the adoption of reduced tillage the role of human capital and other variables this paper presents a model of adoption behavior and explains differences econometrically in farmers decisions to adopt reduced tillage practices and in the efficiency of farmers adoption decisions the empirical results obtained from microdata show that the probability of adopting reduced tillage in corn enterprises differs widely across farms and depends on soil characteristics cropping systems and size of farming operation the results also show that farmers schooling enhances the efficiency of the adoption decision

share tenancy ownership structure and prevented planting claims in crop insurance a conceptual model based on opportunity cost and expected utility principles establishes linkages between the likelihood of prevented planting claims in crop insurance and existing share leasing arrangements internal farm business structures results of heteroskedastic probit estimation procedures indicate that simpler internal business structures and more dominant farmer tenant leasing position can increase the probability of submitting a prevented planting claim

asset based unemployment insurance this article studies a model of consumption savings and job search in which a borrowing constraint limits self insurance the government administers the unemployment insurance program that may condition on an individual s asset position but not on her efforts of finding a job to compensate for the impediments to self insurance benefit payments should optimally be set higher at lower wealth levels and peak for borrowing constrained individuals with zero liquid funds a quantitative exercise reveals that the u s unemployment insurance program is surprisingly close to optimal for the asset poor but far too generous for wealthier individuals

regional tax competition evidence from french regions reulier e and rocaboy y regional tax competition evidence from french regions regional studies two mechanisms can lead to fiscal strategic interactions between local jurisdictions the first is due to the tax base mobility authorities use fiscal variables to attract new resources the second is related to information asymmetries between the politicians and the constituency to reduce these asymmetries voters can compare their fiscal situation with the one in neighbouring jurisdictions these two channels lead to what can be referred to as mobility led and information led tax competition this paper aims to discriminate between these two tax competition models in the case of the french regions the econometric tests suggest that when taxes are paid by voters the politicians in office seem to be involved in an information led tax competition while in the case of taxes paid by firms the mobility of the tax base seems to be the best way to explain strategic fiscal interactions reulier e et

a generalization of the endogenous grid method abstract this paper extends carroll s 2005 the method of endogenous gridpoints for solving dynamic stochastic optimization problems national bureau of economic research technical working paper 309 endogenous grid method to perform value function iteration in models with more than one control variable we propose to mix the endogenous grid method with standard value function iteration to achieve higher efficiency we illustrate the method using the stochastic neoclassical growth model with and without labor leisure choice we report important gains in efficiency that make value function iteration an attractive computational method in terms of both computing time and accuracy

statistical efficiency of double bounded dichotomous choice contingent valuation the statistical efficiency of conventional dichotomous choice contingent valuation surveys can be improved by asking each respondent a second dichotomous choice question which depends on the response to the first question if the first response is yes the second bid is some amount greater than the first bid while if the first response is no the second bid is some amount smaller this double bounded approach is shown to be asymptotically more efficient than the conventional singlebounded approach using data from a survey of californians regarding their willingness to pay for wetlands in the san joaquin valley we show that in a finite sample the gain in efficiency can be very substantial

fiscal policy outcomes and electoral accountability in american states clear fiscal policy effects appear in american state gubernatorial and legislative elections between 1968 and 1992 independent of the effects of incumbency coattails term limits and macroeconomic conditions the results show that accountability is generally stronger following a period of unified party control than under divided government voter reactions to taxes and spending relative to the state economy are conditional on expectations which differ for each party net of these expectations republican gubernatorial candidates lose votes if their party is responsible for unanticipated increases in the size of the state budget democrats do not and indeed may be rewarded for small increases independent of this the incumbent governor s party is punished in legislative elections for failing to maintain fiscal balance taken together these results show how electoral accountability for fiscal policy outcomes is strong but highly contingent on a complex configuration of party labels partisan control expectations and institutions

nash equilibria in models of fiscal competition abstract this paper analyzes nash equilibria in a simple model of an economy with jurisdictions engaging in fiscal competition small number nash equilibria in which tax rates are the strategic variables are shown not to coincide with nash equilibria in which public expenditure levels are the strategic variables

impacts of declining u s retail beef demand on farm level beef prices and production a systems model was estimated to determine the effects of declining u s retail beef demand on farm level beef prices and production retail beef demand declined by nearly 66 from 1976 to 1999 results indicate autonomous shifts in retail demand significantly impacted farm level demands and production based on equilibrium multipliers the 1976 99 reduction in beef demand decreased real slaughter cattle prices and production by 32 1 and 11 2 respectively real feeder cattle prices and production decreased by 8 0 and 22 6 respectively combining the decreases in farm prices and production slaughter and feeder cattle producers experienced a real revenue reduction of 13 3 billion 61 due to the long term decline in demand

does fiscal cooperation increase local tax rates in urban areas charlot s paty s and piguet v does fiscal cooperation increase local tax rates in urban areas regional studies the main purpose of this paper is to assess the effects of fiscal cooperation on local taxation in a decentralized country using experience in french urban municipalities a tax setting model for local business tax is estimated using spatial and panel econometric techniques for the period 1993 2003 controlling for population size it is found that fiscal cooperation is likely to reduce tax competition and as a consequence to increase local business tax rates

modeling conditional yield densities given the increasing interest in agricultural risk many have sought improved methods to characterize conditional crop yield densities while most have postulated the beta as a flexible alternative to the normal others have chosen nonparametric methods unfortunately yield data tends not to be sufficiently abundant to invalidate many reasonable parametric models this is problematic because conclusions from economic analyses which require estimated conditional yield densities tend not to be invariant to the modeling assumption we propose a semiparametric estimator that because of its theoretical properties and our simulation results enables one to empirically proceed with a higher degree of confidence copyright 2003 oxford university press

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

urban sprawl and farmland prices a theoretical model of farmland valuation is developed to explicitly account for three effects of urban sprawl conversion of farmland to urban uses effect on agricultural returns and speculative effect as represented by farmland conversion risk this model is estimated using county level data in the continental united states evidence is found for all three effects of urban sprawl on farmland values counties more accessible to major urban centers have higher net agricultural returns subsidiary evidence supports that the latter effect may be attributed to survival of or conversion to high valued agriculture around urban centers

planting decisions and uncertain consumer acceptance of genetically modified crop varieties there exists much uncertainty about consumer attitudes towards genetically modified foods if it happens that sufficient insufficient acres are planted under non modified seed to meet post harvest demand then a price premium will not will emerge for the non modified varieties a non linearity originates in the fact that a price premium may be supported this non linearity interacts with the extent of demand uncertainty to determine equilibrium varietal plantings and the probability that post harvest varietal prices will differ also as planting approaches signals will be received by growers about the nature of demand they will be planting into we show how the non linearity affects the order on the types of signals that risk neutral growers will prefer to receive

anti corporate farming laws and industry structure the case of cattle feeding nine midwestern states have laws that restrict the involvement of publiclyheld corporations in agriculture opponents argue that the laws direct efforts to regulate ownership structure may have an adverse indirect impact on size structure restricting corporate involvement might stifle the emergence and growth of efficient large scale establishments if corporations have advantages over other organizational forms in meeting capital requirements since 1982 nebraska has had an anticorporate farming law that prohibits corporate ownership of feedlots we test whether the implementation of the nebraska law had an impact on the stochastic process governing the evolution of the state s feedlot size distribution nine states iowa kansas minnesota missouri nebraska north dakota oklahoma south dakota and wisconsin have laws that restrict corporate involvement in agricultural production haroldson 1992 the specific provisions of these laws commonly known as anti corporate farming laws stayton 1991 vary from state to state limitations on the size of corporations agricultural landholdings are a common provision in some states corporations are virtually prohibited from owning farmland or operating farms other states simply outlaw corporate involvement in specific agricultural activities edmondson and krause 1978 the laws in all of the nine states include an exemption for the authorized family farm corporation which is defined in various ways but generally means an incorporated farm enterprise with a limited number of stockholders at least one of whom resides on or operates the farm 1 most observers seem to agree with

estimating the demand for a new technology bt cotton and insecticide policies this article examines the potential demand for bt cotton in the southeast from information gathered in the first year of commercialization we combine revealed preference rp data on adoption of bt cotton varieties with stated preference sp data on willingness to adopt to estimate demand using a double bounded maximum likelihood procedure using estimated demand equations we simulate the costs of reducing conventional insecticide applications through subsidization of bt cotton results indicate that reducing cotton insecticide applications by 40 in the southeast would require a 21 acre subsidy with total annual program costs between 53 million and 60 million

combining contingent valuation and travel cost data for the valuation of non market goods the travel cost method tcm has long been used to infer the economic value of nonmarket resources and public goods more recently contingent valuation cvm survey methods have gained popularity for eliciting these values here cvm survey responses are combined with tcm data on actual market behavior to estimate jointly both the parameters of the underlying utility function and its corresponding ordinary demand function this is a prototypical empirical example of a new modeling strategy variants of which should prove useful in many applications especially where reliance on a single valuation method is undesirable

policy evaluation with combined actual and contingent response data the city of marietta georgia experimentally switched from flat fee financing to volume based pricing for its trash services in january 1994 both before and during the experiment detailed data on individuals observed responses to the actual introduction and contingent behavioral responses to a hypothetical introduction of volume based pricing were collected this study applies these data and investigates the methodology of collecting contingent behavior data and their use in policy analysis in particular this study empirically evaluates the effect of experience with the policy on responses to contingent behavior questions and tests for potential bias in the contingent behavior data

united states farm commodity programs and land use we estimate the impact of government payments on united states land use using county level data from the national resources inventory and the census of agriculture in 1987 1992 and 1997 although payments were made under decoupled support programs effects on land use are found to be significant on average for the years studied our simulations indicate that united states cropland acreage would have been 89 million acres 22 less if program payments had been reduced to half their observed level holding market prices of commodities constant percentage reductions are largest in marginal crop producing areas of the nation

are u s corn and soybeans becoming more drought tolerant an objective drought index that measures the dry and hot conditions adversely affecting crop yields is used in a regression analysis to test whether corn and soybeans have become more drought tolerant results indicate that corn yield losses whether measured in quantity terms or as a percentage of mean yield have decreased the null hypothesis that the absolute level of soybean yield losses due to drought has not changed cannot be rejected but yield losses in percentage terms have decreased over time because drought is the primary cause of yield loss in the u s crop insurance program and because u s crop insurance rates assume that percentage of yield losses are constant over time these results indicate that u s crop insurance rates in the corn belt are too high

unemployment insurance and unemployment accounts the best of both worlds unemployment accounts are mandatory individual savings accounts that can be used only during unemployment or retirement unlike unemployment insurance unemployment accounts solve the moral hazard problem but provide no public insurance to workers i study a hybrid system that borrows from concepts of both unemployment insurance and unemployment accounts in which workers are mandated to save when employed and can withdraw from the account when unemployed once the account is exhausted the unemployed worker receives unemployment benefits this hybrid policy provides insurance to workers more efficiently than an unemployment insurance system because it provides government benefits selectively as a consequence young workers can reduce their precautionary savings and better smooth their consumption over the life cycle calibrating the model to the us economy i find that relative to an optimal unemployment insurance system the optimal hybrid policy leads to a welfare gain of 2 4 measured as consumption equivalent variation jel classification e24 e61 j64 j65

imperfect price deflation in production systems numeraire prices that are measured with error create challenges for econometric estimation a straightforward approach for a model with linear input demands such as generated from a quadratic normalized profit function is proposed where the numeraire price is measured with error numeraire measurement error is likely because expected output price is measured imperfectly by actual output price an approach using generalized method of moments is developed to estimate such errors in variables systems that avoids use of extra sample data or additional structural specifications monte carlo examination of small sample properties shows promise measurement error is statistically significant using aggregate u s agricultural data

designing unemployment insurance for developing countries abstract the high incidence of informality in the labor markets of middle income economies challenges the provision of unemployment protection we show that despite informational frictions the introduction of an unemployment insurance savings account uisa system may provide substantial benefits this system improves welfare by providing insurance to the unemployed and creating incentives to work in the formal sector the optimal scheme generates a reduction in unemployment from 4 to 3 percent an increase in formality from 68 to 72 percent and a rise in total output by 4 percent overall individuals obtain welfare gains equivalent to a 2 4 percent increase in consumption in every period

natural resource economics and conservation contributions of agricultural economics and agricultural economists research by agricultural economists on natural resources has been distinguished by an interdisciplinary emphasis and a dynamic perspective it has recognized technological and institutional constraints has been oriented toward solving concrete resource management and policy problems and has emphasized empirical and quantitative analysis agricultural economists have introduced methods for evaluating natural resource conservation efforts for predicting adoption of resource conservation technologies and for designing efficient and sustainable resource management policies they have identified ways of improving land management and preventing land degradation proposed reforms of institutions governing water allocation and water quality and introduced policies for balancing environmental and efficiency considerations in the management of pests biodiversity and livestock diseases their research has had substantial impacts on the formulation of resource conservation policies

labor market matching with precautionary savings and aggregate fluctuations we analyze a bewley huggett aiyagari incomplete markets model with labor market frictions consumers are subject to idiosyncratic employment shocks against which they cannot insure directly the labor market has a diamond mortensen pissarides structure firms enter by posting vacancies and match with workers bilaterally with match probabilities given by an aggregate matching function wages are determined through nash bargaining we also consider aggregate productivity shocks and a complete set of contingent claims conditional on this risk we use the model to evaluate a tax financed unemployment insurance scheme higher insurance is beneficial for consumption smoothing but because it raises workers outside option value it discourages firm entry we find that the latter effect is more potent for welfare outcomes we tabulate the effects quantitatively for different kinds of consumers we also demonstrate that productivity changes in the model in steady state as well as stochastic ones generate rather limited unemployment effects unless workers are close to indifferent between working and not working thus recent findings are corroborated in our more general setting

factors affecting land price decline over the fifty years before 1981 land prices increased every year but two 1961 and 1970 according to the u s department of agriculture usda index of farmland prices both of those declines were only 1 a third drop occurred from 1981 to 1982 in most years the land price increased at least as much as the cost of living land has provided a moderate current rate of return and has been a good hedge against inflation from 1959 through 1969 land prices in illinois increased at 4 2 compounded annually while the consumer price index cpi increased 2 3 annually from 1970 to 1978 land prices increased at 13 compounded annually while the cpi increased at 5 8 compounded annually land prices peaked near the end of 1980 in the cash grain area of the midwest during 1981 prices fluctuated from one quarter to the next with a general annual decline of 4 to 5 depending on the state miller and benjamin a survey of ninety farm managers and rural appraisers conducted by the author at the annual meeting of the illinois society of farm managers and rural appraisers in february 1982 indicated a decline of 12 5 in illinois land prices from the previous year the range was from 0 to 30 the usda land price index showed a 9 decline from 1 february 1981 to 1 april 1982 for illinois with comparable declines in other corn belt states the federal reserve bank of chicago survey showed changes in that district ranging from 1 to 19 from the previous year miller and benjamin the largest declines occurred in indiana illinois and iowa

marginal property tax effects of conservation easements a vermont case study conservation easements allow landowners to transfer their land s development rights to another entity usually a nontaxable conservation organization conservation reduces the town s tax base necessitating a tax rate increase to maintain service levels however conserving land also decreases the supply of developable land and provides open space amenities that may be capitalized into the value of nearby properties these effects may offset the decrease in the tax base caused by the easement using a sample of twenty nine vermont towns we show that private conservation easements increase property tax rates in the short run but are tax neutral or tax suppressing in the long run

does foreign aid really raise per capita income a time series perspective we analyze the relationship between per capita income and foreign aid we employ annual data and five year averages and carefully examine the time series properties of the data panel estimations with dynamic feasible generalized least squares dfgls show that aid generally has an insignificant or minute negative significant impact on per capita income particularly in highly aid dependent countries this holds true for countries with different levels of human development and income as well as for different regions we also find that aid has a small positive impact on investment but a significant negative impact on domestic savings crowding out and the real exchange rate appreciation jel classification f35 o11 c23 c51 on analyse la relation entre le revenu per capita et l aide etrangere on utilise des donnees annuelles et des moyennes quinquennales et on examine les proprietes de ces series chronologiques des estimations d un modele dynamique utilisant des donnees de panel a l aide de la methode des moindres carres quasi generalises montrent que l aide a generalement un effet negatif minime ou insignifiant sur le revenu per capita particulierement dans les pays qui dependent beaucoup de l aide etrangere ce resultat tient tant pour des pays a divers niveaux de developpement et de revenus que pour differentes regions on decouvre que l aide a un petit effet positif sur l investissement mais un effet negatif significatif sur l epargne effet d encombrement et sur le taux de change reel appreciation

diseconomies of size with fixed managerial ability managerial ability has important implications for farm growth in this article we first show in a production model that increasing output with a fixed level of managerial ability can lead to a decrease in profits next we discuss the effect that managerial ability has on economies of size in the empirical part economies of size are estimated for a sample of dairy farms using a proxy for managerial ability which is calculated as a technical efficiency index the results show that increasing farm size while holding managerial ability constant can be an important source of diseconomies of size copyright 2003 oxford university press

rethinking social insurance economics 1 social insurance programs have become the most important the most expensive and often the most controversial aspect of government domestic policy not only in the united states but also in many other countries including developing and industrialized nations in the united states these programs include social security retirement disability and survivor insurance unemployment insurance and medicare insurance for those age 65 and older together these programs accounted for 37 percent of federal government spending and more than 7 percent of gdp in 2003 these ratios have increased rapidly in the past and are projected to increase even faster in the future because of the more rapid aging of the population i will discuss how the major forms of social

divided government fiscal institutions and budget deficits evidence from the states does partisan control of american state government have systematic effects on state spending and taxing levels does divided control affect the government s ability to make hard decisions do institutional rules like legal deficit carryover restrictions matter using a formal model of fiscal policy to guide empirical analysis of data covering the american states from 1968 to 1987 we conclude that 1 aggregate state budget totals are driven by different factors under democrats and republicans the net result being that democrats target spending and taxes to higher shares of state level personal income 2 divided government is less able to react to revenue shocks that lead to budget deficits particularly where different parties control each chamber of the legislature and 3 unified party governments with restricted ability to carry deficits into the next fiscal year outside the south have sharper reactions to negative revenue shocks than those without restrictions

agricultural profits and farm household wealth recent decades especially since 1973 have been an era of decreasing production profits that threaten the survival of many midand small sized american farms blank 2003 normally the survival of a firm depends on its profitability both in absolute and relative terms to remain viable a firm must offer returns that are both sufficient to cover the owner s financial obligations and competitive with returns from alternative investments if a firm is profitable the wealth of its owners can increase over time an unprofitable firm on the other hand reduces owners wealth yet american agriculture is full of firms that routinely earn low or negative returns on equity from production operations blank 2002 thus complicating the evaluation of the industry s economic health and prospects this suggests that macro level forecasts of american agriculture s future structure and performance require a micro level understanding of the relationship between farm profits and owner wealth this paper addresses that relationship

average crop revenue election a revenue based alternative to price based commodity payment programs this article develops a stochastic model of the average crop revenue election acre program which offers revenue based commodity payments under the 2008 farm act our analysis shows that adding acre revenue payments to gross revenue reduces downside revenue risk for corn wheat and soybean farmers in 2009 on average by 16 21 and 23 respectively results indicate that farms with higher expected yields and lower variance of yields tend to benefit the most from acre integrating federal crop insurance with acre lowers insurance premiums from 10 to 40 depending on the crop and location

the determinants of municipal tax rates in british columbia in this paper we study the regional pattern of municipal business property tax rates in the province of british columbia reduced form tax setting equations produce some evidence that municipal governments respond to tax changes in neighbouring jurisdictions a joint investigation of the determinants of tax base and municipal taxation decisions however reveals that it is difficult to interpret this response as arising primarily out of competition over tax base there is also some evidence that municipal tax rates are sensitive to taxes set on the same base by super municipal bodies jel classification c33 h71 les determinants des taux d imposition municipale en colombie britannique dans ce memoire les auteurs etudient le pattern regional des taux d imposition municipale sur la propriete fonciere commerciale dans la province de la colombie britannique on montre a l aide d un modele en forme reduite d equations de definition des taux d imposition que les gouvernements municipaux reagissent aux changements dans les taux d imposition dans leur voisinage cependant un examen conjoint des determinants de la base d imposition et des decisions municipales montre qu il est difficile d interpreter cette reaction comme emanant d une concurrence fiscale on montre aussi que les taux d imposition municipale sont sensibles aux niveaux de fiscalite imposes sur la meme base par les autorites supra municipales

effective tax rates in macroeconomics cross country estimates of tax rates on factor incomes and consumption abstract this paper proposes a method for computing tax rates using national accounts and revenue statistics using this method we construct time series of tax rates for large industrial countries the method identifies the revenue raised by different taxes at the general government level and defines aggregate measures of the corresponding tax bases this method yields estimates of effective tax rates on factor incomes and consumption consistent with the tax distortions faced by a representative agent in a general equilibrium framework these tax rates compare favorably with existing estimates of marginal tax rates and highlight important international differences in tax policy

differentiation and synergies in rural tourism estimation and simulation of the israeli market this article applies a discrete choice equilibrium model with product differentiation to study the rural tourism industry in israel and to jointly estimate the effect of lodging and farm characteristics on consumer preferences and firms costs the model accounts for heterogeneity in tastes and technologies and allows for unobservable product characteristics we find evidence for technological synergy in the joint production of agricultural goods and rural tourism services but none in the demand the differentiation in the industry is the major contributor to the price cost margin which averages 62 an additional minor cause is government regulation which restricts supply simulation results demonstrate the growth potential of the industry and show that the government can play an important role in catalyzing growth via investment subsidization deregulation of supply and information distribution

competition and privatization amidst weak institutions evidence from mongolia mongolia s mass privatization program was implanted in a country that lacked the very basic institutions of capitalism this paper examines the effects of competition and ownership on the efficiency of the newly privatized enterprises using a representative sample of enterprises and controlling for possible selection biases competition has quantitatively large effects perfectly competitive firms having nearly double the efficiency of monopolies enterprises with residual state ownership appear to be more efficient than other enterprises reflecting an environment where the government was pressured to focus on efficiency and institutions gave little voice to outsider owners jel p0 l1 l33 o12

the potential benefits of herbicide resistant transgenic rice in uruguay lessons for small developing countries abstract in many developing countries the potential benefits from adopting a transgenic variety developed by a multinational corporation are limited by the crop s small production base this paper presents an ex ante evaluation of the economic impact of herbicide resistant transgenic rice in a small developing country uruguay to fully account for the multinational s market power the firm s seed markup is assumed to affect the adoption rate for the variety stochastic simulation techniques are employed to understand how potential benefits may vary with changes in technology yield costs and adoption parameters the results indicate a 1 82 million mean net present value for producers from the development and utilization of transgenic rice in uruguay and 0 55 million for the multinational these relatively small multinational firm benefits suggest that a firm will not undertake significant efforts to develop transgenic varieties adapted to local conditions without either strategic partnerships with local institutions or access to wider regional markets

augmenting travel cost models with contingent behavior data this paper proposes contingent behavior survey questions as a valuable supplement to observed data in travel cost models of non market demand for recreational resources a set of observed and contingent behavior results for each survey respondent allows the researcher to control for individual heterogeneity by taking advantage of panel data methods when exploring the nature of respondent demands the contingent scenarios also provide opportunities to a test for differences between observed and contingent preferences and or b assess likely demands under conditionsbeyond the domain of observed variation in costs or resource attributes most importantly contingent scenarios allow the researcher to imposeexogenously varying travel costs exogenous imposition of travel costs together with panel methods reduces the omitted variables bias that plagues observed data travel cost models of recreational demand using a convenience sample of data for illustrative purposes we show how to estimate the demand for recreational angling by combining observed and contingent behavior data we begin with simple naive pooled poisson models and progress to more theoretically appropriate fixed effects panel poisson specifications

combining revealed and stated preference data to estimate the nonmarket value of ecological services an assessment of the state of the science this paper reviews the marketing transportation and environmental economics literature on the joint estimation of revealed preference rp and stated preference sp data the rp and sp approaches are first described with a focus on the strengths and weaknesses of each recognizing these strengths and weaknesses the potential gains from combining data are described a classification system for combined data that emphasizes the type of data combination and the econometric models used is proposed a methodological review of the literature is pursued based on this classification system examples from the environmental economics literature are highlighted a discussion of the advantages and disadvantages of each type of jointly estimated model is then presented suggestions for future research in particular opportunities for application of these models to environmental quality valuation are presented

the role of unemployment insurance in an economy with liquidity constraints and moral hazard the potential welfare benefits of unemployment insurance along with the optimal replacement ratio are studied using a quantitative dynamic general equilibrium model to provide a role for unemployment insurance agents in our economy face exogenous idiosyncratic employment shocks and are unable to borrow or insure themselves through private markets in the absence of moral hazard replacement ratios as high as 65 are optimal and the welfare benefits of unemployment insurance are quite large however if there is moral hazard and the replacement ratio is not set optimally but is instead set to an empirically plausible value the economy can be much worse off than it would be without unemployment insurance

moral hazard vs liquidity and optimal unemployment insurance this paper presents new evidence on why unemployment insurance ui benefits affect search behavior and develops a simple method of calculating the welfare gains from ui using this evidence i show that 60 percent of the increase in unemployment durations caused by ui benefits is due to a liquidity effect rather than distortions on marginal incentives to search moral hazard by combining two empirical strategies first i find that increases in benefits have much larger effects on durations for liquidity constrained households second lump sum severance payments increase durations substantially among constrained households i derive a formula for the optimal benefit level that depends only on the reduced form liquidity and moral hazard elasticities the formula implies that the optimal ui benefit level exceeds 50 percent of the wage the exact identification approach to welfare analysis proposed here yields robust optimal policy results because it does not require structural estimation of primitives

risk perceptions risk preference and acceptance of risky food consumers risk preferences are often overlooked in studies of consumer demand for risky food we find that risk preferences elicited through context less lottery choices are significantly related to consumers stated preferences for genetically modified gm food these results suggest risk preferences elicited in the laboratory are not artificial in the sense that they appear to be related to the same risk preferences that govern other individual decisions such as food choice consistent with theoretical expectations risk perceptions and risk preferences were found to be significant determinants of acceptance of gm food which has important implications for explaining consumer behavior

optimal unemployment insurance in search equilibrium should unemployment benefits be paid indefinitely at a fixed rate or should the rate decline or increase over a worker s unemployment spell we examine these issues using an equilibrium model of search unemployment the model features worker firm bargaining over wages free entry of new jobs and endogenous search effort among the unemployed the main result is that an optimal insurance program implies a declining benefit sequence over the spell of unemployment numerical calibrations of the model suggest that there may be nontrivial welfare gains associated with switching from an optimal uniform benefit structure to an optimally differentiated system

consistent estimation of censored demand systems using panel data we derive a joint continuous censored commodity demand system for panel data applications unobserved heterogeneity is controlled for using a correlated random effects specification and a generalized method of moments framework used to estimate the model while relatively small differences in elasticity estimates are found between a flexible random effects specification and one that restricts the random effect coefficient to be time invariant larger differences are observed when comparing the flexible model to a pooled cross sectional estimator the results suggest the limited ability of such estimators to control for preference heterogeneity and unit value endogeneity leads to parameter bias

what is it about organic milk an experimental analysis auction experiments were used to examine demand relationships and willingness to pay wtp for organic rbst free no antibiotics used and conventional milk elasticities showed strong substitute and complement relationships between organic rbst free and no antibiotics varieties the sum of the latter two s premiums were not significantly different than the organic premium suggesting diminishing marginal utility for added attributes results from a two stage heteroskedastic tobit model demonstrated that wtp premiums for the varieties differ significantly by demographics and beliefs regarding the conventional version these suggest market segments for rbst free and no antibiotics versions could succeed alongside organic benefiting consumers and producers copyright 2007 oxford university press

consumer benefits of labels and bans on gm foods choice experiments with swedish consumers the european union has been relatively cautious about using biotechnology in food production a label regime combined with the right of individual member states to ban introduction of new genetically modified gm strains means that gm food products in effect are banned in many countries we show how it is possible to empirically test whether a ban can be motivated by reference to potential negative externalities this is followed up by results from a choice experiment we cannot reject the hypothesis of equal wtp for a ban and a labeling scheme

education and innovation adoption in agriculture evidence from hybrid rice in china this paper uses the diffusion of f1 hybrid rice as a case for examining the effects of education on the adoption of new technology in china a simple behavioral model that treats the adoption of hybrid rice as a portfolio selection problem is presented the implications of the model are tested with farm level data collected from a sample of 500 households in hunan province the results from a dichotomous probit model and a two limit tobit model are consistent with the hypothesis that education has a positive impact on the adoption of new technology

the impact of ad hoc disaster and crop insurance programs on the use of risk reducing conservation tillage practices the paper estimates the impacts of risk reducing government programs on the use of conservation tillage no till and other conservation tillage practices in agriculture conservation tillage can be used to reduce production risk from weather shocks however subsidized crop insurance and disaster payments also reduce risk through financial assistance the paper examines the extent to which risk reducing tillage practices and government programs are substitutes for each other the economic model shows that a decline in average weather conditions increases the use of conservation tillage the economic model also shows that the impact of weather risk and risk aversion on risk reducing practices like conservation tillage are ambiguous the effect depends on the degree that losses are offset by government payments the paper uses county level tillage practice data from the conservation tillage information center for the three state region of iowa nebraska and south dakota results are estimated using instrumental variables and spatial panel data techniques instruments for the program participation and payment data include political variables and weather data the empirical analysis shows that recent disaster and indemnity payments are associated with an increase in the use of no till and a decrease in the use of other conservation till results also show that producers in counties with recent drought and flood events are more likely to use other conservation tillage the results imply that there may be unintended impacts of changes to agricultural policies like disaster payments and crop insurance on the use of on farm conservation practices

integration of unemployment insurance with retirement insurance abstract this paper analyzes a social insurance system that integrates unemployment insurance with a pension program allowing workers to borrow against their future wage income to finance consumption during an unemployment episode and thus improving search incentives while reducing the risks arising from unemployment this paper identifies the conditions under which integration improves welfare and the factors which determine the optimal degree of integration we show that when the duration of unemployment is very short compared to the period of employment or retirement the optimal system involves exclusive reliance on pension funded self insurance this system imposes a negligible risk burden for workers while avoiding attenuating search incentives we also argue that joint integration of several social insurance programs with a pension program through an individual account is desirable unless the risks are perfectly correlated with each other

is there a viable market for area based crop insurance the performance of area yield insurance and farm level multiple peril crop insurance is analyzed for cotton and soybean production in georgia and south carolina the analysis improves on many previous studies by utilizing actual farm level yield data and by comparing the two types of insurance products not only for actuarially fair premium rates but also for actual unsubsidized and subsidized premium rates results suggest that even in heterogeneous production regions area yield insurance may be a viable alternative to farm level insurance when premium rates for farm level insurance contain large positive wedges

decentralisation as an incentive scheme recent changes have introduced more decentralization in a number of traditionally centralized countries 1 in the case of france it is sometimes claimed that the 1982 1983 reform of subcentral government is of historical importance although the principles of that reform are not contested any more by the new majority elected in 1986 opinions still differ on a number of policy issues some of the issues are presented in this introductory section but the main purpose of this paper is not to expose or discuss in detail the problems of decentralization in france as argued in the second part of the introductory section the theoretical framework in which the policy issues of decentralization are usually discussed by economists is somewhat unsatisfactory in particular when applied to unitary states such as britain or france the bulk of the paper is devoted to the exploration of a different approach to decentralization it is not purported however that this approach could completely replace the more traditional one consequently when in the concluding section we return briefly to the policy issues identified here this is to be read as a preliminary attempt to evaluate the relevance of the reasoning developed in the paper

valuing water quality as a function of water quality measures employing a unique and rich data set of water quality attributes in conjunction with detailed household characteristics and trip information we develop a mixed logit model of recreational lake usage and undertake thorough model specification and fitting procedures to identify the best set of explanatory variables and their functional form for the estimated model our empirical analysis shows that individuals are responsive to the full set of water quality measures used by biologists to identify the impaired status of lakes thus changes in these quality measures are not simply a scientific exercise but they also translate into changes in the recreational usage patterns and well being of individual households willingness to pay wtp estimates are reported based on improvements in these physical measures

on the adoption of genetically modified seeds in developing countries and the optimal types of government intervention given the proprietary nature of most genetically modified gm seed technologies the question arises as to how farmers in developing countries can gain proper access based on empirical observations a theoretical model is developed focusing on farmers adoption decisions in response to pricing strategies of a foreign monopolist and a domestic supplier of conventional seeds government interventions such as seed subsidies encouragement of r d and intellectual property rights ipr enforcement and their effects on gm coverage and national welfare are analyzed the possibility of the government obtaining a license to distribute gm seeds domestically through a transfer to the monopolist is also considered

willingness to pay for curbside recycling with detection and mitigation of hypothetical bias in this article we estimate willingness to pay for curbside recycling using a unique data set we also test for and detect significant hypothetical bias using stated and revealed preference data a short scripted cheap talk statement is used to mitigate the bias and provide more efficient estimates of the welfare impacts of curbside recycling programs copyright 2003 oxford university press

optimal unemployment insurance this paper considers the design of an optimal unemployment insurance system the problem is modeled as a repeated principalagent problem involving a risk averse agent the unemployed worker and a risk neutral principal which cannot monitor the agent s search effort the optimal long term contract subject to the associated incentive constraints is characterized this contract involves a replacement ratio that decreases throughout the unemployment spell and a wage tax after reemployment that under some mild regularity conditions increases with the lenght of the unemployment spell some numerical results are presented that suggest that the gains from switching to this optimal unemployment insurance scheme could be quite large the performance of this optimal contract is also compared to alternative liquidity provision mechanisms

incumbent behavior vote seeking tax setting and yardstick competition this paper develops a model of the political economy of tax setting in a multijurisdictional world where voters choices and incumbent behavior are determined simultaneously voters are assumed to make comparisons between jurisdictions to overcome political agency problems this forces incumbents into a yardstick competition in which they care about what other incumbents are doing we provide a theoretical framework and empirical evidence using u s state data from 1960 to 1988 the results are encouraging to the view that vote seeking and tax setting are tied together through the nexus of yardstick competition

does tourism promote cross border trade we estimate a simultaneous bivariate qualitative choice model of arizona agribusiness firms propensity to trade and visit as a tourist the cross border state of sonora mexico venture business visits quantified through the tourism equation were found to have the largest impact on a firm s propensity to trade tourist visits have a greater impact on trade when combined with other firm attributes such as age perceived need for geographic diversity foreign language fluency and firm size than if considered alone our results suggest that there is a role for government agencies to play in overcoming imperfect information related to trade opportunities through facilitating exploratory business venture and tourist visits

supply response of u k milk producers short run own price response elasticities are estimated from two samples of panel data for specialist dairy farms in the northwest and southwest of england although these farms are subject to milk marketing quotas the free tradability of quotas enables them individually to adjust the output quite rapidly model specifications have been chosen to test the ability of panel data to directly reveal behavioral responses without the imposition of theoretical restrictions significantly the two independent samples generate quite similar results especially in terms of supply response measures stable and promising estimates are obtained with simultaneous models giving higher elasticities than single equation models

impact of openness on growth in different country groups this paper evaluates the impact of openness on growth in different country groups using a panel of 79 countries over the period 1970 98 it distinguishes itself from many existing studies in three aspects firstly both trade and fdi are included as measures of openness secondly countries are classified into high middle and low income groups to compare the roles of trade and fdi in these groups thirdly the possible problems of endogeneity and multicollinearity of trade and fdi are carefully dealt with in a panel data setting the main findings are as follows total trade has a general positive impact on growth in all country groups although the impact from imports is not significant in high income countries fdi has a positive impact on growth in high and middle income countries but not in low income countries with the existing absorptive capabilities low income countries can benefit from both exports and imports but not from fdi these findings suggest that trade and fdi affect growth through different channels and under different conditions the paper also discusses important policy implications

economic versus accounting rates of return for farm land a well known characteristic of agriculture is the traditionally low accounting current rates of return on farm land ratios of cash rent to land values as well as reported rates earned on total assets of crop farms typically have fallen in the three to six percent range over time despite swings in general inflation and changes in the levels of real returns to farm assets melichar 1979 barry 1980 these accounting rates of return are frequently much below the interest rates on financial assets and the measured returns on

ex post moral hazard in prevented planting this article analyzes the existence of moral hazard in prevented planting pp in the united states the pp provision is defined as the failure to plant an insured crop by the final planting date due to adverse events if the farmer decides not to plant a crop the farmer receives a pp indemnity late planting lp is an option for farmers to plant a crop while maintaining crop insurance after the final planting date crop insurance may alter farmers behavior in selecting pp or lp and could increase the likelihood of pp claims even though farmers can choose lp this study finds evidence that a farmer with higher insurance coverage tends to choose pp more often ex post moral hazard spatial panel models attest to the existence of the ex post moral hazard in pp empirically empirical results show that the pp ratio has a positive relationship with insurance coverage in the case of corn production

optimal life cycle unemployment insurance we argue that us welfare would rise if unemployment insurance were to be increased for young workers and decreased for old this is because young workers have little means to smooth consumption during unemployment and want jobs to accumulate high return human capital so unemployment insurance is highly valuable to them while the induced moral hazard problem is mild we consider a life cycle model with unemployment risk and endogenous search eort that we calibrate to match us labor market institutions we nd that allowing unemployment replacement rates and other government transfers to decline with age yields sizeable welfare gains which amount to around two thirds of the gains attained under the constrained optimal scheme for unemployment insurance over the life cycle

genetically modified crops their market and welfare impacts a framework is developed for examining price and welfare effects of the introduction of genetically modified gm products in the short run non gm grain generally becomes another identity preserved product however more profound market effects are observed under some reasonable parameterizations when calibrated to reflect the u s corn market introducing gm technology increases aggregate welfare over a wide range of scenarios unless the corresponding production cost savings are small and consumers are seriously concerned about gm products the possibility that gm technology may reduce aggregate welfare is interesting because the model assumes rational agents and does not include regulatory constraints

supply response to countercyclical payments and base acre updating under uncertainty an experimental study we design an experiment to simulate how people make agricultural production decisions under three policy scenarios each incorporating direct payments dps a price uncertainty without countercyclical payments ccps b price uncertainty with ccps and c price uncertainty ccps and uncertainty regarding base acreage updating results are the ccp program and perceived possibility of future base updating created incentives for subjects to invest more in program base crops despite payments being decoupled from current production decisions those choosing to reduce revenue risk by increasing plantings of base crops may face reduced incomes suggesting the efficiency of crop markets may be diminished

human capital and earnings distribution dynamics abstract earnings heterogeneity plays a crucial role in modern macroeconomics we document that mean earnings and measures of earnings dispersion and skewness all increase in us data over most of the working life cycle for a typical cohort as the cohort ages we show that i a human capital model can replicate these properties from the right distribution of initial human capital and learning ability ii differences in learning ability are essential to produce an increase in earnings dispersion over the life cycle and iii differences in learning ability account for the bulk of the variation in the present value of earnings across agents these findings emphasize the need to further understand the role and origins of initial conditions

stages and determinants of fertilizer use in semiarid african agriculture the niger experience fertilization is a stepwise decision in niger survey data from a representative sample of 100 households were utilized with individual and joint estimation to evaluate the determinants of fertilizer use at its three different stages manure alone and two different types of inorganic fertilizer application the fertilizer price relative to the millet price was always a highly significant determinant of fertilizer adoption farmers experience in seeing the results of fertilization in the field was a principal factor influencing the use of manure and of the micro fertilization other studies in semiarid regions have emphasized risk liquidity or fertilizer responsiveness under harsh conditions but the shift to the micro doses of inorganic fertilizer was statistically associated here with the demonstration trials and the price ratios fertilizer millet a variable reflecting the millet price recovery approximately 6 months after harvest was the most important factor in the decision to raise further inorganic fertilizer use with side dressing policy implications were focused on the importance of demonstration trials and improvements in the economic conditions millet fertilizer price ratios

modeling a household s choice among food store types a household s choice among the different types of food stores to patronize depends on characteristics of both the stores and the household store characteristics include prices and promotional deals two types of household characteristics are important the household s specific purchase history and demographics this study proposes a new multinomial logit model to account for these choice determinants in an empirical application to fluid milk we find that store characteristics and both household demographics and purchase history are significant determinants of a household s store type choices and must all be included in a choice model copyright 2012 oxford university press