designing and rating an area yield crop insurance contract this article documents the design and rate making procedures used in the development of the group risk plan grp the new federal crop insurance product that insures based on area yield the authors of this article worked closely with personnel in the federal crop insurance corporation and others in developing methodological and practical constraints needed in implementing a workable area yield contract grp indemnity payments are made based on percentage shortfalls in actual county yields relative to a forecasted yield historical county yield data are used to develop forecasted yields and premium rates

job displacement from agriculture unlike manufacturing employers small agricultural employers are generally not required to participate in the unemployment insurance system which leaves many farm workers ineligible for unemployment benefits theory implies that displaced workers who are ineligible for benefits experience shorter jobless spells and a lower reemployment wage with data from the displaced workers survey we show that displaced agricultural workers spend 4 6 fewer weeks unemployed and upon reemployment earn 9 less than displaced manufacturing workers not surprisingly in states where small agricultural employers are required to participate in the unemployment insurance program postdisplacement outcomes for agricultural and manufacturing workers are similar copyright 2010 oxford university press

linear adjustment costs and seasonal labor demand evidence from retail trade firms standard models of dynamic labor demand rely on the presence of adjustment costs to explain the observed smoothness in employment patterns although the costs are often difficult to quantify the experience rating feature of the u s unemployment insurance ui system provides a measurable linear cost of adjustment using a unique data set with administrative data on over 8000 firms i estimate the effect of a ui induced linear adjustment cost on seasonal labor demand in retail trade i find strong support for the large role of adjustment costs in reducing the employment response of firms to seasonal fluctuations in demand

patents as a measure of technology shocks and the aggregate u s labor market i introduction one of the dominant approaches to macroeconomic research in the past several decades has been the island paradigm of friedman 1968 and phelps 1970 in this framework economic agents operate under incomplete information regarding relative and absolute prices when making economic decisions this paradigm is used in the rational expectations literature see mccallum 1980 and the references therein in a market clearing framework to study among other things the effects of fiscal and monetary policies in aggregate economic systems this market clearing model is sufficiently popular that it is rare to find a textbook treatment of macroeconomics that omits this new classical model of the aggregate economy one component of this aggregate economic model is a labor market where nominal wages are flexible 1 this approach to the labor market was developed by lucas and rapping 1969 in their model it is assumed that labor suppliers operate under incomplete information about the aggregate price level thereby raising the possibility that output produced in the economy will vary with the level of price expectations 2 despite its central role in explaining economic fluctuations in a popular model of the economy there is surprisingly little evidence available in previous research testing the implications of this model of the labor market one objective of the present study is to provide some empirical evidence on this market clearing model of the labor market in carrying out such a test it will be necessary to provide an explanation for the nonstationary nature of labor market series such as real wages and employment one possible explanation for this apparent nonstationarity would be the technology shocks frequently used in the real business cycle literature e g long and plosser 1983 where it has often been assumed that these shocks are i 1 unobservable stochastic processes thus these shocks to the production function may be used as a way of explaining why macroeconomic time series are also i 1 a similar mechanism involves the possibly nonstochastic scalar preceding the aggregate production function in the economic growth literature this magnitude called the solow residual measures the growth in aggregate output that cannot be explained by the growth of quality adjusted factor inputs in production this residual is sometimes thought to be measured by the stock of knowledge used by economic agents barro and sala i martin 1995 p 351 increases in the stock of knowledge enable the aggregate economy to produce more goods and or new goods from quality adjusted resource levels when knowledge increases if the stock of knowledge is nonstationary then so too would be output and other magnitudes in an aggregate economy 4 thus the nonstationary nature of aggregate data can be explained by a nonstationary element of the aggregate production function whether stochastic or deterministic however that variable is interpreted if the sources of the apparent nonstationarity in macroeconomic data are assumed to be unobservable i 1 stochastic processes an implication of this fact is that the inability to measure technology shocks renders it impossible to test the implications of economic models that would arise if these shocks could be measured for example if technology shocks are i 1 then optimizing behavior by households and firms will result in cointegrating relationships between technology shocks and choice variables set by the public if it were possible to measure shocks to the production function one could test for these long run cointegrating relationships and the parameters of these cointegrating vectors could be estimated 5 in addition it is desirable to explicitly incorporate technical change into economic models if it could indeed be measured because doing so may result in more reliable estimates of structural parameters of economic interest and it may permit improved tests of economic hypotheses

fiscal versus traditional market variables in canadian migration this paper evaluates the hypothesis that the influence of traditional market variables on migration in canada has diminished over time this is attributed to a crowding out process whereby growth of social security type programs has cushioned the effects of say unemployment and thus motivation to migrate for jobs and fiscal policies have exerted unintended effects implications are that market forces that would work naturally to induce migration from low to high income regions and thus equalize earned incomes have been short circuited and that traditional tools of manpower policy for influencing migration such as job creation skill enhancement or wages are less effective currently than they might have been in the past

real options approach to inter sectoral migration of u s farm labor the core of the literature on inter sectoral labor migration is based on net present value models of investment in which individuals are assumed to migrate to take advantage of positive wage differentials in this article we argue that a real options approach taken together with the adjustment costs associated with sectoral relocation may provide a basis for explaining the migration of farm labor out of the agricultural sector given the irreversibility of migration decisions and uncertainty in the economy potential migrants might choose to postpone migration even in the face of positive wage differentials using annual u s employment data from between 1948 and 2009 our results indicate that large elasticities between economic incentives and out farm migration are observed after a high threshold of wage differentials between farm and off farm sectors is surpassed

cyclical and causal relations between real wages and employment in the eu this paper analyses and compares the joint behaviour of real wages and employment over the business cycle in the european union eu economies using both annual and quarterly data since 1960 further investigation of the cointegrating properties and the existence of causal effects in the real wage employment relation is undertaken by employing appropriate var models the evidence suggests weak procyclical or acyclic behaviour of real wages relative to cyclical employment in the quarterly data and stronger procyclicality in the annual data thus confirming the dunlop tarshis result for the majority of the eu economies with a few exceptions no cointegrating relations were detected while the granger causality tests suggest either weak or lack of unidirectional causality finally the sensitivity analysis showed that the filtering method has not much influence on the results but the choice of deflator may overturn them in certain cases

federalism chinese style the political basis for economic success in china china s remarkable economic success rests on a foundation of political reform providing a considerable degree of credible commitment to markets this reform reflects a special type of institutionalized decentralization that the authors call federalism chinese style this form of decentralization has three consequences first it fosters competition not only in product markets but also among local governments for labor and foreign capital this competition in turn encourages local government experimentation and learning with new forms of enterprises regulation and economic relationships second it provides incentives for local governments to promote local economic prosperity finally it provides a significant amount of protection to local governments and their enterprises from political intrusion by the central government

modeling conditional yield densities given the increasing interest in agricultural risk many have sought improved methods to characterize conditional crop yield densities while most have postulated the beta as a flexible alternative to the normal others have chosen nonparametric methods unfortunately yield data tends not to be sufficiently abundant to invalidate many reasonable parametric models this is problematic because conclusions from economic analyses which require estimated conditional yield densities tend not to be invariant to the modeling assumption we propose a semiparametric estimator that because of its theoretical properties and our simulation results enables one to empirically proceed with a higher degree of confidence copyright 2003 oxford university press

a time series analysis of representative agent models of consumption andleisure choice under uncertainty this paper investigates empirically a model of aggregate consumption and leisure decisions in which utility from goods and leisure is nontime separable the nonseparability of preferences accommodates intertemporal substitution or complementarity of leisure and thereby affects the comovements in aggregate compensation and hours worked these cross relations are examined empirically using postwar monthly u s data on quantities real wages and the real return on the one month treasury bill the estimated values of the parameters governing preferences differ significantly from the values assumed in several studies of real business models several possible explanations of these discrepancies are discussed

legal status and earnings of agricultural workers agricultural workers who work in the united states earn 15 more on average than do undocumented workers these earnings differentials vary substantially with demographic characteristics for example much of the weekly earnings loss from not having legal status can be offset by language ability most of the earnings differential is due to wage differentials rather than hours differentials

migratory labor and agriculture farm workers are shown to respond strongly to economic incentives to seasonally migrate for work the economic model is specified with separate earnings structures for migratory and nonmigratory work and a reservation wage for migration is specified to reflect the choice between migratory and nonmigratory work the empirical model adjusts for self selectivity in the sample and demonstrates that domestic farm workers sort themselves into migratory and nonmigratory workers in a manner consistent with the theory of comparative advantage implications for immigration and government employment and training programs are considered

implications of immigration policies for the u s farm sector and workforce i background in 1942 the united states and mexico signed the bracero program a formal agreement to draw seasonal labor to work in u s agriculture which provided employment opportunities to poor rural mexicans 1 however this program was abolished in 1964 ending the legal seasonal labor supply to u s agriculture in the southwestern states concurrently the united states passed the immigration act of 1965 establishing a quota of 120 000 legal immigrants per year the abandonment of the bracero program the new legal immigrants quota limits and economic inequality between the united states and mexico paved the way for steady entry of illegal laborers and led to eventual insurmountable illegal immigration population in the united states because illegal immigration was not a serious problem in the 1960s and 1970s legislation addressed only the number of legal immigrants allowed to enter the united states but in the 1980s illegal immigration began to emerge as a national problem and extensive debates entrenched around issues such as preventing the entry of unauthorized workers providing public services to illegal immigrants and even legalizing these workers consequently the u s congress attempted to address the immigration problems by enacting the 1986 immigration reform and control act irca the goals of irca were to eliminate the stock of undocumented workers through amnesty 2 and domestic enforcement of employer sanctions and curb the influx of illegal immigrants by increasing the border surveillance amnesty failed to eliminate the stock of illegal immigrants because only about half of the illegal immigrants filed for citizenship and it created future expectation of amnesty and more illegal unauthorized entry furthermore domestic sanctions on employers of undocumented workers and deportation of these workers were scantly enforced to stop the influx of immigrants irca focused heavily on tightening border control the irca also legislated the h 2a program which allowed agricultural employers to bring in guest workers during seasonal operations ers 2007 however farmers complained that the cumbersome paperwork of h 2a and bureaucratic delay were not conducive to procure seasonal laborers at the time of peak farm operations such as vegetable and fruit picking 3 in spite of irca s amnesty provision and strengthened control measures illegal immigration continued to rise about 12 million unauthorized immigrants resided in the united states in 2007 martin 2007 which is reaffirmed by many popular press reports leading to an extended congressional debate that began at the start of this decade to solve the illegal immigration problem several bills were proposed by the house of representatives the senate and the white house addressing issues related to increased domestic and border enforcements 4 paths to citizenship and guest worker programs montgomery 2006 these bills were not passed because of major disagreements among lawmakers over providing citizenship and guest worker programs as a result of the failed legislations and the september 11 attack the government primarily focused on border security accordingly funding for border enforcement has steadily increased 5 and resources were diverted from domestic to border enforcement however boucher and taylor 2007 documented that increased funding to secure the border did not deter undocumented workers from crossing the border because determined immigrants eventually find a way to enter the country by repeated attempts following september 11 2001 the u s immigration and customs enforcement ice further decreased the number of human hours devoted to worksite inspection because monitoring critical infrastructure took priority gao 2005 for example from 1999 to 2003 the number of human hours for domestic enforcement decreased from 480 000 to 18 000 6 7 but by late 2005 the u

new evidence on labor supply employment versus hours elasticities by sex and marital status using the tri annual micro panel data of the survey of income and program participation we estimate fixed effects labor supply models separating the extensive and intensive margins the employment elasticity is 0 6 for single men versus 1 1 for married men the employment elasticity is 2 4 for single women versus 1 8 for married women the compensated hours worked elasticity is 0 4 for employed single and married men and 0 7 for employed single and married women the implied aggregate employment elasticity of 1 5 and hours per employee elasticity of 0 5 indicate employment fluctuations account for three fourths of wage induced variation in labor hours

are u s corn and soybeans becoming more drought tolerant an objective drought index that measures the dry and hot conditions adversely affecting crop yields is used in a regression analysis to test whether corn and soybeans have become more drought tolerant results indicate that corn yield losses whether measured in quantity terms or as a percentage of mean yield have decreased the null hypothesis that the absolute level of soybean yield losses due to drought has not changed cannot be rejected but yield losses in percentage terms have decreased over time because drought is the primary cause of yield loss in the u s crop insurance program and because u s crop insurance rates assume that percentage of yield losses are constant over time these results indicate that u s crop insurance rates in the corn belt are too high

has technology increased agricultural yield risk evidence from the crop insurance biotech endorsement the conventional wisdom that technological advances in seed breeding and genetic modification of corn traits have lowered yield risk has recently been challenged by research that argues that the converse is true the implications of this research have been applied to models of climate change and have led to the conclusion that these advances have actually increased agronomic risk such that climate change is asserted to raise important concerns regarding the stability and viability of agricultural output in the future in a large body of empirical work the argument is based upon assertions that corn yields have become more sensitive to weather stresses this increased sensitivity has coincided with the introduction of a variety of genetically engineered ge crops in the 1990s and 2000s we use corn yields and data from the us federal crop insurance program to evaluate these claims an initial examination of yield responses to droughts in 1988 and 2012 suggests more robust yields in the latter period in spite of very comparable weather stresses we next consider side by side data collected under the biotech endorsement be to the federal crop insurance program between 2008 and 2011 this endorsement provided substantial discounts for growers using certain ge hybrids reflecting policymakers beliefs that these hybrids had lower yield risk we find that risk as measured by the rate of indemnities paid per units insured was significantly lower for crops insured under the be we also find that the difference in risk tends to be greater when growing conditions are less favorable

the cyclical behavior of prices and quantities the case of the automobile market abstract this paper aims at understanding the joint behavior of prices and quantities in a particular market it examines whether we can find decision problems for suppliers and buyers together with a market structure which are consistent with observed price and quantity series because of the homogeneity of the product and the quality of the data we study the automobile market we conclude that the behavior of prices is inconsistent with simple market structures prices appear to be too sticky we then consider potential explanations none appears completely satisfactory in particular costs of changing prices do not explain the joint behavior of prices and quantities

consumption leisure choice with habit formation abstract in an intertemporal consumption leisure choice model with wage uncertainty and habit forming consumption we have shown that consumption and leisure do move in opposite directions consistent with the observed pro cyclicy of aggregate hours worked

a declining farm workforce analysis of panel data from rural mexico analysis of nationally representative individual level panel data from 1980 to 2010 reveals a significant negative trend in the agricultural labor supply from rural mexico which is the primary source of hired workers for u s farms these findings offer an explanation for the rise over time in u s farm wages concomitants of the agricultural transformation including growth in the non farm economy falling birth rates and an increase in rural education accelerate the transition of rural mexicans out of farm work higher u s farm wages and increased border enforcement slow the transition but the combined impact of these offsetting variables is relatively small a diminishing farm labor supply has far reaching implications for farmers farm labor organizers rural communities and agricultural workers

heterogeneity and distributional form of farm level yields representing farm level crop yield heterogeneity and distributional form is critical for risk and crop insuranceresearch moststudieshaveusedcountydata understatingbothsystematicandrandomvariation comparison of systematic versus random intra county variation is lacking few studies compare the various distributional forms that have been proposed this study utilizes the extensive potential of government farm level crop insurance data results show that systematic intra county variation is surprisingly strong a newly applied reverse lognormal distribution is preferred when county wide variation is removed but the normal distribution fits surprisingly well in the crop insurance relevant percentiles when county wide variation is not removed representing and accounting for both spatial and temporal heterogeneity is a major problem in agricultural economics and policy analysis due to the fact that most data are aggregated to at least the county level e g gardner and kramer 1986 just and pope 1999 both systematic and random components of crop yields are major factors in intra county farm level heterogeneity that are critical for modeling risk producer behavior and crop insurance participation most studies have either used aggregate at least county level data or relied on relatively few farm level observations the former makes results primarily illustrative while the latter limits statistical significance this article characterizes intra county crop yield heterogeneity both spatially and temporally with the most extensive dataset utilized to date and evaluates a broader set of parametric distributional possibilities than previously

a business cycle model with variable capacity utilization and demand disturbances abstract we develop a dynamic general equilibrium model with demand preference shocks estimated using hall s j labour economics 15 1997 223 residual that replicates u s business cycles well at least compared to the real business cycle models the key factor is cyclical capital utilization which is based on imperfect competition slow adjustments in capital stock and fixed requirement of labor input we also demonstrate theoretically that a representative agent economy with preference shocks could be viewed as the reduced form of a heterogeneous agents economy with incomplete markets specifically a heterogeneous agents economy with incomplete markets is aggregated into a representative agent economy with preference shocks this result would provide a microeconomic foundation for preference shock models it is also shown that a shock to marginal utility of consumption and a shock to marginal disutility of labor have different effects

are crop yields normally distributed the evidence for nonnormality of crop yields is reassessed three methodological problems are identified in typical yield distribution analyses i misspecification of the nonrandom components of yield distributions ii missreporting of statistical significance and iii use of aggregate timeseries ats data to represent farm level yield distributions one or more of these problems infect virtually all evidence against normality to date the positive contribution of the article is a set of principles that must be followed in any valid investigation of yield normality

macroeconomic fluctuations and the allocation of time what are the fundamental driving forces of macroeconomic fluctuations in particular why do people spend more time working in booms and less in recessions these are basic questions of macroeconomics recent thinking has emphasized technology shifts preference shifts and changes in government purchases as likely driving forces it is useful to distinguish atemporal and intertemporal effects of the driving forces under standard assumptions the technology shift has no effect through atemporal channels because income and substitution effects exactly offset a straightforward decomposition of movements of employment attributes most of them to the atemporal effects of preference shifts

crop insurance valuation under alternative yield distributions considerable disagreement exists about the most appropriate characterization of farm level yield distributions yet the economic importance of alternative yield distribution specifications on crop insurance valuation has not been well documented the results of this study demonstrate that large differences in expected payouts from popular crop insurance products can arise solely from the parameterization chosen to represent yield distributions the results suggest that the frequently unexamined yield distribution specification may lead to economically significant errors in crop insurance policy rating and assessment of expected payouts from policies

illegal immigration border enforcement and relative wages evidence from apprehensions at the u s mexico border we examine illegal immigration in the united states from mexico over the period 1976 1995 one challenge is that we do not observe the number of individuals that attempt to enter the united states illegally we only observe the number of individuals apprehended attempting to cross the u s mexico border illegally based on a simple migration model we postulate the existence of an apprehensions function which expresses apprehensions at the border as a function of illegal attempts to cross the border and u s border enforcement effort we find that a 10 decrease in the mexican real wage leads to a 7 5 to 8 8 increase in apprehensions at the border excerpt

are crop yields normally distributed a reexamination this article demonstrates that normality test procedures that include individual detrending of short term panel data can severely reduce the power of normality tests and strongly bias normality tests in a type ii direction an alternative error component implicit detrending procedure is suggested that demonstrates higher power for the distributions examined both procedures are applied to a large data set with normality of yield residuals being rejected assuming normality is shown to reduce potential premium rates for a large number of producers in an existing crop insurance product

testing day s conjecture that more nitrogen decreases crop yield skewness whilecontroversysurroundsskewnessattributesoftypicalyielddistributions abetterunderstandingis importantforagriculturalpolicyassessmentandforcrop insuranceratesetting day 1965 conjectured that crop yield skewness declines with an increase in nitrogen use at low levels but not at higher levels employing four corn yield experimental plot datasets we investigate the conjecture by introducing a a flexible bayesian extension of the just pope technology to incorporate skewness and b a quantilebased measure of skewness shift bayesian estimation provides strong evidence in favor of negative skewnessatcommercialnitrogenratesandforday sconjecture therewasweakerevidenceinfavorof positively skewed cotton yield and little evidence in favor of the conjecture the results are confirmed by the quantile based measure we also find evidence that skewness becomes more negative upon moving from corn after corn to corn after soybean

nonparametric estimation of crop yield distributions implications for rating group risk crop insurance contracts we use nonparametric density estimation procedures to evaluate county level crop yield distributions implications for rating area yield crop insurance contracts are discussed the procedures developed are used to measure yield risk and calculate insurance premium rates for wheat and barley in the 1995 96 group risk program

a simple nonadditive preference structure for models of household behavior over time intertemporal separability is an almost universal assumption in empirical work on household behavior but a good deal of recent work on consumption and labor supply suggests that it may not be tenable the traditional weakening of this assumption is to allow for habit formation i propose an alternative structure for intertemporal preferences that nests intertemporal additivity in a simple way and yields closed form solutions for demand functions this structure includes the neoclassical durables model as a special case i derive a demand system that nests the almost ideal system as its time separable counterpart this model is estimated on u k aggregate time series data for seven goods time separability is decisively rejected moreover i find that ignoring temporal dependencies leads to considerable bias in the estimates of elasticities of the seven goods durables display the strongest nonseparable effect the estimated reactions are consistent with the neoclassical durables model

more than mean effects modeling the effect of climate on the higher order moments of crop yields this article proposes the use of moment functions and maximum entropy techniques as a flexible approach for estimating conditional crop yield distributions we present a moment based model that extends previous approaches and is easily estimated using standard econometric estimators predicted moments under alternative regimes are used as constraints in a maximum entropy framework to analyze the distributional impacts of switching regimes an empirical application for arkansas mississippi and texas upland cotton demonstrates how climate and irrigation affect the shape of the yield distribution and allows us to illustrate several advantages of our moment based maximum entropy approach

urban spatial development in the land policy reform era evidence from beijing this paper examines the characteristics of urban spatial development in beijing and identifies the extent to which these characteristics can be attributed to the emerging land market in beijing as

u s soybean yields estimation and forecasting with nonsymmetric disturbances national average soybean yields are skewed with a relatively high chance of low yields maximum likelihood estimates support this hypothesis revised forecasts which account for skewed yields are positioned higher than forecasts based on the illusion of a symmetric distribution also yield instability has been increasing steadily the standard deviation of the soybean yield distribution is twenty five percent higher in the late 1980s than it was in the early 1970s

the global and local dimensions of place making remaking shanghai as a world city shanghai the largest socialist industrial city in china is now experiencing dramatic restructuring under global and local forces this paper provides a preliminary account of remaking this city into a world city the case study suggests the tremendous and pervasive impact of globalisation on the city in transitional economies although it is still not comparable with a truly global city the growth of inward investment particularly its penetration into real estate development has exerted direct impacts on the urban structure it is argued that however that this global influence can only be realised through the coincidence of indigenous changes in the political economy system specifically the willingness of the central government to give more autonomy to local governments the new policy to set up a window for china s open policy the incentive for making money from selling the space the injection of public money into infrastructure and fierce promotional development strategies all contributed to the process of urban restructuring the effect of combined global and local changes has led to an extremely optimistic growth atmosphere and a building boom since the mid 1990s shanghai highlights the local as well as the global dimensions of urban change in the post socialist economies

federalism as a commitment to reserving market incentives the authors advance a new perspective in the study of federalism their approach views federalism as a governance solution of the state to credibly preserving market incentives market incentives are preserved if the state is credibly prevented from compromising on future economic success and from bailing out future failures the salient features of federalism decentralization of information and authority and interjurisdictional competition help provide credible commitment or these purposes in addition the authors suggest that some federalism are self sustaining

migration of seasonal agricultural workers nearly half of all seasonal farm workers migrate at least 75 miles in a given year an expected earnings differential from migration weakly induces migration a 10 earnings differential raises the probability of migrating by slightly more than 1 this result indicates that there are substantial costs to migrating and that employers must offer large earnings premia to induce a substantial number of workers to move to their jobs some demographic groups earn substantially higher earnings by migrating these higher earnings from migration are primarily due to higher wages rather than more hours of work

identifying the source of dynamics in disaggregated import data this paper uses kennan s 1988 model to separately identify supply side and demand side dynamics in us import data dynamics arise from both autocorrelated shocks to supply and demand side fundamentals and from lagged adjustment to these shocks the model consists of a pair of partial adjustment models in which consumers and producers each attempt to follow a stochastic target level of imports subject to a quadratic adjustment cost the model is applied to quarterly data on us imports of seven narrowly defined commodities autos beer cameras wine cigars tea and soap two main results emerge first adjustment costs are important on both sides of the market second supply side adjustment costs are larger than demand side adjustment costs 1998 john wiley sons ltd

warming temperatures will likely induce higher premium rates and government outlays for the u s crop insurance program likely climate change impacts include damages to agricultural production resulting from increased exposure to extreme heat considerable uncertainty remains regarding impacts on crop insurance programs we utilize a panel of u s corn yield data to predict the effect of warming temperatures on the mean and variance of yields as well as crop insurance premium rates and producer subsidies while we focus on corn we demonstrate that the subsidy impacts are likely to carry over to other major program crops we find that warming decreases mean yields and increases yield risk on average which results in higher premium rates under a 1 c warming scenario we find that premium rates at the 90 coverage level will increase by 39 on average however there is considerable statistical uncertainty around this average as the 95 confidence interval spans from 22 to 61 we also find evidence of extensive cross sectional differences as the county level rate impacts range from a 10 reduction to a 63 increase results indicate that exposure to extreme heat and changes in the coefficient of variation are large drivers of the impacts under the 1 c warming scenario we find that annual subsidy payments for the crop insurance program could increase by as much as 1 5 billion representing a 22 increase relative to current levels this estimate increases to 3 7 billion 57 under a 2 c warming scenario our results correspond to a very specific counterfactual the marginal effect of warming temperatures under current technology production and crop insurance enrollments these impacts are shown to be smaller than the forecasted impacts under a commonly used end of century general circulation model for even the most optimistic co emissions projection

an econometric analysis of fluctuations in aggregate labor supply and demand the paper contains a simple equilibrium model of the labor market the supply function allows for intertemporal substitution in response to real wage fluctuations and the demand function allows for adjustment costs on employment the supply and demand functions both solve quadratic partial adjustment problems driven by rational expectations about future real wages the market equilibrium also solves a partial adjustment problem driven by rational expectations about future preference and technology shocks two related issues are emphasized the identification of dynamic labor supply and demand functions and the theoretical interpretation of serial correlation in employment and real wages when the supply and demand shocks are assumed to be ar 1 processes which are not causally related the model delivers a simple structure for the equilibrium process for employment and real wages which is a restricted var 2 this simple structure facilitates the interpretation of summary statistics on the time series properties of observed employment and real wage series the supply and demand functions can both be locally identified using only employment and real wage data an illustrative application is presented using u s manufacturing data for the period 1948 1971

the multivariate flexible accelerator model its empirical restrictions and an application to u s manufacturing this paper derives an exhaustive set of restrictions implied by the multistock flexible accelerator specification of the adjustment cost model for the firm the flexible accelerator specification of the demand for capital and labor is estimated using u s manufacturing annual data for the 1947 1976 period the consistency of the data with the model is examined by testing the validity of the derived restrictions finally the conditions which permit aggregation over firms are determined and tested empirically the flexible accelerator specification has been popular in the empirical literature on interrelated investment and employment decisions see nadiri and rosen 38 coen and hickman 10 and schramm 40 more recent examples include sargent 39 berndt fuss and wavermann 4 berndt and morrison 6 and meese 34 under suitable assumptions the specification may be rationalized by the adjustment cost model of the firm eisner and strotz 13 lucas 30 mortensen 35 extends the work of lucas and derives some empirically testable restrictions of the accelerator specification that are implied by the adjustment cost framework the broad objective of this paper is to provide a more rigorous and comprehensive test of the adjustment cost model than is presently found in the literature this objective is achieved in three stages first we offer an alternative derivation of the mortensen restrictions and more importantly we prove theorem 1 that his restrictions are exhaustive i e we establish an integrability result for the flexible accelerator adjustment cost model second the flexible accelerator specification of the demand for capital and labor is estimated using total u s manufacturing annual data for the 1947 76 period it is assumed that firms minimize expected production costs subject to a technology which implies that capital and labor stocks are costly to adjust while a third factor materials is freely adjustable the consistency of the data with the adjustmentcost framework is examined by testing for the validity of the derived restrictions further we test the validity of some separability restrictions on the adjustmentcost technology that to varying degrees are imposed a priori in all of the cited empirical studies finally we provide a complete characterization of the individual firm technologies which justify the common assumption of the existence of a representative firm this problem of aggregation over firms which has been

the impact of wage differentials on choosing to work in agriculture based on a model of industry choice and wage determination a 1 increase in the relative wage in agriculture increases the probability that a nonurban male with no more than a ninth grade education works in agriculture by 3 37 at the sample mean and by 1 3 when averaged over the entire sample a 10 increase in wages may increase the proportion of those males who choose to work in agriculture by nearly a quarter

on the adjustment matrix in error correction models abstract this paper explores the determinants of the adjustment matrix in error correction models within two intertemporal models of the firm in a production smoothing model of inventories it is shown that the adjustment matrix contains the speed of adjustment of inventories as conjectured in previous work but this parameter matrix also contains the parameters from the autoregressive polynomials associated with the stochastic unobservable shocks in the model two empirical examples are provided suggesting that these unobservable shocks cannot be assumed to be serially uncorrelated in a flexible wage model of a labor market the impact upon the adjustment matrix of normalizing the cointegrating matrix is studied in contrast to one state variable problems normalization of the cointegrating matrix is arbitrary on economic and statistical grounds in this model and it is shown that even with serially uncorrelated shocks estimating the elements of the adjustment matrix may not provide an estimate of the speed of adjustment under some normalizations of the cointegrating matrix the implication of the analysis is that without guidance from an economic model about the interpretation of elements of the adjustment matrix under alternative normalizations of the cointegrating matrix or when unobservable shocks are serially correlated economic interpretation of estimates of the adjustment matrix will be hazardous

decoding urban land governance state reconstruction in contemporary chinese cities in the rapidly growing literature on urban development in china many authors have emphasised the salient features of economic decentralisation and the increasingly significant role of the local state however such arguments neglect a counter trend in which the central state has deterritorialised and rehierarchised some key functions using the case of land governance this paper argues that facing the complication of changing urban conditions there is a resurgence of the state s regulatory power the decentralisation of economic governance is now counter balanced by the rise of state strategies to control the articulation of scales through which a more centrally consolidated power can be achieved the central government still serves as an important level of economic regulation in this sense new interpretations of commoditised urban transformation especially commoditised production of the built environment should be understood by underscoring the interplay between trends of decentralisation and terr

liquidity constrained migrants liquidity constraints represent a major obstacle for potential migrants trying to meet the high cost of undocumented international migration some cover it by borrowing from a smuggling organization with a commitment to repay the loan by working in the destination country as bonded laborers this paper compares alternative ways of financing migration and shows that debt bondage is optimal only if the international wage differential is sufficiently large in relation to migration costs tougher border controls as well as internal enforcement measures can be expected to reduce the incidence of debt bonded relative to self financed migration although they may not necessarily lower the overall inflow of illegal aliens

ethnic capital and intergenerational mobility this paper analyzes the extent to which ethnic skill differentials are transmitted across generations i assume that ethnicity acts as an externality in the human capital accumulation process the skills of the next generation depend on parental inputs and on the quality of the ethnic environment in which parents make their investments or ethnic capital the empirical evidence reveals that the skills of today s generation depend not only on the skills of their parents but also on the average skills of the ethnic group in the parent s generation

rate making for farm level crop insurance implications for adverse selection this research identifies two problems in the new federal crop insurance that may cause adverse selection a the relationship between rate making and expected yields for individual farmers and b the bias introduced in coverage protection when trends are not used to establish expected yields a theoretical investigation using the normality assumption demonstrates the potential severity of these problems and empirical results from farm level data lend further support as crop insurance changes to individualized methods of protection these issues will be particularly important for developing rates

china s changing urban governance in the transition towards a more market oriented economy china s changing urban development processes and urban landscapes in the transition towards a more market oriented economy have received extensive research attention in recent years relatively the governing of chinese cities is still underresearched this article aims to analyse the forces released both inside and outside the formal socialist state system and the impacts on phenomenal restructuring of urban governance especially at local levels marketisation has created new elements beyond the reach of state work units that represent the state s hierarchical control the pillars of the socialist governing structure the party state the work units system and household registration are shaken by these forces the changes in the organisation of people capital production materials infrastructure and space fundamentally demand new urban governance territorial organisations such as the municipality urban districts street office and residents committees are reinvented and consolidated to restore a governable society the devolution towards the base level and the reinvention of local communities reflect the state s attempt to reconsolidate its power to create a governable society as well as to cope with practical pressures such as the provision of social assistance to poor and aged residents re employment of laid off workers and the management of floating immigrants the combination of new market elements and decentralised state apparatus has given rise to the entrepreneurial endeavour of china s governance this research highlights the micro foundation of the new urban governance in addition to the globalisation capital mobility city competitiveness thesis

dynamic factor demands and the effects of energy price shocks a dynamic model is used to understand how sharp changes in energy prices affect investment behavior employment and energy use the authors discuss the theory behind their model selection model specifications estimation methods and data list parameter estimates and elasticities for the selected model and describe the simulations they conclude that 1 the data strongly reject the hypothesis of constant returns to scale within their specification of aggregate production 2 the data indicate adjustment costs on labor are small and 3 their results help reconcile some of the conflicting estimates of energy demand elasticities appearing in recent literature 23 references 3 figures 3 tables

international trade and labor migration a theory of the relationship between international trade and labor mobility is developed that takes into account five characteristics of such migration including its temporary nature differences between migrant and native labor the acceptance of unpredictable conditions of employment by migrant labor the ready availability of further labor resources and international capital mobility particular attention is paid to the role of international labor migration in helping to insulate native populations from the rigors of industrial fluctuations and in helping to preserve import competing industries that would have succumbed without the availability of cheap imported labor

immigration reform and farm labor markets farmers throughout the united states report a shortage of workers at the same time there are proposals to strengthen the enforcement of existing immigration laws in this paper we develop an equilibrium approach to examine the impact of removing undocumented workers from the california agricultural labor market and to infer whether there is evidence of shortages using individual worker data we find evidence that is consistent with a persistent shortage in some sub sectors of the california farm labor market further we conduct counter factual policy simulations over a range of possible policy alternatives and find that removing 50 all undocumented farm workers from the state would lead to an increase in wages of over 22

land property rights and international migration evidence from mexico abstract in this paper i ask whether there is a relationship between land property rights and international migration in order to identify the impact of property rights i consider a country wide land certification program that took place in mexico in the 1990s my identification strategy exploits the staggered implementation and the households eligibility for the program i find that the program increased the eligible households likelihood of having one or more members abroad by 12 in terms of the number of migrants my coefficient estimates explain 26 of the 1994 1997 increase in migrants from ejido areas and 13 15 of the increase from all of mexico consistent with our theoretical model the impact is strongest for households without a land will this implies that land inheritance issues drive at least part of the effect

instrumental variables procedures for estimating linear rational expectations models abstract this paper illustrates how to use instrumental variables procedures to estimate the parameters of a linear rational expectations model these procedures are appropriate when disturbances are serially correlated and the instrumental variables are not exogenous we compare our procedures to some alternative estimators that estimate free parameters from restrictions implied by the euler equations the procedures are applicable to a variety of linear rational expectations models several examples of which we cite

on technological change in crop yields technological changes in agriculture tend to alter the mass associated with segments or components of the yield distribution as opposed to simply shifting the entire distribution upwards we propose modeling crop yields using mixtures with embedded trend functions to account for potentially different rates of technological change in different components of the yield distribution by doing so we can test some interesting and previously untested hypotheses about the data generating process of yields for example 1 is the rate of technological change equivalent across components and 2 are the probabilities of components constant over time our results technological change is not equivalent across components and probabilities tend not to have changed significantly over time have implications for modeling yields we find estimated conditional yield densities are quite different when unique trend functions are embedded inside the mixture components versus estimating the same mixture with detrended data also we prove different rates of technological change in different components lead to nonconstant variance with respect to time i e heteroscedasticity we present two applications of the proposed yield model the first application considers climate determinants of component membership where our results are consistent with the literature for climate determinants of yields the second application compares the proposed yield model to usda s current rating methodology for area yield crop insurance contracts and finds the proposed model may lead to more accurate rates

ranking crop yield models using out of sample likelihood functions there has been considerable debate regarding which probability distribution best represents crop yields this study ranks six yield densities based on their out of sample forecasting performance the forecasting ability for each density was ranked according to its likelihood function value when observed at out of sample observations results show that a semiparametric model offered by goodwin and ker best forecasts county average yields

a time series analysis of real wages consumption and asset returns summary this paper re examines whether the time series properties of aggregate consumption real wages and asset returns can be explained by a neoclassical model previous empirical rejections of the model have suggested that the optimal labour contract model might be appropriate for understanding the time series properties of the real wage rate and consumption we show that an optimal contract model restricts the long run relation of the real wage rate and consumption we exploit this long run restriction cointegration restriction for estimating and testing the model using ogaki and park s 1989 cointegration approach this long run restriction involves a parameter that we call the long run intertemporal elasticity of substitution ies for non durable consumption but does not involve the ies for leisure this allows us to estimate the long run ies for non durable consumption from a cointegrating regression tests for the null of cointegration do not reject our model as a further analysis our estimates of the long run ies for non durable consumption are used to estimate the discount factor and a coefficient of time nonseparability using hansen s 1982 generalized method of moments we form a specification test for our model a la hausman 1978 from these two steps this specification test does not reject our model this paper re examines whether the time series properties of aggregate consumption real wages and asset returns are consistent with a simple neoclassical representative agent economy previous empirical explorations of this issue have rejected the neoclassical model in large part because the marginal rate of substitution between consumption and leisure does not equal the real wage as is implied by the the first order conditions of the model in this paper we argue that an optimal labour contracting model is more appropriate for understanding the time series behaviour of real wages and consumption we show that a version of the optimal contract model restricts the long run relation between real wages and consumption we exploit this longrun restriction ri cointegration restriction to estimate preference parameters and test the model first we employ the cointegration approach suggested by ogaki and park 1989 to estimate the long run intertemporal elasticity of substitution for non durable consumption from a cointegrating regression we test the model by testing for the cointegration restriction

us immigration policies and dynamics of cross border workforce in agriculture given the contentious debate on immigration this study develops a dynamic model to analyse the effects of stricter border and domestic enforcement and streamlining the guest worker programme on cross border migration from mexico employment and production in us labour intensive and mexican agriculture and the us and mexican wage rates the model incorporates labour leisure decisions of mexican workers and labour market dynamics and linkages the findings show stricter border and domestic controls exacerbate the labour shortage problems and reduce the us agricultural production streamlining the guest worker programme provides a steady supply of farm workers and has negligible impact on the us wage

an analysis of the impact of climate change on crop yields and yield variability this paper develops an econometric model of stochastic production functions to quantify the impacts of climatic variables on the mean variance and covariance of crop yields the estimates of the production function parameters and their elasticities are utilized to analyse the impacts of the projected climate change on agriculture the results show that the climate change will have modest effects on the mean crop yields but will significantly reduce the variance and covariance for most of the crops considered the results have implications for allocations of agricultural land among crops and for crop production mix

local governments as industrial firms an organizational analysis of china s transitional economy despite widespread skepticism about government ownership in transitional economies china s rapid industrial growth has been led by public enterprises kornai s theory of soft budbet constraints born of the failure of earlier hungarian reforms fosters such skepticism but it assumes as fixed organizational characteristics that in fact vary widely across government jurisdictions local governments with smaller industrial bases have clearer financial incentives and constraints fewer nonfinancial interests in enterprises and a greater capacity to monitor them in china s vast public sector the fastest growth in output and productivity has occurred where government ownership rights are clearest and most easily enforced which enables officials to manage public industry as a diversified market oriented firm

estimation of mixture models using cross validation optimization implications for crop yield distribution modeling a critical issue in identifying an appropriate characterization of crop yield distributions is that the best fitting distribution in an in sample framework is not necessarily the best choice out of sample this study provides a methodology for estimating flexible and efficient mixture models using cross validation that alleviates many of these associated model selection issues the method is illustrated in an application to the rating of group risk insurance products results indicate that nonparametric models often fit best in sample but are inefficient and consistently overstate true rates and vice versa for parametric models the proposed model provides unbiased rates and also has desirable efficiency properties

bayesian estimation of possibly similar yield densities implications for rating crop insurance contracts the agricultural act of 2014 solidified insurance as the cornerstone of u s agricultural policy the congressional budget office 2014 estimates that this act will increase spending on agricultural insurance programs by 5 7 billion to a total of 89 8 billion over the next decade in light of the sizable resources directed toward these programs accurate rating of insurance contracts is of the utmost importance to producers private insurance companies and the federal government unlike most forms of insurance agricultural insurance is plagued by a paucity of spatially correlated data a novel interpretation of bayesian model averaging is used to estimate a set of possibly similar densities that offers greater efficiency if the set of densities are similar while seemingly not losing any if the set of densities are dissimilar simulations indicate that finite sample performance in particular small sample performance is quite promising the proposed approach does not require knowledge of the form or extent of any possible similarities is relatively easy to implement admits correlated data and can be used with either parametric or nonparametric estimators we use the proposed approach to estimate u s crop insurance premium rates for area type programs and develop a test to evaluate its efficacy an out of sample game between private insurance companies and the federal government highlights the policy implications for a variety of crop state combinations consistent with the simulation results the performance of the proposed approach with respect to rating area type insurance in particular small sample performance remains quite promising

in search of a stylised fact do real wages exhibit a consistent pattern of cyclical variability the paper surveys the studies on the cyclical behaviour of real wages published from the twenties onwards the traditional simple neoclassical model of the labour market suggests that real wages tend to move countercyclically however from a theoretical viewpoint there are few reasons to expect this behaviour once the simple model is extended to account for imperfect competition uncertainty lagged responses or contracting between firms and workers empirical studies give different answers to the problem the contributions reviewed in the paper are arranged roughly in a chronological order the interwar period the postwar pre econometric studies the econometric work using aggregate data the evidence produced on the basis of longitudinal data the analyses of the shock responsiveness of real wages and finally the most recent papers attempting a reconciliation of the somewhat conflicting evidence derived from aggregate and panel data

relaxing heteroscedasticity assumptions in area yield crop insurance rating this article focuses on the effect of differing heteroscedasticity assumptions on derived premium rates of area yield crop insurance tests of the proportional and absolute heteroscedasticity assumptions are conducted using both in sample and out of sample measures our results suggest that arbitrarily imposing a specific form of heteroscedasticity or homoscedasticity in insurance rate calculations limits actuarial soundness our results have practical implications for the federal crop insurance programs as we reject the traditional rating assumptions for many cotton regions and lower yielding higher risk corn and soybean counties but not in the heart of the cornbelt copyright 2011 oxford university press

an investigation of the determinants of manufacturing employment in the united kingdom in this paper we present and estimate an adjustment cost model of industry employment which takes explicit account of both expectations and aggregation over different labour types the resulting model is subject to a large number of tests and is a highly robust representation of the data finally forecasts are produced for manufacturing employment up to 1990

time series representations of economic variables and alternative models of the labour market accepting the hypothesis that the time series facts of the aggregate labour market may be summarized by the linear autoregressive and moving average representations of wages prices unemployment and interest rates implies that a useful theory ought to lead to predictions about these representations following this approach this paper first catalogues many of the time series facts about the aggregate labour market and then compares them against alternative models of the labour market based on the intertemporal substitution and staggered contract hypotheses