the expansion of modern agriculture and global biodiversity decline an integrated assessment the world is banking on a major increase in food production if the dietary needs and food preferences of an increasing and increasingly rich population are to be met this requires the further expansion of modern agriculture but modern agriculture rests on a small number of highly productive crops and its expansion has led to a significant loss of global biodiversity ecologists have shown that biodiversity loss results in lower plant productivity while agricultural economists have linked biodiversity loss on farms with increasing variability of crop yields and sometimes lower mean yields in this paper we consider the macro economic consequences of the continued expansion of particular forms of intensive modern agriculture with a focus on how the loss of biodiversity affects food production we employ a quantitative structurally estimated model of the global economy which jointly determines economic growth population and food demand agricultural innovations and land conversion we show that even small effects of agricultural expansion on productivity via biodiversity loss might be sufficient to warrant a moratorium on further land conversion

profits and politics coordinating technology adoption in agriculture abstract this paper examines the political economy of government led coordination of economic activity in a simple two sector model in which individuals choice of agricultural technology affects industrialization we demonstrate the existence of multiple equilibria the economy is either characterized by the use of a traditional agricultural technology and a low level of industrialization or the use of a mechanized technology and a high level of industrialization relative to the traditional technology use of the mechanized technology increases output but leaves some population groups worse off we show that the distributional implications of choosing the mechanized technology restrict the possibility of pareto improving coordination by an elected policy maker even when we allow for income redistribution

green revolution land reform and household income distribution in the philippines income of agricultural households consists of returns to labor capital and land from farming supplemented mainly by labor earnings from nonfarm sources agricultural technology affects farmers income through its effect on factor demands and factor prices which in turn induce changes in the allocation of farmers own resources to different uses income from farming is also affected by village institutions such as land tenure which governs the distribution of income between landlords and tenants as well as resource allocations

induced innovations and farm mechanization cal change in agriculture then they come mainly from the public agent of farm technology the agricultural research system the research system should be held responsible for the social consequences of farm mechanization and it should be budgeted and directed accordingly on the other hand if mechanization and exit from farming are caused mostly by external price and wage changes the responsibility of the research system is limited principally to technology improvement in this note we discuss the newly emerging tradition of induced innovation and its relation to the alternative explanations of machine labor substitution in agriculture we first clarify the conceptual basis of the induced innovation hypothesis and the related innovation possibility function second we call into question the validity of some of the empirical applications we argue that an incomplete conceptualization of the induced innovation idea has led to invalid empirical tests and to inappropriate implications on the causes of american farm mechanization

an error correction model of induced innovation in uk agriculture cointegration techniques are applied to a model of induced innovation based on the two stage constant elasticity of substitution ces production function this approach results in direct tests of the inducement hypothesis which are applied to agricultural data for the united kingdom from 1953 to 2000 the time series properties of the variables are checked cointegration is established and an error correction model ecm constructed which attempts to separate factor substitution from technological change finally the ecm formulation is subjected to causality tests which show that the factor price ratio for chemicals and land is granger prior to the factor saving bias of technological change however long run relative prices are not causally prior to the machinery labour ratio this results from perturbations in the user cost of machinery caused by oil price shocks thus the induced innovation hypothesis iih may explain long run transformations like the mechanical and fertilizer revolutions that

the induced innovation hypothesis and u s public agricultural research applicability of the induced innovation hypothesis that a change in relative input prices induces innovation to economize use of the increasingly expensive input hicks 1932 is examined for u s public agricultural research a reduced form test is developed using input prices from the agricultural production sector expenditures from the public research sector aimed at developing new technology to save specific agricultural inputs and variables to control for innovation marginal cost differences and nonhomotheticity unlike recent demand side studies that soundly reject the induced innovation hypothesis for agriculture support for the hypothesis is found for several input pairings through these tests of public agricultural research using state level panel data

growth and distribution a test of the induced innovation hypothesis for the korean economy this study investigates technical change biases and their effects on distribute shars in korea we are particularly concerned with whether technical change biases have been induced by changes in relative factor prices accompanied by rapid economic growth in korea our test results show that technical change in korea has been biased in the direction in the direction for saving labour and using capital thus rendering support to the induced innovation hypothesis these findings are roughly in parallel with empirical studies on the induced innovation hypothesis for the us and japanese economies the similar pattern in technical change biases between korea and the two advanced economies is noteworthy in light of their basic differences in factor endowments another salient feature of our empirical analysis is that the price corrected labour share in korea has continually shrunk in the process of rapid economic growth which has been partly precipitated by factor price disorting policies

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

technology adoption and agricultural price policy market interventions such as price supports or fertilizer subsidies can lead to gains from speeding up adoption of new technologies but the policies distort resource allocation a framework is developed for optimizing policies in light of the adoption allocation trade off based on adoption coefficients and production parameters from third world agriculture levels and duration of policies are estimated sensitivity analyses are performed gains are small at best and may be zero or negative in view of farmer costs of adjustment and deadweight losses from taxes profit technology adoption if new technologies are desirable why not use price supports or input subsidies to encourage faster technology adoption while frequently raised in policy deliberations this question has received little serious analysis particularly neglected has been the conflict or trade off between a gains in output as producers switch from old to new technologies and b the losses from resource use distortions brought about by price policies when output prices are raised or prices of inputs such as fertilizer are lowered the

labor productivity measurement in japanese agriculture 1956 1990 abstract this paper investigates the factors responsible for a drastic decline in the growth rate of labor productivity of the agricultural sector for the 1956 1990 period this investigation is carried out by a newly devised procedure which decomposes the growth rate of labor productivity into 1 the total substitution effect which consists of the effects due to factor price changes and biased technological change and 2 the tfp effect composed of the effects due to scale economies and technological progress based on empirical estimation of the translog cost function it was found that the total substitution effect contributed to the growth of labor productivity much more than the tfp effect did for the period under question

a flexible model of factor biased technological change an application to japanese agriculture abstract results indicate that when restrictive assumptions on production structure and parameter constancy are avoided and quality adjusted flow variables employed an explanation of factor biased technological change emerges that is consistent with observed patterns of factor use while substitution possibilities during this period were limited biol nearly as strong a substitute for labor as for land technological change was found to be significantly labor saving and using in biological inputs and machinery and only weakly land saving descriptions of pre world war ii technology as primarily land saving miss the significant contribution of labor saving technology in agricultural transformation and ignore the dynamics of inter sectoral factor demand

global population growth technology and malthusian constraints a quantitative growth theoretic perspective we structurally estimate a two sector schumpeterian growth model with endogenous population and finite land reserves to study the long run evolution of global population technological progress and the demand for food the estimated model closely replicates trajectories for world population gdp sectoral productivity growth and crop land area from 1960 to 2010 projections from 2010 onwards show a slowdown of technological progress and because it is a key determinant of fertility costs significant population growth by 2100 global population reaches 12 4 billion and agricultural production doubles but the land constraint does not bind because of capital investment and technological progress

brain drain and economic growth theory and evidence we focus on the impact of migration prospects on human capital formation and growth in a small open developing economy we assume that agents are heterogeneous in skills and take their educational decisions in a context of uncertainty regarding future migrations we distinguish two growth effects an ex ante brain effect migration prospects foster investments in education because of higher returns abroad and an ex post drain effect because of actual migration flows the case for a beneficial brain drain bbd emerges when the first effect dominates i e when the average level of human capital is higher in the economy opened to migrations than in the closed economy we derive the theoretical conditions required for such a possibility to be observed using cross section data for 37 developing countries we find that the possibility of a bbd could be more than a theoretical curiosity

geographic aggregation and induced innovation in american agriculture the induced innovation hypothesis is tested for the usa and western regions using cointegration procedures an error correction model separates short run and long run effects of relative price changes a significant difference in the elasticities of factor substitution along the isoquant and the innovation possibility curve implies induced innovation the estimated results support the hypothesis for washington the pacific northwest and the western region but not for the nation corroborative tests of weak exogeneity fail to support the hypothesis in any of the geographic units changes in output level and research investment do not significantly bias agricultural technology in the usa

research and extension expenditures and productivity in japanese agriculture 1960 1990 abstract this paper investigates the cause for the decline in the growth of productivity in japanese agriculture since the late 1960s for this objective it investigates the effects of research and extension r e activities on the extent and the direction of the bias of technological change in japanese agriculture for the period 1960 1990 based on the translog cost function framework empirical results show that the cost reducing effects of r e measured in terms of the absolute value of the cost r e elasticity increased slightly from 0 194 in 1960 to 0 205 in 1965 and then decreased consistently to 0 110 in 1990 this finding is broadly consistent with the finding of the decline or slowdown in agricultural productivity since the late 1960s the bias due to r e was found to be toward labor intermediate inputs and other inputs saving on the one hand and machinery and land using on the other labor saving and machinery using biases are consistent with the hicksian induced innovation hypothesis

welfare impacts of alternative public policies for agricultural pollution control in an open economy a general equilibrium framework a general equilibrium approach is used to evaluate the welfare impacts of alternative policies for reducing agricultural pollution in an open economy with preexisting distortions caused by income taxes and agricultural subsidies the policies examined here include the removal of distortionary agricultural subsidies we find that even though these distortions are small compared to others in the economy removing them and imposing nitrogen reduction subsidies and or output taxes can enhance welfare and reduce nitrogen pollution thereby leading to a substantial double dividend the relative efficiency of the alternative policies examined here depends on the level of the nitrogen reduction target copyright 2008 oxford university press

specification of production functions for analyzing technical change and factor inputs in agricultural development abstract this paper focuses on some vital issues involed in specifying the number of variables to be included in agriculture s production function and on the functional form that the agricultural production function should assume in the context of a computable general equilibrium model when land and intermediate inputs seeds and fertilizers as well as capital and labor are included modeling the agricultural sector can best be done in a more disaggregated format than simple cobb douglas or ces specifications after examining the transcendental logarithmic production function the paper proposes to adopt nested ces specifications on the basis of empirically observed elasticities of substitution

agricultural production technologies with systematic and stochastic technical change a production system modeling tool is developed that implements recent work on autoregressive and endogenous stochastic production technologies associated with generalized fechner thurstone gft optimizing functions a gft class production system is used to evaluate the empirical support for technology specifications inherent in the neoclassical theoretic structure of an agricultural production region little likelihood support is found for zero serial correlation elimination of systematic technology changers from the production system strict neoclassical production technologies hicks neutral technical change or zero homogenous factor demand functions

testing the induced innovation hypothesis an error correction model of south african agriculture abstract this paper applies cointegration techniques to a model of induced innovation based on the two stage constant elasticity of substitution ces production function this approach results in direct tests of the inducement hypothesis which are applied to data for south african commercial agriculture for the period 1947 1991 south african data is used because the policy changes have been substantial enough that the factor and price ratios have turning points rather than being monotonic the time series properties of the variables are checked cointegration is established and an error correction model ecm constructed allowing factor substitution to be separated from technological change finally the ecm formulation is subjected to causality tests which show that both the factor price ratios and r d and extension expenditures are granger prior to the factor saving biases of technological change thus each stage of the analysis corroborates the inducement hypothesis however straightforward price inducement is only part of the explanation of changes in factor ratios policy induced innovation in response to tax concessions and subsidised credit is also present

higher education and economic growth in africa abstract this paper uses panel data over the 1960 2000 period a modified neoclassical growth equation and a dynamic panel estimator to investigate the effect of higher education human capital on economic growth in african countries we find that all levels of education human capital including higher education human capital have positive and statistically significant effect on the growth rate of per capita income in african counties our result differs from those of earlier research that find no significant relationship between higher education human capital and income growth we estimate the growth elasticity of higher education human capital to be about 0 09 an estimate that is twice as large as the growth impact of physical capital investment while this is likely to be an overestimate of the growth impact of higher education it is robust to different specifications and points to the need for african countries to effectively use higher education human capital in growth policies

global economic growth and agricultural land conversion under uncertain productivity improvements in agriculture we study how stochasticity in the evolution of agricultural productivity interacts with economic and population growth at the global level we use a two sector schumpeterian model of growth in which a manufacturing sector produces the traditional consumption good and an agricultural sector produces food to sustain contemporaneous population agriculture demands land as an input itself treated as a scarce form of capital in our model both population and sectoral technological progress are endogenously determined and key technological parameters of the model are structurally estimated using 1960 2010 data on world gdp population cropland and technological progress introducing random shocks to the evolution of total factor productivity in agriculture we show that uncertainty optimally requires more land to be converted into agricultural use as a hedge against production shortages and that it significantly affects both optimal consumption and population trajectories

continuous ascending vs pooled multiple unit auctions abstract we examine a seldom studied multiple unit auction format known as a pooled auction we use both theory and economic experiments to compare the pooled auction to the continuous simultaneous ascending auction on the grounds of revenue and efficiency generation the results show that due to very aggressive bidding in the pooled auction it generates substantially more revenue than the ascending auction while achieving equivalent efficiency levels we then attempt to explain the overbidding in the pooled auction and find that neither risk nor loss aversion can explain it we present instead a model with an attentional bias that is related to models of probability underweighting and show that it can explain the data

biased technological change and factor demand in postwar japanese agriculture 1958 84 abstract the objective of this study is to gain a better understanding of factor substitutions in postwar japanese agriculture by shedding special light on biased technological change such biased technological change is first measured then associated with the movements of factor prices and then tested for the hicksian induced innovation hypothesis in addition a decomposition analysis is carried out in order to quantitatively examine the importance of the biased effects for determining changes in factor cost shares and factor proportions during the 1958 84 period a slightly modified stevenson greene model of the translog cost function is employed this model has at least two important advantages over ordinary translog cost functions first it incorporates time into the model such that all coefficients of the ordinary translog cost function may change over time this is more realistic than the ordinary translog cost function which assumes that all coefficients are constant over the period of estimation another attractive feature is that it enables us to test the induced innovation hypothesis directly the model is applied to the 1958 84 period by making use of farm level data the results show that technological change was biased towards saving labor and other inputs and using machinery intermediate inputs and land this biased technological change is found to be in principle consistent with the induced innovation hypothesis furthermore it is shown through decomposition analyses that the biased technological change had significant impacts on changes in factor cost shares and factor proportions during these years the empirical results of this study imply that technological change in japanese agriculture has in general proceeded in a manner consistent with factor endowments conditions since the late 1950s an implication of this study for agriculture in less developed countries is that agricultural policies seeking development through technological progress should be carried out so as to take advantage of peculiar factor endowments conditions in the individual countries

induced bias of technical change in agriculture the united states and japan 1880 1980 because of extreme differences in factor endowments and price ratios among factors between the united states and japan both countries have experienced sharply different patterns of factor use and productivity growth in agriculture for the past 100 years of modern economic growth in this study the method of testing the hicksian hypothesis of induced innovation was developed using the two level ces production function the model was applied to the historical data of u s and japanese agricultural development for 1880 1980 the results were consistent with the hypothesis that different patterns of technical change in the two countries were induced by differences in the levels and the movements in relative factor prices

induced innovation and marginal cost of new technology abstract lacking data on development and implementation costs for input saving technologies we develop a nonparametric procedure to estimate relative differences in marginal technology costs for technical change to be consistent with the induced innovation hypothesis we apply it to u s agriculture

induced innovation in u s agriculture time series direct econometric and nonparametric tests the hypothesis of induced innovation is tested for u s agriculture using a high quality state level panel data set and three disparate testing techniques time series direct econometric and nonparametric we find little support for the hypothesis that conclusion is robust across testing techniques however as with all empirical tests of this hypothesis conducted to date ours focus only on the demand side of the hypothesis the hypothesis could have been rejected simply because the marginal cost of developing and implementing input saving technologies for the relatively expensive inputs is greater than for the relatively cheap inputs copyright 2009 oxford university press

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