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

time aggregation and the distributional shape of unemployment duration this paper reports empirical evidence on the sensitivity of unemployment duration regression estimates to distributional assumptions and to time aggregation the results indicate that parameter estimates are robust to distributional assumptions while estimates of duration dependence are not time aggregation does not seem to have drastic effects on the estimates in a simple parametric model like the weibull but can produce dramatic changes in the more complicated extended generalized gamma model semiparametric models for grouped data produce stable estimates and perform much better than continuous time models in terms of significance at high levels of time aggregation

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

rational household labor supply traditionally household behavior is derived from the maximization of a unique utility function in this paper we propose an alternative approach in which the household is modeled as a two member collectivity taking pareto efficient decisions the consequences of this assumption are analyzed in a three good model in which only total consumption and each member s labor supply are observable if the agents are assumed egoistic i e they are only concerned with their own leisure and consumption it is possible to derive falsifiable conditions upon household labor supplies from both a parametric and nonparametric viewpoint if alternatively agents are altruistic restrictions obtain in the nonparametric context useful interpretation stems from the comparison with the characterization of aggregate demand for a private good economy

the relevant market for production and wholesale of electricity in the nordic countries an econometric study we apply cointegration analysis to daily averages of nord pool prices covering the period 2001 2007 in order to empirically characterize the geographical dimension of the relevant market for production and wholesale of electricity we reach the following econometric conclusions i price areas finland sweden and norway 3 unambiguously belong to the same relevant market ii denmark 2 belongs to this same market except for the subsample 2004 2007 iii norway 1 and denmark 1 define separate markets on their own we find that the stochastic trends in nord pool prices originate in countries abundant in capacity to generate hydro power

aggregation of exponential smoothing processes with an application to portfolio risk evaluation in this paper we propose a unified framework to analyse contemporaneous and temporal aggre gation of exponential smoothing ewma models focusing on a vector ima 1 1 model we obtain a closed form representation for the parameters of the contemporaneously and temporally aggregated process as a function of the parameters of the original one in the framework of ewma estimates of volatility we present an application dealing with value at risk var pre diction at different sampling frequencies for an equally weighted portfolio composed of multiple indices we apply the aggregation results by inferring the decay factor in the portfolio volatility equation from the estimated vector ima 1 1 model of squared returns empirical results show that var predictions delivered using this suggested approach are at least as accurate as those obtained by applying the standard univariate riskmetricstm methodology

assets activities and income generation in rural mexico factoring in social and public capital in recent years there has been increasing emphasis in the rural development literature on the multiple income generating activities undertaken by rural households and the importance of assets in determining the capacity to undertake these activities controlling for the endogeneity of activity choice and applying lee s generalisation of amemiya s two step estimator to a simultaneous equation model household returns to assets from multiple activities are explored for the mexico ejido sector to incorporate the multiple variables representing social and public capital into the analysis factor analysis is used the results indicate that the asset position of the household has a significant effect on household participation in income generating activities and returns to those activities furthermore the inclusion of measures of social and public capital into the analysis show that these assets play an important role in income generating activities and that the influence is dependent on the type of social and public capital as well as the particular activity

common trends and common cycles the existence of a serial correlation common feature among the first differences of a set of i 1 variables implies the existence of a common cycle in the beveridge nelson stock watson decomposition of those variables a test for the existence of common cycles among cointegrated variables is developed the test is used to examine the validity of the common trend common cycle structure implied by flavin s excess sensitivity hypothesis and campbell and mankiw s mixture of rational expectations and rule of thumb hypothesis for consumption and income linear independence between the cointegration and the cofeature vectors is exploited to decompose consumption and income into their trend and cycle components copyright 1993 by john wiley sons ltd

on measuring economic diversification reply professors wasylenko and erickson s comment on our article regarding the measurement of economic diversification hackbart and anderson 1975 focuses on two issues 1 that the entropy measure yields diversity rankings for regional economies that are almost identical to those derived with the ogive index and 2 that the entropy measure is an inadequate measure for examining industrial diversity either among regions or for a particular region over a period of time concerning the first issue wasylenko and erickson indicate that the

the impact of soil conservation and output diversification on farm income in central american hillside farming this article analyzes the determinants of farm income among hillside farmers participating in natural resource management projects in el salvador and honduras the farm income function was evaluated using a system of equations in which income is determined simultaneously by the farmer s decision to adopt soil conservation technologies and by the level of diversification number of agricultural activities on the farm the database used comes from surveys administered to 678 beneficiaries of these projects during 2002 the econometric results suggest that all the variables related directly to land use i e output diversification soil conservation practices and structures and the adoption of forestry systems have a positive and statistically significant association with farm income also farmers who own land enjoy higher farm incomes than those who do not the results indicate that when investing in natural resource management projects governments and multilateral development agencies should pay close attention to output diversification land tenure and human capital formation as effective instruments in increasing farm income

soil conservation and governmental policies in tropical areas does aid worsen the incentives for arresting erosion this paper focuses on how farmers respond with respect to the adoption of soil conservation measures to governmental agricultural policies aiming at supporting smallholders a simple micro economic framework was chosen to undertake an analysis of farmer choices among three activities farming adoption of soil conservation measures and off farm work the model shows that governments have to be cautious when designing support measures if improved resource management is a policy goal in the design of such measures attention has to be paid both to 1 the distribution in land quality and 2 the distribution in the net returns from adopting soil conservation measures

adoption of agricultural innovations in developing countries a survey this paper reviews various studies which have provided a description and possible explanation to patterns of innovation adoption in the agricultural sector the survey points out that the tendency of many studies to consider innovation adoption in dichotomous terms adoption nonadoption may not be appropriate in many cases where the actual decisions are defined over a more continuous range more attention needs to be given to the socio cultural and institutional environment in area studies so that their interrelation with economic factors affecting adoption can be inferred the presence of several interrelated innovations is another aspect that needs to be considered more carefully in future research since a number of simultaneous decisions may be involved furthermore the possibility of regular sequential patterns in adopting components of a new technological package should be specifically addressed in future studies finally the impact of differential adoption rates on land holding distribution merits attention in future research

a new approach to decomposition of economic time series into permanent and transitory components with particular attention to measurement of the business cycle abstract this paper introduces a general procedure for decomposition of non stationary time series into a permanent and transitory component allowing both components to be stochastic the permanent component is shown to be a random walk with drift and the transitory or cyclical component is a stationary process with mean zero the decomposition methodology which depends only on past data and therefore is computable in real time is applied to the problem of measuring and dating business cycles in the portwar u s economy we find that measured expansions and contractions are of roughly equivalent duration and that our dating of cyclical episodes tends to lead the traditional nber dating and to a lesser extent the growth cycle chronology of zarnowitz and boschan 1977

some consequences of temporal aggregation in empirical analysis i derive the generating mechanism of a temporally aggregated process when the disaggregated one belongs to the vector autoregressive integrated moving average class i then study the effects of temporal aggregation on a set of characteristics of usual interest such as exogeneity causality cointegration and common features an empirical example with canadian interest rates illustrates the main issues

economic policy uncertainty and dollar pound exchange rate return volatility abstract the extent to which economic policy uncertainty epu amplifies exchange rate volatility has been an important research question for at least a decade previous research has investigated this relationship using monthly data concluding that epu imparts an effect on exchange rate volatility either contemporaneously or with a one month lag the use of monthly frequency however may not provide an accurate causal interpretation and may even compromise the accuracy of the estimates if the natural cycles of epu are shorter than a month to address this econometric concern i construct uncertainty measures at a daily frequency and estimate a garch model using daily usd british pound returns the evidence indicates that epu contributes to exchange rate volatility much more quickly than monthly data can detect using a regression technique for separating epu from non policy economic uncertainty i find that non policy market uncertainty increases volatility more than epu does

valuing soil conservation benefits of agroforestry contour hedgerows in the eastern visayas philippines abstract trees can be considered as investments made by economic agents to prevent depreciation of natural assets such as stocks of top soil and water in agroforestry systems farmers use trees in this manner by deliberately combining them with agricultural crops on the same unit of land although advocates of agroforestry have asserted that soil conservation is one of its primary benefits empirical estimates of these benefits have been lacking due to temporal and spatial complexity of agroforestry systems and the nonmarket aspect of soil capital assets this study designs and applies a bio economic framework for valuing the soil conservation benefits of agroforestry the framework is tested with econometric analysis of data from surveys of households in eastern visayas philippines where usaid government of philippines introduced contour hedgerow agroforestry in 1983 by constructing a weighted soil quality index that also incorporates measures of soil fertility texture and color in addition to erosion we extend previous economic studies of soil resources this index is regressed on a variety of farming and site specific bio physical variables next we use a cobb douglas profit function to directly relate agricultural profits and soil quality thus the value of soil conservation is measured as a quasi rent differential or the share of producer surplus associated with a change in soil quality because this framework assumes the existence of markets the assumption is tested by analysing the statistical significance of consumption side variables e g number of household members on production side variables e g profits instrumental variables are used to handle the endogeneity of the soil index in the profit equation seemingly unrelated regression sur analysis is used to accommodate correlation of errors across the soil and profit equations regression results reveal the importance of agroforestry intensity private ownership land fragmentation and familiarity with soil conservation as positive covariates of soil quality analysis of production data indicate the importance of market prices education farming experience farm size topography and soil quality as positive covariates of household profits investments in agroforestry to improve or maintain soil capital can increased annual agricultural profits by us 53 for the typical household which is 6 of total income however there are significant up front costs given that small farmers in tropical uplands are important players in the management of deteriorating soil and forest resources policy makers may want to consider supporting farmers in the early years of agroforestry adoption

small system modelling of real wages inflation unemployment and output per capita in italy 1970 1994 the relationships between real wages output per capita inflation and unemployment in italy between 1970 and 1994 are modelled using a cointegrated vector autoregression there is evidence of a change in the underlying equilibria and in the dynamic evolution of the variables probably associated with the substantial changes in many sectors of the italian economy after 1979 alternative ways to model structural change in the italian labour market are considered in adopting a split sample approach the results favour an hysteresis interpretation of unemployment

temporal aggregation and hall s model of consumption behaviour a simple exercise of time series analysis shows that the presence of the phonomenon of temporal aggregation in quarterly consumption data can substantially alter the empirical inference about hall mocel of consumption behaviour this fact has received almost no attention in the econometric research in this field

economics of erosion control and seed fertilizer technologies for hillside farming in honduras abstract with population growth still at very high rates and large scale commercial farmers and cattle ranchers owning much of the more fertile valley land small scale farmers are concentrated on increasingly marginal steeply sloping hillsides in central america the continuing soil erosion and land degradation in these low input staple crop production hillside farming systems lead many to be pessimistic about increasing the agricultural incomes of these farmers however this study shows that the appropriate combination of improved technologies and agricultural policy or alternative production diversification strategies can improve the incomes of small scale hillside farmers in southern honduras by over 50 the technology components considered are stone walls and ditches combined with living tree barriers to prevent erosion of the hillsides and a package of improved sorghum seed seed treatment and modest doses of nitrogenous fertilizer a whole farm mathematical programming framework is used to determine the potential farm level income effects of the soil conservation and seed fertilizer technologies the main conclusion is that erosion control devices and yield increasing crop varieties and fertilizer are an effective technology introduction strategy for the erosion prone hillside landholdings found in many areas of central america if policy actions or diversification strategies for disposal of surplus grain are found which are effective in reducing the risk of low income from cereal price reductions in high production years adoption of the improved technologies is shown to be profitable for small scale farmers another benefit not explicitly considered would be to slow the very rapid growth of urban poverty in these countries sensitivity analysis results indicated that neither risk aversion nor the increased availability of crop land or initial cash have any substantial effects on the predicted adoption level of the improved technologies or on their income impacts for these farmers

temporal aggregation of univariate and multivariate time series models a survey abstract we present a unified and up to date overview of temporal aggregation techniques for univariate and multivariate time series models explaining in detail although intuitively the technical machinery behind the results some empirical applications illustrate the main issues

children s resources in collective households identification estimation and an application to child poverty in malawi children s resources matter but they are hard to identify because consumption is typically mea sured at the household level modern collective household models permit some identication of indi vidual household member resources but these models typically either ignore children or treat them as attributes of adults we propose a collective household model in which children are people with their own utility functions possibly assigned to them by parents extending the frameworks of browning chiappori and lewbel 2007 and lewbel and pendakur 2008 we show identication of children s resource shares within households we invoke semiparametric restrictions on individual preferences and use data on the household level consumption of assignable private goods to achieve identication of each individual s resource share within the household we show this without being able to observe consumption by individual household members of goods that are partly or wholly shared goods within the household further we obtain identication using only engel curves and so do not require ob served price variation in the data we estimate our model using data from malawi andnd that as the number of children in a household grows women s resource shares fall and children s resource shares rise and men s resource shares are basically unchanged we alsond evidence of gender bias against girls and observe that the resource shares of mothers and children are increasing in the education level of the mother finally we use our estimates to construct poverty indices at the person level andnd that per capita poverty indices understate the incidence of child poverty in malawi

production growth and business cycles ii new directions abstract this paper outlines new directions for investigations of real business cycle models consideration of stochastic growth of exogenous and endogenous forms analysis of suboptimal outcomes arising due to externalities of distorting taxes and implications of labor market heterogeneity

household equivalence scales and welfare comparisons abstract the ratio of cost functions of different households facing the same prices and attaining the same utility level is a true cost of demographic characteristics index this index is independent of a base level of income or utility ib if and only if it equals a ratio of household equivalence scales that are themselves ib applied cost index and equivalence scales specifications are usually ib this paper describes the general restrictions on cost functions and social welfare functions required for ib scales and for their use in welfare analysis

common features in economics and finance an overview of recent developments this introductory article offers an overview of some developments in the common features literature since the publication of the seminal article by engle and kozicki in the journal of business economic statistics in 1993 with the aim of highlighting the unifying theme of the contributions in this volume

determinants of farmers indigenous soil and water conservation investments in semi arid india abstract this paper investigates the determinants of farmers indigenous soil and water conservation investments in the semi arid tropics of india a simple theoretical model is used to develop hypotheses about the determinants of investment under alternative factor market conditions and these are tested using data on conservation investment from three villages we find that conservation investment is significantly lower on leased land in two of the study villages and lower on plots that are subject to sales restrictions in one village suggesting the potential for land market reforms to increase conservation investment in one village households with more adult males more farm servants and less land invest more in conservation as predicted by the model of imperfect labor markets and households with more debt and off farm income invest more consistent with the model of imperfect credit markets evidence that conservation investment is affected by factor market imperfections is weaker in the other villages where investments are much larger suggesting transaction costs as the source of the differences between villages other factors that have a significant effect on investment include the farmer s education and caste characteristics of the plot size slope irrigation status and quality ranking and the presence of existing land investments the results suggest the importance of accounting for differences across communities and households in factor market and agroclimatic conditions in designing programs to promote investments in soil and water conservation

aggregation unit roots and the time series structure of manufacturing real wages the effects of both temporal and cross sectional aggregation on the estimated time series characteristics of manufacturing real wage data are examined the effects especially of temporal aggregation are found to be quite large and in accord with statistical theory the well known results of j altonji and o ashenfelter 1980 that real wages are a random walk and of c r nelson and c i plosser 1982 that real wages are an ima 1 1 process both seem to be entirely artifacts of temporal aggregation with the true models following processes that are much more complex and that display substantial cyclical behavior copyright 1992 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

equivalence versus indifference scales comparing income levels across families with different composition is a central issue for most welfare indicators and policies currently the dominant method relies on income based equivalence scales which raise a host of theoretical empirical and normative difficulties however a new approach based on the notion of indifference scales avoids most of these problems while leading to empirically tractable estimation methods i submit that time has come to abandon the traditional view in favour of the new concept

the diffusion of new agricultural technologies the case of crossbred cow technology in tanzania the recent literature on agricultural technology adoption shows that diffusion of new technologies varies significantly across space and time furthermore puzzles exist about why some seemingly profitable technologies are not adopted especially in livestock production we employ a hazard or duration function to explain diffusion of crossbred cow technology in a unique sample of tanzania farmers a farmer s adoption of crossbred technology depends positively on the proximity of his farm to other users on his schooling and on his access to credit and contact with extension agents

farm productivity in rwanda effects of farm size erosion and soil conservation investments this paper examines the effects of farm size soil erosion and soil conservation investments on land and labor productivity and allocative efficiency in rwanda there were several key results first there is a strong inverse relationship between farm size and land productivity and the opposite for labor productivity for smaller farms there is evidence of allocative inefficiency in use of land and labor probably due to factor market access constraints second farms with greater investment in soil conservation have much better land productivity than average those with very eroded soils do much worse than average smaller farms are not more eroded than larger farms but have twice the soil conservation investments third land productivity benefits substantially from perennial cash crops and the gains to shifting to cash crops are highest for those with low erosion and high use of fertilizer and organic matter program and policy effort to encourage and enable farmers to make soil conservation investments to use fertilizer and organic matter and to participate in cash cropping of perennials will have big payoffs in productivity land markets that allow smaller farmers to buy land could also increase aggregate productivity

a downward spiral research evidence on the relationship between poverty and natural resource degradation abstract many observers have conceptualised the link between rural poverty and environment as a downward spiral with population growth and economic marginalisation leading to environmental degradation recent micro scale empirical research challenges this model showing striking heterogeneity in environmental management by the rural poor their success in adapting to environmental change and the efficacy of policies in influencing outcomes local endowments conditions affecting the adoption of resource conserving technologies and local institutions supportive of the poor are key factors that condition poverty environment interactions and outcomes in relation to agriculture the main strategies to jointly address poverty and environmental improvement are to increase poor people s access to natural resources enhance the productivity of poor people s natural resource assets and involve local people in resolving public natural resource management concerns research is needed to support these strategies particularly to explore poverty environment agriculture interactions develop technologies for poor farmers and partner with local communities for action research on policies and programmes

location specificity settler type and productive efficiency a study of the mahaweli project in sri lanka increasing agricultural production and the reduction of rural inequality in income distribution are major goals of irrigated land settlement in developing countries we discuss the levels and determinants of observed differences in technical and allocative efficiency among farmers and the resulting inequality in a major irrigated land settlement scheme in sri lanka the analysis is carried out in three seperate stages first stochastic frontier production functions are estimated then farmer specific measures of efficiences are obtained on the basis of these functions finally these efficiency measures are regressed on several explanatory variables differences in human capital endowments among settler types as well as uneven distribution of water are important determinants of farmer efficiency

the adoption and impact of soil and water conservation technology an endogenous switching regression application this paper identifies the factors that affect farmers decisions to adopt soil and water conservation technology in africa and how this technology impacts farm yields and net returns this technology is important because it improves efficiency of water use from rainfall a critical issue in water deficient sub saharan africa an analysis of new data from a survey of 342 rice farmers in northern ghana shows that farmers education capital and labor constraints social networks and extension contacts and farm soil conditions mainly determine adoption of field ridging and the adoption of this technology increases rice yields and net returns significantly jel q15 q24

unbiased estimation of the half life to ppp convergence in panel data three potential sources of bias introduce complications for panel data estimation of the half life of purchasing power parity deviations they are bias induced by inappropriate cross sectional aggregation of heterogeneous coefficients small sample estimation bias of dynamic lag coefficients and bias induced by time aggregation of commodity prices all of these biases have been addressed individually in the literature in this paper we address all three biases in arriving at our estimates using an annual panel data set of cpi based real exchange rates for 21 oecd countries from 1973 to 1998 we obtain a point estimate of the unbiased half life of 3 0 years with a 95 confidence interval of 2 3 4 2 years

real business cycles in this paper we demonstrate how certain very ordinary economic principles lead maximizing individuals to choose consumption production plans that display many of the characteristics commonly associated with business cycles our explanation is entirely consistent with i rational expectations ii complete current information iii stable preferences iv no technological change v no long lived commodities vi no frictions or adjustment costs vii no government viii no money and ix no serial dependence in the stochastic elements of the environment we also provide a completely worked out example of the type of artificial economy we have in mind the time series properties of the example exhibit some major features of observed business cycles although this type of model may not be capable of explaining all of the regularities in actual business cycles we believe that it provides a useful well defined benchmark for assessing the relative importance of factors e g monetary disturbances

stochastic trends and economic fluctuations in a small open economy in this paper we describe how restricted vector autoregressions can be employed to examine the sources of macroeconomic fluctuations we show how cointegration restrictions can be used to identify a var system with common stochastic trends subject to transitory and permanent changes in average growth and how we may investigate the system s responses to permanent shocks i e to innovations to the trends theoretical cointegration vectors are derived from a small open economy growth model for terms of trade real gdp real consumption and real investments applying these methods to swedish annual data 1875 1986 we find that permanent real supply shocks account for most of the fluctuations in gdp even in the short run

market access by smallholder farmers in malawi implications for technology adoption agricultural productivity and crop income abstract in malawi maize is the major crop and food staple given limited off farm employment opportunities much needed increases in household income for improving food security must come from gains in agricultural productivity through better technology and more profitable crops in the past hybrid maize and more recently tobacco were promoted by policy for increasing smallholder income an analysis of determinants of adoption of these two crops and related income effects is presented apart from factor endowment and exposure to agroecological risks differences in the household s access to financial and commodity markets significantly influence its cropping shares and farm income