pest externalities from agricultural inputs agricultural inputs such as water pesticide and even time may have the unintended effect of stimulating some pest populations leading to crop losses a conceptual model is developed to contrast optimal use of pesticide and nonpesticide inputs with myopic use patterns which ignore pest externalities under most conditions optimal management is found to entail reduced input levels these issues are illustrated for imperial valley cotton using biological simulation correct calculation of the relative profitability of conventional and integrated pest management techniques such as a shortened growing season are found to depend crucially on whether pest externalities are taken into account

improvement of technical efficiency of firm groups abstract cooperation between firms can never improve the technical efficiency of any firm coalition the directional distance function by virtue of its additive nature is a useful tool that outlines this impossibility in this paper the additive aggregation scheme of input output vectors is generalized according to an aggregator accordingly cooperation between firms may increase the technical efficiency of the firm group this improvement is shown to be compatible with nonjoint semilattice technologies that bring out either output or input weak complementarity firm games are investigated to show that firms may merge on the basis of their inputs due to constraints imposed on outputs conversely they may merge with respect to the outputs they can produce because of limitations imposed on inputs

bilateral trade and shocks in political relations evidence from china and some of its major trading partners 1990 2013 abstract an extensive number of studies investigate the effects of political relations on trade by estimating a gravity model using annual or quarterly data we argue that the use of low frequency data introduces an aggregation bias because the cycle of moderate political shocks is much shorter measured in weeks using monthly data from 1990 through 2013 for china we estimate a model of political relations and conclude that political shocks are short lived narrative evidence from two case studies illustrates the transitory nature of these shocks a var model shows that although political shocks influence exports to china the effects largely vanish within two months a comparison of the monthly and annual frequency gravity equation regressions illustrates the effects of temporal aggregation

withholding consumption a social dilemma perspective on consumer boycotts this article draws on social dilemma theory and reference group theory to understand the individual boycott decision and tests the predictions stemming from this conceptualization in two experiments consistent with our predictions consumers likelihood of participating in both economic and social issue boycotts is jointly determined by their perceptions of the boycott s likelihood of success their susceptibility to normative social influences and the costs they incur in boycotting consumers success perceptions are in turn determined by their expectations of overall participation and efficacy as well as the message frame inherent in proboycott communications two key determinants of consumers boycotting costs are their preference for the boycotted product and their access to its substitutes more specifically consumers who are more susceptible to the normative influence exerted by the reference group of potential boycotters are more influenced by expected overall participation rates in their boycott likelihood

conflict cooperation and commerce the effect of international political interactions on bilateral trade flows the public choice approach to political economy is employed to gain insight into the connection between international politics and trade flows a model is constructed in which importers are assumed to be rational utility maximizers who seek to satisfy international security as well as economic welfare objectives this model of bilateral trade flows reflects contemporary theory in the field of international economics and it explicitly incorporates the general foreign policy orientation of importers among its determinants the model is tested in 16 annual crosssectional estimations 1960 75 for a complete network of 25 countries the findings show considerable support for the hypothesis that trade flows are significantly influenced by broad political relations of amity and enmity between nations the author concludes that nations adjust trade ties to satisfy security as well as economic welfare goals and that a formal political economy of trade should reflect this fact

information sharing in dea a cooperative game theory approach abstract in this paper a cooperative dea game is proposed based on the idea that different organizations can gain if they share data on the input consumption and output production of their processing units a larger data sample allows a more complete description of the production possibility set and consequently of the efficient frontier however since not all organizations will benefit in the same way it is convenient to use cooperative game theory in order to share the benefits of the cooperation the proposed cooperative dea game is shown to be subadditive and balanced models for computing the value of the game and checking its stability taking into account the exponential number of coalitions that exist when the number of organizations is large are also presented the approach is illustrated with a dataset from the literature

intra industry foreign direct investment we use a new firm level data set that establishes the location ownership and activity of 650 000 multinational subsidiaries close to a comprehensive picture of global multinational activity a number of patterns emerge from the data most foreign direct investment fdi occurs between rich countries the share of vertical fdi subsidiaries which provide inputs to their parent firms is larger than commonly thought even within developed countries more than half of all vertical subsidiaries are only observable at the four digit level because the inputs they are supplying are so proximate to their parent firms final good that they appear identical at the two digit level we call these proximate subsidiaries intra industry vertical fdi and find that their location and activity are significantly different to the inter industry vertical fdi visible at the two digit level these subsidiaries are not readily explained by the comparative advantage considerations in traditional models where firms locate their low skill production stages abroad in low skill countries to take advantage of factor cost differences we find that overwhelmingly multinationals tend to own the stages of production proximate to their final production giving rise to a class of high skill intra industry vertical fdi

power politics and international trade r recent literature attributes the relative scarcity of open international markets to the prisoner s dilemma structure of state preferences with respect to trade we argue that the prisoner s dilemma representation does not reflect the most critical aspect of free trade agreements in an anarchic international system namely their security externalities we consider these external effects explicitly doing so leads us to two conclusions 1 free trade is more likely within rather than across political military alliances and 2 alliances are more likely to evolve into free trade coalitions if they are embedded in bipolar systems than in multipolar systems using data drawn from an 80 year period beginning in 1905 we test these hypotheses the results of the analysis make it clear that alliances do have a direct statistically significant and large impact on bilateral trade flows and that this relationship is stronger in bipolar rather than in multipolar systems in the early 1970s students of international relations began what would become a long and heated debate about the political correlates of open international markets recently however an important element of consensus has begun to emerge most contributors to this debate now seem to agree that the prisoner s dilemma structure of state preferences with respect to trade explains the relative dearth of open international markets here we argue that what has become the standard prisoner s dilemma representation neglects the most critical aspect of free trade agreements in the anarchic international system namely their security externalities we consider these external effects explicitly in order to do so we construct and analyze a simple game theoretic model the results of this analysis demonstrate that tariff games between allies differ systematically from those played between actual or potential adversaries these differences imply that free trade is more likely within rather than across political military alliances however our analysis also suggests that the evolutionary prospects of alliances vary those that are the products of bipolar systems are more likely to evolve into free trade coalitions than are their multipolar counterparts less credible exit threats and clearer responsibilities for alliance stability explain the advantage of a bipolar system we test this argument using data drawn from an 80 year period beginning in 1905 the empirical analysis supports our argument it demonstrates that alliances have a direct statistically significant and large effect upon bilateral trade moreover it shows that on average alliances have a much stronger effect on trade in a bipolar than in a multipolar world 2

the effects of strategic and economic interdependence on international conflict across levels of analysis this study develops a social network analytic approach to conceptualize and measure interdependence across levels of analysis this framework contains several innovations first it integrates sensitivity interdependence the effects of changes in one state on other states with vulnerability interdependence the opportunity costs of breaking a relationship second it measures interdependence at different levels of analysis and across multiple relationships third it integrates multiple dimensions of interdependence into a single measure i derive hypotheses from the realist and liberal paradigms regarding the effects of strategic and economic interdependence on monadic dyadic and systemic conflict these hypotheses are tested via data on alliances military capability and trade the findings provide robust support to the expectations of the liberal paradigm regarding the effects of strategic and economic interdependence on conflict on the other hand the expectations of the realist paradigm are not supported i discuss the theoretical and empirical implications of this approach

issues relating to agricultural pricing policies and their analysis in developing countries abstract agricultural pricing policies in developing countries are often the result of complex interactions between producer consumer and merchant groups and their relative effectiveness in influencing government decision making even within governments various ministries often have opposing views in this environment one of the contributions a policy analyst can make is to attempt to quantify the effects of different policy options this permits a more informed discussion which hopefully leads to better decision making and an improved incentive environment many analyses of agricultural pricing policies have used the standard partial equilibrium analysis where no linkages between commodity markets were considered in this paper we have considered cross price effects also we have discussed issues relating to other adjustments refinements of the standard method so that a practitioner not familiar with the various methods can form an opinion of what the options are and what adjustments may be appropriate for a particular case in question the adjustments relate to overvaluation of currencies input price distortions differences in the degree of distortions between producers and consumers and variability of border prices the inclusion of cross price elasticities was important for assessing production consumption and trade effects for argentina but for the other countries it resulted in only somewhat improved accuracy the adjustment for exchange rates had a large impact in egypt and was important for other countries as well this underlines the importance of exchange rates as key variables for agricultural pricing policies in general the numbers show that the traditional taxation policies of agricultural products in the sample of developing countries is somewhat less widespread than in the past these policies however continue to favor consumers over producers with significant losses for some of the latter the large size of welfare losses especially compared to efficiency losses highlights the importance of correcting distorted prices that adversely affect the poorest sections of society also the usual government objective of taxing producers to raise revenues is frequently defeated by the large subsidies provided to consumers for the partitioner for whom time is often of the essence the assessment of welfare effects using the partial equilibrium method may provide reasonably good first cut estimates of the order of magnitude of the impact of distortions but often these base case estimates can and should be adjusted for a number of possible factors the analyst needs to determine how important accurate estimates of key variables are to the policy makers he or she then needs to compare the costs involved in generating or gathering the data and doing the calculations with the benefits of a broader and more accurate analysis of the distortionary effects of the particular case in question

measuring super efficiency in dea in the presence of infeasibility super efficiency data envelopment analysis dea model is obtained when a decision making unit dmu under evaluation is excluded from the reference set because of the possible infeasibility of super efficiency dea model the use of super efficiency dea model has been restricted to the situations where constant returns to scale crs are assumed it is shown that one of the input oriented and output oriented super efficiency dea models must be feasible for a any efficient dmu under evaluation if the variable returns to scale vrs frontier consists of increasing constant and decreasing returns to scale dmus we use both input and output oriented super efficiency models to fully characterize the super efficiency when super efficiency is used as an efficiency stability measure infeasibility means the highest super efficiency stability if super efficiency is interpreted as input saving or output surplus achieved by a specific efficient dmu infeasibility does not necessary mean the highest super efficiency

spatial heterogeneity contract design and the efficiency of carbon sequestration policies for agriculture abstract in this paper we develop methods to investigate the efficiency of alternative contracts for carbon c sequestration in cropland soils taking into account the spatial heterogeneity of agricultural production systems and the costs of implementing more efficient contracts we describe contracts being proposed for implementation in the united states and other countries that would pay farmers for adoption of specified practices per hectare contracts we also describe more efficient contracts that would pay farmers per tonne of soil c sequestered and we show how to estimate the costs of implementing these more efficient contracts in a case study of a major agricultural region in the united states we confirm that the relative inefficiency of per hectare contracts varies spatially and increases with the degree of spatial heterogeneity the results also show that per hectare contracts are as much as five times more costly than per tonne contracts a degree of inefficiency similar to that found in assessments of command and control industrial emissions regulations measurement costs to implement the per tonne contracts are found to be positively related to spatial heterogeneity but are estimated to be at least an order of magnitude smaller than the efficiency losses of the per hectare contract for reasonable error levels this finding implies that contracting parties could afford to bear a significant cost to implement per tonne contracts and achieve a lower total cost than would be possible with the less efficient per hectare contracts

brazilian policies that encourage deforestation in the amazon this paper shows that general tax policies special tax incentives the rules of land allocation and the agricultural credit system all accelerate deforestation in the amazon these policies increase the size of land holdings and reduce the chances of the poor to become farmers the following are the key provisions i the virtual exemption of agricultural income from income taxation makes agriculture a tax shelter ii rules of public land allocation provide incentives for deforestation because the rules used in determining the security of a claim and its land area encourage land clearing iii the progressive land tax contains provisions that encourage the conversion of forest to crop land or pasture iv the tax credit scheme aimed toward corporate livestock ranches subsidizes inefficient ranches established on cleared forest land and v subsidized credit is available for sudam approved ranches

market based systems for reducing chemical use in agriculture in the united states this study uses a computable general equilibrium cge model of the u s economy to estimate the economic effects of agricultural fertilizer and pesticide input reductions on individual farm sectors and on the economy as a whole the costs of reducing agricultural chemicals using a market based approach and a command and control approach are compared the real cost to society of restrictng fertilizer and pesticide use by 20 percent across all uses is estimated to be 2 3 billion a market based approach that would provide incentives to reduce chemical use in the most cost efficient manner would be about 10 percent less costly

dea production games abstract in this paper linear production games are extended so that instead of assuming a linear production technology with fixed technological coefficients the more general non parametric dea production technology is considered different organizations are assumed to possess their own technology and the cooperative game arises from the possibility of pooling their available inputs collectively processing them and sharing the revenues two possibilities are considered using a joint production technology that results from merging their respective technologies or each cooperating organization keeping its own technology this gives rise to two different dea production games both of which are totally balanced and have a non empty core a simple way of computing a stable solution using the optimal dual solution for the grand coalition is presented the full cooperation scenario clearly produces more benefits for the organizations involved although the implied technology sharing is not always possible examples of applications of the proposed approach are given

political preference functions and public policy reform a model of policy making is developed where governments seek to maximize support from social groups through the combination of both pert social welfare increasing and pert welfare transferring policies the implicit weights of a political preference function shift with a change in the relative cost of interest group organizing attention is paid to the degree of wealth transfers as total social welfare increases because of pert policy changes the model demonstrates that in the case of two competing groups the weight given to one group in the allocation of social surplus will increase as total social welfare increases with a bias toward the other group the relative weights placed on consumers and producers based on pest policies alone are misleading indicators of the political influence of groups a number of general implications of this political economic analysis for the reform of public policies are investigated

environmental issues and economic decisions in developing countries abstract this paper explains the key role of environmental economics in incorporating environmental concerns into decision making and in facilitating the more efficient management of natural resources as a step toward sustainable development it reviews concepts and techniques for valuation of environmental impacts for use in conventional cost benefits analysis as well as key related aspects including environmental impacts of economywide policies multicriteria analysis risk and uncertainty and discount rate issues several developing country case studies are summarized which cover a range of practical valuation methods the evidence presented suggests that the valuation techniques for determining use values may be applied successfully in appropriate cases but examples involving nonuse values are rare the use of multiobjective desicion methods also needs to be explored where economic valuation is not feasible

linear programming models for firm and industry performance programming models of technology are enjoying a revival in several strands of literature one such strand is the growing literature devoted to the assessment of firm performance based on the work of farrell 1957 and the later popularized by charnes cooper and rhodes 1978 under the name of data envelopment analysis dea for an early programming model see boles 1966 a second strand of literature seeks to model the industry production function and is associated with johansen 1972 fbrsund and hjalmarsson 1987 and aigner and chu 1968 a third strand of literature uses programming techniques such as nonparametric tests of regularity conditions in production see afriat 1972 hanoch and rothschild 1972 diewert and parkan 1983 and varian 1984 one of the purposes of this paper is to examine the relationship between the first two areas i e analysis of firm and industry programming models of technology and performance in order to compare the industry and firm models we restate them in a general programming form and ignore issues of functional form examination of these models in primal and dual form reveals that the industry approach constructs technology from firm data but allows hypothetical reallocation of aggregate resources across firms to yield an industry function the firm models also construct technology from the data on all firms in the sample industry but do not allow for reallocation of inputs across firms this suggests a natural hybrid an industry model which allows for both firm specific inputs and inputs which can be reallocated across firms the paper unfolds as follows we begin by presenting a stylized version of the aigner and chu and johansen models of industry production we

the political determinants of international trade the major powers 1907 1990 we test three arguments about the effect of international politics on trade flows the first argument states that trade flows are greater between states with similar interests than those with dissimilar interests the second that trade flows are greater in democratic dyads than nondemocratic dyads and the third that trade flows are greater between allies we examine trade flows between the major powers from 1907 to 1990 this period provides variation on all three independent variables of interest and allows us to separate the three arguments empirically we estimate a gravity model of trade with the above political variables added our results demonstrate that joint democracy and common interests increase trade in a dyad but alliances generally do not even when controlling for polarity of the system

crop insurance acreage decisions and nonpoint source pollution the redirection of farm policy in the 1996 farm bill has generated much interest in seeking environmentally friendly and economically viable ways to protect farm income agricultural insurance has been suggested as such an instrument this article estimates the effect of crop insurance on crop mix and the resulting change in chemical use in the central nebraska basin providing corn insurance will shift land from hay and pasture to corn which will increase chemical use at the extensive margin this extensive margin effect dominates the effect of crop insurance on the application rate leading to an increase in total chemical use

hyteresis in import prices the beachhead effect this paper shows that temporary real exchange rate fluctuations can have persistent hysteretic effects on trade specifically when market entry costs are sunk sufficiently large exchange rate shocks alter domestic market structure and thereby induce hysteresis this simple result has strong implications for exchange rate theory t rade policy and estimation of trade equations empirical evidence su ggests that the recent dollar overvaluation induced hysteresis in u s import prices namely the aggregate pass through equation of exchange rates to import prices shifted in the 1980s the shift s nature and timing is broadly consistent with the hysteresis hypothesis copyright 1988 by american economic association

paying a visit the dalai lama effect on international trade is political compliance a precondition for healthy trade relations with china the chinese government frequently threatens that meetings between its trading partners officials and the dalai lama will be met with animosity and ultimately harm trade ties with china we run a gravity model of exports to china from 159 partner countries between 1991 and 2008 to test the extent to which bilateral tensions affect trade with autocratic china in particular we investigate empirically whether countries that receive the dalai lama despite china s opposition experience a significant reduction of their exports to china in order to account for the potential endogeneity of meetings with the dalai lama the number of tibet support groups and the travel pattern of the tibetan leader are used as instruments our empirical results support the idea that countries officially receiving the dalai lama at the highest political level are punished through a reduction of their exports to china however this dalai lama effect is only observed for the hu jintao era and not for earlier periods furthermore we find that this effect is mainly driven by reduced exports of machinery and transport equipment and that it disappears two years after a meeting took place

attitudes and farmer conservation behavior conservation behavior is influenced by the attitudes of farmers and by context variables like income and farm terrain important attitudes were selected by using the theory that fundamental value ranks or weights affect attitudes and that only certain values are important to the conservation decision an extension of the tobit estimation approach handling both censored observations of the dependent variable and measurement error for the nonlimit observations was used conservation behavior models can be improved with a merger of concepts and approaches from social psychology and economics

limitations in evaluating environmental and agricultural policy coordination benefits agricultural policy has traditionally been concerned with the maintenance and stability of farm income and the provision of a stable food supply at low relative prices the food security act of 1985 was the first farm legislation to directly tie farm income and environmental concerns through the conservation reserve program conservation compliance sodbuster and swampbuster provisions the coordination of conservation and farm income policies contributed to commodity supply control by reducing the availability of arable land and it promoted environmental quality by removing some highly erodible land and wetlands from crop production a number of new environmental and food safety initiatives are also being enacted outside the agricultural policy process the most significant piece of legislation is the water quality act of 1987 designed to control

investing in the peace economic interdependence and international conflict research appears to substantiate the liberal conviction that trade fosters global peace still existing understanding of linkages between cone ict and international economics is limited in at least two ways first cross border economic relationships are far broader than just trade global capital markets dwarf the exchange of goods and services and states engage in varying degrees of monetary policy coordination second the manner in which economics is said to inhibit cone ict behavior is implausible in light of new analytical insights about the causes of war we discuss and then demonstrate formally how interdependence can ine uence states recourse to military violence the risk of disrupting economic linkages particularly access to capital may occasionally deter minor contests between interdependent states but such opportunity costs will typically fail to preclude militarized disputes instead interdependence offers nonmilitarized avenues for communicating resolve through costly signaling our quantitative results show that capital interdependence contributes to peace independent of the effects of trade democracy interest and other variables students of world politics have long argued that peace is a positive externality of global commerce theorists like montesquieu and kant and practitioners like woodrow wilson asserted that economic relations between states pacify political interaction mounting evidence in recent years appears to substantiate these claims multiple studies many identie ed with the democratic peace link interstate trade with reductions in militarized disputes or wars 1 while we concur with the evolving

does trade still follow the flag t he economic ties between any two nations are frequently affected by a warming or cooling of bilateral diplomatic relations but there is little to be found in modern economics or political science that helps us understand the connections between international politics and commerce the notion that international economics could be studied in isolation from its political underpinnings or consequences would have been quite alien to mercantilist thinkers in the eighteenth century or to the critics or advocates of imperialism in the nineteenth that economics and politics were inextricably intertwined was taken as a matter of course indeed trade follows the flag was central to these people s understanding of world politics and international economics intellectual trends over the past century radically changed this worldview the ascendancy of liberalism in economic thought brought with it a compartmentalization of disciplines that may now be eroding but we are left with theories of international politics and economics that are very weakly bridged the objective of this study is to map one of the many connections between international politics and commercial ties specifically i seek to identify and measure the effect of changes in state to state diplomatic relations on trade flows between those nations theoretical underpinnings of my effort are in the tradition of public choice political economy frey 1984 because i treat importers as rational utility maximizers and their behavior as determined by preferences pursued within a context of specified constraints the model i put forward is wholly consistent with contemporary neoclassical trade theory but i extend the economists notion of welfare and contend that importers take account not only of the price and quantity of goods and services but of the place of origin of these products and the political relationship between the importing and the exporting nation they do so essentially for traditional security reasons that is importers are motivated to manage their trade relations in ways that minimize risks of disruption in supply or the possibility of hurting friends or

uncoordinated agricultural and environmental policy making an application to irrigated agriculture in the west agriculture and the environment are linked by a mutual reliance on scarce resources and prevalent market distortions in this paper we examine the efficiency costs of policies that correct distortions in one sector while ignoring those in another the dual distortions of an environmental externality and water subsidies are studied in the context of irrigated agriculture in california the welfare costs associated with independent action by either a water agency or an environmental authority when that policy maker attempts to correct the respective market distortion without consideration of the distortion in the other market are estimated policies to correct the two distortions are found to be complementary under these conditions the independent correction of either distortion improves welfare by at least 118 per acre in most cases the simultaneous adoption of various second best policies further reduces welfare losses associated with these distortions

the relationship between political tensions trade and capital flows in asean plus three we estimate the effects of political tension on trade and capital flows in asean plus three countries in the framework of a gravity model we quantify political tension through text parsing software reading daily reuters articles from 1990 to 2013 and exclude brunei and laos due to sparsity of news coverage regarding bilateral trade we find that political conflict measured by negative reports in reuters articles seems to only affect bilateral trade between countries that are not both members of the world trade organization wto for these countries a 1 per cent rise in the tension score results in a 0 05 per cent decline in trade there is weaker evidence that improvement in bilateral relationship measured by positive reports in reuters articles is associated with more trade as for capital flows while long term capital flows measured by foreign direct investment appear to be unaffected by short term tensions both a non democratic government and a history of war negatively affect fdi

efficient firm groups allocative efficiency in cooperative games abstract the concept of efficiency in groups postulates that a coalition of firms has to record a smaller distance toward the aggregate technology frontier compared with the sum of individual distances efficiency analysis either allocative or technical is defined with respect to cooperative firm game in order to provide operational distance functions the so called pseudo distance functions these pseudo distances belong to the core interior of the allocative firm game in other terms any given firm coalition may always improve its allocative efficiency we prove that such a result is impossible for technical efficiency i e the technical efficiency cannot increase for all possible coalitions

econometric process models for integrated assessment of agricultural production systems this article develops the conceptual and empirical basis for a class of empirical economic production models that can be linked to site specific biophysical models for use in integrated assessment research site specific data are used to estimate econometric production models and these data and models are then incorporated into a simulation model that represents the decision making process of the farmer as a sequence of discrete and continuous land use and input use decisions an econometric process model of the dryland grain production system of the northern plains demonstrates the capabilities of this type of model to simulate decision making both within and outside the range of observed data copyright 2001 oxford university press

integration of environmental concerns into agricultural policies of industrial and developing countries abstract the question which this paper addresses concerns the types of environmental and resource related agricultural policy adjustments that could properly address the costs of resource degradation and increase long term prospects for sustainable development various public policy approaches e g polluter pays principle fiscal measures regulations etc are discussed and analyzed with regard to their environmental and resource impacts the paper provides illustrative experiences from industrial and developing nations and where possible lessons and insights of relevance to policy making in developing countries are sought

aggregation of malmquist productivity indexes in this paper we extend the work of fare and zelenyuk 2003 on aggregate farrell efficiency scores european journal of operational research 146 3 615 620 to find a theoretically justified method of aggregating malmquist productivity indexes over individual decision making units firms countries etc into a group malmquist productivity index we also consider the aggregation of decomposed parts of the malmquist productivity index to obtain a decomposition of the malmquist productivity index for a particular group c 2005 elsevier b v all rights reserved

agricultural trade liberalization price changes and environmental effects many analyses of agricultural trade liberalization have been undertaken but few have considered the effects on the environment for the developed countries reducing the degree of protection would result in less intensive production therefore environmental stress would be reduced a reduction of trade barriers in industrial countries would result in higher world prices and in a somewhat lower world price variability assuming initially no policy changes for developing countries the question is how the liberalization would affect the environment higher prices in developing countries increase the level of production by intensifying production particularly in the commercial sector and by an area expansion both result in negative environmental effects these could be partly offset by an increase in hired labor in the commercial sector which might reduce pressure at the frontier and on marginal lands as well as by the income effect these off setting effects may be small however the direction of the overall environmental effects cannot be determined unambiguously without empirical examination at the global level the beneficial economic effects of agricultural trade liberalization probably outweigh the expected negative environmental effects in developing countries but this cannot be unambiguously established without valuation

incentives regulations and sustainable land use in costa rica deforestation in costa rica has proceeded at a rapid pace of the remaining 2 700 km2 of virgin forests on privately owned land over 300 km2 are being deforested each year pressure on national parks which cover about 27 percent of costa rica is likely to increase in the future preliminary information indicates that contrary to our expectations most of the deforestation at present is not being done by squatters but driven by profit and asset maximization motives of the timber industry banana companies and large cattle ranchers setting aside 27 percent of the country s land as parks and reserves was a major policy decision aside from the removal of some perverse incentives operating inside park areas the main issue there is one of sound management including protection from intruders strengthening enforcement and controlled tourism on the remaining primary and secondary forest areas on privately owned land outside the parks a key question is whether public interests connected with external costs of deforestation warrant public intervention the paper suggests that a differentiated approach to this and other questions is needed depending on the costs and benefits involved and it discusses incentives and regulations which influence land use and makes proposals for reforms

integration of environmental concerns into economic analyses of projects and policies in an operational context abstract the efficient use of natural resources both mineral and biological as well as man made capital and human resources is a vital prerequisite for economic and social development one key role of ecological economics is to help value environmental and natural resources more precisely and internalize the cost and benefits of using such resources into the decision making process this paper reviews current economic approaches to the analysis of projects and policies and discusses possibilities for better intergrating environmental concerns into public decision making it reviews current practices as they relate to project analysis the analysis of economic policies and national income accounting a major need at present is not for more theory or techniques but for application of existing methodology and approaches to concrete problems particularly in developing countries the major objective should not be to provide fine turned numbers but to indicate orders of magnitude some project and policy alternatives can be ruled out in this fashion also one can often identify the key estimates to which the decision is sensitive and focus more refined analyses on them cost benefit analysis should be used to the extent possible alongside one needs to consider and to the extent possible rigorously analyze consequences and risks that cannot be measured in monetary terms and use for example multi criteria analysis where possible this together with sound judgement are at present the best inputs into decision making

the impact of marketing systems on soil sustainability of agriculture in developing countries a method and an application this article is concerned with soil sustainability problems of agriculture in developing countries in particular with soil erosion the aim of our study is to develop a comprehensive model that explains the adoption of sustainable agricultural practices with respect to soil conservation our approach includes the following special features a the model is comprehensive in that it includes a large number of institutional personal social economic and physical explanatory variables b particular attention is paid to the influence of marketing systems on the adoption of sustainable agricultural practices which to our knowledge has been neglected in past research c the concept of adopting sustainable agricultural practices asap is differentiated into a limited number of basic components of soil conservation and d the model is estimated by principal component regression which enhances efficient estimation of the impact of many explanatory variables on asap our model is applied to cabuyal hillside farming in colombia the application demonstrates the usefulness of the proposed model asap is differentiated into three basic components soil disturbance control soil protection practices and run off control it appears that soil disturbance control is particularly influenced by farmers characteristics such as education and managerial variables the second component soil protection practices appears to be strongly influenced not only by farmers managerial variables but also by their relationship with their environment in particular marketing institutions the third soil conservation component run off control is influenced by the physical characteristics of the plot and by the available farm labor our empirical results demonstrate the usefulness of the proposed model in designing agricultural policies because it can determine which variables are more likely to influence the adoption of a specific type of soil conservation

business as usual economic responses to political tensions do political tensions harm economic relations theories claim that trade prevents war and political relations motivate trade but less is known about whether smaller shifts in political relations impact economic exchange looking at two major economies we show that negative events have not hurt u s or japanese trade or investment flows we then examine specific incidents of tensions in u s french and sino japanese relations over the past decade two case pairs that allow us to compare varying levels of political tension given high existing economic interdependence and different alliance relations aggregate economic flows and high salience sectors like wine and autos are unaffected by the deterioration of political relations in an era of globalization actors lack incentives to link political and economic relations we argue that sunk costs in existing trade and investment make governments firms and consumers unlikely to change their behavior in response to political disputes d o political tensions have economic consequences the relationship between economic interdependence and conflict has been a central debate in international relations leading scholars contend that states with good relations should have more trade than states with poor relations and import decisions of firms will respond to the climate of friendliness orhostilitythatexistsbetweentheimporterandexporter morrow siverson and tabares 1998 650 pollins 1989b 739 analysis of trade and conflict in a simultaneous equations model concludes that political relations are driving commerce not the other way around keshk pollins and reuveny 2004 1175 we reexamine these arguments in the current globalization era to show that sunk costs reduce incentives for state and private actors to link political and economic relations 1

does political conflict hurt trade evidence from consumer boycotts i estimate the impact of international conflict on bilateral trade relations using several incidents of politically motivated boycotts the boycott of danish goods by muslim countries following the muhammad comic crisis in 2005 2006 the chinese boycott of japanese goods in response to the senkaku diaoyu island conflict in 2012 the boycott of french products in the us over the iraq war in 2003 and turkey s boycott of israel over the gaza conflict in 2014 the results from difference in differences regressions and the synthetic control group method show that boycotts can have strong negative effects on bilateral trade in both goods and services i estimate an average one year trade disruption of 18 8 in the case of denmark 2 7 for japan and 1 7 for french imports where in the latter two cases this effect is only short term for all boycott instances this is only a minor share of overall exports of the boycotted country over the same period for the iraq and gaza conflicts there is a reciprocal negative effect on the boycotted countries imports from the boycotter product level results are in line with intuition boycotts are most effective for consumer goods especially highly branded signature export goods such as japanese cars while having at most a temporary effect on intermediates and capital goods an event study on japanese stock market returns suggests that the chinese boycott depressed stock values of explicitly boycotted japanese firms only temporarily

on multi decomposition of the aggregate malmquist productivity index abstract the purpose of this paper is to demonstrate the multi decomposition of the aggregate malmquist productivity index that is a combined decomposition both by attribute which is characterized by technical change or efficiency change and by firm

uniform and non uniform second best input taxes we investigate second best input based taxes foragricultural nonpoint pollution control when marketprices are endogenous and production isheterogeneous theoretically we derive the optimalforms of taxes which take account of heterogeneity non uniform taxes and a tax which does not auniform tax empirically we use a multi factor market equilibrium simulation model to determineoptimal tax rates and associated equity effects particularly differences in landowner gains lossesacross a heterogeneous region when market prices areendogenous second best tax policies result inpecuniary externalities that affect existingenvironmental externalities in particular thepecuniary externalities amplify the effect of producerheterogeneity on determination of sub regionaldifferences in tax rates and returns to land particularly for the uniform policy with endogenousprices the uniform tax rate is considerably higherthan any of the non uniform rates and ironically thenon uniform taxes result in less dispersion oflandowner gains across sub regions than the uniformtax

interactions between agricultural and environmental policies a conceptual framework agricultural policy has a well documented impact on farmers production decisions and those decisions land water and agricultural chemical use may in turn affect the environment there is a public perception that existing agricultural policies are linked to agricultural pollution as exemplified by the conclusions of the recent national research council report alternative agriculture 1989 there is only limited theoretical or empirical research addressing these linkages however this paper develops a conceptual framework that can be used to analyze the interactions between agricultural and environmental policies and pollution this framework integrates physical and economic models at a disaggregate level necessary to capture the heterogeneity of the physical environment and the economic behavior of farmers following e hochman and d zilberman 1978 the disaggregate units can be statistically aggregated to a level useful for policy analysis agricultural and environmental policies can be categorized according to their effects on the intensive and extensive margins combining the different policy instruments with the microeconomic heterogeneity we find that existing agricultural and environmental policies can have either positive or negative effects of nonpoint source pollution to infer an aggregate effect requires data that do not currently exist our framework provides a basis for empirical investigations of these effects given adequate data moreover we find that agricultural policy instruments can be used to mitigate pollution if used appropriately