baking industries from the late 1950s through mid 1990s productivity growth in u s grain milling and feed manufacturing has been consistently strong and positive in grain milling approximately 15 of the growth is due to size economies technical change has been capital using increasingly material saving and in recent years decreasingly labor saving or increasingly labor using the quality of capital has risen relative to that of labor and materials in all but the baking industry capital intensification and incentives for plant size growth remain unabated copyright 2000 oxford university press

ex ante consumer welfare evaluation in cost benefit analysis abstract public projects and policies are normally evaluated ex ante i e while consumers may still be uncertain about future prices income levels interest rates and preferences this paper extends the theory of ex ante consumer welfare evaluation by developing a 2 period model with multiple sources of uncertainty it provides insights into the influence of temporal uncertainty on the empirical measurement of ex ante willingness to pay

structural change capital investment and productivity in the food processing industry investment in new technology affects structural change and economic performance through its effect on capital and input composition this is particularly important for capital intensive industries such as food processing which lack short run flexibility due to adjustment costs this study considers the impacts of capital quasi fixity on capital and noncapital input decisions made in the u s food and kindred products industry from 1965 to 1991 a cost based production theory model is used to evaluate investment motivations for three capital components productivity growth accompanying changing input patterns is then discussed focusing on capital and farm input demand

ambiguity aversion in buyer seller relationships a contingent claims and social network explanation negotiations between buyers and sellers or suppliers of goods and services have become increasingly important due to the growing trend towards international purchasing outsourcing and global supply networks together with the high uncertainty associated with them this paper examines the effect of ambiguity aversion on price negotiations using multiple priors based real options with non extreme outcomes we study price negotiation between a buyer and seller in a dual contingent claims setting call option holding buyer vs put option holding seller to derive optimal agreement conditions under ambiguity with and without social network effects we find that while higher ambiguity aversion raises the threshold for commitment for the seller it has equivocal effects on the buyer s negotiation prospects in the absence of network control conversely when network position and relative bargaining power are accounted for we find the buyer s implicit price or negotiation threshold decreases or increases unequivocally with increasing aversion to ambiguity extending extant real options research on price negotiation to the case of ambiguity this set of results provides new insights into the role of ambiguity aversion and network structures in buyer seller relationships including how they influence the range of negotiation agreement between buyers and sellers the results also help assist managers in formulating robust buying selling strategies for bargaining under uncertainty by knowing their network positions and gathering background information or inferring the other party s ambiguity tolerance beforehand buyers and sellers can anticipate where the negotiation is heading in terms of price negotiation range and mutual agreement possibilities

prudence with respect to ambiguity under expected utility prudence is equivalent to a positive third derivative of utility and plays a crucial role in precautionary saving behaviour eeckhoudt and schlesinger 2006 proposed behavioural definitions of prudence and of higher order risk preferences the present paper proposes a similar definition for prudence with respect to ambiguity i e situations in which objective probabilities are not available implications for several ambiguity models are derived ambiguity prudence is implied by hansen and sargent s 2001 multiplier preferences empirically correlates with financial behaviour and plays a key role in prevention behaviour this article is protected by copyright all rights reserved

agricultural productivity and structural transformation evidence from brazil we study the eects of the adoption of new agricultural technologies on structural transfor mation to guide empirical work we present a simple model where the eect of agricultural productivity on industrial development depends on the factor bias of technical change we test the predictions of the model by studying the introduction of genetically engineered soybean seeds in brazil which had heterogeneous eects on agricultural productivity across areas with dierent soil and weather characteristics we nd that technical change in soy production was strongly labor saving and lead to industrial growth as predicted by the model

competition and substitutability in the swedish pharmaceuticals market substitution possibilities between brand name pharmaceuticals are analysed the analysis is based on data from three different markets the prescription drug market for beta blocking agents the over the counter market for purgatives and the hospital market for two pharmaceutical treatments for gastric ulcers the results indicate that there exist some substitution possibilities among the brand name drugs included in the study

moving off the farm and intensifying agricultural production in shandong a case study of rural labor market linkages in china this study examines linkages between off farm labor markets and the labor allocated by farmers to on farm production of fruit crops using a stratified random sample of rural households in shandong province we find that young and educated members of the labor force tend to work more frequently in the off farm labor market and that off farm employment reduces the likelihood and intensity of fruit production fruit production is associated with lower levels of off farm employment households and individuals who are less likely or able to find off farm employment can benefit from shifting into fruit production although off farm employment is an important avenue out of poverty fruit production provides ways for the less educated and older households to raise their income

non additive beliefs and strategic equilibria abstract this paper studies n player games where players beliefs about their opponents behaviour are modelled as non additive probabilities the concept of an equilibrium under uncertainty which is introduced in this paper extends the equilibrium notion of dow and werlang 1994 j econom theory 64 305 324 to n player games in strategic form existence of such an equilibrium is demonstrated under usual conditions for low degrees of ambiguity equilibria under uncertainty approximate nash equilibria at the other extreme with a low degree of confidence maximin equilibria appear finally robustness against a lack of confidence may be viewed as a refinement for nash equilibria journal of economic literature classification numbers c72 d81

generating skilled self employment in developing countries experimental evidence from uganda we study a government program in uganda designed to help the poor and unemployed become self employed artisans increase incomes and thus promote social stability young adults in uganda s conflict affected north were invited to form groups and submit grant proposals for vocational training and business start up funding was randomly assigned among screened and eligible groups treatment groups received unsupervised grants of 382 per member grant recipients invest some in skills training but most in tools and materials after four years half practice a skilled trade relative to the control group the program increases business assets by 57 work hours by 17 and earnings by 38 many also formalize their enterprises and hire labor we see no effect however on social cohesion antisocial behavior or protest effects are similar by gender but are qualitatively different for women because they begin poorer meaning the impact is larger relative to their starting point and because women s work and earnings stagnate without the program but take off with it the patterns we observe are consistent with credit constraints

public goods game with ambiguous threshold abstract various collective action problems can be described as a discrete public goods game with a threshold in this game players may be reluctant to contribute to the provision of public goods when the threshold value is uncertain we derive equilibria when players face ambiguity i e knightian uncertainty on the threshold value by using choquet expected utility furthermore we show that in a class of neo additive capacities an increase in ambiguity decreases the equilibrium maximal number of contributors irrespective of players ambiguity attitudes this contrasts to what mcbride 2006 shows when the probability distribution is known

disappointment in decision making under uncertainty decision analysis requires that two equally desirable consequences should have the same utility and vice versa most analyses of financial decision making presume that two consequences with the same dollar outcome will be equally preferred however winning the top prize of 10 000 in a lottery may leave one much happier than receiving 10 000 as the lowest prize in a lottery this paper explores the implications of disappointment a psychological reaction caused by comparing the actual outcome of a lottery to one s prior expectations for decision making under uncertainty explicit recognition that decision makers may be paying a premium to avoid potential disappointment provides an interpretation for some known behavioral paradoxes and suggests that decision makers may be sensitive to the manner in which a lottery is resolved the concept of disappointment is integrated into utility theory in a prescriptive model

climate change catastrophes and insuring decisions a study in the presence of ambiguity abstract this paper attempts to study how individuals respond to the availability of an insurance that would safeguard their interests if a climate change catastrophe occurred if such an insurance is available to them do individuals insure themselves sufficiently further the study investigates if information regarding the past occurrence of the catastrophic event leads to an increase in insurance subscriptions and or the emergence of a lemons market finally policy implications are investigated can an indirect intervention in the form of a nudge ensure a better outcome

on lionel mckenzie s 1957 intrusion into 20th century demand theory in this essay we read mckenzie s 17 paragraphs of 1957 on demand theory without a utility index as an opening to the narrative of 20th century demand theory and as a lever for the understanding of what has now reached culmination as the neoclassical theory of demand in tracking the influence of these paragraphs on both theoretical and applied work we also use them as a foothold for reflection on the process of theorizing to argue for the view that one cannot neglect the changing problematic that the theory is adduced to address that the historical narrative behind a particular theorem is indispensable in understanding the theorem itself this implicit theorizing of the process of theorizing then forces us to consider stigler s distinction between textual and scientific exegesis and confront it to a second order level of theorizing and thereby bring out the continuity possibly not quite seamless between a theorem and its history

ambiguity optimism and pessimism in adverse selection models we investigate the effect of ambiguity and ambiguity attitude on the shape and properties of the optimal contract in an adverse selection model with a continuum of types using the parametric model of ambiguity and ambiguity aversion called the neo additive model chateauneuf eichberger and grant 2007 we show that it necessarily features efficiency and a jump at the top and pooling at the bottom of the distribution conditional on the degree of ambiguity the pooling section may or may not be supplemented by a separating section as a result ambiguity adversely affects the principal s ability to solve the adverse selection problem and therefore the least efficient types benefit from ambiguity with respect to risk conversely ambiguity is detrimental to the most efficient types this is confirmed in the comparative statics section

ambiguity and uncertainty in ellsberg and shackle this paper argues that the similarities between ellsberg s and shackle s frameworks for discussing the limits of the probabilistic approach to decision theory are more important than usually admitted the paper discusses the grounds on which the ambiguity surrounding the decision maker in ellsberg s urn experiments can be deemed analogous to the uncertainty faced by shackle s entrepreneur taking crucial decisions the two authors insights are assessed and special attention is paid to the criteria for decision under uncertainty they put forward the paper establishes a link between ellsberg s and shackle s perspectives and the non additive probability approach of gilboa and schmeidler an approach that offers an alternative to standard probability calculus which can be of use to analyse both ambiguity and uncertainty the comparison between ellsberg and shackle draws on an interpretation of keynes s treatise on probability emphasising keynes s rejection of both well defined probability functions and maximisation as a guide to human conduct it is shown that keynes s viewpoint implies a reconsideration of the boundaries of probability theory that is in the same vein of ellsberg s and shackle s concern in the years of the consolidation of savage s new probabilistic mainstream copyright the author 2009 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

technological change and economies of scale in u s poultry processing this article uses a unique data set provided by the census bureau and a translog cost function to empirically examine technological change in the u s poultry industry results reveal substantial scale economies that show no evidence of diminishing with plant size and that are much greater than those realized in cattle and hog slaughter findings suggest that consolidation is likely to continue particularly if demand growth diminishes and that controlling for plant product mix is critical to accurate cost estimates

optimists pessimists and the precautionary principle the precautionary principle has emerged as a leading guide to public decision making about environmental risks under irreversibility and uncertainty in this paper we adopt a two period model with irreversibility and agents differentiated by their degree of optimism to characterize the conditions under which the precautionary principle applies we show in particular that it is more often applied if the decision maker has an intermediate optimism index if scientific research is more effective at reducing uncertainty and if the same decision maker makes the decisions for both periods moreover we show that socially optimal decisions lead to apply the precautionary principle more often than an elected decision maker does

consumption versus asset smoothing testing the implications of poverty trap theory in burkina faso abstract despite solid theoretical foundations for the notion that poor borrowing constrained households will intertemporally manage assets to smooth consumption the consumption smoothing hypothesis has not always withstood empirical scrutiny this paper reassesses the intertemporal asset management problem with a poverty trap model and shows that we would expect to see asset smoothing not consumption smoothing in the neighborhood of critical asset levels at which optimal accumulation behavior bifurcates we then employ threshold estimation techniques to empirically confirm the co existence of consumption and asset smoothing regimes using a household panel data set from west africa households above the estimated threshold almost completely insulate their consumption from weather shocks whereas those below the threshold do not these results not only indirectly provide evidence of the existence of poverty traps but also speak to the level and incidence of the costs of uninsured risk

the household responsibility system reform and the adoption of hybrid rice in china abstract this paper studies the diffusion of hybrid rice before and after the recent institutional change from the collective team system to the household based farming system in rural china a simple model which treats the adoption of hybrid rice as a portfolio selection problem is presented the model is tested against time series cross county data collected from hunan province in south china the empirical evidence suggests that 1 adoption behavior in the collective system was not consistent with the predictions of the theoretical model this evidence indicates the existence of administrative intervention in influencing production decisions in the collective system 2 there was a significant change in the structure of the adoption function following the transition from the collective system to the household based system and 3 adoption behavior in the household system is consistent with the predictions of the theoretical model

ambiguity social opinion and the use of common property resources in this paper we argue that ambiguity combined with social opinion formation can be used as the foundation of a game theoretic equilibrium concept that transcends the standard nash equilibrium concept applied to a model of the tragedy of the commons our approach sheds light on the international environmental crisis and the relevant ongoing international negotiations we conclude that social opinion formation in most cases has a significant impact on equilibrium common property resource usage

risk uncertainty and option exercise many economic decisions can be described as an option exercise or optimal stopping problem under uncertainty motivated by experimental evidence such as the ellsberg paradox we follow knight 1921 and distinguish risk from uncertainty to capture this distinction we adopt the multiple priors utility model we show that the impact of ambiguity on the option exercise decision depends on the relative degrees of ambiguity about continuation payoffs and termination payoffs consequently ambiguity may accelerate or delay option exercise we apply our results to investment and exit problems and show that the myopic npv rule can be optimal for an agent having an extremely high degree of ambiguity aversion

the impact of ethiopia s productive safety net programme and its linkages abstract this paper assesses the impact of ethiopia s productive safety nets programme psnp the largest social protection programme in sub saharan africa outside of south africa using propensity score matching techniques we find that the programme has little impact on participants on average due in part to transfer levels that fell far below programme targets participants with access to both the psnp and packages of agricultural support are more likely to be food secure to borrow for productive purposes use improved agricultural technologies and operate non farm own business activities however beneficiaries did not experience faster asset growth

an econometric estimation of hicksian and marshallian elasticities in indian manufacturing the knowledge of substitution possibilities between different factors of production is essential in evaluating the impact of public policies on productivity employment industrial growth and factor intensity since the advent of flexible functional forms in the early 1970s a large number of studies have estimated the ease of factor substitution however to date most of the empirical evidence on factor substitution is based on a cost function a drawback with the cost function

moderate stake variations for risk and uncertainty gains and losses methodological implications for comparative studies risk attitudes are known to be sensitive to large stake variations however little is known on the sensitivity to moderate variations in stakes this is important for studies that want to compare risk attitudes between countries or over time i find that variations of 20 affect only utility while larger variations may affect also probability weighting surprisingly the effect on weighting functions is larger for losses than for gains it is also more pronounced for risk than for uncertainty

the elasticity of scale and the shape of average costs different concepts of returns to scale the first which is most widely used for defining returns to scale is the relative increase in output as all input quantities are increased proportionally along a ray through the origin the second which is the more relevant concept for micro economic analysis is the increase in output relative to costs for variations along the expansion path where input prices are constant and costs are minimized at every output 2 as it turns out these two concepts yield equal measures for the elasticity of scale3 e at every minimum cost point in the input space however the change in e with output is generally different for the two concepts 4 since expansion paths do not coincide with rays unless the production function is homothetic 5 but it is the change of e along the expansion path and not along the raywhich determines the shape of the average cost curve ac and which is therefore relevant for the analysis of firms and industry behavior under competition 6 these relations are stated and analyzed below it is shown that assumptions made in the literature7 which are related to the behavior of e along rays or to the slope of the technically optimal surface where returns to scale are locally constant are irrelevantbeing neither necessary nor sufficient for implying classical u shaped average cost curves the following definitions and results are used here

a test of the underinvestment myopia and commodity bias hypotheses for u s agricultural research abstract analysts of agricultural research policy in the united states of america have claimed that the over all level of public investment in agricultural research is less than what would be socially optimal that the present composition of public research investment is excessively myopic in that too little basic research is performed relative to the level of applied research and that the allocation of research resources among commodities is inconsistent with economic efficiency a non linear optimal growth model of the u s economy was developed to analyse these propositions strong support was found for the claim that the overall level of investment has been inadequate no support was found for the contention that basic research has been relatively underfunded compared to applied research weak support was found for the view that crop research has suffered from more acute underfunding than has livestock research

asset pricing in a lucas fruit tree economy with the best and worst in mind this paper studies a lucas 1978 fruit tree economy under the assumption that the agents are choquet expected utility ceu rather than standard expected utility decision makers more speci cally the agents non additive beliefs about the economy s dividend payment process are modelled as neo additive capacities so that the agents decision behavior emphasizes the best respectively worst possible economic scenarios in contrast to existing models of lucas type economies with ambiguity averse agents epstein and wang 1994 which ensure dynamic consistency through heavy restrictions on admissible ambiguity attitudes my ap

a one line proof of the slutsky equation one focus of the usual classroom discussion of consumer theory is the demonstration that the individual consumer s reaction to a change in the market price of a commodity can be usefully broken down into vectors of substitution effects and income effects the slutskv equation relating the price effect to the substitution and income effects can be simply nmotivated by j r hicks graphical presentation p 31 but the usual proof see paul samuelson is very tedious and nonintuitive if the instructor includes a discussion of the expenditure function in his curriculum however he has available a concise intuitively appealing proof of the slutsky equation 1 suppose a consumer with income y faces a vector of commoditv prices p his marshallian demand curve for commodity j is given by xj dj y p the minimum expenditure necessary for the consumer to achieve any utility level u is given by his expenditure function y m u p here y is in units of the jth good his hicksian income compensated demand for commodity j is represented xj hi u p if m is differentiable we have the well known result that

precautionary principle as a rule of choice with optimism on windfall gains and pessimism on catastrophic losses abstract the paper investigates a decision making process involving both risk and ambiguity differently from existing papers basili m chateauneuf a fontini f 2005 choices under ambiguity with familiar and unfamiliar outcomes theory and decision 58 195 207 chichilnisky g 2000 axiomatic approach to choice under uncertainty with catastrophic risks resources and energy economics 22 221 231 chichilnisky g 2002 in el shaarawi a h piegorsch w w eds catastropic risks encyclopedia of environmetrics vol 1 john wiley sons ltd chichester uk pp 274 279 we assume that in a choquet expected utility framework the decision maker is pessimistic with respect to unfamiliar catastrophic losses optimistic with respect to unfamiliar windfall gains and ambiguity neutral with respect to the familiar world a representation of the decision maker s choice is obtained that mimics the restricted bayes hurwicz criterion in this way a characterization of the precautionary principle is introduced for decision making processes under ambiguity with catastrophic losses and or windfall gains

a bias aggregation theorem abstract in a market where some traders are rational maximize expected utility and others are systematically biased deviate from expected utility due to some bias parameter do equilibrium prices necessarily depend on focusing on the case where there is an aggregate and systematic bias in the population we show that market prices can still be unbiased hence we establish that systematically biased agents do not necessarily imply biased market prices

input substitution economies of scale and productivity growth in the us upholstered furniture industry cost factor demand and productivity growth are considered in the upholstered furniture industry over 1958 87 factors are divided into labour capital and materials it is found that all inputs are substitutes in production although substitution elasticities are small factor demand is price inelastic for all inputs the industry operates around minimum average cost productivity growth is small but significant the results indicate that labour will continue to be important in the industry however regional comparative advantage is not related to labour alone the results suggest that policies to attract or retain the industry must consider the low degree of factor substitution

rural reforms and agricultural growth in china this paper employs province level panel data to assess the contributions of decollectivization price adjustments and other reforms to china s agricultural growth in the reform period decollectivization is found to improve total factor productivity and to account for about half of the output growth during 1978 84 the adjustment in state procurement prices also contributed positively to output growth its impact came mainly from the responses in input use the effect of other market related reforms on productivity and output growth was very small reasons for slowdown in agricultural growth after 1984 are also analyzed copyright 1992 by american economic association

another look at pesticide productivity and pest damage using the lichtenberg zilberman fox weersink damage specification we develop a short run supply response framework based on rational producer behavior in the presence of damage agents we show how representation can be used to measure and decompose the economic damage associated with the presence of pests how to measure the shadow prices of damage control agents how to measure the manner in which pesticide application biases variable input use and how pesticide application affects the relative returns to quasi fixed factors of production an econometric version of the model is estimated using a panel data set on greek olive producers both our theoretical and our empirical results suggest that the most traditional measure of pest damage understates actual economic losses and revenue losses due to pests

multiple input multiple output production choices and technology in the u s wheat region duality theory motivates a translog expected profit function consistent with multiple products price uncertainty preseason climate constraints acreage control policies and possibly nonhomothetic technology although multiple outputs are allowed enterprise specific data is not necessary instead time series measures of output revenues and expected prices input expenses and prices and fixed input flows are employed appropriate measures of elasticities of choice returns to size and biases in technological change are derived results indicated decreasing returns to size rather limited though complementary responsiveness of choices to price changes and the nature of biases in technological changes

the rich domain of uncertainty source functions and their experimental implementation we often deal with uncertain events for which no probabilities are known several normative models have been proposed descriptive studies have usually been qualitative or they estimated ambiguity aversion through one single number this paper introduces the source method a tractable method for quantitatively analyzing uncertainty empirically the theoretical key is the distinction between different sources of uncertainty within which subjective choice based probabilities can still be defined source functions convert those subjective probabilities into willingness to bet we apply our method in an experiment where we do not commit to particular ambiguity attitudes but let the data speak

clustered pricing in the corporate loan market theory and empirical evidence abstract existing theories explaining security price clustering as well as clustering in the retail deposit and mortgage markets are incompatible with the clustering in the corporate loan market we develop a new theoretical model that the attitude of the lender toward the uncertainty about the quality of the borrower leads to the clustering of spreads our empirical results support our theoretical model and we find that clustering increases with the degree of uncertainty between the lender and the borrower in contrast clustering is less likely when the uncertainty about the quality of the borrower has been reduced through repeated access and through prior interactions of the lender and the borrower

a more robust definition of subjective probability the goal of choice theoretic derivations of subjective probability is to separate a decisionmaker s underlying beliefs subjective probabilities of events from their preferences attitudes toward risk classical derivations have all relied upon some form of the marschak samuelson independence axiom or the savage sure thing principle which imply that preferences over lotteries conform to the expected utility hypothesis this paper presents a choice theoretic derivation of subjective probability in a savage type setting of purely subjective uncertainty which neither assumes nor implies that the decisionmaker s preferences over lotteries necessarily conform to the expected utility hypothesis copyright 1992 by the econometric society

the impact of positive agricultural income shocks on rural chinese households in the post collectivization period rural chinese households were required to sell part of their grain output to the state at a below market price however increases in this quota price beginning in 1993 generated substantial positive income shocks these income shocks also varied cross sectionally in accordance with crop composition given that quotas were systematically larger for rice producing households generating a quasi random source of variation in the size of the shock driven by climatic variation in suitability for rice cultivation households induced to experience relatively larger income shocks show evidence of decreased agricultural investment increased investment in non agricultural businesses and increased migration as households gain increased income consistent with the hypothesis that credit constraints may have constrained some households from entering non agricultural production ex ante in addition there is evidence that these households were concentrated among households who had not previously diversified out of agriculture

technology labor wars and producer dynamics explaining consolidation in beefpacking beefpacking underwent a dramatic transformation in the 1970s and 1980s as plants got much larger and industry concentration rose dramatically we use individual census bureau plant records to analyze the sources of the transformation we find that there were modest but extensive scale economies in packing plants covering the full range of plant sizes and that such economies became more important throughout the period of the study as production shifted to larger plants we estimate that the industry s aggregate processing costs fell by 35 3 by 2002 compared to what they would have been without consolidation

valuing an investment project using no arbitrage and the alpha maxmin criteria from knightian uncertainty to risk we consider a two period irreversible investment decision problem in which the firm can either invest in period 0 or in period 1 the firm is assumed to be able to specify a set of three scenarios or more but not a probability measure assuming the option to wait is valued with the no arbitrage principle when the firm makes use of the criteria maxmin we show the firm ends up with a known probability measure that assigns a positive probability to three or four scenarios only

the relative demand for inputs a decomposition analysis of us agriculatural production 1988 the relative demand for inputs a decomposition analysis of us agriculatural production applied economics vol 20 no 5 pp 665 678

agricultural productivity growth rural economic diversity and economic reforms india 1970 2000 a salient theme in d gale johnson s work is the importance of agricultural development for general prosperity and for economic diversification e g johnson 2000 johnson has also noted that most of the world s poor are engaged in farming so that a key focus of development policy is to raise the incomes of farmers from a global perspective increasing the productivity of agriculture given the fixity of land is necessary for both poverty reduction and the development of the nonagricultural sector at the level of the world agricultural productivity gains poverty reduction and the growth of the nonfarm sector are complements however the question remains whether these observations imply that every poor country should focus its public resources on agricultural development in order to raise the incomes of people now engaged in farming and whether such a policy is necessary for obtaining economic diversity in this article we use the experience of india over the past 30 years to address the issue of whether agricultural technical change actually leads to economic diversification and income growth within the rural sector in the context of an open economy country in which there are cross area trade and capital flows we focus in particular on the rural sector because this is the sector in which linkages between agricultural and nonagricultural sectors are thought to be the strongest we exploit the fact that india has maintained a policy of openness with respect to agricultural technology over this period permitting and actively supporting agricultural development and has moved to a reformed regime in which goods are traded and capital is more mobile in the 1990s evidence on the relationship between agricultural growth and nonfarm

a translog cost function analysis of u s agriculture 1939 77 over the past four decades major changes have occurred in u s agriculture a new era in agricultural production in the united states began in 1939 world war ii gave a boost to agriculture still bogged in the depression productivity increases over the period 1939 77 have been quite impressive measured crudely by the ratio of the indices of output and input the productivity index 1967 100 increased from 59 in 1939 to 119 in 1977 to study this phenomenon a multi input translog cost function incorporating hicks neutral technical change hntc was specified annual timeseries data for the united states was used to estimate the model neoclassical duality theory provides an approach for computing the pairwise elasticities of substitution between inputs for each year as well as the annual own and cross price elasticities of demand for inputs

choice under uncertainty with the best and worst in mind neo additive capacities the concept of a non extreme outcome additive capacity neo additive capacity is introduced neo additive capacities model optimistic and pessimistic attitudes towards uncertainty as observed in many experimental studies moreover neo additive capacities can be applied easily in economic problems as we demonstrate by examples this paper provides an axiomatisation of choquet expected utility with neo capacities in a framework of purely subjective uncertainty

shocks and their consequences across and within households in rural zimbabwe abstract increasing attention is now being paid to poverty dynamics in developing countries this work links the extent to which households smooth consumption or smooth assets given income shocks the empirical evidence on the churning of households in and out of poverty and the possibility that temporary shocks can have permanent consequences using longitudinal data from rural zimbabwe this paper extends the discussion of these issues by disaggregating the impact of shocks by levels of asset holdings by disaggregating the impact of shocks on individual level welfare and by assessing the extent to which such shocks have permanent consequences by doing so it assesses the validity of distinguishing between asset and consumption smoothing and provides insights into whether poverty dynamics assessed at the household level provide an adequate picture of dynamics at the individual level

material productivity in food manufacturing material prices have risen in food manufacturing resulting in material productivity growth this study estimates material productivity indexes for new jersey s foodmanufacturing sector a 21 material productivity growth is indicated for the 1964 84 period the mechanism of material productivity growth is also investigated results suggest that greater material efficiency is encouraged by rising material prices wage rates and regulation and by declining food prices short run impacts on material productivity are caused by input substitution beyond the short run impacts are caused by material saving technological change in some food manufacturing subsectors higher material prices may bring lower revenues to material suppliers

optimism and pessimism in games this paper considers the impact of ambiguity in strategic situations it extends the earlier literature by allowing for optimistic responses to ambiguity ambiguity is modelled by ceu preferences we propose a new solution concept for players who may express ambiguitypreference then we study comparative statics of changes in ambiguity attitude in games with strategic complements this gives a precise statement of the impact of ambiguity on economic behaviour

decision theory under ambiguity we review recent advances in the field of decision making under uncertainty or ambiguity we start with a presentation of the general approach to a decision problem under uncertainty as well as the standard bayesian treatment and issues with this treatment we present more general approaches choquet expected utility maximin expected utility smooth ambiguity and so forth that have been developed in the literature under the name of models of ambiguity sensitive preferences we draw a distinction between fully subjective models and models incorporating explicitly some information we review definitions and characterizations of ambiguity aversion in these models we mention the challenges posed by some of the models presented we end with a review of part of the experimental literature and applications of these models to economic settings

duality the output effect and applied comparative statics except for kako agricultural production studies using cost functions have analyzed technology via allen elasticities technological change parameters and homotheticity tests kako used a transcendental logarithmic translog cost function to decompose empirically changes in derived factor demand into three separate components output level factor substitution effects and technical change kako s work allows further investigation of technical change on derived factor demands however kako s output effect is different from the traditional concept the production analog of the income effect in consumer theory this note outlines a theoretical and econometric approach for measuring the output effect the output effect is important because it presents a more complete picture of factor employment adjustments than do demand elasticities generated from cost functions elasticities generated from cost functions restrict the producer to a given level of output producers however may also adjust output as factor prices change the output effect captures this adjustment this paper demonstrates a method for deriving the output effect from the cost function first the general assumptions and the model are outlined then the cost function is related to the indirect production function and the output effect obtained results are presented for the special case of a homothetic production function the paper concludes with an empirical application to the u s meat products industry

an economic analysis of technology in the meat products industry the meat products industry underwent significant structural change during the last two decades the relocation and expansion of commercial cattle feeding stimulated development of new single species slaughtering facilities to replace older multi species plants an essentially new processing industry arose specializing in breaking and packaging carcasses this forward integration has significantly changed distribution methods of slaughtering and fabricating firms increased emphasis on coordination of inputs led to interest in backward integration from packing into cattle feeding the steer and heifer slaughtering sector which was decentralized and competitive in the 1950s has turned toward centralization and concentration although the largest firm accounted for only 13 of total u s steer and heifer slaughter in 1977 it had more than doubled its share since 1970 in 1978 this firm slaughtered more than twice as many steers and heifers as its nearest competitor in addi

welfare dynamics in pakistan and ethiopia does the estimation method matter identifying household level welfare dynamics and associated dynamic poverty trap thresholds can have important implications for the targeting of poverty reduction policies the small existing empirical microeconomic literature has found evidence both for and against poverty traps using household panel data from rural pakistan and ethiopia this article examines whether these different results are likely driven by differences in estimation methods or whether they reflect actual differences across settings it applies the estimation methods from the existing literature to the same two datasets and also proposes a novel semiparametric panel data estimator that combines the advantages of the previous fully parametric and nonparametric approaches the results suggest that absent any dynamic poverty trap thresholds the effect of using different estimation methods is secondary having a small influence on the estimated long term level of household well being but not the identification of multiple dynamic welfar

regional agricultural endowments and shifts of poverty trap equilibria evidence from ethiopian panel data we examine changes in patterns of equilibria over time and across regions applied to the ethiopia rural household survey we revisit incidence of multiple equilibria using new nonparametric techniques and examine single equilibria that remain stagnant below the poverty line using quantile regressions we identify differences across the income distribution we introduce the empirical analysis of sequences of equilibria we identify a single equilibrium in 1994 1999 but find a second higher equilibrium emerging in 1999 2004 evidencing a shift from unimodal toward a bimodal asset distribution the most deprived region exhibits a low level stagnant equilibrium despite significant rural income growth nationwide

a definition of uncertainty aversion a definition of uncertainty or ambiguity aversion is proposed it is argued that the definition is well suited to modelling within the savage as opposed to anscombe and aumann domain of acts the defined property of uncertainty aversion has intuitive empirical content behaves well in specific models of preference multiple priors and choquet expected utility and is tractable tractability is established through use of a novel notion of differentiability for utility functions called eventwise differentiability

destructive effects of constructive ambiguity in risky times unclear bailout policy underinvestment and calls for greater responsibility by bankers are some of the observations from the recent financial crisis the paper explains underinvestment as an inefficient equilibrium under ambiguous bailout policy agents suffer from a lack of information about the insolvency resolution methods the beliefs of bankers regarding whether an insolvent bank is liquidated may differ from those of depositors even if bankers and depositors possess absolutely symmetric information about the economy this disrupts the flow of funds through the banking channel if the investment climate is characterized by high aggregate risk the paper suggests policy implications aimed at a reduction of the anxiety of agents and at aligning their beliefs to restore efficiency

do students behave like real taxpayers in the lab evidence from a real effort tax compliance experiment we report on data from a real effort tax compliance experiment using three subject pools students who do not pay income tax company employees whose income is reported by their employer and self employed taxpayers who are responsible for filing and payment while compliance behavior is unaffected by changes in the level of or information about the audit probability higher fines increase compliance we find subject pool differences self assessed taxpayers are the most compliant while students are the least compliant through a simple framing manipulation we show that such differences are driven by norms of compliance from outside the lab

ambiguity made precise a comparative foundation the theory of subjective expected utility has been recently extended to allow ambiguity to matter for choice we propose a notion of absolute ambiguity aversion by building on a notion of comparative ambiguity aversion we characterize it for a preference model which encompasses some of the most popular models in the literature we next build on these ideas to provide a definition of unambiguous act and event and show the characterization of the latter as an illustration we consider the classical ellsberg 3 color urn problem and find that the notions developed in the paper provide intuitive answers journal of economic literature classification number d81

giffen behavior and subsistence consumption this paper provides the first real world evidence of giffen behavior i e upward sloping demand subsidizing the prices of dietary staples for extremely poor households in two provinces of china we find strong evidence of giffen behavior for rice in hunan and weaker evidence for wheat in gansu the data provide new insight into the consumption behavior of the poor who act as though maximizing utility subject to subsistence concerns we find that their elasticity of demand depends significantly and nonlinearly on the severity of their poverty understanding this heterogeneity is important for the effective design of welfare programs for the poor jel d12 012

constrained output maximization and us agriculture this paper presents a framework for estimating an indirect production function and then applies it to aggregate us agriculture issues addressed include tests of standard hypotheses about the underlying technology homotheticity neutral technical change etc as well as examination of consistency in aggregation and the effects of changes in the level of aggregate expenditure on farm output since there already exist several studies empirically describing agricultural production technologies with indirect objective functions one might fairly ask whether this paper really breaks any new ground we feel that it does one reason is that existing studies e g binswanger 1974 lopez 1980 ball and chambers 1982 ray 1982 and weaver 1983 all rely on either profit or cost functions to date there appears to be only one study using an indirect production appelbaum 1979 and it is not in agriculture this seems unfortunate because there are many instances in agriculture for which an indirect productio

comparing three ways to update choquet beliefs abstract we analyze three rules for updating neo additive capacities only for generalized bayesian updating is relative optimism the same for both updated and unconditional capacities for updates of the other two either the updated capacity is fully optimistic or fully pessimistic

income diversification poverty traps and policy shocks in cote d ivoire and kenya abstract this paper presents evidence on the effects of two different sorts of policy shocks on observed income diversification patterns in rural africa in cote d ivoire households with poor endowments were less able to respond to attractive emerging on farm and non farm opportunities due to entry barriers to superior livelihood strategies the benefits of exchange rate reform accrued disproportionately to households that were richer prior to devaluation by contrast food for work transfers to households in kenya significantly reduced liquidity constraints enabling project participants to pursue more lucrative livelihood strategies in non farm activities and higher return agricultural production patterns jointly these two shocks underscore the importance of liquidity market access and skill constraints to skilled non farm income sources to dynamic poverty traps in rural africa

assets and poverty traps in rural bangladesh using longitudinal survey from rural bangladesh this article examines the determinants of land and asset accumulation over time and explores why some households may be trapped in asset poverty non parametric and parametric methods are used to discern the shape of the asset accumulation path and whether unique or multiple equilibria exist we find evidence for concavity of the dynamic asset frontier but no evidence for multiple equilibria it is suggested that the existence of well functioning factor markets in rural bangladesh and elsewhere in south asia explain the contrasts between our results and those for several african countries