benefit incidence with incentive effects measurement errors and latent heterogeneity a case study for china abstract in what is probably the largest cash transfer program in the world today china s dibao program aims to fill all poverty gaps in theory the program creates a poverty trap with 100 benefit withdrawal rate bwr but is that what we see in practice the paper proposes an econometric method of estimating the mean bwr allowing for incentive effects measurement errors and correlated latent heterogeneity under the method s identifying assumptions a feasible instrumental variables estimator corrects for incentive effects and measurement errors and provides a bound for the true value when there is correlated incidence heterogeneity the results suggest that past methods of assessing benefit incidence using either nominal official rates or raw tabulations from survey data are deceptive the actual bwr appears to be much lower than the formal rate and is likely to be too low in the light of the literature on optimal income taxation the paper discusses likely reasons based on qualitative observations from field work the program s local implementation appears to matter far more than incentives implied by its formal rules

the elasticity of export demand for u s cotton the conceptually relevant elasticity for policy analysis is the total export demand elasticity which takes into account feedback effects of the u s price on other countries prices in this paper a total export demand elasticity for u s cotton is estimated in an extended armington framework the results indicate that the export demand facing the united states is probably elastic however estimated total demand elasticities are considerably less elastic than the estimated direct demand elasticities which do not account for feedback effects resulting from finite excess supply elasticities in the rest of the world in designing agricultural policy a knowledge of relevant elasticities is essential given the current economic climate characterized by volatile export markets and prices the price elasticity of export demand has received considerable attention economists however have not reached a consensus about the magnitude of this parameter in their review of studies of price elasticity of export demand for agricultural commodities gardiner and dixit report seven estimates of the elasticity of export demand for u s cotton ranging from 0 02 taylor and collins to 5 5 johnson because the policy recommendations based on the assumption of an elastic foreign demand could differ dramatically from those based on the assumption of inelastic foreign demand further research in this area is warranted the objective of this paper is to develop estimates of the elasticity of foreign demand for u s cotton the armington approach was used to formulate models for estimation because it is simple to formulate is a powerful method for modeling u s crop exports sarris 1981 thompson and had not been used extensively in modeling cotton trade the study differs from previous works by extending the armington framework to estimate total elasticities of demand in which feedback effects of u s price on the price of other countries cotton is taken into account results from this paper should be useful in estimating the elasticity of export demand for u s cotton and in demonstrating the importance of estimating total export demand elasticities

grading minimum quality standards and the labeling of genetically modified products we relate the labeling of genetically modified gm products to the theory of grading and minimum quality standards the model represents three stages in the supply chain assumes a vertical product differentiation framework allows for the accidental commingling of non gm products and treats regulation as a purity threshold for non gm products we find that a non gm purity level that is too strict leads to the disappearance of the non gm product and that some quality standard benefits farmers indeed the standard that is optimal from the perspective of producers is stricter than what is optimal for consumers and for societal welfare

the short term impact of unconditional cash transfers to the poor experimental evidence from kenya we use a randomized controlled trial to study the response of poor households in rural kenya to unconditional cash transfers from the ngo givedirectly the transfers differ from other programs in that they are explicitly unconditional large and concentrated in time we randomized at both the village and household levels furthermore within the treatment group we randomized recipient gender wife versus husband transfer timing lump sum transfer versus monthly installments and transfer magnitude us 404 ppp versus us 1 525 ppp we find a strong consumption response to transfers with an increase in household monthly consumption from 158 ppp to 193 ppp nine months after the transfer began transfer recipients experience large increases in psychological well being we find no overall effect on levels of the stress hormone cortisol although there are differences across some subgroups monthly transfers are more likely than lump sum transfers to improve food security whereas lump sum transfers are more likely to be spent on durables suggesting that households face savings and credit constraints together these results suggest that unconditional cash transfers have significant impacts on economic outcomes and psychological well being

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

concentration in ownership of plant variety rights some implications for developing countries this paper explores concentration levels in the ownership of intellectual property rights over plant varieties worldwide an analysis of data for 30 upov member countries shows a high degree of concentration in the ownership of plant variety rights for six major crops at the national level in the developed world much of this concentration has arisen owing to the rapid consolidation of the seed industry through mergers and acquisitions especially in the 1990s a high degree of concentration in the ownership of plant variety rights in combination with recent efforts to strengthen plant variety protection regimes is likely to have significant effects on the prospects for future innovation in plant breeding and the distribution of market power between companies for developing countries concentration in intellectual property right ownership may have important implications for the structure of domestic seed industries and access to protected varieties and associated plant breeding technologies these implications for developing countries are likely to become apparent in the context of the rapid spread of plant variety protection and access legislation emerging changes in the international exchange regime for plant material and liberalised investment policies permitting foreign investment in the seeds sector

miss targeted or miss measured abstract a method is proposed for testing the robustness of the assessed targeting performance of an anti poverty program to the fact that program administrators have a broader concept of poverty than the economist evaluator an application is given to china s main urban anti poverty program

how can safety nets contribute to economic growth the paper provides an up to date and selective review of the literature on how social safety nets contribute to growth the evidence is carefully chosen to show how safety nets have the potential to overcome constraints on growth linked to market failures and is organized into 4 distinct pathways i encouraging asset accumulation by changing incentives and by addressing imperfections in financial markets caused by constraints in obtaining credit and from information asymmetries overcoming such failures helps households to invest into their human capital or productive assets ii failures in insurance markets especially in low income setting safety nets are assisting in managing risk both ex post and ex ante iii safety nets are overcoming failure to create assets and other local economy complementary factors to household level investments iv safety nets are shown to relax political constraints on policy safety nets have a dual objective of directly alleviating poverty through transfers to the poor and of triggering higher growth for the poor however the trade off between the dual objectives of equity and growth is not eliminated by the potential for productive safety nets this remains critical for designing social policies

unconditional cash transfers in china who benefits from the rural minimum living standard guarantee dibao program summary this paper analyzes china s rural minimum living standard guarantee dibao program one of the largest minimum income cash transfer schemes in the world and examines possible changes to the program design despite its size and central position in china s current poverty reduction strategy little is known about the rural dibao program s performance and targeting effectiveness our analysis uses annual household survey data from the china household income project matched with published administrative data for the years 2007 09 we find that the program provides sufficient income to poor beneficiaries but does not substantially reduce the overall level of poverty conventional targeting analysis reveals large inclusionary and exclusionary targeting errors propensity score targeting analysis yields smaller but still large targeting errors simulations of possible changes to the program design reveal that expanding coverage can potentially yield greater poverty reduction than increasing transfer amounts replacing locally diverse dibao lines and transfer amounts with a nationally uniform dibao threshold and transfer could in theory reduce poverty further but the potential gains are modest without improvements in targeting this paper makes several contributions to our knowledge this is the first household level empirical analysis of china s dibao program in rural areas so the findings provide new policy relevant information moreover the literature has not settled the question of whether such programs should be centralized or decentralized we show that in practice the potential gains of centralizing the eligibility rule and transfer amount are conditional on the efficiency of targeting by varying the program s key design parameters our analysis also yields insights into alternative policy recommendations to improve the program performance

do lower yielding farmers benefit from bt corn evidence from instrumental variable quantile regressions abstract there have been serious questions about whether lower yielding farmers in developing countries who are typically poor smallholders benefit from genetically modified crops like bacillus thuringensis bt corn this article examines this issue by estimating the heterogeneous impacts of bt corn adoption at different points of the yield distribution using farm level survey data from the philippines a recently developed estimation technique called instrumental variable quantile regression ivqr is used to assess the heterogeneous yield effects of bt corn adoption and at the same time address potential selection bias that usually plague impact assessment of agricultural technologies we find that the positive yield impact of bt corn in the philippines tend to be more strongly felt by farmers at the lower end of the yield distribution this result suggests that bt corn could be a pro poor technology since most of the lower yielding farmers in the philippines are poor smallholders with low incomes

valuing product innovation genetically engineered varieties in us corn and soybeans we develop a discrete choice model of differentiated products for us corn and soybean seed demand to study the welfare impact of genetically engineered ge crop varieties using a unique data set spanning the period 1996 2011 we find that the welfare impact of the ge innovation is significant in the last five years of the period analyzed our preferred counterfactual indicates that total surplus due to ge traits was 5 18 billion per year with seed manufacturers appropriating 56 of this surplus the seed industry obtained more surplus from ge corn whereas farmers received more surplus from ge soybeans

surplus distribution from the introduction of a biotechnology innovation we examine the distribution of welfare from the introduction of bt cotton in the united states in 1996 the welfare framework explicitly recognizes that research protected by intellectual property rights generates monopoly profits and makes it possible to partition these rents among consumers farmers and the innovating input firms we calculate a total increase in world surplus of 240 3 million for 1996 of this total the largest share 59 went to u s farmers the gene developer monsanto received the next largest share 21 followed by u s consumers 9 the rest of the world 6 and the germplasm supplier delta and pine land company 5

risk perceptions endogenous demand and regulation of agricultural biotechnology abstract this paper presents a dynamic model of optimal product regulation in which consumer acceptance and the rate of product innovation are included as endogenous variables insights derived from the model are used to critically evaluate recent policy controversies regarding regulation of agricultural biotechnology the results of the analysis indicate that if regulatory policy significantly affects consumer risk perceptions more stringent regulatory requirements than those based solely on scientific risk assessment may be economically efficient when demand is endogenously affected by regulatory policies industry may also benefit from stronger regulations even if this results in a significant increase in product development costs

intellectual property rights and the welfare effects of agricultural r d the profound changes that have affected agriculture in modern times are perhaps best illustrated by the evolution of production techniques due to mechanization new chemical inputs such as herbicides pesticides and fertilizers genetic selection of crops and animals new crop varieties and countless other technical and organizational improvements these innovations have allowed a generalized increase in physical output while at the same time agriculture has suffered a massive exodus of labor forces towards the non farm sectors indeed a stylized fact of developed countries post war growth is that productivity in agriculture has grown faster than in other sectors jorgenson and gollop 1992 this remarkable record naturally begs the question of what is at its root and a view that commands considerable consensus is that agricultural productivity growth is due to past investments in scientific research and development r d

valuing varieties with imperfect output quality measurement markets for agricultural products may be inefficient when signals do not adequately reflect product characteristics important to market participants preferences can be explicitly reflected in price premiums for measurable characteristics using hedonic methods however when product quality information is costly to obtain the problem is compounded bundling of quality traits by variety can serve to signal product quality a procedure is developed to derive the value of different varieties in meeting buyer demands an application to the hard red spring market wheat illustrates the use of a procedure to distinguish among varieties and provides empirical support for the existence of akerlof s lemon market in the release of wheat varieties

does welfare enable family expenditures on human capital evidence from china summary using the national china household income project 2007 urban survey data and a propensity score matching method this article investigates whether welfare receipt helped enable low income families to spend more on human capital we find that welfare recipient families prioritized spending in health and education relative to their non recipient peers welfare particularly helped poor families afford medical care medicine tuition and fees for noncompulsory education private tutoring for children and purchasing of textbooks we find some evidence that welfare helped recipient families pay for maintenance fees for their residence but receiving welfare also deterred families from having leisure activities

an ex ante economic and policy analysis of research on genetic resistance to livestock disease trypanosomosis in africa abstract this paper undertakes an ex ante economic analysis of research on how resistance to trypanosomosis a dominant livestock disease in africa can be maintained and enhanced while retaining and reinforcing characteristics of economic importance to farmers and on how trypanotolerance can be imparted to susceptible animals while retaining their other important traits the results indicate that potential benefits to research historically field based but increasingly biotechnology driven range from two to nine times potential costs and that the internal rate of return on investments can be six times the real interest rate field based research while exhibiting lower potential benefits on aggregate than does biotechnology research is also less costly and because of its more immediate payback has higher internal rates of return returns to biotechnology research hinge on close links with field based research and on strategic but relatively small incremental human and capital investments the results also suggest that further research is needed to consistently identify and track the impacts of alternative intellectual property rights iprs options on the levels and distributions of biotechnology research benefits

ex ante analysis of the benefits of transgenic drought tolerance research on cereal crops in low income countries this article develops a framework to examine the ex ante benefits of transgenic research on drought in eight low income countries including the benefits to producers and consumers from farm income stabilization and the potential magnitude of private sector profits from intellectual property rights iprs the framework employs country specific agroecological drought risk zones and considers both yield increases and yield variance reductions when estimating producer and consumer benefits from research benefits from yield variance reductions are shown to be an important component of aggregate drought research benefits representing 40 of total benefits across the eight countries further estimated annual benefits of us 178 million to the private sector suggest that significant incentives exist for participation in transgenic drought tolerance research

the costs and benefits of refuge requirements the case of bt cotton abstract refuge requirements have been the primary regulatory tool to delay pest resistance to bt crops this paper presents a simple method to estimate the annual cost of refuges to producers applying it to bt cotton it also examines broader welfare impacts estimating how bt cotton acreage restrictions affect producer surplus consumer surplus seed supplier profits and commodity program outlays the implications of grower adoption behavior partial adoption aggregate adoption and refuge choice for regulatory costs are examined empirical examples illustrate how providing multiple refuge options significantly reduces regulatory costs

the effects of imperfect competition on the size and distribution of research benefits studies of agricultural research benefits usually assume perfectly competitive markets studies that have allowed for market power of agribusiness firms have generally assumed unrealistic pure monopsony or monopoly behavior this paper allows for processing firms to exhibit a range of degrees of oligopsony power in buying raw farm products and oligopoly power in selling processed farm products the results indicate that different types of research induced technical change can exacerbate or ameliorate distortions from the exercise of market power by agribusiness firms which affects the size and especially the distribution of research benefits

how does public assistance affect family expenditures the case of urban china summary using recent national household survey data and a propensity score matching method this study examines the effects of urban china s primary public assistance program minimum living standard assistance mlsa on family expenditures an important yet understudied indicator of family material well being we find that families receiving mlsa prioritized human capital investment i e paying for education and health rather than making the ends meet e g paying for food clothing rent and utilities the policy implications of these findings are discussed

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

decentralizing eligibility for a federal antipoverty program a case study for china in theory the informational advantage of decentralizing the eligibility criteria for a federal antipoverty program could come at a large cost to the program s performance in reaching the poor nationally whether this happens in practice depends on the size of the local income effect on the eligibility cutoffs china s di bao program provides a case study poorer municipalities adopt systematically lower thresholds roughly negating intercity differences in need for the program and generating considerable horizontal inequity so that poor families in rich cities fare better the income effect is not strong enough to undermine the program s overall poverty impact other factors including incomplete coverage of those eligible appear to matter more

pharmaceutical and industrial traits in genetically modified crops coexistence with conventional agriculture this paper discusses the implications of using genetically modified crops to biomanufacture pharmaceuticals and industrial compounds from the perspective of their co existence with conventional agriculture such plant made pharmaceuticals and plant made industrial products rely on exciting scientific and technological breakthroughs and promise new opportunities for the agricultural sector but they also entail novel risks the management of the externalities and of the possible unintended economic effects that arise in this context is critical and poses difficult questions for regulators

taxes subsidies and equilibrium unemployment this paper considers the effects of wage taxes employment subsidies and unemployment benefits in a simple model of equilibrium search unemployment is determined by the equality of job matchings and job separations job vacancies are determined by a zero profit condition and wages by a nash bargain between the meeting firm and worker i show that marginal wage taxes influence the firm s and worker s equilibrium sharing rule whereas employment subsidies and unemployment benefits influence only the surplus shared hence tax financed subsidies reduce wages and raise employment and vacancies whereas tax financed unemployment benefits raise wages and reduce employment and vacancies in this paper we consider the effects of wage taxes employment subsidies and unemployment benefits on equilibrium search unemployment in a model where wages are determined competitively by the meeting firm and worker discussions about the desirability of taxes and subsidies and their effect on employment and wages abound in the labour economics literature yet the only tax or subsidy that has been systematically discussed in a competitive search framework is a lump sum unemployment benefit the reason for this might be that the structure of the model is such that it is ideally suited to the study of unemployment benefits whereas traditional supply and demand analysis could arguably cope with other kinds of taxes this might be true in some cases but if it is at all appropriate to think of equilibrium unemployment as coming out of an essentially competitive framework when the process which brings together jobs and workers is characterized by frictions traditional supply and demand analysis may not be rich enough to give us all the answers we need 1 the model of this paper is a simple equilibrium model with endogenous unemployment supply of jobs i e demand for labour and real wages unemployment exists because unemployed workers and unfilled jobs cannot find each other instantaneously in the interval of time required to match all workers and jobs some existing job worker pairs break up providing a new flow into unemployment thus unemployment can never be eliminated in equilibrium flows into and flows out of unemployment are equal wages are set endogenously by generalized nash bargains between the individual firm and worker the equilibrium wage rate is shown to depend on all the parameters of the model and to be determined simultaneously with equilibrium unemployment the driving force in the model which provides the link between wages and unemployment is the rate of job vacancies the total number of jobs is determined by zero profit conditions because of constant returns to scale the number of jobs taken up each period depends positively on the number of job vacancies because a typical unemployed worker will have a better chance of locating a job when there are more vacancies if the real wage rate falls the expected profits from a job rise firms open up more vacancies to take advantage of this and so more jobs are taken up but as vacancies rise and

productivity growth in world agriculture sources and constraints during the last half century advances in crop production came from expansion in areas irrigated from more intensive application of fertilizers and crop protection chemicals and from crop varieties that were more responsive to technical inputs and management advances in animal production came from genetic improvements and advances in animal nutrition differences among developed and developing countries in output per hectare and per worker have widened if these gaps are to be narrowed agricultural research capacity in developing countries will have to be substantially strengthened

bt cotton in india field trial results and economic projections abstract the performance of bt cotton in india is analyzed on the basis of field trial data from 2001 the amounts of pesticides applied during the trials were reduced to one third of what was used in conventional cotton while under severe pest pressure yield gains were 80 productivity effects are modeled econometrically with a damage control specification the first approval for the commercial cultivation of bt hybrids was given in 2002 by 2005 the technology is expected to cover one quarter of total indian cotton area medium term projections show sizeable welfare gains for the overall economy with farmers being the main beneficiaries

can gm technologies help the poor the impact of bt cotton in makhathini flats kwazulu natal abstract the results of a two year survey of smallholders in makhathini flats kwazulu natal show that farmers who adopted bt cotton in 1999 2000 benefited according to all the measures used higher yields and lower chemical costs outweighed higher seed costs giving higher gross margins these measures showed negative benefits in 1998 99 which conflicts with continued adoption but stochastic efficiency frontier estimation which takes account of the labor saved showed that adopters averaged 88 efficiency as compared with 66 for the nonadopters in 1999 2000 when late rains lowered yields the gap widened to 74 for adopters and 48 for nonadopters

the potential impact of tobacco biopharming the case of human serum albumin biopharming stands to significantly expand the uses of many agricultural crops this article examines the potential size and distribution of welfare gains from biopharming transgenic tobacco as a source of human serum albumin hsa using an economic surplus model under imperfect competition the results suggest that hsa from transgenic tobacco will generate annual profits for the innovating firm of between 25 million and 49 million on the other hand consumers are unlikely to benefit during the patent life of the product given the innovator s market power

economic and welfare impacts of commercializing a herbicide tolerant biotech wheat abstract a transgenic variety of spring wheat was proposed for deregulation in north america in 2002 more recently the developer shelved this plan in this paper a quantitative model is used to analyze the possible economic impact of commercializing a crop for which there may be sizable consumer resistance at issue is whether and under what conditions the economic benefits from biotech wheat could be outweighed by economic costs the analysis also addresses the distribution of costs and benefits among stakeholders producers consumers and us taxpayers specific attention is given to the impacts on consumers in non biotech and biotech market segments and those in the united states and foreign countries under base case assumptions the analysis suggests that commercialization of biotech wheat could lead to a small net loss of total economic welfare results depend critically on several model parameters the rate of biotech adoption unit cost savings for biotech producers the share of the non biotech market segment and extra costs associated with a dual marketing system for wheat

labeling regulations and segregation of first and second generation genetically modified products innovation incentives and welfare effects we review some of the most significant issues and results on the economic effects of genetically modified gm product innovation with emphasis on the question of gm labeling and the need for costly segregation and identity preservation activities the analysis is organized around an explicit model that can accommodate the features of both first generation and second generation gm products the model accounts for the proprietary nature of gm innovations and for the critical role of consumer preferences vis a vis gm products as well as for the impacts of segregation and identity preservation and the effects of a mandatory gm labeling regulation we also investigate briefly a novel question in this setting the choice of research direction when both cost reducing and quality enhancing gm innovations are feasible

impact of bt cotton on pesticide poisoning in smallholder agriculture a panel data analysis while substantial research on the productivity and profit effects of bt cotton has been carried out recently the economic evaluation of positive and negative externalities has received much less attention here we focus on farmer health impacts resulting from bt related changes in chemical pesticide use previous studies have documented that bt cotton has reduced the problem of pesticide poisoning in developing countries but they have failed to account for unobserved heterogeneity between technology adopters and non adopters we use unique panel survey data from india to estimate unbiased effects and their developments over time bt cotton has reduced pesticide applications by 50 with the largest reductions of 70 occurring in the most toxic types of chemicals results of fixed effects poisson models confirm that bt has notably reduced the incidence of acute pesticide poisoning among cotton growers these effects have become more pronounced with increasing technology adoption rates bt cotton now helps to avoid several million cases of pesticide poisoning in india every year which also entails sizeable health cost savings