baseline value specification and sensitivity analysis in multiattribute project portfolio selection abstract a key issue in applying multi attribute project portfolio models is specifying the baseline value a parameter which defines how valuable not implementing a project is relative to the range of possible project values in this paper we present novel baseline value specification techniques which admit incomplete preference statements and unlike existing techniques make it possible to model problems where the decision maker would prefer to implement a project with the least preferred performance level in each attribute furthermore we develop computational methods for identifying the optimal portfolios and the value to cost based project rankings for all baseline values we also show how these results can be used to i analyze how sensitive project and portfolio decision recommendations are to variations in the baseline value and ii provide project decision recommendations in a situation where only incomplete information about the baseline value is available

distributive leakages of agricultural support some empirical evidence abstract the paper evaluates the transfer efficiency of the austrian bread grain policy taking into account distributive leakages i e how much of the transfers officially intended to support farm income are finally realised in the upstream and downstream industries gardner s am j agric econ 65 1983 225 well known measure of average transfer efficiency ate is augmented for the case of more than two social groups and computer intensive simulation procedures are utilised to deal with parameter uncertainty

evolution of the economics of agricultural policy agricultural economists helped develop farm programs to respond to the dire economic situation of the 1920s and 1930s some early authors appreciated that such policies created problems in markets for commodities and inputs over time our understanding of agricultural issues and policies has deepened through the application of improved models and tools of analysis to more extensive data we have developed better answers to old questions and have responded to changing policy instruments market contexts and policy concerns this article traces the evolution of our deepening economic understanding of the causes and consequences of agricultural policy

sectoral implications of farm program modifications the overall and distributional effects of farm programs and selected revisions are examined using a mathematical programming sector model the model incorporates market distortions caused by price supports target prices program participation deficiency payments and marketing loans current farm programs are found to increase producer prices depress consumer prices and in turn result in excess production and higher consumption and exports domestic and foreign consumers as well as domestic producers are subsidized by farm programs social deadweight loss occurs as government payments exceed welfare benefits received by consumers and producers society as a whole benefits from reductions in program provisions

redistributing income back to european community consumers and taxpayers through the common agricultural policy a multiple policy instrument generalization of gardner s surplus transformation curve analysis is applied to an empirical model of the ec wheat sector to compare welfare effects of policy change proposals a production quota support price combination is estimated as the most efficient means of making relatively small transfers from ec agriculture to consumers taxpayers a coresponsibility levy support price combination is estimated as the most efficient means of making larger transfers the importance of accounting for income transfer size distortions in related markets and the structure of markets when comparing welfare effects of policy change proposals is demonstrated

measuring the social costs of suboptimal combinations of policy instruments a general framework and an example abstract since most agricultural programs employ two or more policy instruments simultaneously it is notable that little research has attempted to find optimal instrument combinations and no research exists which evaluates the social costs unrealized benefits of combining instruments suboptimally in our paper we report a simple and feasible method to find optimal policy instrument combinations and we provide the first general formal approach to measuring the social costs of suboptimal policy instrument combinations our approach is illustrated in an analysis for five major u s crops corn feed grains wheat rice cotton the simple model we employ for the illustration suggests that except for the feed grains program the observed programs combined policy instruments quite suboptimally we conclude that agricultural economics research now can and should begin placing increased emphasis on studying optimal policy instrument combinations

impacts and incidence of agricultural commodity programs since the passage of the agricultural adjustment act of 1933 commodity programs have had a major impact on resource use and returns to factors in u s agriculture while the need to insulate domestic agricultural markets from the vagaries of international price movements has been emphasized in developing countries 2 farm price supports are often justified as a means of redistributing income from consumers to commodity producers 3 an important issue is whether producers are the ultimate beneficiaries of commodity programs john e floyd paul r johnson t d wallace and gordon c rausser and j w freebairn investigated social costs of commodity programs 4 these studies are based on estimates of producer and consumer surpluses that depend on price elasticities of demand and shortrun supply curves for example floyd employed linearly homogeneous production functions and demonstrated that in the short run farm price supports benefit landowners more than producers 5 recently d gale johnson focused on long run distributional consequences of commodity programs and argued that in the long run landowners are the recipients of all commodity program benefits if they do not benefit in the long run why do producers advocate price support programs for agricultural commodities the puzzle is resolved 1 if rent adjustment is slow and producers gain in the short run or 2 if producers are also landowners although the short run incidence of the benefits of commodity programs is influenced by the speed of

is the united states really underinvesting in agricultural research that the level of public investment in u s agricultural research is too low is widely accepted this paper argues that there are two important limitations to the evidence assembled in support of the underinvestment hypothesis a many authors have compared the social rate of return to public investments with the private rate of return to private investments b costs of public expenditures on agricultural research have been underestimated by a failure to account for the marginal excess burden of the tax collection system taking these two factors into account evidence in support of the underinvestment hypothesis is weakened considerably

when do export subsidies have a redistributional role if an export subsidy is efficient that is has a surplus transfer role then there exists an implicit function relating the optimal level of the subsidy to the income target in the agricultural sector if an export subsidy is inefficient no such function exists we show that dependence exists in large export equilibrium not in small export equilibrium and show that these results remain robust to concerns about domestic tax distortions the failure of previous work to produce this result stems from its neglect of the income constraint on producer surplus in the programming problem transferring s cons umersand taxpayersto farmers

a lorenz pareto measure of pure diversification several diversification and concentration measures have been proposed these measures play an important role in both research and practice in the fields of strategic management industrial economics antitrust regulation and organizational studies two problems with popular existing measures are their inappropriate performance on a benchmark example of the industrial organization literature and their lack of normalization into the unit interval this note proposes a measure that overcomes these deficiencies a distinction is drawn between two separate dimensions of diversification that we call scope and pure diversfication respectively we call attention to how such pure measures can be recombined with scope for the construction of special purpose multiattribute indices our proposed measure is simply related to the well known gini index but is entirely novel a convenient relationship to pareto s principle permits flexible description and interpretation

some neglected social costs of government spending in farm programs economic welfare analyses of farm programs typically assume that the direct social opportunity cost of subsidy payments is one dollar per dollar of government spending recent literature suggests that the marginal opportunity cost of a dollar of u s federal government spending is more likely to be in the range of 1 20 to 1 50 this implies that the net social costs of farm programs that involve government spending are significantly greater than the typical estimates in addition the normative efficiency ranking of alternative policies is sensitive to the marginal opportunity cost of government spending

the economics of coupled farm subsidies under costly and imperfect enforcement this study relaxes the assumption of perfect and costless policy enforcement found in traditional agricultural policy analysis and introduces enforcement costs and cheating into the economic analysis of output subsidies policy design and implementation is modeled in this paper as a sequential game between the regulator who decides on the level of intervention an enforcement agency that determines the level of policy enforcement and the farmer who makes the production and cheating decisions analytical results show that farmer compliance is not the natural outcome of self interest and complete deterrence of cheating is not economically efficient the analysis also shows that enforcement costs and cheating change the welfare effects of output subsidies the efficiency of the policy instrument in redistributing income the level of government intervention that transfers a given surplus to agricultural producers the socially optimal income redistribution and the social welfare from intervention

efficiency of decoupled farm programs under distortionary taxation when lump sum taxation is not feasible decoupled transfers to farmers which require raising government revenue will entail welfare loss somewhere in the economy assuming the government s objective is to assure a given welfare level for farmers we show that when decoupling is possible free trade is always superior to some tariff protection for a small country even under distortionary taxation as expected for a large country there is scope for an optimal tariff policy that improves the terms of trade however we show a separation between the exercise of market power through an optimal tariff and the interaction of distortionary taxation with transfers to farmers we conclude that decoupling is usually desirable even in a distorted economy in which lump sum taxation is not feasible

efficient income redistribution for a small country using optimal combined instruments abstract in this paper i improve gardner s surplus transformation curve framework by assuming that governments are able to vary many policy instruments simultaneously instead of only one i use my framework to find the combination of the currently used instruments which provides the most efficient income redistribution for the austrian bread grains market comparing the most efficient policy with the actual policy reveals that 464 10 6 austrian shillings were wasted i theoretically compare for a small country the transfer efficiency of every possible pair of the four major agricultural policy instruments floor price production quota co responsibility levy and deficiency payments without considering the marginal cost of public funds mcf deficiency payments cum quota equal to a fully decoupled direct income support is the most efficient policy succeeded by floor price cum quota and floor price cum deficiency payments if the mcf is taken into account the ranking crucially depends on the market parameters the transfer level and the value of the mcf for the austrian bread grains market i empirically demonstrate that given the present support level a fully decoupled direct income support redistributes income most efficiently as long as the mcf is lower than 1 17 beyond this value a floor price cum quota policy becomes more efficient a floor price cum deficiency payments policy is never superior to the floor price cum quota

modeling project preferences in multiattribute portfolio decision analysis abstract when choosing a portfolio of projects with a multi attribute weighting model it is necessary to elicit trade off statements about how important these attributes are relative to each other such statements correspond to weight constraints and thus impact on which project portfolios are potentially optimal or non dominated in view of the resulting set of feasible attribute weights in this paper we extend earlier preference elicitation approaches by allowing the decision maker to make direct statements about the selection and rejection of individual projects we convert such project preference statements to weight information by determining the weights for which i the selected project is included in all potentially optimal or non dominated portfolios or ii the rejected project is not included in any potentially optimal or non dominated portfolio we prove that the two complementary selection rules will exclude exactly the same set of weights however analyses that apply the dominance structure often lead to multiple mutually exclusive feasible weight sets and therefore the approach based on potential optimality is more relevant for practical decision analysis we also propose ex ante value of information measures to guide the elicitation of project preference statements and illustrate our results by analyzing a real case on the selection of infrastructure maintenance projects

the effects of farm commodity and retail food policies on obesity and economic welfare in the united states many commentators claim that farm subsidies have contributed significantly to the obesity epidemic by making fattening foods relatively cheap and abundant and symmetrically that taxing unhealthy commodities or subsidizing healthy commodities would contribute to reducing obesity rates in this article we use an equilibrium displacement model to estimate and compare the economic welfare effects from a range of hypothetical farm commodity and retail food policies as alternative mechanisms for encouraging consumption of healthy food or discouraging consumption of unhealthy food or both we find that compared with retail taxes on fat sugar or all food or subsidies on fruits and vegetables at the farm or retail levels a tax on calories would be the most efficient obesity policy a tax on calories would have the lowest deadweight loss per pound of fat reduction in average adult weight and would yield a net social gain once the impact on public health care expenditures is considered

on the design of agricultural policy mechanisms the fact that different agricultural policy mechanisms have emerged for different commodities suggests that the choice of policy instrument may reflect the goals of agricultural policy makers this paper uses the principles of mechanism design under asymmetric information to examine the motivations underlying the choice of agricultural policy mechanisms it is found that supply control mechanisms favor high cost producers and the budget while mechanisms resulting in overproduction favor low cost producers

a study of the impact of direct trade on taiwan s fishery sector with special reference to the effect of china s wto accession after taiwan became a member of the wto in 2002 its tariff rates for fishery products decreased by an average of 35 5 from the level in 2001 direct imports of fishery products from china would be allowed in 2004 these tariff reductions and the relaxation of import restrictions will have a strong effect on taiwan s fishery sector in this paper we present an analysis of how fishery production prices input usage and welfare distribution might react to trade liberalization in addition to evaluating the overall impact of tariff reduction on taiwan s fishery sector we assess the effects of china s wto accession on the taiwanese market we use a fishery sector equilibrium model in which 40 products and 68 fishing activities are identified the model also includes an import export subsector a factor input subsector and a supply demand equilibrium condition to analyze the distributions of social welfare due to trade liberalization three simulations are conducted to investigate the impact of tariff reductions in 2004 2 years after taiwan has jointed the wto the results indicate that taiwan s fishery sector will be adversely affected when it encounters the extremely low import prices of certain fishery products from china the total production of the fishery sector and its value are predicted to decrease by 4 03 and 9 96 respectively in 2004 aquaculture would suffer the heaviest loss with a 7 48 reduction in the production and a 19 23 reduction in its value the demand for labor will decrease by 8 71 the effect is most pronounced in aquaculture in which the demand for labor will go down by 11 40 and the wage rate will decline by 14 28 to meet the challenge of globalization the taiwanese fishery industry will have to diversify and improve its operational efficiency as well as production and distribution structures for a sustainable development

objectives and constraints of government policy the countercyclicity of transfers to agriculture estimates of government transfers to typical u s corn wheat and cotton farms are regressed on estimates of market derived farm income to show that u s farmers receive greater government transfers when they face relatively unfavorable market conditions this transfer countercyclicity is shown to be unrelated to potential deadweight losses constraining government transfers it is argued that prevailing political economy models have difficulty explaining transfer countercyclicity because they focus on political agents constraints to the neglect of political agents objectives

environmental and distributional impacts of conservation targeting strategies abstract resource purchasing funds have become a major tool for environmental protection and resource conservation these funds use various strategies to target resources for conservation the choice of which may lead to striking differences in environmental performance this paper develops an analytical framework to analyze the impact of alternative targeting strategies on different interest groups including consumers producers labor and environmentalists we show that ignoring the output price effect of purchasing funds reduces environmental gain and in some cases may make a purchasing fund counterproductive and we argue that the optimal design of targeting criteria must consider the price feedback effect

stop and go agricultural policies with a land market this article studies the design of farm policy in the presence of asymmetric information about farmers productivity a government objective to insure farmers a minimum parity income an endogenous land rent and diminishing returns on alternative nonprogram crop land uses in this setting acreage set asides are never part of an optimal farm policy although compensated acreage limits are when there are new farmer entrants who cannot be excluded from farm programs optimal policy takes the form of a pure voluntary acreage limitation or buyout program in which high cost producers participate and low cost producers do not copyright 2003 oxford university press

minimum cost strategies for sequestering carbon in forests this paper examines the costs of meeting explicit targets for increments of carbon sequestered in forests when both forest management decisions and the area of forests can be varied costs are estimated as welfare losses in markets for forest and agricultural products results show greatest change in management actions when targets require large near term flux increments while land area change is largest when long term increments are needed marginal costs per tonne of carbon flux do not vary greatly with the form of the target and are similar to findings of earlier studies for comparable size of average carbon flux increment

a multicommodity analysis of trade policy effects the case of nicaraguan agriculture agricultural trade policies for a small country are analyzed using a simple multicommodity quadratic programming agricultural sector model the policy conditions simulated include a quantitative trade restrictions given an uncertain world market b export taxation and c import subsidies the multicommodity sectoral wide coverage permits analysis of the factor product market linkages and enables identification of the distributional consequences

on the marginal welfare cost of taxation this paper develops a rigorous partial equilibrium analysis of the determinants of margin al welfare cost mwc of taxes on labor earnings it shows that four key parameters interact to determine the magnitude of mwc using aggregate data and plausible ranges of values for the parameters mwc can vary from under 10 percent to more than 300 percent of marginal tax revenue intermediate parameter values sugge st mwc is in the 25 50 percent range however the more extreme estimates cannot be ruled out on the basis of available evidence suggesting that mwc cannot yet be copyright 1987 by american economic association

cross subsidization due to inframarginal support in agriculture a general theory and empirical evidence a general theory of cross subsidization due to inframarginal support is developed two sources of output distortion are identified exit deterrence and extramarginal output some firms would not be in business without the subsidy cost savings due to declining average costs are always greater than the losses incurred where price equals marginal cost moreover it is theoretically possible for inframarginal subsidies to expand output more than equivalent fully coupled subsidies empirical analysis of u s dairy subsidies isolates these components of cross subsidization and finds distortions from inframarginal support to be substantial with implications for trade negotiations dispute settlement and policy formulation copyright 2008 oxford university press

causes of u s farm commodity programs this paper i s an attempt to explain variations by commodity in producer protection afforded by farm price support programs since the1930s particularly emphasized are theideas that these programs are essentially income redistributional measures and that given political forces the programs are attempts to redistribute efficiently variables associated with the cost to producers of generating political pressure and the social cost deadweight losses of redistribution are both found to be empirically important copyright 1987 by university of chicago press

the effect of agricultural policies on land use and environmental quality in this paper i consider the environmental quality gains that may be achieved by reducing agricultural income supports a new methodology is developed to estimate land use shares in an application to wisconsin milk price support reductions result in shifts of marginal agricultural land to forest reducing soil erosion and providing off site water quality improvements the environmental benefits are estimated to be at least as large as the decreased welfare burden on consumers and taxpayers indicating a central role for environmental quality considerations in motivating policy reforms and a more efficient means of achieving the environmental quality goals of land retirement programs

preference programming for robust portfolio modeling and project selection in decision analysis difficulties of obtaining complete information about model parameters make it advisable to seek robust solutions that perform reasonably well across the full range of feasible parameter values in this paper we develop the robust portfolio modeling rpm methodology which extends preference programming methods into portfolio problems where a subset of project proposals are funded in view of multiple evaluation criteria we also develop an algorithm for computing all non dominated portfolios subject to incomplete information about criterion weights and project specific performance levels based on these portfolios we propose a project level index to convey i which projects are robust choices in the sense that they would be recommended even if further information were to be obtained and ii how continued activities in preference elicitation should be focused the rpm methodology is illustrated with an application using real data on road pavement projects

scenario based portfolio selection of investment projects with incomplete probability and utility information abstract in the selection of investment projects it is important to account for exogenous uncertainties such as macroeconomic developments which may impact the performance of projects these uncertainties can be addressed by examining how the projects perform across several scenarios but it may be difficult to assign well founded probabilities to such scenarios or to characterize the decision makers risk preferences through a uniquely defined utility function motivated by these considerations we develop a portfolio selection framework which i uses set inclusion to capture incomplete information about scenario probabilities and utility functions ii identifies all the non dominated project portfolios in view of this information and iii offers decision support for rejection and selection of projects the proposed framework enables interactive decision support processes where the implications of additional probability and utility information or further risk constraints are shown in terms of corresponding decision recommendations

structuring resource allocation decisions a framework for building multi criteria portfolio models with area grouped options multi criteria portfolio modelling has been extensively employed as an effective means to allocate scarce resources for investment in projects when considering costs benefits and risks some of these modelling approaches allow the grouping of projects into organisational areas thus also supporting the decision of resource allocation among organisational units in a way that is collectively efficient for the organisation however structuring in practice a portfolio model using this latter type of approach is not a trivial task how should areas be defined where should new projects be included how should one define the criteria to evaluate performance as far as we know there is very little indication in the operational research and decision sciences literatures on how to structure this type of model this paper suggests different ways to structuring portfolio models where projects are divided into areas and evaluated by multiple criteria and illustrates their use in two action research projects drawing on these experiences it then suggests a general framework for the structuring of such models in practice directions for future research are also identified

livestock disease indemnity design when moral hazard is followed by adverse selection averting or limiting the outbreak of infectious disease in domestic livestock herds is an economic and potential human health issue that involves the government and individual livestock producers producers have private information about preventive biosecurity measures they adopt on their farms prior to outbreak ex ante moral hazard and following outbreak they possess private information about whether or not their herd is infected ex post adverse selection we investigate how indemnity payments can be designed to provide incentives to producers to invest in biosecurity and report infection to the government in the presence of asymmetric information we compare the relative magnitude of the first and second best levels of biosecurity investment and indemnity payments to demonstrate the tradeoff between risk sharing and efficiency and we discuss the implications for status quo u s policy

climate change interactions with agriculture forestry sequestration and food security climate change can negatively affect crop productivity decreasing food production in many regions across the world literature suggests forest carbon sequestration fcs is a good alternative to mitigate climate change due to its ability to sequester carbon at low cost nevertheless fcs subsidies have not been addressed together with impacts on food security and climate change reduced crop yields in our multidisciplinary work we collected the crop yield shocks from global circulation crop modeling we also developed a new version of a computable general equilibrium model for the economic analysis thus we evaluate the global economic impacts of using carbon taxes and fcs to achieve 50 emission reductions we find that implementing an aggressive fcs incentive can cause substantial increases in food prices because of land competition between forest and crop production without climate induced yield reductions fcs is attractive but not with the yield reductions with the climate induced yield shocks food price increases are huge so large that it is clear this approach could not be adopted in the real world the results cry out for investment in agricultural research on climate adaptation our findings suggest economic well being falls more without mitigation than with 50 emission reductions

food costs and the 1988 us drought abstract alternative government stock policies are evaluated in terms of their effects on the us livestock sector and consumer food prices before and after the 1988 drought using a comprehensive model of the us agricultural sector stock levels associated with the food security act of 1985 fsa85 are compared with those of a reduced stock policy this option reduced government corn stocks to zero and lowered overall stocks by almost 2 million bushels prior to the drought saving taxpayers about 15 billion compared to the observed level of spending associated with fsa85 however consumers were projected to spend almost 40 billion more following the drought in higher food particularly meat costs because of the dramatic shock lower corn stocks would have on corn prices and the livestock sector

optimal strategies for selecting project portfolios using uncertain value estimates abstract practically all organizations seek to create value by selecting and executing portfolios of actions that consume resources typically the resulting value is uncertain and thus organizations must take decisions based on ex ante estimates about what this future value will be in this paper we show that the bayesian modeling of uncertainties in this selection problem serves to i increase the expected future value of the selected portfolio ii raise the expected number of selected actions that belong to the optimal portfolio ex post and iii eliminate the expected gap between the realized ex post portfolio value and the estimated ex ante portfolio value we also propose a new project performance measure defined as the probability that a given action belongs to the optimal portfolio finally we provide analytic results to determine which actions should be re evaluated to obtain more accurate value estimates before portfolio selection in particular we show that the optimal targeting of such re evaluations can yield a much higher portfolio value in return for the total resources that are spent on the execution of actions and the acquisition of value estimates

cropping activities in agricultural sector models a methodological proposal sector models may be constructed using two fundamentally different approaches first there are the large price endogenous reviewed in mccarl and spreen or cost minimizing reviewed in heady and srivastava sector models hereafter called sm second there are modeling systems which contain a large number of representative farms sharples and schaller walker and dillon or thomson and buckwell hereafter called rfsm the representative farm models not emphasized in this paper consist of many farm models which usually are iteratively solved into an equilibrium bell and hazell present an application in which simultaneous equilibrium is determined on the other hand the sm sector models divide a country into regions each containing aggregate activities and constraints typically these models exhibit a rather poor replication of regional crop mix e g schaller or burton flexibility constraints often are used to correct these deficiencies sahi and craddock sharples and schaller

in search of rational government what political preference function studies measure and assume political preference function ppf studies assume that policy making can be described by a mathematical problem in which a rational government maximizes a function of interest groups welfares the purpose of my paper is to explain in depth ramifications of ppf study assumptions and methodology ppf studies that attempt to measure interest group political power do so by measuring marginal rates of transformation along a pareto frontier one can estimate political power with a ppf only if observed policies are pareto efficient which may depend on the assumed number of interest groups and policy instruments marginal rates of transformation need not reveal anything meaningful about interest group political power and may incorrectly measure the direction of transfers

budgetary and producer welfare effects of revenue insurance legislation passed in 1996 changed the way the u s federal government acts to reduce risks faced by u s crop products the authors compare the new alternative forms of revenue insurance to the 1990 deficiency payment program and to a no program alternative they estimate the effects of the alternative polices on the acreage allocations of a representative farm on the expected government cost and on producer welfare simulation results indicate that a revenue insurance scheme that guarantees 75 percent of expected revenue to risk averse produced could provide approximately the same level of benefits as the 1990 program at as little as one fourth the cost

least cost cheap food policies some implications of international food aid abstract many low income countries pursue cheap food policies in which consumers pay subsidized prices for bread rice and other staples this paper addresses the issue of why different governments select different food subsidy policies using multiple instruments rather than a simple across the board subsidy to provide consumers with access to cheap food it examines the optimal structure of cheap food policies in the context of a partial equilibrium model in which the country may be large in trade and is able to combine import subsidies or tariffs and output taxes or subsidies to transfer income to consumers through the market the model allows for a marginal opportunity cost of government revenues greater than one dollar in addition in the model food aid from overseas may be either given away to the consumer or given to the government for subsequent sale in the domestic market the results indicate that only by happenstance will a country choose to use a pure consumption subsidy or a pure import subsidy to transfer income to consumers in addition an increase in international food aid does not necessarily lead the government to reduce producer and consumer prices for a commodity

efficient redistribution using quotas and subsidies in the presence of misrepresentation and cheating this paper introduces misrepresentation and cheating into the policy analysis of output quotas and subsidies analytical results show that when cheating occurs output quotas are a less efficient means of income redistribution than is traditionally believed as well cheating increases the transfer efficiency of output subsidies the result is that an all or nothing choice between quotas and subsidies will generally favor the use of subsidies a combination of quotas and subsidies however usually remains the most efficient means of income redistribution through market intervention a key assumption in agricultural policy analysis is that farmers follow the provisions of the policy instruments in the manner desired by the policy maker or alternatively that it is costless to ensure that farmers do so in reality however farmers may be expected to act opportunistically when faced with an agricultural policy when a production quota is in effect farmers may cheat by overproducing and selling the above quota amount through alternative channels under an output subsidy scheme farmers may report and collect on a greater quantity of production than they actually produced the possibility of misrepresentation and cheating arises because it is costly to determine farmers actions because of this cost farmers are in a position to misrepresent their quantity of production and or to cheat very few studies have incorporated misrepresentation or cheating in theoretical agricultural policy analysis one exception is alston and smith who raise the question of cheating and black market activity in an examination of rationing in an industry with an effective minimum price policy in place studies that deal with farmer opportunism can also konstantinos giannakas is an assistant professor in the department of agricultural economics university of nebraska lincoln murray fulton is director centre for the study of co

when do export subsidies have a redistributional role reply our differences are three the first arises from the belief that a nonzero value for the optimally chosen policy instrument implies that the instrument is efficient for redistribution alston smith and vercammen p 543 paragraph 3 consider the two equations 1 o f p3 and 2 f 3 r h a p3 representing the solution to the problem of maximizing weighted marshallian surplus using simultaneously a per unit border intervention 9 and a per unit domestic intervention wr in the solution parameter ot denotes the weight applied to producer surplus parameter p denotes the weight applied to government revenues consumer surplus is implicitly weighted one and the country in question is small in the sense that it is unable to affect world price by any of its domestic adjustments see the appendix details of the forms of the functions f p and h ot p are easily derived but what matters in the context of alston smith and vercammen s comment is redistributivep referencest hatf avorp roducers are consistent with higher values alpha and whereas the optimal domestic intervention 7r has both alpha and beta effects the optimal border intervention r has only a beta effect it does not have a redistributional role garth holloway is reader in agricultural economics and statistics department of agricultural and food economics school of agriculture policy and development university of reading the author is very grateful to xavier irz bhavani shankar chittur srinivasan colin thirtle and richard tiffin for their comments and their wisdom and to mario mazzochi marinos tsigas and cal turvey for their scholarship including help in tracking down a fairly complete collection of the papers that cite alston and hurd they are not responsible for any errors or omissions note in equation 1 that the border intervention is positive whenever a distortion exists because 8 0 implies 3 1 8 1 and thus f p 0 see appendix using alston smith and vercammen s definition the instrument is now efficient and therefore has a redistributive role but now suppose that the distortion is removed so that 3 1 8 1 8 0 and consequently the border intervention is zero according to alston smith and vercammen the instrument is now inefficient and has no redistributive role the reader will note that this thought experiment has said nothing about supporting farm incomes and so has nothing whatsoever to do with efficient redistribution of course the definition is false it follows that a domestic distortion arising from the excess burden argument 3 1 8 8 0 does not make an export subsidy efficient the export subsidy having only a beta effect does not have a redistributional role the second disagreement emerges from the comment that holloway uses an idiosyncratic definition of the relevant objective function of the government alston smith and vercammen p 543 paragraph 2 the objective function that generates equations 1 and 2 see the appendix is the same as the objective function used by gardner 1995 when he first questioned alston carter and smith s claim that a domestic distortion can make a border intervention efficient in transferring surplus from consumers and taxpayers to farmers the objective function used by gardner 1995 is the same objective function used in the contributions that precede it and thus defines the literature on the debate about borderversus domestic intervention streeten yeh paarlberg 1984 1985 orden gardner 1985 the objective function in the latter literature is the same as the one implied in another literature that originates from wallace and includes most notably gardner 1983 but also alston and hurd amer j agr econ 86 2 may 2004 549 552 copyright 2004 american agricultural economics association this content downloaded on tue 15 jan 2013 07 58 41 am all use subject to jstor terms and conditions 550 may 2004 amer j agr econ the objective function in holloway is this same objective function it is of course marshallian surplus 1 the third disagreement concerns scholarship the comment does not seem to be cognizant of several important papers especially bhagwati and ramaswami and bhagwati both of which precede corden 1974 1997 but also lipsey and lancaster and moschini and sckokai one important aspect of alston and hurd and one extremely important result in holloway this oversight has some unfortunate repercussions first it misdirects to the wrong origins of intellectual property second it misleads about the appropriateness of some welfare calculations third it prevents alston smith and vercammen from linking a finding in holloway pp 242 43 with an old theorem lipsey and lancaster that settles the controversy alston carter and smith 1993 1995 gardner 1995 and presently alston smith and vercammen about the efficiency of border intervention in the presence of domestic distortions

are government transfers efficient an alternative test of the efficient redistribution hypothesis the efficient redistribution hypothesis says that no available government policies are pareto superior to observed government policies efficient redistribution from government policy is a central tenet of much recent theoretical and applied political economy literature in this paper limitations of previous attempts to test the efficient redistribution hypothesis are discussed and an alternative test of the efficient redistribution hypothesis that uses vector optimization theory and bootstrap methodology is presented

adverse selection in reverse auctions for ecosystem services this paper examines how auctions for ecosystem services introduce adverse selection limiting cost effectiveness induced value experiments test theory and examine the extent of adverse selection in these markets in comparison to the baseline of either doing nothing or the optimality of an externality correcting tax a discriminatory reverse auction and two screening contracts are tested in limited budget situations the auction achieved the lowest social surplus while screening contracts that rely upon the government observing the development value yield the highest relative social surplus these results are important because recent environmental policy trends are focused on expanding fiscally costly reverse auctions jel q57 q58

the goals of u s agricultural policy a mechanism design approach this article examines motivations underlying the government s choice of alternative policy mechanisms for subsidizing agriculture optimal policies are analyzed for three government objectives one where the government wishes to ensure a minimum level of net income for all farmers a second where the government s only concern is to transfer income from consumers and taxpayers to the farm sector and a final augmented income transfer objective the analysis offers an explanation for agricultural policy mechanisms that involve overproduction by high cost producers relative to a free market equilibrium such a distortion might arise from the existence of nonmarket values for the production of relatively high cost farmers in the government s objective

partial market liberalization and the efficiency of policy reform the case of the european dairy sector this article analyzes the efficiency of partial market liberalization and policy reform with an application to the european dairy sector in a second best world partial moves toward market liberalization are not always efficiency improving we develop a general equilibrium model to investigate the efficiency implications of discrete changes in government policy the analysis covers price and quantity instruments used in both domestic and trade policy we derive simple conditions under which partial market liberalization is efficiency improving we apply the approach to agricultural policy reform in the european dairy sector and identify market liberalization scenarios that are not efficiency improving

economic potential of biomass based fuels for greenhouse gas emission mitigation use of biofuels diminishes fossil fuelcombustion thereby also reducing net greenhousegas emissions however subsidies are neededto make agricultural biofuel productioneconomically feasible to explore the economicpotential of biofuels in a greenhouse gasmitigation market we incorporate data onproduction and biofuel processing for thedesignated energy crops switchgrass hybridpoplar and willow in an u s agriculturalsector model along with data on traditionalcrop livestock production and processing andafforestation of cropland net emissioncoefficients on all included agriculturalpractices are estimated through crop growthsimulation models or taken from the literature potential emission mitigation policies ormarkets are simulated via hypothetical carbonprices at each carbon price level theagricultural sector model computes the newmarket equilibrium revealing agriculturalcommodity prices regionally specificproduction input use and welfare levels environmental impacts and adoption ofalternative management practices such asbiofuel production results indicate no rolefor biofuels below carbon prices of 40 perton of carbon equivalent at these incentivelevels emission reductions via reduced soiltillage and afforestation are more costefficient for carbon prices above 70 biofuels dominate all other agriculturalmitigation strategies

phasing out of environmentally harmful subsidies consequences of the 2003 cap reform abstract subsidies linked to production have been classified as environmentally harmful by the oecd a core element of the eu 2003 common agricultural policy cap reform is to decouple income support from production this paper estimates the environmental consequences of this policy reform an agricultural sector model using a modified version of the positive mathematical programming method depicts the complex natural structural and political relationships of austrian farming changes in management measures can be analyzed with respect to their environmental effects by using appropriate indicators simulation results show that the 2003 cap reform will reduce the average cost of production and may improve environmental conditions regarding soil water and greenhouse gases when compared to a scenario without reform thus the new cap is likely to bring about outcomes which the previous reform agenda 2000 promised but did not deliver

judging agricultural policies a survey this survey provides a structured picture of 40 years of literature which uses welfare economic tools to judge agricultural policy challenges and developments of normative agricultural policy analysis are discussed in an easily accessible graphical framework it is shown how the literature has gone from examining a very small discrete set of simple policies to a much broader often continuous set of policies that combine policy instruments simultaneously the importance of the pareto criterion used to explore the limits of how government can affect welfare is revealed moreover given the importance of the objective of income redistribution in agricultural policy agricultural economists have often departed from the purely efficiency oriented tradition in economics it is shown that they have tried to incorporate equity considerations by either adding these criteria as constraints to the social welfare function or directly incorporating these criteria in the functional form of the social welfare function

taxes and subsidies in vertically related markets in the framework of a two country two good partial equilibrium model where one of the commodities the bulk commodity is an intermediate input in the production of the second good the processed good we assume that the government wishes to transfer income to both bulk commodity and processed good producers our analysis is concerned with efficient redistribution the instruments are subsidies or taxes and there is an opportunity cost of public funds we use the targeting principle to characterize the set of optimal subsidies or taxes applied on both the bulk commodity and the final good in this vertically related market structure the theoretical analysis is illustrated using the example of cereals the bulk commodity and pork and poultry the processed good in the european union

developing a global diversification measure previous measures focusing on either the international market or product dimension of corporate diversification have been unsatisfactory for analyzing global diversification since both dimensions constitute important elements of a firm s global diversification strategy this study constructs a measure in which both dimensions can be captured allowing business strategy researchers to examine corporate diversification in the global context in accomplishing this task this study extends the jacquemin berry entropy diversification measure to the global horizon

a meta analysis of general and partial equilibrium simulations of trade liberalisation under the doha development agenda model based simulation of welfare effects is commonly used to make a case for trade liberalisation and to inform participants a nd stakeholders in trade negotiations however the simulated welfare effects of trade liberalisation vary greatly even across studies that model similar liberalisation scenarios this

the relative efficiency of voluntary vs mandatory environmental regulations abstract increased use of voluntary programs for environmental protection as an alternative to mandatory approaches raises the issue of the relative efficiency of the two approaches this paper analyzes the efficiency of voluntary programs relative to mandatory programs in agriculture under the voluntary program producers adopt a land conservation practice and in turn the government provides technical and financial assistance the voluntary program is more efficient than a program that mandates adoption if and only if the deadweight losses of government expenditures under the voluntary program are less than the difference between private and public costs of government services plus the additional implementation costs of the mandatory program this necessary and sufficient condition is more likely to be satisfied when a the deadweight loss from raising government revenue is zero or small b government services are less rival c the costs of government services are lower than what farmers would have to pay for equivalent private services d the number of farms in the program is large and e the saving in implementation costs under the voluntary program is large and increases rapidly with program acreage

consumer s surplus without apology the purpose of this paper is to settle the controversy surrounding consumer s surplus and by so doing to validate its use as a tool of welfare economics i will show that observed consumer s surplus can be rigorously utilized to estimate the unobservable compensating and equivalent variations the correct theoretical measures of the welfare impact of changes in prices and income on an individual i derive precise upper and lower bounds on the percentage errors of approximating the compensating and equivalent variations with consumer s surplus these bounds can be explicitly calculated from observable demand data and it is clear that in most applications the error of approximation will be very small in fact the error will often be overshadowed by the errors involved in estimating the demand curve the results in no way depend upon arguments about the constancy of the marginal utility of income consequently this paper supplies specific empirical criteria which can replace the apologetic caveats frequently employed by those who presently apply consumer s surplus moreover the results imply that consumer s surplus is usually a very good approximation to the appropriate welfare measures to preview below i establish the validity of these rules of thumb for a

policy dependency and reform economic gains versus political pains economic analysis condemns market intervention in favour of farmers as inefficient and ineffective and therefore worthy of radical reform practical experience however indicates that such lessons are hard to learn and implement economic analysis tends to ignore the path dependencies generated by the policy evolution process without reform strategies that take full account of these dependencies policy reform will continue to be reluctant slow and frequently counterproductive this paper reconsiders the evolution of farm policies and the economic assessment of their costs and benefits in so doing it re phrases conventional economic arguments in terms which seem to accord better with sensible intuition which may prove more accessible and credible to policymakers and advisors the difficulties of reconciling economic efficiency with political acceptability are identified the paper concludes with a substantial challenge to the agricultural economics profession

sequestration offsets versus direct emission reductions consideration of environmental co effects abstract atmospheric greenhouse gas accumulation and consequential temperature increase can be remedied by emission reductions or agricultural carbon sequestration both options have direct and external environmental effects this paper examines the magnitudes of existing estimates of corresponding external co effects and how they could affect optimal combination of emission reductions and agricultural carbon sequestration we discuss whether government intervention in the form of taxation subsidization is justified for internalizing the externalities considering their relative magnitudes implementation costs and potential benefits that could be derived from such intervention we conclude that the existing estimates of external benefits from sequestration and emission reduction do not provide enough support for allocating resources to alter the market mix of carbon sequestration and direct emission reduction strategies

analysis of the carbon sequestration costs of afforestation and reforestation agroforestry practices and the use of cost curves to evaluate their potential for implementation of climate change mitigation abstract carbon sequestration in forest sinks is an important strategy to remove greenhouse gases and to mitigate climate change however its implementation has been limited under the clean development mechanism of the kyoto protocol which has not created the incentives for widespread implementation the objective of this paper is to analyze the sequestration costs of agroforestry afforestation and reforestation projects arps following a partial market equilibrium using average cost curves and economic break even analysis to identify the supply costs the modelling done in this work contrasts the voluntary and clean development mechanism transaction costs data is based on the voluntary project scolel te being implemented in mexico cost curves are developed for seven different sequestration options considering transaction and implementation costs information from agricultural production in chiapas mexico is used to integrate opportunity costs of two agroforestry practices suggesting that sequestration costs may follow a u shape with an initial reduction due to economies of scale and a subsequent increase caused by high opportunity costs the widespread implementation of agroforestry options not requiring complete land conversion e g living fences and coffee under shade might be cost effective strategies not generating high opportunity costs results also suggest that payments in the early years of the project and lower transaction costs favour the development of arps in the voluntary market especially in marginal rural areas with high discount rates

selecting a portfolio of solar energy projects using multiattribute preference theory this article reports a procedure developed to assist the u s department of energy in selecting a portfolio of solar energy applications experiments the procedure has also been used in other government procurements and appears to be applicable in a variety of project funding processes the technical quality of each proposed applications experiment was summarized through the use of multiple evaluation measures or attributes these were combined into a single index of the overall technical quality of an experiment through the use of a multiattribute utility function recently derived results in measurable value theory were applied to derive an index of the overall technical quality of a portfolio of experiments budgetary and programmatic issues were handled through the use of constraints this approach allowed the portfolio selection problem to be formulated as an integer linear program details of the application are presented including a discussion of the data requirements and assessment procedure used the portfolio selection procedure was successfully applied and variations of it have been successfully used in four other solar energy procurements

adjustable robustness for multi attribute project portfolio selection abstract robust portfolio modeling rpm supports multi attribute project portfolio selection with uncertain project scores and decision maker preferences by determining non dominated portfolios for all possible realizations of uncertain parameters decision recommendations produced by rpm may prove too conservative for real life decision problems we develop a methodology to reduce the set of possible realizations by limiting the number of project scores that may simultaneously deviate from their most likely value by adjusting this limit decision makers can choose desired levels of conservatism our approach also allows to capture dependencies among project scores as well as uncertainty in portfolio constraints

responsiveness of rural and urban land uses to land rent determinants in the u s south ricardian and von thunen land rent models are combined into a single land use share model including farm forest and urban land uses the land share model is applied to the southern united states and elasticities are extracted that measure land share response to changes in population income land values prices and costs in counties with different degrees of urbanizationt he study explores the effect of treating either rural or urban land as a residual use while this practice is common in existing land use studies it is found to significantly affect parameter estimates in this county level analysis

measurement issues in the evaluation of projects in a project portfolio abstract a common problem arising in many domains is how value the benefits of projects in a project portfolio recently there has been some attention given to a decision analysis practice whereby analysts define a value function on some criterion by setting 0 as the value of the worst project in particular clemen and smith have argued this practice is not sound as it gives different results from the case where projects are priced out and makes a strong implicit assumption about the value of not doing a project in this paper we underscore the criticism of this way of using value functions by showing it can lead to a rank reversal we provide a measurement theoretic account of the phenomenon showing that the problem arises from using evaluating projects on an interval scale such as a value scale whereas to guard against such rank reversals benefits must be measured on at least a ratio scale seen from this perspective we discuss how the solution proposed by clemen and smith of reformulating the underlying optimisation problem to allow for explicitly non zero values addresses the issue and explore in what sense it may be open to similar problems in closing we discuss what lessons from practice may be drawn from this analysis focussing on settings where the clemen and smith proposal may not be the most natural way of modelling

rationalizing agricultural export subsidies export subsidies are an important form of agricultural policy especially for large traders such as the united states and the european community a number of small countries also use export subsidies in effect e g saudi arabian wheat or canadian dairy products in that the domestic price is set well above world levels and surplus production is dumped onto the world market a number of recent contributions to trade theory have argued that export subsidies can be welfare enhancing for the subsidizing country and by implication that the policy choice is consistent with the hypothesis that a benevolent government is pursuing pareto efficiency in the present paper we examine these arguments and present an alternative explanation of export subsidies utilizing the concept of efficient redistribution becker gardner 1983 in standard trade models arguments in favor of global export subsidies arise from failure to exploit market power in another good itoh and kiyono feenstra itoh and kiyono use a threegood model to show that subsidies on marginal goods defined as goods not exported at all or exported in small quantities can increase welfare in the subsidizing country a subsidy on marginal goods causes their production to increase and the supply of nonmarginal goods to decrease thereby raising the price of the nonmarginal goods and increasing the exporter s terms of trade feenstra also employs a threegood model and demonstrates that it is possible for the pattern of substitutability and complementarity across goods to allow subsidies to increase welfare the necessary condition is that the subsidized export be a stronger substitute for another exported good or a stronger complement for an imported good in the subsidizing country than abroad the export subsidy increases welfare by improving the terms of trade in the other imported or exported good the distortion in feenstra s model is the failure to exploit market power in the second or third market as an alternative to global export subsidies abbott paarlberg and sharples aps have examined targeted export subsidies and found that in some circumstances they can be welfare improving dutton later showed the aps result arises because they first constrain the export tax to the rest of the world to be zero so that it becomes theoretically possible for the best export tax to the targeted country to be negative the aps result hinges on differences in import demand elasticities and the exporting country s use of market power in order to price discrim

the economic consequences of substituting carbon payments for crop subsidies in u s agriculture there is a growing body of literature on the costs of sequestering carbon however no studies have examined the interplay between farm commodity programs and carbon sequestration programs this study investigates two dimensions of the interaction between farm commodity programs and afforestation programs using a price endogenous sector model of agriculture in the united states first this study compares the fiscal and welfare costs of achieving specific carbon targets through afforestation with and without current farm programs second it examines the welfare fiscal and carbon consequences of replacing existing farm subsidies wholly or in part with payments for carbon two approaches hicksian and marshallian are investigated in the first the sector model is used to quantify the carbon consequences and fiscal costs associated with various combinations of farm commodity and carbon sequestration programs that leave consumers and producers in the u s agricultural sector no worse off than under existing farm programs the second approach focuses on the carbon and welfare consequences of various farm commodity and carbon sequestration programs that hold total program fiscal costs constant at current levels althouth the methodology and data are applied to the united states the issues addressed are common in a number of developed nations particularly within the european union eu adapting existing sector models in these nations to perform similar analyses would provide policy makers with more precise information about the nature of the trade offs involved with second best policies for replacing farm commodity subsidies with tree planting subsidies

reconsidering agri environmental policy permitted by the uruguay round agreement agri environmental policies are increasingly being used to redress the balance between jointly produced agricultural and environmental outputs and are permitted by the uruguay round ur agreement with the general provision that they not distort trade in this paper we argue that any market consequences of efficient welfare enhancing agri environmental policies should not be considered trade distorting to consider them so is inconsistent with economic efficiency and with ecological integrity social cost benefit analysis cba is a more appropriate test and guide of trade consistency for agri environmental policies and using trade effects as the test may not enhance social welfare moreover specific provisions in the ur agreement restricting payments under agri environmental policies to opportunity costs are not warranted on economic efficiency grounds and consign the environment to a status subsidiary to agricultural output

targeting green payments under a budget constraint this paper examines the impact of regulatory budget constraints on subsidy rates intended to reduce farm emissions this paper focuses on the impact that subsidy rates developed under a limited budget may be optimally differentiated to target in addition to marginal damages features such as abatement costs income transfer and producers participation in the policy the degree to which subsidy rates optimally target these other features depends on how the subsidy is implemented or on how benchmarks for pollution abatement are defined eight hypothetical farms were subjected to five budget levels under three policy scenarios 1 optimally set benchmarks 2 historical benchmarks and 3 uniform benchmarks setting subsidy rates equal to the imputed marginal benefits of abatement is not necessarily optimal under budget constraints and when the regulatory authority is restricted in setting the subsidy benchmark when the benchmark is restricted optimal subsidy rates target marginal costs and income transfer to producers in addition to marginal benefits the optimal subsidy rates in the context of a uniform benchmark were essentially uncorrelated with benefits given a budget large enough to optimally fund a large diverse group of producers

agricultural policies in the presence of distorting taxes this article analyzes how distortionary factor taxes affect the welfare impacts of production subsidies production quotas acreage controls subsidies for acreage reductions and cash transfers to farmers pre existing taxes substantially raise the costs of all these policies these additional costs reflect the welfare losses from financing certain policies by distortionary taxes they also reflect interactions with factor markets caused by changes in the costs of producing agricultural output previous studies ignore the latter types of effect consequently they significantly overstate the costs of production subsidies and understate the costs of production quotas acreage controls and subsidies for acreage reductions

reversal of fortune immiserizing technical change in agriculture several recent studies have reported the possibility of immiserizing technical change in agriculture in these studies the interaction of government commodity policy and technical change has been shown potentially to lead to a loss of national welfare a negative rate of return to research the purpose of this paper is to tie these recent results to the earlier results of bhagwati and johnson on immiserizing growth technical change and to offer a more general condition for describing the impacts of distortions on the benefits from technical change

contract design for the purchase of environmental goods from agriculture an environmental stewardship program whereby farmers are paid directly for the environmental goods they provide is developed by combining the microparameter distribution model with mechanism design principles the program overcomes the information asymmetry between farmers and governments and accounts for the deadweight losses from distortionary taxes the characteristics of optimal input and payment schedules of the program are derived these optimal schedules are determined by the tradeoffs between farming profits environmental benefits and deadweight losses from taxes and are second best except under restrictive conditions on deadweight losses from taxes and on the marginal product of inputs and marginal pollution costs

the incidence of agricultural policies abstract a general equilibrium model is used to analyze agricultural policy incidence in the presence of distortionary income taxation the incidence of lump sum transfers to farmers supply control through input retirement and production subsidies are considered partial equilibrium incidence calculations are shown to systematically overstate the benefits farmers receive from farm programs kaldor s compensation test is used to judge the relative efficiency inefficiency of alternative farm programs at the margin supply control through input retirement may dominate decoupled lump sum transfers if the tax system is very inefficient and subsidy payments are high

selecting a portfolio of nonhomogeneous r d proposals abstract this article reports a procedure developed to assist the u s department of energy in the selection of a portfolio of proposals addressing the design and manufacture of components of solar photovoltaic arrays and complete photovoltaic systems considerations such as the relative importance of the different components in the overall effort compatibility of the proposed designs and budgetary and programmatic issues were complicating factors the technical quality of each proposal was represented by multiple evaluation measures these were combined into a single index through the use of multi attributeutility function indices representing the relative importance of the various components were then developed and results in measurable value theory were applied to derive an index of technical quality of a portfolio of proposals the problem was then formulated as an integer program it was solved by using an interactive branch and bound code that allowed for sensitivity analysis before selecting the portfolio of proposals for funding the procedure was successfully applied to funding a portfolio of proposals aimed at reducing the cost of producing photovoltaic arrays and to several other government sponsored procurements

credit market imperfections and the distribution of policy rents this article shows that credit market imperfections have important implications for the distribution of policy rents in a model with land as fixed factor and credit market imperfections when an area payment is given land rents go up by more than the subsidy on aggregate farms may lose from the subsidy the results depend on the extent to which subsidies have direct and indirect effects on the credit constraints on whether farms rent or own land and on farm heterogeneity

endogenous policy and supply management in a post gatt world previous studies of the effects of agricultural trade policy reform have treated internal policies for supply managed commodities as exogenous in our model however quotas on imports are chosen jointly with domestic production quotas to balance total wel fare and its distribution among producers consumers importers and taxpayers gatt and nafta regulations impose minimum import access requirements on supply managed com modities we show the unintended consequences of these regulations which arise from the induced adjustment of domestic quota policies using canadian supply management as an example

eu agri environmental programs and the restaurant table effect the share of agricultural area enrolled in eu agri environmental programs varies significantly between eu member states these national differences are explained based on a model that reflects both that these programs internalize externalities and the political economy we identify six factors that affect the extent to which agri environmental programs are implemented environmental benefits opportunity costs of participation budgetary pressure the share of program expenditures financed by the eu the political weight attributed to farmers at the national and the political influence of each country at the eu level in addition we demonstrate that if the policy decision making process is noncooperative at the eu level countries that contribute less to the eu budget will ceteris paribus implement more programs using data of four years and feasible generalized least square methods we are able to confirm our theoretical results including a noncooperative behavior of eu member states

modeling agricultural supply response using mathematical programming and crop mixes mathematical programming models are widely used in agricultural sector analysis however the lack of micro level data as well as computational requirements necessitate the aggregation of individual producers into representative units when working at the sectoral level this usually leads to unrealistic extreme specialization in supply responses in 1982 mccarl introduced the historical crop mixes approach to avoid extreme specialization we extend this approach by generating additional synthetic crop mixes using supply response elasticities and systematically varied commodity prices in addition to avoiding extreme specialization this approach provides flexibility when future supply responses can be vastly different from past responses an application to u s biofuel policy analysis is presented

distinguishing between related and unrelated international geographic diversification a comprehensive measure of global diversification this paper argues that it is important to distinguish between related and unrelated international geographic diversification when measuring impact of diversification on performance it then extends the jacquemin berry entropy measure to propose a comprehensive measure of global diversification that comprises related and unrelated product diversification and related and unrelated international geographi diversification it suggests a classification of firms based on diversification strategies and proposes hypotheses for future research

unintended impacts of public investments on private decisions the depletion of forested wetlands by affecting relative economic returns infrastructure investments can induce major changes in private land use the authors find that 30 percent of forested wetland depletion in the mississippi valley has resulted from private decisions induced by federal flood control projects despite explicit federal policy to preserve wetlands the model aggregates individual land use decisions using a parametric distribution of unobserved land quality dynamic simulations are used to quantify the impacts on wetlands of federal projects and other factors copyright 1990 by american economic association