forest dependence and income distribution in a subsistence economy evidence from india abstract we examine an area of northern india where forestry acts to ameliorate the incidence of poverty and destitution though it does not otherwise contribute significantly to the reduction of income inequality the poor would be doubly disadvantaged without common property access to forest products conservation measures entailing curtailment in the right to common access pose a dilemma this issue is explored here

the ambiguous impact of inequality on local resource management abstract the impact of inequality on the ability of human groups to undertake successful collective action is investigated with special reference to overexploitation of common property resources in voluntary provision problems on the one hand inequality has an ambiguous impact on the feasibility of the efficient outcome even though better endowed agents contribute more to collective action in regulated settings on the other hand inequality tends to reduce the acceptability of available regulatory schemes and therefore to make collective action more difficult

the environment and emerging development issues development economics for the most part has failed to recognize renewable environmental resources as economic goods yet the lives of the poor in developing countries are intimately tied to the fate of their local common property resources soil fuel wood water and so on ignoring the loss of common property renewable resources via degradation centralization or privatization in calculations of net national product can mask the destruction of resources available to a country s poor behind the false appearance of a growing national economy this paper describes the difference between the problem of managing local common property resources in developing countries and the problem of protecting the global commons such as the atmosphere and oceans it outlines the calculations that would include the local commons in the national income accounting of capital assets and argues that the interests of those most dependent on the increasingly scarce local commons will be best served by placing control in their hands while the central government provides infrastructure and educational support to control the pollution of the global commons on the other hand the paper sketches a plan in which most countries would have a high incentive to participate a global allocation of limited tradable permits to discharge defined pollutants

internal r d effort external imported technoloogy and economic value added empirical study of taiwan s electronic industry technology innovation is a significant resource in the contemporary knowledge based economy the main sources of technology innovation are internal r d effort and external imported technology two primary traditional production factors are physical capital and labour the theoretical basis for this study is an evolutionary cobb douglas production function explaining the effects of four resources internal r d effort imported technology physical capital and labour on a firm s sales and economic value added eva time series cross section panel data from 219 taiwan electronic manufacturers between 1990 and 2003 were employed for fixed effect model major empirical findings were observed in this study first internal r d effort can positively affect a firm s sales and eva conversely imported technology is found to have had no significant effect on sales and eva second although both physical capital and labour affect a firm s sales more than the effects of internal r d and external imported technolog

agricultural household models extensions applications and policy this book presents the basic model of an agricultural household that underlies most of the case studies undertaken so far the model assumes that households are price takers and is therefore recursive the decisions modeled include those affecting production and the demand for inputs and those affecting consumption and the supply of labor comparative results on selected elasticities are presented for a number of economies the empirical significance of the approach is demonstrated in a comparison of models that treat production and consumption decisions separately and those in which the decisionmaking process is recursive the book summarizes the implications of agricultural pricing policy for the welfare of farm households marketed surplus the demand for nonagricultural goods and services the rural labor market budget revenues and foreign exchange earnings in addition it is shown that the basic model can be extended in order to explore the effects of government policy on crop composition nutritional status health saving and investment and to provide a more comprehensive analysis of the effects on budget revenues and foreign exchange earnings methodological topics primarily the data requirements of the basic model and its extensions along with aggregation market interaction uncertainty and market imperfections are discussed the most important methodological issues the question of the recursive property of these models is also discussed

the conservation reserve program as a least cost land retirement mechanism mechanism design theory is used to characterize the properties of a least cost crp if marginal land rents decrease with acres farmed then a least cost crp is a set of nonlinear price schedules if marginal land rents are independent of acres farmed then an offer system constitutes a least cost crp the least cost offer system gives a useful estimate of the upper bound of a least cost crp empirical results suggest that a 34 million acre crp should have cost no more than 1 billion per year

competition based environmental policy an analysis of farmland preservation in maryland policy makers have turned to competition based voluntary enrollment programs as a cost effective way to achieve preferred land uses this paper studies bidder behavior in an innovative auction based program in which farmers compete to sell and retire the right to develop their land we derive a reduced form bidding model that includes private and common values this model allows us to estimate the role of bidder competition winner s curse correction and the underlying distribution of private values we estimate that the auction enrolled as many as 3 000 acres 12 more than a take it or leave it offer would have enrolled for the same budgetary cost

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

priorities in cost sharing for soil and water conservation a revealed preference study a number of studies have questioned how successfully paid land diversion has been adapted to address broad environmental policy concerns similar evaluations of cost sharing programs have not been performed this paper uses a revealed preference approach to estimate the implicit decision criteria used to allocate federal cost sharing funds in maryland during the fiscal years 1994 through 1996 funds appear to have been awarded preferentially to projects that enhanced agricultural productivity and farm profitability in contrast to findings regarding the crp however our results do not indicate that cost share awards in maryland were inconsistent with stated environmental quality priorities

payments for ecosystem services programs predicting landowner enrollment and opportunity cost using a beta binomial model this paper concerns predicting enrollment in payment for ecosystem services pes programs to promote habitat preservation on private lands we develop a beta binomial model to address both program participation and the amount of land enrolled by each potential enrollee we apply the estimation approach to stated preference data from non industrial private forest owners in finland as an alternative econometric model we also develop a multivariate censored regression model of enrollments using cross validation we find that the beta binomial model predicts at least as well as the multivariate censored model yet has fewer parameters using our estimation results we demonstrate policy predictions regarding program enrollment and landowner opportunity cost

r d and the growth of firms empirical analysis of a panel of italian firms abstract this paper deals with the growth of firms and with their innovative activities the main hypothesis of the paper maintains that firms with a strong commitment to r d have a higher rate of growth because they succeed in the product market after a review of the related literature the paper presents an econometric analysis of the r d growth of firms relation based on a database of italian firms data on a sample of 500 firms with time series in the range 1989 1997 were drawn from the mediocredito survey of italian manufacturing descriptive analysis shows that the sales growth rate of firms with r d is higher than that of firms without r d econometric analysis is performed in two steps first we apply a panel unit root test im k pesaran h shin y 1997 testing for unit roots in heterogeneous panels dae university of cambridge mimeo to verify whether the firm size significantly affects firm growth the test confirms gibrat s law that firm size has a stochastic trend second we explore whether there are variables with stochastic trends that could account for firm size according to our estimates the growth rate of firms is positively correlated with research intensity in these estimates a further interesting result is that investment in ict is not significant or shows a parameter with negative sign

household inventories and marketed surplus in semisubsistence agriculture a model of semisubsistence agriculture explicitly accounting for the ability of farm households to hold inventories of staple foods is developed comparative statics analysis highlights the potential importance of wealth effects attributable to price induced changes in the value of household inventories empirical results for three groups of households in an indian village confirm that failure to account for household inventories leads to an overstatement of the responsiveness of both consumption demand and marketed surplus

targeting public investments by agro ecological zone to achieve growth and poverty alleviation goals in rural india abstract this paper shows that improved technology and rural infrastructure have made important contributions to agricultural growth and poverty reduction in india however these effects have varied widely across agro ecological zones in the past the government has devoted more resources to irrigated areas and this has led to significant production growth and poverty reduction in those areas however as investments in irrigated areas continue to increase their marginal returns diminish and it is now in many of the rainfed areas including some of lower agricultural potential where the marginal returns from additional government investments in technology and infrastructure are largest

the interaction of population growth and environmental quality an important question for policy is whether holding constant per capita income and other relevant factors population pressures have a significant effect upon environmental degradation the authors examine the effect of population pressures upon deforestation in 64 developing countries in an attempt to provide relevant empirical findings data on deforestation were drawn from the food and agriculture organizations production yearbook results suggest that a relationship exists between per capita income and deforestation and that for africa rural population density shifts the relationship upward the increase in the rate of deforestation levels off as income increases the rate of growth in per capita income also has a significant negative impact upon deforestation although the magnitude of the effect is small the authors close in stressing that reducing the rate of population growth is not necessarily the best way to reduce the rate of deforestation deforestation in developing countries is really a problem of market failure since property rights are often neither defined nor enforced there is essentially no private cost of deforestation with no long term stake in the land people have no incentive to use land efficiently this situation must be addressed in conjunction with the problems of poverty and population growth

the population problem theory and evidence this study is concerned with the relationships among population growth poverty and environmental degradation with particular focus on the situation in developing countries the author rejects the concept of a general theory of fertility behavior in favor of an interpretation of these relationships which might be applicable to certain situations in the poorest parts of the indian subcontinent and sub saharan africa such situations include unacceptable risks of maternal death for poor illiterate women and a condemnation to extreme poverty in conditions of the deterioration of local resources and of the environment the author concludes that population growth rates are too high in certain specific areas and that an appropriate policy reaction to such conditions would be to try to change the options that men and women face so that their reasoned choice would be to lower their fertility

aggregation bias in the economic model of crime this paper uses county level panel data to test the appropriateness of the one size fits all reduced form regression approach commonly used when estimating the economic model of crime empirical results provide initial evidence that previous studies which restrict deterrent effects to have identical impacts across crime types may be presenting statistically biased results

empirical regularities in the poverty environment relationship of rural households evidence from zimbabwe abstract analysis of rural households and environmental resources is beset by inadequate data especially in africa using purpose collected panel data from zimbabwe we demonstrate seven empirical regularities in the rural poverty environment relationship most important environmental resources make a significant contribution to average rural incomes poorer households also depend heavily on these resources which contribute c 40 to their incomes richer households however use greater quantities of environmental resources in total finally considerable differentiation exists in the economic characteristics of environmental goods these results demonstrate the considerable economic significance of environmental resources to rural households surveys which ignore them miscalculate rural incomes and welfare

intra generational equity and sustainable welfare a time series analysis for the uk and sweden this paper discusses the importance of intra generational equity to sustainable development it outlines a number of methodologies for measuring income inequality in the economy and presents several possible ways of incorporating the impact of distributional effects into measures of welfare in the economy the authors highlight in particular an index developed by atkinson atkinson a b 1970 distributive politics and economic growth q j econ may 465 490 based on the social welfare model this method possesses two main advantages over other methods firstly it is expressed directly in terms of social well being secondly value judgements incorporated into the measure are made explicit through the parameter o which expresses society s degree of aversion to income inequality the paper calculates the value of the atkinson index for two case study countries sweden and the uk between 1950 and 1996 for a central estimate of o0 8 the results show that the welfare loss due to inequalities in the distribution of income varied between 5 and 10 for sweden and between 6 and 14 for the uk with the higher values coming towards the end of the period the paper explores the sensitivity of these results to changes in the value of o for the case of the uk and discusses the relevance of the work to the measurement of sustainable welfare 2000 elsevier science b v all rights reserved

poverty and environmental degradation a review and analysis of the nexus abstract there is much controversy surrounding the poverty environmental degradation nexus the predominant school of thought argues that poverty is a major cause of environmental degradation and if policy makers want to address environmental issues then they must first address the poverty problem another school of thought argues that a direct link between poverty and environmental degradation is too simplistic and the nexus is governed by a complex web of factors in this paper a formal structure for analyzing the complex web of factors is formulated and used to review the existing literature on the links between poverty and the degradation of four natural resource sectors the analysis highlights the important role institutional and market failure in encouraging agents from various income groups to exhibit unsustainable activities which in turn forces some of the agents to fall into poverty another important factor is the role of conflicts between different agents income groups in the povertyenvironmental degradation nexus the analysis also highlights the presence of feedback loops between environmental degradation and poverty

the drivers of export value added in china s provinces a multi regional input output model it is vital to calculate chinese provinces exports in domestic and global value chains from the perspective of value added to address the problem of double counting in this study we calculated t

optimal conservation programs asymmetric information and the role of fixed costs an increasing number of environmental protection programs offers financial compensation to farmers in exchange for conservation services incentive compatible contracts can be designed to mitigate excess compensation but the extant literature suggests that outcomes are always second best so that other instruments such as conservation auctions may be preferred we argue that the claim regarding the first best solution never being incentive compatible is correct if all conservation costs are variable in nature if there are fixed costs too the first best compensation scheme may be incentive compatible after all given the relevance of fixed costs in conservation issues we conclude that incentive compatible contracts should be given a second chance as a policy measure to induce conservation

cost effectiveness of alternative green payment policies for conservation technology adoption with heterogeneous land quality this paper quantitatively analyses the cost effectiveness of alternative green payment policies designed to achieve a targeted level of pollution control by heterogeneous microunits these green payment policies include cost share subsidies that share the fixed costs of adoption of a conservation technology and or input reduction subsidies to reduce the use of a polluting input the paper shows that unlike a pollution tax that achieves abatement through three mechanisms a negative extensive margin effect a negative intensive margin effect and a technology switching effect a cost share subsidy and an input reduction subsidy are much more restricted in the types of incentives they provide for conservation of polluting inputs and adoption of a conservation technology to control pollution moreover they may lead to varying levels of expansion of land under production costs of abatement with alternative policies and implications for production and government payments are compared using a simulation model for controlling drainage from irrigated cotton production in california with drip irrigation as a conservation technology

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

old age pensions and fertility in rural areas of less developed countries some evidence from mexico this paper reviews the theoretical relationship between old age pensions and human fertility and offers preliminary evidence from mexico on the direction and magnitude of the effect on fertility of the introduction of a formal old age pension system the security motive is an untested but plausible hypothesis especially for rural areas where alternative methods for caring for the elderly if they exist are likely to be relatively risky and unprofitable a number of different effects can theoretically be expected following introduction of a system of old age pensions in such areas including a savings reduction effect and life cycle effects such as effects on the time phasing of labor force participation and of consumption and effects on family fragmentation and intergenerational transfers and on the sex composition of the labor force and the allocation of family resources between the sexes information costs uncertainties about various aspects of the social security system and the possibility of differences between desired and actual fertility must also be considered given the long list of possible effects and offsetting influences and uncertainties about the magnitudes of such effects the actual outcome can only be resolved empirically data on sugar cane workers who began to be covered by a social security system in 1963 in 34 contiguous rural municipalities in the papaloapan river basin in southeastern mexico were used to test the relationship a regression analysis of the determinants of change in the child woman ratios in the 34 municipalities from 1960 70 indicated among other findings that the proxy used for the influence of participation in an old age pension system had a significantly negative effect on fertility an increase in social security participation from 0 to 50 would appear to reduce the child woman ratio by more than 1 10 despite the simplicity of the testing procedure shortcomings in the available data and the possibility of specification bias the results indicate that the security motive may be important and requires further empirical and theoretical research

a complete solution to a class of principal agent problems with an application to the control of a self managed firm this paper considers a class of principal agent problems which have the following features 1 there is adverse selection because the principal ignores the value of one parameter of the agent s true characteristics 2 leaving aside the information parameter the principal s welfare as well as the agent s welfare depend on two types of variables observable to both of them the first ones possibly multidimensional are called action variable s and the second one which is one dimensional has in general the meaning of a money transfer 3 the principal is a stackelberg leader of the two person game he can commit himself to decision rules which are admissible on informational grounds he optimizes within the adequate class taking into account besides the agent s reaction one constraint which has generally the meaning of an individual rationality constraint and sometimes of a feasibility constraint the optimization is limited to the class of non stochastic mechanisms 4 the problem can also receive an alternative interpretation the principal faces a continuum of agents of unknown characteristics the distribution being known however stylized principal agent problems of this type have often been considered in the economic literature in particular the reader will later be able to recognize that the standard income tax model a la mirrlees 1971 the quality or quantity choice model of the monopolist a la mussa and rosen 1978 or maskin and riley 1982 and the model of government regulation of the private monopolist of baron and myerson 1982 all belong to

economic growth and the rise of forests although forests have diminished globally over the past 400 years forest cover has increased in some areas including india in the last two decades aggregate time series evidence on forest growth rates and income growth across countries and within india and a newly assembled data set that combines national household survey data census data and satellite images of land use in rural india at the village level over a 29 year period are used to explore the hypothesis that increases in the demand for forest products associated with income and population growth lead to forest growth the evidence is consistent with this hypothesis which also shows that neither the expansion of agricultural productivity nor rising wages in india increased local forest cover

implementing second best environmental policy under adverse selection abstract a key obstacle to practical application of mechanism design theory to regulation is the difficulty of obtaining consistent beliefs regarding information that theoretical models assume to be commonly held this article presents a solution to this problem by developing an easily implemented empirical methodology with which the government can use available data to develop beliefs regarding the technology and distribution of types in a regulated sector characterized by hidden information results are used to calibrate a second best land conservation mechanism and evaluate its cost relative to simpler alternatives

market value r d and patents abstract a significant relationship is found between the market value of the firm and its intangible capital proxied by past r d expenditures and the number of patents based on a time series cross section analysis of data for large u s firms

the effect of conservation priority areas on bidding behavior in the conservation reserve program we explore how a landowner s bid to enroll in the conservation reserve program crp is influenced by his parcel s designation as a conservation priority area cpa a theoretical model of a landowner s optimal bid is presented and we demonstrate the ambiguity in a landowner s optimal bid response to cpa designations the bid choice is analyzed using a data set of accepted and unaccepted offers during three crp sign up periods we focus empirically on a subset of offers from the prairie pothole cpa to identify whether bid responses to exogenous location factors differ across landowners with varying opportunity costs to enrollment jel q15 q18

income and the environment in rural india is there a poverty trap we study the relationships between rural income distributions and changes in environmental conditions in southern western and central india between 1994 95 and 2000 01 other than the relatively rich we find that all income strata benefit from an improved environment and intermediate expenditure households benefit more than the very poor in absolute terms higher median consumption expenditures and richness are estimated to increase environmental decline but we do not find a significant impact of income poverty on local environmental health the results do not support the poverty trap conjecture with environmental degradation driving expenditure reductions that promote offsetting aforestation which benefits the poor

population and the environment a parable of firewood and other tales the author analyzes the relationship between population and the environment with a focus on the role which environmental degradation and natural resources depletion may play in producing the population pressure which lies behind such degradation and depletion especially in developing countries the principal conclusion of this analysis is that the possibilities for a stable equilibrium between human population and its environment are quite limited i show that parental altruism toward their children can only make matters worse if socially unchecked by leading to an increase of the birthrate in every environmental state in comparison with that which would occur in its absence excerpt

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

an incentive approach to land set aside programs abstract this paper is devoted to a theoretical analysis of policies aiming at reducing the supply of agricultural produce through contractual or mandatory land set aside the model relies on contract theory under adverse selection it allows us to evaluate the impact of asymmetric information about yields on the optimal price support policy and on land set aside specifically we analyze an optimal contractual policy consisting of a subsidy system which makes transfers dependent on the set aside area and a policy of mandatory land set aside applying uniformly to all farms and ignoring incentive constraints numerical simulations allow us to assess and compare the respective effects of these policies

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

open technology innovation activity and firm value evidence from korean firms despite the importance of open technology innovation activity otia for firm value the literature investigating effects of otia announcements of developing country firms is not known in international academic circles our study using an event study approach examines the effects of otia technology import and joint r d announcements of firms in korea one of the leading developing and highly innovative countries we find that the announcements of otia produce positive average abnormal returns interestingly unlike the prior studies on developed country firms otia with firms in the homogenous industry leads to greater firm value than that involving firms in heterogenic industries this implies an importance of a technological fusion with external firms in different industries for value of developing country firms in addition this article finds no home bias that a nationality of partner firms is not essential for the relation between otia and value of firms

poverty and resource dependence in rural india abstract previous studies of rural households in developing countries have tended to find that the dependence of these households on common pool resources declines with income our study of households in jhabua india finds a more complex relationship using the share of resource income in total long run or permanent income as our dependence measure which we argue is more appropriate than the short run income based measure commonly used in the literature we find that for households that collect any resources at all dependence exhibits a u shaped relationship with income that is the poorest and richest households depend more on resources than households with intermediate incomes the poorest and richest households are also found to be least likely to collect however indicating that resource use at the income extremes is bimodal either zero or above average moreover the observed trends for resources as a whole are not mirrored in those for individual resources dependence on fuelwood and dung declines with income for example while dependence on fodder and construction wood increases these findings suggest that common pool resources are a productive source of income not just for the poor but also for the rich and that improvements in the stocks of these resources can potentially form the basis of poverty reduction efforts in these economies

incentives for wetland creation abstract when information about soil quality is complete wetland creation with a take it or leave it contract which specifies wetland size and transfer yields higher social benefits than if a uniform contract which offers a payment proportional to the wetland size had been used this result points to a paradox because uniform contracts have been used a lot in practice this article concentrates on the presence of asymmetric information about soil quality as a possible explanation for this paradox it shows that the choice of instrument for wetland creation has welfare implications different contracts typically yield quite different social welfare surpluses and distribution between interest groups it is not obvious which of four contracts studied dominates when a farm characteristic affecting costs is unknown to the social planner the probability distribution of the characteristic the size of the excess burden the elasticity of costs and benefits to wetland size and the cost of acquiring missing information influence the outcome

the economics of a public fund for environmental amenities a study of crp contracts the problem of targeting crp purchases to buy environmental amenities under productivity and environmental heterogeneity is considered gini coefficients and lorenz curves are used to measure the effectiveness of spending under alternative targeting criteria the environmental benefits considered are water erosion wind erosion surface water quality and wildlife habitat the three alternative targeting criteria examined include purchasing land according to i the benefit to cost ratio ii the level of benefits and iii the level of cost results indicate that the degree of variability and correlation determine the extent to which suboptimal targeting achieves a significant portion of available environmental benefits

implementable ramsey boiteux pricing in agricultural and environmental policy agricultural producers frequently face price discrimination that is based either on characteristics of their products or on the physical manner in which the product is produced we consider how to set such discriminatory prices optimally and show that for a very broad range of production technologies the first best voluntary policy which involves a modified version of ramsey boiteux pricing is implementable even in the presence of hidden knowledge by farmers about their types

optimal environmental regulation of politically influential sectors with asymmetric information abstract politically motivated subsidies can have undesired environmental consequences asymmetric information regarding firm productivity constrains the government s ability both to redistribute income and control emissions taking political and information constraints as given this article characterizes a social welfare maximizing policy the optimal policy uses a single instrument to achieve both goals making income support subsidies contingent upon pollution reduction price variation allows the government to design contracts with countervailing incentives potentially eliminating some firms information advantage