challenges of conducting contingent valuation studies in developing countries we review the experiences and challenges that researchers can face when conducting contingent valuation studies in developing countries we discuss these challenges based on our own experiences of conducting field contingent valuation studies about genetically modified rice in five developing countries that represent different regions of the world and diverse cultures we also base our discussion on results from a survey we conducted of agricultural and applied economists regarding their own experiences the issues covered include the selection and training of local personnel the recruitment of participants sampling challenges participants compensation survey methods and implementation elicitation methods the literacy rate of the population and security safety issues in developing countries we also discuss the implications of our findings to other well established stated preference methods such as choice experiments

real exchange rates and time varying trade costs this paper re examines the empirical modeling of purchasing power parity ppp deviations in the presence of commodity market frictions first we show that a specific type of smooth transition models can closely approximate the functional form of the theoretical adjustment mechanism derived by dumas 1992 dynamic equilibrium and the real exchange rate in a spatially separated world review of financial studies 5 2153 180 for the case of constant as well as changing trade costs second we develop for the first time an empirical model of the real exchange rate which allows for changes in the degree of market integration by employing a long span of data on the dollar sterling real exchange rate and a micro founded proxy for trade frictions we provide novel evidence of a significant relationship between the persistence of the real exchange rate and the level of trade costs this finding suggests that both the difficulty of detecting ppp and the extend of rogoff s puzzle vary over time with the degree of trade restrictiveness finally we highlight policy repercussions of our results

exchange rate pass through and the welfare effects of the euro this article explores the implications of the european single currency within a simple sticky price intertemporal model we focus on the question of how the euro may change the sensitivity of consumer prices in europe to exchangerate changes our central conjecture is that the acceptance of the euro will lead european prices to become more insulated from exchange rate volatility we find that this affects both the volatility and levels of macroeconomic aggregates in both the u s and europe we find that european welfare is enhanced and the u s shares in europe s good fortune

exploiting a cost advantage and coping with a cost disadvantage this paper provides an empirical investigation of how firms with cost advantages cost disadvantages exploit cope with their advantages disadvantages through their pricing behavior guided by microeconomic theory and insights from the industrial organization literature we develop testable implications about the effect of industry structure and firm specific characteristics on the pass through elasticity the rate at which changes in a firm s cost relative to competitors translates into changes in the firm s price relative to competitors we test these implications using data from the pims competitive strategy database the results indicate that a firm s pass through elasticity systematically depends on whether the firm operates in a commodity or noncommodity industry the firm s capacity utilization and its cost and quality position in its industry the pass through elasticity is also shown to depend in a nonlinear way on market concentration

globesity the effects of globalization on obesity and caloric intake abstract we examine the effect of globalization in its economic and social dimensions on obesity and caloric intake namely the so called globesity hypothesis our results suggest a robust association between globalization and both obesity and caloric intake a one standard deviation increase in globalization is associated with a 23 8 percent increase in obese population and a 4 3 percent rise in calorie intake the effect remains statistically significant even after using an instrumental variable strategy to correct for some possible reverse causality and ommited variable bias a lagged structure and corrections for panel standard errors however we find that the primary driver of the globesity phenomenon is the social rather than the economic dimension of globalization and specifically the effect of changes in information flows and social proximity on obesity a one standard deviation increase in social globalization increased the percentage of obese population by 13 7 percent

agent compensation and the limits of bonding agents in positions of trust may engage in malfeasance which is difficult to detect this paper develops a model in which employers seek to control malfeasance by paying wages contingent on imperfect monitoring and agents may be required to pay entry fees or post bonds we conclude that entry fees which exceed agents assets are ineffective in controlling malfeasance as a result conditions exist in which it is optimal to pay agents more than their opportunity cost such conditions lead to an excess supply of applicants and allow employers to engage in discrimination at zero cost to themselves

integrating technology traits and producer heterogeneity a mixed multinomial model of genetically modified corn adoption this article proposes a model of technology adoption that integrates demand for individual traits of new technologies with the potential for heterogeneity based on farm and farmer characteristics the model is applied to recent genetically modified corn adoption data from minnesota and wisconsin farmers using a mixed multinomial logit mmnl model to estimate the effects of traits and farm and farmer characteristics on adoption outcomes this approach allows explicit recovery of estimates of farmers shadow prices for individual technology traits results show the importance of producer and regional heterogeneity in preferences for seed traits

what separates us sources of resistance to globalization with increasing sophistication economists have been estimating gravity equations for five decades robust evidence shows that borders and distance impede trade by much more than tariffs or transports costs can explain we therefore advocate investigation of other sources of resistance despite the greater difficult involved in measuring and modelling them from our selective review of recent findings a unifying explanation emerges a legacy of historical isolation and conflict forged a world economy in which neither tastes nor information are homogeneously distributed cultural difference and inadequate information manifest themselves most strongly at national borders and over distance

reputation and hierarchy in dynamic models of employment the employment relationship with employees ability and their actions both private information thus combining adverse selection with moral hazard is modeled as a repeated game with self enforcing contracts being perfect bayesian nash equilibria under termination contracts the equilibrium contract structure consists of a hierarchy of ranks finite in number even though ability is continuous reputation acts as an effective device for worker discipline without the need for involuntary unemployment selection by bonding is not in general incentive compatible but selection by promotion of employees through the ranks is many other features correspond to observed employment structures

payments for pioneers revisiting the role of external rewards for sustainable innovation under heterogeneous motivations abstract acknowledging the diversity of preferences goals and motivations of individuals is key to promote the effectiveness of incentive based conservation interventions this paper analyses the heterogeneity of motivations to adopt silvopastoral practices a social ecological innovation for soil conservation and carbon emission reduction we use q methodology to identify smallholders views with regard to these practices in a community in the forest frontier in chiapas mexico the analysis uncovers three main perspectives self sufficient pioneers environmentally conscious followers and payment dependent conservatives we discuss these perspectives around three topics smallholders predisposition to adopt silvopastoral practices their views about needing external payments to sustain their livelihood and the diffusion of innovative sustainable practices we relate these perspectives with livelihood characteristics and with observed adoption levels under a pilot programme to promote silvopasture our findings suggest that incentives other than payments may be more appropriate for those more likely to adopt and that payments could encourage rent seeking strategies and not necessarily promote permanent behavioural change we suggest ways for designing more effective and adaptive environmental conservation programmes to foster adoption and continuation of social ecological innovations

genetically modified crops corporate pricing strategies and farmers adoption the case of bt cotton in argentina this article analyzes adoption and impacts of bt cotton in argentina against the background of monopoly pricing based on survey data it is shown that the technology significantly reduces insecticide applications and increases yields however these advantages are curbed by the high price charged for genetically modified seeds using the contingent valuation method it is shown that farmers average willingness to pay is less than half the actual technology price a lower price would not only increase benefits for growers but could also multiply company profits thus resulting in a pareto improvement implications of the sub optimal pricing strategy are discussed recently genetically modified gm crops have brought about important changes in the global market for agricultural technologies especially seeds prospects of high economic returns and tightened intellectual property rights iprs have provided new incentives for the private sector to invest in crop improvement and extend its business to nontraditional markets the increasingly proprietary nature of seed technologies has implications for farmers adoption and benefit distribution private innovators endowed with a patent on a technology will attempt to capture the gains from their innovation through monopoly pricing moschini and lapan recent studies have looked into the partitioning of welfare created by gm crops among agricultural producers consumers and innovating input firms e g moschini lapan and sobolevsky falckzepeda traxler and nelson in these studies however the market price of the technology is

exchange rate pass through exchange rate volatility and exchange rate disconnect abstract this paper explores the hypothesis that high volatility of real and nominal exchange rates may be due to the fact that local currency pricing eliminates the pass through from changes in exchange rates to consumer prices exchange rates may be highly volatile because in a sense they have little effect on macroeconomic variables the paper shows the ingredients necessary to construct such an explanation for exchange rate volatility in addition to the presence of local currency pricing we need a incomplete international financial markets b a structure of international pricing and product distribution such that wealth effects of exchange rate changes are minimized and c stochastic deviations from uncovered interest rate parity together it is shown that these elements can produce exchange rate volatility that is much higher than shocks to economic fundamentals and disconnected from the rest of the economy in the sense that the volatility of all other macroeconomic aggregates are of the same order as that of fundamentals

hedging price volatility using fast transport abstract purchasing goods from distant locations introduces a significant lag between when a product is shipped and when it arrives these transit lags are trade barriers for firms facing volatile demand who must place orders before knowing the resolution of demand uncertainty we provide a model in which airplanes bring producers and consumers together in time fast transport allows firms to respond quickly to favorable demand realizations and to limit the risk of unprofitably large quantities during low demand periods the model predicts that the likelihood and extent to which firms employ air shipments is increasing in the volatility of demand they face decreasing in the air premium they must pay and increasing in the contemporaneous realization of demand we confirm all three conjectures using detailed us import data fast transport thus provides firms with a real option to smooth demand volatility on international markets and we provide simple calculations of that option value this enables us to identify how the option value relates to goods characteristics and to changes in air transport premia associated with technological and policy change including the introduction of jet engines and liberalization of trade in air services

globalisation and the spatial concentration of production new trade theory models predict that freer trade increases the spatial concentration of industrial production across countries while nations with large home markets and central geographical location become increasingly attractive business locations small peripheral countries gradually deindustrialize using data for 26 industries 20 oecd countries and 20 years we investigate the empirical validity of this claim separating out the role of home market size from geographical factors and using various panel methods we find robust evidence in line with theory freer trade has indeed magnified the importance of domestic demand and geographical location for the pattern of industrial production across the globeand has therefore exacerbated spatial disparities

rising trade costs agglomeration and trade with endogenous transaction costs while transport costs have fallen the empirical evidence also points at rising total trade costs in a model of industry location with endogenous transaction costs that seeks to replicate features from the machinery industry we show how and under which conditions a decline in transport costs can lead to an increase in the total cost of trade the subtle relationship between endogenous transport costs and the sensitivity of trade

symmetric pass through of tariffs and exchange rates under imperfect competition an empirical test abstract this paper examines the effect of tariffs and exchange rates on u s prices of japanese cars trucks and motorcycles in particular we test whether the long run pass through of tariffs and exchange rates are identical the symmetry hypothesis we find that this hypothesis is easily accepted in our sample we also find that the pass through relation varies across products ranging from about 0 6 for trucks to unity for motorcycles these coefficients have very different implications for trade policy we explain the results based on demand cost and institutional conditions in each industry

shipping the good horses out this paper formalizes the alchian allen 1964 theorem within a vertically differentiated goods general equilibrium model in contrast to the existing literature equilibrium prices depends on the transportation cost it shows that the eect of a xed transportation cost regardless of quality tilts the importing region s demand towards the consumption of higher quality goods the model extends the alchian allen theorem by showing that the strength of this eect depends on the importing region s endowment specically if the importing region is endowed with the imported goods of similar quality mix the eect is even stronger we also show that the importing region s market size and preferences matter to the strength of the eect using auction data of australian thoroughbred yearlings we conrm that better horses are shipped out further furthermore consistent with the model s prediction the strength of the alchian allen eect depends on the endowment of the importing regions

a conceptual framework of adoption of an agricultural innovation abstract in this paper we present a conceptual framework of individual farmers decisions on adoption of a new innovation using the example of a new crop species this framework overcomes the shortcomings of a number of previous studies it represents the adoption of an innovation as a dynamic decision problem spanning at least several years the model allows for generation of potentially valuable information from trialing the innovation the value of such trials is due to development of skills e g in agronomic management of a crop as well as reduction in uncertainty about the innovation s long term profitability the framework also includes the farmer s personal perceptions managerial abilities and risk preferences in order to properly represent the adoption decision process the influences of socio demographic factors within the framework are discussed

commodity storage and the market effects of biofuel policies the author 2016 legislation passed in 2007 by the u s congress increased by about 1 3 billion bushels the net amount of corn required to be processed annually into ethanol for motor fuel use we estimate that corn prices were about 30 higher from 2006 to 2014 than they would have been without this demand increase we develop a partially identified structural vector autoregression model our identification strategy is unique in the literature because it enables us to estimate the effects of transitory shocks such as weather separately from the effects of persistent shocks such as the increased ethanol mandate moreover by only partially identifying our model we show how to generate robust conclusions without strong identifying assumptions

distance time and specialization lean retailing in general equilibrium transport time increases with distance traveled and time is valuable we show the implications of these facts for global specialization and trade products where timely delivery is important will be produced near the source of final demand where wages will be higher as a result in the model timely delivery is important because it allows retailers to respond to final demand fluctuations without holding costly inventories and timely delivery is possible only from nearby locations using a unique dataset that allows us to measure the retail demand for timely delivery we show that the sources of u s apparel imports have shifted in the way predicted by the model with products for which timeliness matters increasingly imported from nearby countries jel f1 transporting goods and people costs time and money and both transport fees and time in transit generally increase with the distance traveled these facts imply an incentive to economize on distance and the equilibrium effects

what goes around comes around export enhancing effects of import tariff reductions abstract in international trade transportation requires a round trip for which a transport firm has to commit to shipping capacity that is sufficient to meet the maximum shipping volume this may cause the backhaul problem trade theory suggests that facing the problem transport firms with market power adjust their freight rates strategically when import tariffs change as a consequence a country reducing its import tariffs may experience an increase in exports as well as imports using worldwide data covering 1995 2007 we find evidence that supports these predictions a 1 reduction in an importer s tariffs increases the import freight rates by around 0 8 decreases the export freight rates by around 1 1 and increases the export quantity by 0 6 to 1 these findings indicate a new mechanism through which import tariff reductions lead to export expansions

trade and climate policies do emissions from international transport matter this paper provides orders of magnitude of the importance of co2 emissions from international transport freight activities under a variety of scenarios regarding trade and climate policies it is based on a stylized multi region multi sector cge model that includes the four modes of international transport air water road and rail and where choices regarding the energy mix and transport mode have been endogeneized a separate decomposition of emission changes into the well known scale composition and technique effects is provided scale effects turn out to be roughly double in international transport than in exports while technique effects are weaker due to less substitutability between energy inputs as a result international transport represents half of the world increase in global emissions when trade liberalization is considered isolately when trade liberalization is coupled with a carbon tax limited to rich countries international transport represents roughly one eigth of the carbon leakage effect

demographic influences on willingness to pay for cold tolerance technology new technologies in agriculture have the potential to increase production levels reduce risk and improve profits for farm operators however in order for this to take place the technologies must appeal to producers creating enough interest that they decide to invest in them gauging the level of interest in a technology and the types of producers who will be interested in trying it are important steps in technology development cereal crops such as wheat are important to agriculture in canada in terms of both acreage and revenue researchers in canada are currently attempting to develop more cold tolerant cereal crops to reduce the risk of frost damage and increase the area available to produce these crops a producer survey including questions on past adoption behavior attitudinal characteristics and demographics as well as a set of dichotomous choice questions on new varieties was conducted and analyzed using a regression and willingness to pay calculations demographics were the focus during these activities it was determined that producers from areas experiencing frost regularly with high incomes and large land bases had a higher propensity to adopt and higher willingness to pay for this technology

long range growth economic development in the global network of air links we study the impact of international long distance flights on the global spatial allocation of economic activity to identify causal effects we exploit variation due to regulatory and technological constraints which give rise to a discontinuity in connectedness between cities at a distance of 6000 miles we show that these air links have a positive effect on local economic activity as captured by satellite measured night lights to shed light on how air links shape economic outcomes we first present evidence of positive externalities in the global network of air links connections induce further connections we then find that air links increase business links showing that the movement of people fosters the movement of capital in particular this is driven mostly by capital flowing from high income to middle income but not low income countries taken together our results suggest that increasing interconnectedness generates economic activity at the local level by inducing links between businesses but also gives rise to increased spatial inequality locally and potentially globally

notes on bribery and the control of corruption abstract existing models of corruption that allow for bribery have ignored an important recursive problem when an auditor or a policeman bargains over a bribe with a person he has arrested he has to take into account the fact that he may in turn be caught for taking this bribe and be involved in a similar bargain but from the other side the purpose of this paper is to provide a simple model for capturing this recursion having done so it goes on to analyse some conditions for the control of corruption these turn out to be different from what conventional wisdom suggests

the decoupling of emerging economies theoretical and empirical puzzle with the growing importance of the emerging economies ees in the international scene a lively debate has begun on whether the national economic cycles are converging or the cycles of ees and advanced economies aes are becoming disconnected the so called hypothesis of decoupling of ees from the aes given the important practical implications that decoupling could have for example on the definition of national and international economic policies and on business strategies aimed at investment diversification and risk management the question kindles not only the interest of academics but also policymakers and practitioners are very interested in the issue the decoupling question has been long debated in different circles and from different points of view this survey aims to retrace the steps of this debate and to provide some suggestions for future empirical researches

valuing genetic resources in peasant economies the case of hairless creole pigs in yucatan abstract we report the results of a choice experiment study to model preferences over a selection of breed traits of creole pigs the study was conducted amongst households of backyard producers and small farmers rearing this local breed in yucatan mexico hypothetical choice data were collected to estimate the preference of households over alternative pigs profiles whose attributes distinguish creole pigs from the potentially more productive yet less adapted exotic breeds currently threatening to severely displace this locally adapted animal genetic resource angr the observed choices are employed to estimate a series of random utility models whose results are first tested for preference equality between households and small farmers then endogenous segmentation is allowed within households by means of latent class models stated preference based estimates are found to be of the same magnitude as revealed preference producers costs as a consequence the method is deemed to be appropriate for the valuation of non market functions in production estimates conditional on household characteristics are then presented and discussed

farmers preferences for crop variety traits lessons for on farm conservation and technology adoption although in situ conservation is increasingly considered an efficient way of conserving plant genetic resources little is known about the incentives and constraints that govern conservation decisions among small farm holders in developing countries using a choice experiment approach we investigated ethiopian farmers crop variety preferences estimated the mean willingness to pay for each crop variety attribute and identified household specific and institutional factors that governed the preferences we found that environmental adaptability and yield stability are important attributes for farmers choice of crop varieties farmers are willing to forego some extra income or yield to obtain a more stable and environmentally adaptable crop variety among other things household resource endowments particularly land holdings and livestock ownership years of farming experience and contact with extension services are the major factors causing household heterogeneity of crop variety preferences based on our experimental results we derived important policy implications for on farm conservation breeding priority setting and improved variety adoption in ethiopia c 2010 elsevier b v all rights reserved less

the nature of outsourcing relationships evidence from oap prices i introduction the dramatic growth in international outsourcing has fueled the expansion of international trade and deepened international integration 1 developments in outsourcing attract public attention due to concern that improvements in information technologies enable companies to relocate production or assembly activities to lower cost overseas locations 2 however while international outsourcing allows firms to take advantage of factor price differences grossman and helpman 2005 demonstrate that country cost differences are not sufficient by themselves to guarantee outsourcing as international outsourcing decisions are based on many factors including the costs of search and customization more generally new research in international trade recognizes information as a key element in the globalization process however informational improvements such as reduced communication costs or increasingly sophisticated bar code transmission and management tools may not affect all producers uniformly as ranch and trindade 2003 show product differentiation in consumption or production when combined with informational uncertainty produces a degree of natural protection for this reason information technology improvements are likely to deliver the greatest increases in global integration for those markets where the matching of differentiated partners is critical to the formation of new international partnerships similarly as noted by antras 2003 and bernard et al 2010 the organization of a firm s global operations depends further on factors including the importance of headquarters investments and the degree of product contractibility 3 a key goal of this paper is to study whether outsourcing decisions are consistent with outsourcing models that feature search and adaptation costs to this end this paper studies u s outsourcing conducted under the auspices of the overseas assembly program or oap the oap program was designed to allow firms to avoid tariffs on u s origin inputs that they utilized in final goods they assembled overseas thus while the oap does not include all u s outsourcing activities it does not capture u s assembly of foreign parts or overseas contract manufacturing that is based on u s designs and specifications oap imports provide insight into a wide swath of u s outsourcing and represented 8 5 of u s import value during the sample period since the oap provides tariff benefits to manufacturers who use u s inputs in their overseas production it is administered by u s customs consequently while the oap provides insights into manufacturing outsourcing decisions it does not provide information on developments in services outsourcing since oap exempts u s inputs from tariffs the program requires participating firms to provide detailed information on the u s and foreign content of their outsourcing imports thus oap data records facilitate the precise measurement of cost shocks and trade frictions at the country product level in particular heterogeneity in input choices both across countries and products can be exploited to identify cost pass through and general price responses for outsourcing imports for example year by year pass through can be estimated by regressing yearly oap price changes at the product country level on product country cost changes plots of the year by year coefficients in figure 1 show that the raw rate of oap pass through ranged from 6 to 23 4 however accurate outsourcing pass through estimation requires a theory based estimation framework that controls for economic factors that also influence price decisions this paper adopts feenstra s 1989 passthrough model which is modified to account for the cost structure and tariff treatment facing outsourcing firms who produced products for import under the oap this framework which is based on a bertrand model of competition in internationally differentiated goods focuses its attention on cost pass through and on the degree to which producers emulate the price changes of their competitors

the willingness to adopt agro ecological innovations application of choice modelling to caribbean banana planters this paper proposes an ex ante evaluation of the willingness to adopt agro ecological innovations aimed at reducing pesticide use for banana production in the french west indies four innovative systems including intercropping improved fallow and new pest tolerant varieties are proposed to a sample of 607 planters with innovation and policy attributes calibrated from a bio economic farm model the model interacts technological and economic innovation attributes with farmer individual factors and allows for a dual source of unobserved heterogeneity we estimate a system of random coefficient logit models to obtain marginal values of innovation traits that can be useful for targeting farm types with appropriate innovations and designing policies for securing agricultural revenue

cost pass through in the u s automobile market we study cost pass through in the u s automobile market using a framework that incorporates the effects of cost changes on input decisions we find that accounting for firms factor market decisions significantly increases measured cost pass through although we reject the hypothesis of full cost pass through and constant markups in addition our evidence suggests that cost shocks common to all manufacturers have a greater effect on prices than do model specific cost shocks finally we examine how pass through varies with manufacturer nationality finding that u s firm cost pass through exceeds that of european and asian firms

valuing indigenous cattle breeds in kenya an empirical comparison of stated and revealed preference value estimates abstract in this study we compare revealed and stated preference approaches to value traits of cattle in kenya the premise is that much can be learnt about non market values of indigenous animal genetic resources angr from the use of multi attribute stated preference methods if these compare well with revealed preference results the objective is to investigate the performance of choice experiments ces in maasai cattle trading by conducting an external test of preference consistency we compare value estimates for cattle attributes from ces data with those from hedonic analysis of actual transactions by the same population of traders in the same markets and over the same period if ces perform well they can be used to investigate values of those genetically determined livestock traits currently not prominent in pastoralists populations but desirable candidates for breeding or conservation programmes e g disease resistance the results indicate that ce estimates pass the external test and appear to be adequately precise in estimating values for cattle traits that are relevant in market transactions for maasai traders accounting for taste and variance heterogeneity does not change this conclusion ces may therefore be a promising tool for valuing phenotypic traits expressed by indigenous angr

an income satiation model of efficiency wages efficiency wages are wages that exceed a worker s reservation wage a standard explanation for such wages is bonding high wages increase the cost of being discharged for misbehavior and so help ensure worker honesty a neglected alternative is satiation by decreasing the worker s marginal utility of income the high wage decreases the benefit from misbehavior satiation unlike bonding applies even in a one period model but it relies on the misbehavior having a monetary benefit and on at least part of the punishment being nonmonetary

institutional quality and international trade institutions quality of contract enforcement property rights shareholder protection and the like have received a great deal of attention in recent years yet trade theory has not considered the implications of institutional differences beyond treating them simply as different technologies or taxes the purpose of this paper is twofold first we propose a simple model of international trade in which institutional differences are modeled within the framework of incomplete contracts we show that doing so reverses many of the conclusions obtained by equating institutions with productivity institutional differences as a source of comparative advantage imply among other things that the less developed country may not gain from trade and factor prices may actually diverge as a result of trade second we test empirically whether institutions act as a source of trade using data on us imports disaggregated by country and industry the empirical results provide evidence of institutional content of trade institutional differences are an important determinant of trade flows

the trade reducing effects of market power in international shipping abstract developing countries pay substantially higher transportation costs than developed nations which leads to less trade and perhaps lower incomes this paper investigates price discrimination in the shipping industry and the role it plays in determining transportation costs in the presence of market power shipping prices depend on the demand characteristics of goods being traded we show theoretically and estimate empirically that ocean cargo carriers charge higher prices when transporting goods with higher product prices lower import demand elasticities and higher tariffs and when facing fewer competitors on a trade route these characteristics explain more variation in shipping prices than do conventional proxies such as distance and significantly contribute to the higher shipping prices facing the developing world a simple back of the envelope calculation suggests that eliminating market power in shipping would boost trade volumes by 5 9 for the us to 15 2 for latin america our findings are also important for evaluating the impact of tariff liberalization cargo carriers decrease shipping prices by 1 2 for every 1 reduction in tariffs

how corruption may corrupt abstract the incidence of corruption appears to vary strongly across societies even for comparable activities the model highlights how the profitability of bureaucratic corruption may be related to its frequency and points toward a few mechanisms that can be used in explaining the stylized facts of varying incidence of corruption there might be multiple self fulfilling equilibria levels of corruption even when both supply and demand of corrupt acts are considered

cotton farmers willingness to pay for pest management services in northern benin this study was carried out to assess cotton farmers willingness to pay wtp for pest management services in northern benin targeted staggered control tsc has been introduced to reduce pesticide use in cotton cropping and generate an estimated benefit of fcfa48 800 74 40 per cotton hectare accruing from increased productivity and reduced pesticide cost however tsc application requires extra time for pest identification and scouting and its adoption remains low due to the lack of funding to boost farmers awareness and cover training costs an interval regression model was used to analyze responses to a double bounded contingent valuation survey with data collected from 300 cotton farmers the results showed that 87 3 of cotton farmers were willing to pay for tsc services annual wtp per cotton hectare was estimated at fcfa16 962 25 80 revealing an existing demand for tsc adoption respondents wtp was driven by farm and socio economic characteristics financial mechanisms managed by farmers could thus potentially foster technology adoption and in turn generate economic and environmental benefits

a dynamic model of corruption deterrence abstract this paper presents a model of corruption deterrence with a simple overlapping generations structure built into it a crucial assumption is that when corruption becomes more prevalent in the economy it is harder to audit a corrupt official effectively it is shown that this assumption may give rise to several stationary equilibrium levels of corruption this possibility has been exploited to explain why sometimes a government may temporarily resort to an extremely severe deterrence policy and why the same deterrence scheme may imply quite different levels of corruption a case study is provided to give empirical support to the model

overseas assembly and country sourcing choices abstract this paper studies the cross country pattern of u s overseas assembly activities between 1980 and 2000 to examine how outsourcing decisions are affected by changes in country and competitor costs a number of interesting regularities emerge when a country s costs rise the share of u s overseas assembly activities in that location decline conversely a country s share grows when competitor country costs increase while own and competitor country costs affect overseas assembly in all countries the magnitude of these effects is larger for developing countries in many cases the measured cost responses appear to correspond with outsourcing theories that are based on search and customization costs

airplanes and comparative advantage abstract airplanes are a fast but expensive means of shipping goods a fact which has implications for comparative advantage the paper develops a ricardian model with a continuum of goods which vary by weight and hence transport cost comparative advantage depends on relative air and surface transport costs across countries and goods as well as stochastic productivity a key testable implication is that the u s should import heavier goods from nearby countries and lighter goods from faraway counties this implication is tested using detailed data on u s imports from 1990 to 2003 looking across goods the u s imports nearby exporters have lower market share in goods that the rest of the world ships by air looking across exporters for individual goods distance from the us is associated with much higher import unit values these effects are large which establish that the model identifies an important influence on specialization and trade

on the elements and practices of monitoring abstract politicians and businessmen have to address the principal agent problem whenever delegation of power occurs installing a monitoring scheme may help to ensure that the officers perform the desired functions checks and balances are the theme in the political arena while management and control are the routines in the business world throughout history numerous monitoring networks have been deployed to overcome the difficulties comparing how those monitoring networks solved the controlling issues may shed light on the incentive structures embodied furthermore the evolution of institutions and organizations could be discerned via the changes in incentives

goods prices and exchange rates what have we learned import prices typically change by a smaller proportion than the exchange rate between the exporting and importing country recent research indicates that common currency relative prices for similar goods exported to different markets are highly correlated with exchange rates between those markets this evidence suggests that incomplete pass through is a consequence of third degree price discrimination while distance matters for market segmentation borders have independent effects the source of the border effect has not been clearly identified furthermore there is little evidence yet to suggest substantial market power is implied by the observed price discrimination

transportation costs and international trade in the second era of globalization while the precise causes of postwar trade growth are not well understood declines in transport costs top the lists of usual suspects however there is remarkably little systematic evidence documenting the decline this paper brings to bear an eclectic mix of data in order to provide a detailed accounting of the time series pattern of shipping costs the ad valorem impact of ocean shipping costs is not much lower today than in the 1950s with technological advances largely trumped by adverse cost shocks in contrast air shipping costs have dropped an order of magnitude and airborne trade has grown rapidly as a result as a result international trade has also experienced a significant rise in speed

on the origins of comparative advantage this paper proposes a simple theory of international trade with en dogenous technological dierences across countries the core of our analysis lies in the determinants of the division of labor we consider a world economy comprising two large countries with a continuum of goods and one factor of production labor each good is characterized by its complexity de ned as the number of tasks that must be per formed to produce one unit there are increasing returns to scale in the performance of each task which creates gains from specialization and uncertainty in the enforcement of each contract which create transac tion costs the trade obetween these two forces pins down the size of productive teams across sectors in each country under free trade the country where teams are larger specializes in the more complex goods in our model it is the country where the product of institutional qual ity and human per worker capital is larger hence better institutions and more educated workers are complementary sources of comparative advantage in the more complex industries

the place premium bounding the price equivalent of migration barriers large international differences in the price of labor can be sustained by differences between workers or by natural and policy barriers to worker mobility we use migrant selection theory and evide

trade costs 1870 2000 what has driven trade booms and trade busts in the past century and a half was it changes in global output or in the costs of international trade to address this question we derive a micro founded measure of aggregate bilateral trade costs based on a standard model of trade in differentiated goods these trade costs gauge the difference between observed bilateral trade and frictionless trade in terms of an implied markup on retail prices of foreign goods thus we are able to estimate the combined magnitude of tariffs transportation costs and all other macroeconomic frictions that impede interna tional trade but that are inherently difficult to observe we use this measure to examine the growth of global trade between 1870 and 1913 its retreat from 1921 to 1939 and its subsequent rise from 1950 to 2000 we find that trade cost declines explain roughly 55 percent of the pre world war i trade boom and 33 percent of the post world war ii trade boom while a precipi tous rise in trade costs explains the entire inter

the welfare effects of repealing the u s offshore assembly provision abstract this paper develops new estimates of the welfare and domestic production effects of repealing the us offshore assembly provision oap although the controversy surrounding the oap has recently intensified the only such estimates of repealing the oap weredeveloped by finger 1976 the estimates are developed by applying a partial equilibrium trade model of a two stage production process to nineteen productct categories in which oap trade was important in 1986 the paper find that repael of the oap reduces domestic welfare however the effects are small and almost negligible in percentage terms the important effects of repeal are distributional

utilizing conjoint analysis to design modern crop varieties empirical example for groundnut in niger abstract preferences for monetary and non monetary plant traits influence modern crop variety adoption decisions of farmers to enhance adoption probability of modern crop varieties it is necessary to identify and focus research on traits that significantly contribute to utility while de emphasizing insignificant plant attributes this paper illustrates the potential for applying conjoint analysis to aid the design and targeting of client responsive modern crop varieties farmers ranked eight orthogonally derived plant trait combinations used in an illustrative example utilities were estimated using the choice probability based method of ordered probit results showed that conjoint analysis can differentiate significant and non significant traits of modern crop varieties the usefulness of applying conjoint analysis over identifiable disaggregated groups of a sample was also evident future application of conjoint analysis to the design and targeting of modern crop varieties should carefully consider sample composition and size to permit the estimation of relevant sub models for desired farmer segments

outsourcing in a global economy we study the determinants of the location of subcontracted activity in a general equilibrium model of outsourcing and trade we model outsourcing as an activity that requires search for a partner and relationship specific investments that are governed by incomplete contracts the extent of international outsourcing depends inter alia on the thickness of the domestic and foreign market for input suppliers the relative cost of searching in each market the relative cost of customizing inputs and the nature of the contracting environment in each country

endogenous pricing to market and financing costs abstract this paper explains why relative ppp should hold more tightly in emerging markets and why pricing to market would be observed more frequently in the oecd countries it studies the endogenous determination of pricing to market in a real option model with time dependent transportation costs where the future terms of trade are random allowing time dependent transportation costs adds a dimension of investment to the pre buying of imports implying that financial considerations determine the frequency of pricing to market and the deviations from relative ppp if the expected discounted cost of last minute delivery is higher than pre buying one exercises the option of spot market imports if the realized terms of trade are favorable enough pricing to market is observed in countries characterized by low terms of trade volatility and low financing costs in these circumstances imports are pre bought and the spot market for imports is inactive in countries where the financing costs and the terms of trade volatility are high few imports are pre bought the price of imports is determined by the realized real exchange rate and a version of relative ppp holds with an intermediate level of terms of trade volatility and of financing costs a mixed regime is observed if the realized real exchange rate is weak pricing to market would prevail increasing consumers welfare by shielding them from the adverse purchasing power consequences of weak terms of trade if the realized real exchange rate is favorable enough more imports are purchased in the spot market and the relative ppp would hold higher financing costs increase the cost of pre buying imports reducing thereby the frequency of pricing to market increasing the expected relative price of imports reducing the expected deviations from relative ppp and reducing welfare