the effects of the international security environment on national military expenditures a multicountry study we consider the influence of countries external security environments on their military spending we first estimate the ex ante probability that a country will become involved in a fatal militarized interstate dispute using a model of dyadic conflict that incorporates key elements of liberal and realist theories of international relations we then estimate military spending as a function of the threat of armed interstate conflict and other influences arms races the defense expenditures of friendly countries actual military conflict democracy civil war and national economic output in a panel of 165 countries 1950 to 2000 we find our prospectively generated estimate of the external threat to be a powerful variable in explaining military spending a 1 percentage point increase in the aggregate probability of a fatal militarized dispute as predicted by our liberal realist model leads to a 3 percent increase in a country s military expenditures

public good provision and ancillary benefits the case of climate agreements several studies found ancillary benefits of the provision of public goods to be of considerable size if these additional private benefits were noticed they would imply not only higher cooperative but also non cooperative provision levels however beyond these largely undisputed important quantitative effects there would be qualitative and strategic implications associated with ancillary benefits public policy would no longer be a pure but an impure public good in this paper we investigate these implications in a setting of non cooperative coalition formation in the context of climate change in particular we address the following question would ancillary benefits if they were taken in consideration increase participation in international climate agreements and raise the success of these treaties in welfare terms

the theory of public goods non nash behaviour abstract most treatments of equilibrium public goods provision assume zero conjectural variations in the sense that each individual regards the behaviour of the rest of the community as independent of his own this paper introduces nonzero conjectural variations into the model a diagram is introduced which can depict both the individual s and the community s equilibrium in the presence of nonzero conjectural variations equilibrium and optimal outcomes are compared and a specific functional form is used to investigate the effect of community size on the nature of equilibrium finally we discuss the requirement that conjectures should be consistent

risk aversion and credit constraints in farmers decision making a reinterpretation in 1976 the agricultural development council sponsored a conference on risk uncertainty and agricultural development which has been summarised in a volume edited by james roumasset jean marc boussard and inderjit singh 1979 the volume provides an excellent review of the state of the art at that time however as discussed in the summary chapters of that volume there were few theoretical empirical or policy issues on which clear conclusions could be reached on the basis of knowledge then available in the intervening years progress has been made on a number of issues as a result of both empirical investigations and theoretical advances this paper concentrates on advances which have relevance to the controversy about the relative roles of risk aversion and credit constraints in limiting farmers investment levels especially for purchased inputs such as seeds or fertilizers in particular we review recent experimental studies on the extent of risk aversion among farmer populations in developing

frontier production functions and technical efficiency measures the concept of technical efficiency is central to measuring the firm performance the measurement of technical efficiency has proved difficult and complex and the literature provides a range of methodologies this paper reviews the various methodologies for measuring technical efficiency and offers a comparison between established methods of measurements the discussion is literary with less mathematical jargons and equations the objective of this paper is not to be exhaustive but to be up to date and to provide a significant discussion on some of the core methods of measuring technical efficiency

complementarity free riding and the military expenditures of nato allies abstract this paper examines the major influences of an ally s demand for military expenditures demand equations are estimated for a sample of nato nations using the iterative seemingly unrelated regressions technique evidence is presented indicating that structural changes occured in these equations in the early 1970s this instability is the predicted effect of the doctrine of flexible response adopted by nato during this time period the statistical tests show that the medium sized nuclear powers military expenditures responded identically to income and defense spillins the same held true for the lowland allies

testing novel implications from the selectorate theory of war the authors tested five novel hypotheses derived from the selectorate theory of war with data for up to about 140 states and spanning the years 1816 1993 the hypotheses point to subtle differences in selection effects across regime types that should operate during crises that fall short of war and also during wars leaders who rely on a large coalition such as democrats to remain in office are shown to be more selective than their small coalition counterparts in their willingness to fight wars when the odds of victory are not overwhelming they are also more selective than their small coalition counterparts in their willingness to take part in disputes that fall short of war when the odds are not exceptionally favorable however they are less selective about this form of participation than they are about war small coalition leaders show no such selectivity in their preparedness to engage in disputes short of war or in war as a function of their odds of victory these results hold whether the odds of victory are assessed continuously or whether they are based on a specific threshold the authors also find in keeping with the selectorate theory that if a war fails to resolve quickly democrats try harder than autocrats to win and when the war is over democrats demobilize much more slowly than autocrats

an empirical study of cereal crop production and technical efficiency of private farmers in ethiopia a mixed fixed random coefficients approach in this paper we use a fixed random coefficients regression model to analyse data for cereal growing small scale farmers in efficiency results show that land size is a major constraint and only small changes in cultivated area and land quality yield relatively high increments to output larger farms are relatively less productive everything else being equal human capital in the form of literacy and experience are found to affect productivity positively our findings show a high degree of farm specific technical inefficiency with regard to the inputs we find high degrees of input specific technical inefficiency especially so for labour and fertilizer the age structure of the household environmental factors and education are found to be weakly correlated with efficiency furthermore sharecropping is found to be positively correlated with technical efficiency

a measurement of firm and input specific technical and allocative effiencies the objective of this paper is to suggest an alternative modelling to the existing stochastic frontier production function to provide measures of firm and input specific technical and allocative effciencies

risk efficiency and the adoption of modern crop varieties evidence from the philippines efficiency among farmers of less developed countries has been the focus of numerous studies since t w schultz hypothesized that farmers in developing agricultures are poor but efficient 1 a growing body of literature supports schultz s argument that farmers in developing agricultures have low incomes not because they use their resources inefficiently but because they lack the technology and resources they need to realize higher productivity and thus higher incomes a high priority in agricultural development assistance since the 1960s has been the generation of technology that would enable farmers to increase their productivity much research has been devoted to the causes of low agricultural productivity and the longer term productivity gains that may be forthcoming from modern technology but less attention has been devoted to the process of technology adoption by low income farmers as noted in the recent survey of adoption of agricultural innovations by g feder r e just and d zilberman there have been efforts to model adoption in the context of risk but there is a dearth of empirical evidence on the ways that farmers respond over time as a new production technology is introduced in a risky environment 2 in this article we address the empirical analysis of technical efficiency as farmers adopt new production technology taking into account production risk and learning we utilize recently developed efficiency criteria applicable when production is risky and implement these criteria using an approximation to a representative farmer s decision model 3 pooled time series and cross sectional data collected by the international rice research institute are used to investigate the

measuring soil quality dynamics a role for economists and implications for economic analysis measuring soil quality is extremely difficult yet it has clear economic importance in particular there is a great deal of empirical interest in the dynamics of soil quality evolution when land managers respond to policies and other incentives yet current methodologies for measuring changes in agricultural land quality are largely static and rely heavily either on incomplete measures such as proxy variables or ad hoc indexes of selected soil characteristics moreover much empirical work relies on static econometric techniques or simulation models in this paper we develop a means to infer soil quality changes from input and output data using a dynamic production function model using data from field experiments we estimate the model in a way that allows the recovery of a dynamic measure of soil quality whose evolution depends on variations in management practices our methodology and findings will help provide firmer empirical foundations for analyses of the economic implications of land degradation and the soil quality implications of agricultural policies

charitable donations by uk households evidence from the family expenditure survey this paper reports estimates based on both standard tobit and generalized tobit techniques of the determinants of charitable giving in the uk using 1984 family expenditure survey data this is the first such study using uk data separate estimates are presented of the determinants of participation and of the level of donations by giving households participation is seen to be sensitive to income the tax price of giving and a range of demographic variables while the level of donations varies primarily with income donations are found to be inelastic with respect to changes in disposable income

nonparametric analysis of technical and allocative efficiencies in production in this paper we extend varian s 1984 nonparametric production analysis to situations when the set of observed output input and price data is not consistent with profit maximization for at least one firm in such cases varian s results imply that no production possibility set containing all observations can rationalize the observed data we identify each firm whose performance given the prices faced by it may be found consistent with profit maximization relative to some production possibility set containing all observed output input vectors we show that the set 4 of all such firms can itself be weaklv rationalized in the sense that there exists a closed convex and monotone production possibility set that contains all the observations and relative to which the performance of all the firms in the set 8o is consistent with profit maximization given their respective prices by definition firms not included in this largest set d of efficient observations unambiguously deviate from profit maximizing behavior for any production possibility set containing all observations we follow farrell 1957 and analyze these deviations into technical and allocative efficiency measures considering as admissible all closed convex and monotone production possibility sets relative to which the performance of each firm in the set g remains consistent with profit maximization we then describe nonparametric methods for determining the tightest upper and lower bounds on the technical allocative and aggregate efficiency measures evaluated relative to all such admissible production possibility sets it is seen that the tightest upper bound on the technical efficiency measure is the same as the value computed by the nonparametric efficiency evaluation technique known as data envelopment analysis thus establishing a link between this literature in management science operations research and the nonparametric production analysis in economics

measuring technical efficiency in the stochastic varying coefficient frontier model due to the assumption that the best practice methods refer to each input separately instead of the whole set of inputs used by a firm the benchmark technology as defined in the stochastic varying coefficient frontier model may be infeasible and theoretically improper whenever the maximum response coefficients are not coming from the same production unit to overcome this problem we propose alternative measures of output oriented and single factor technical efficiencies inspired from the maximum likelihood formulation of the nonneutral frontier model the empirical results indicate that there are significant differences between the two in terms of the estimated efficiency scores but not significant differences we detected in terms of the efficiency ranking

altruism moral norms and social approval joint determinants of individual offset behavior we provide a theoretical and empirical analysis of individual offset behavior with environmental offsets as a specific form of voluntary public good provision while existing theoretical models on the voluntary provision of public goods usually focus exclusively on single motivations for individual contributions we explicitly account for various motivations in a unified framework drawing on theories for public good provision such as pure and impure altruism internalized norms and social approval such an approach is particularly useful when individual offset behavior is heterogeneous the applicability of our theoretical framework is supported by data from a choice experiment on voluntary carbon offsetting in switzerland and the usa we find that willingness to pay for offsets mainly depends on an individual s internalized norms to avoid environmental degradation as well as partly on income the probability to offset instead is better explained by an individual s expected social recognition for offsetting

production risk and optimal fertilizer rates a random coefficient model risk as an impediment to progress is a recurrent theme among development practitioners wharton galbraith lipton in the context of the new rice technology it has been argued that the full potential of modern varieties mvs has not been realized because year toyear variability in crop response has caused farmers to use less than the economically optimal level of inputs barker et al over the years a growing body of literature has emerged quantifying the effect of risk aversion on input use particularly fertilizer the evidence is conflicting and the controversy continues while moscardi and de janvry and ryan and perrin conclude that risk aversion substantially lowers input levels roumasset and rosegrant and herdt show that the low observed levels of input use cannot be attributed to risk

production risk risk aversion and the determination of risk attitudes among spanish rice producers agricultural production is subject to risk and the attitudes of producers toward risk will influence input choices insofar as these affect production risk risk attitudes in turn may be affected by certain socioeconomic characteristics of producers using 2004 survey data from a cross section of 130 spanish rice farms we estimate risk aversion coefficients of farmers and investigate the influence of a series of socioeconomic variables on their risk attitudes our results show that farmers exhibit risk averse behavior and that risk attitudes are related to a series of socioeconomic characteristics in particular the belief that the farm will continue after the producer retires is found to increase the degree of risk aversion while age is found to have nonlinear effects on risk aversion off farm income especially from nonagricultural activities is found to reduce risk aversion neither the educational level of the producer nor the presence of dependents on the household is found to have an effect on risk preferences regarding the production technology we find that land labor and fitosanitary products are risk reducing inputs whereas capital seeds and fertilizer all increase risk

production risk and optimal input decisions the paper examines the impact of production risk on a producer s optimal input decisions whether producers use more or fewer inputs in a yield risky environment depends on the sign of the marginal risk premium which is determined by risk preferences and technology i present the weakest condition on technology that is sufficient to sign the marginal risk premium for all risk averse preferences if this condition fails to hold the marginal risk premium is not of the same sign for all risk averters results are used to explore the properties of an estimated technology

donations to a public good in a large economy abstract the characteristics of private provision of public goods in a large economy are investigated when agents undertake an activity which has an adverse effect on the quantity of the public good itself in contrast to a model in which provision is by donations alone a substantial proportion of the population can be donors in a large economy nevertheless the model faces certain empirical difficulties

income effects and the inconvenience of private provision of public goods for bads the case of recycling in finland abstract absent or weak income effects reported in many contingent valuation studies have cast doubt on the reliability of the survey method we find that the income effect depends on the type of public good in question there is a negative income effect for willingness to pay for recycling which requires time and effort for sorting but a positive effect for the more convenient incineration hence high income low income individuals may display less more effort on environmental behavior this stresses the importance of comprehensive distributional analyses when assessing alternative environmental policies

regime type the fate of leaders and war we propose and test a formal model of war and domestic politics building on recent evidence on the relationship between regime type the effect of war on the probability of losing office and the consequences of losing office the less the outcome of international interaction affects a leader s tenure and the less punitive are the consequences of losing office the more a leader is willing to make concessions to strike a peaceful bargain we demonstrate that our theory successfully predicts war involvement among nondemocratic regime types moreover our theory offers an intuitive explanation for the democratic peace compared to nondemocratic leaders the tenure of democratic leaders depends relatively little on the war outcome and democratic leaders fare relatively well after losing office thus democratic leaders should be more willing and able to avoid war especially with other democrats

bayesian efficiency analysis with a flexible form the aim cost function in this article we describe the use of gibbs sampling methods for drawing posterior inferences in a cost frontier model with an asymptotically ideal price aggregator nonconstant returns to scale and composed error an empirical example illustrates the sensitivity of efficiency measures to assumptions made about the functional form of the frontier we also examine the consequences of imposing regularity through parametric restrictions alone