the adoption of reduced tillage the role of human capital and other variables this paper presents a model of adoption behavior and explains differences econometrically in farmers decisions to adopt reduced tillage practices and in the efficiency of farmers adoption decisions the empirical results obtained from microdata show that the probability of adopting reduced tillage in corn enterprises differs widely across farms and depends on soil characteristics cropping systems and size of farming operation the results also show that farmers schooling enhances the efficiency of the adoption decision

modeling farm level crop insurance demand with panel data a random effects binomial probit model is applied to data for a panel of kansas wheat farms to examine multiple peril crop insurance demand a theoretical model is developed which suggests inclusion of the moments of both market return and the return to insurance empirical results indicate that the first and second moments of both market return and the returns to insurance are significant the price elasticity of demand is estimated to be 0 65 preseason weather variables when included in the models were not found to be significant failing to support the hypothesis of intertemporal adverse selection

pest externalities from agricultural inputs agricultural inputs such as water pesticide and even time may have the unintended effect of stimulating some pest populations leading to crop losses a conceptual model is developed to contrast optimal use of pesticide and nonpesticide inputs with myopic use patterns which ignore pest externalities under most conditions optimal management is found to entail reduced input levels these issues are illustrated for imperial valley cotton using biological simulation correct calculation of the relative profitability of conventional and integrated pest management techniques such as a shortened growing season are found to depend crucially on whether pest externalities are taken into account

the environmental effects of agricultural trade liberalization in latin america an interpretation abstract the trade and environment debate has focused attention on the possible contradiction between promoting free markets while meeting domestic environmental objectives this paper takes a view from the south recent econometric models predict net effects of expanded agricultural trade to be positive for the global environment yet further pressure on degraded resources and marginal farmers and a reinforcement of sectoral policies that benefit commercial export crop growers as opposed to food producers may make increased trade more of a bane than a blessing for developing countries in the context of emerging regional trading blocks in latin america nafta and mercosur removal of trade barriers between participating nations has led to dislocation of production whose localized impacts it is hoped would be resolved through reconversion of agriculture in affected subregions it may be however that internalization of socio environmental costs of such dislocation would indicate that production despite competitive disadvantages would best have been left where it was to gain a better empirical understanding of the links between agricultural trade policy and the environment will require prediction of ecosystem stresses anticipated from alterations in how producers grow crops in specific geophysical settings rather than reliance on stylized facts

empathy conditioned conservation walking in the shoes of others as a conservation farmer conservation tillage on farms can improve downstream water quality using a dual interests theoretical framework guided by the metaeconomics approach this paper examines the role of self interest and shared other interest in the conservation tillage adoption decision the data is from a 2007 survey of farmers in the blue river tuttle creek watershed of nebraska and kansas logit models show that farmers who temper their pursuit of self interest with shared other interest reflecting empathy sympathy are more likely to adopt conservation tillage habit and control also play a role farmers pursue a joint and interdependent own interest and not only self interest as presumed in microeconomics

the supply response of aggregate agricultural output in jamaica abstract a dominant theme in the development literature is that individual agricultural products responds to price incentives not because of shifts between products but that total agricultural output is not responsive to price the econometric evidence for jamaica shows that this presumption is not valid the paper begins by reviewing the growth experience of the jamaican economy it then analyzes the trends in agricultural production the remainder of the paper provides the econometric estimates of broad agricultural output to price the empirical evidence shows that aggregate agricultural output is responsive to price but it will take time for agricultural production to materialize a summary of the published estimates of the supply response for individual crops is also presented

evidence on corporate hedging policy this paper provides empirical evidence on the determinants of corporate hedging decisions the paper examines the evidence in light of currently mandated financial reporting require ments and in particular the constraints placed on anticipatory hedging data on hedging are obtained from 1992 annual reports for a sample of 3 022 firms out of the 771 firms classified as hedgers 543 firms disclose information in their annual reports on their hedging activities the remaining 228 firms report use of derivatives but no information on hedging activities based on the evidence i draw the following conclusions with respect to the models of hedging evidence is inconsistent with financial distress cost models evidence is mixed with respect to contracting cost capital market imperfections and tax based models and evidence uniformly supports the hypothesis that hedging activities exhibit economies of scale

demand and supply trends in global agriculture abstract this paper considers the sustainability of the global agricultural system at acceptable levels of economic and environmental costs a future scenario of demand for food and fibre is outlined as the challenge confronting the global agricultural system over the next 40 years the capacity of the system to increase supply in response to this scenario in an economically and environmentally sustainable manner in less developed countries is considered five categories of agricultural resources are investigated knowledge which can be more readily developed than other resources can be substituted for natural resources of each resource it is therefore asked whether knowledge has the capacity to substitute for agricultural resources to increase supply in a sustainable manner the demand scenario will only be met in a sustainable way with improved knowledge which may compensate for insufficient supplies of natural resources as knowledge can only grow through investment in its development a strategy to control and manage the allocation of investments to various sectors is required if a sustainable global agricultural system is to be developed

pricing and capital allocation in catastrophe insurance abstract this paper studies multi line pricing and capital allocation by insurance companies when solvency matters to consumers capital is costly to hold and the average loss is uncertain in this environment product quality concerns lead firms to diversify across markets and charge high prices for risk that threatens company solvency even if the risk is unrelated to other asset risk price differences across markets are traced to differences in capital required at the margin to maintain solvency finally the paper shows that capital costs have significant effects on catastrophe insurance markets because of high marginal capital requirements

domestic constraints on export led growth a case study of india abstract in light of the 1991 1993 indian policy reforms this paper assesses the feasibility of a strategy of manufacturing export led growth for india by means of simulation experiments using a nine sector seven income classes computable general equilibrium model developed for india s seventh plan period 1985 1990 the relative merits of this strategy are compared to those of an alternative open development strategy agricultural demand led industrialization under both a fixed and flexible exchange rate regime compared to earlier models the analysis adds disaggregated agricultural supply and income distribution and export demand response the results suggest that industrial growth can be self defeating by raising the relative price of domestic goods and thereby running into an export demand bottleneck hence if a step up in manufacturing exports is to contribute to a non inflationary acceleration of gdp growth it needs to be supplemented by adequate policies aimed at raising agricultural output and income

brazilian policies that encourage deforestation in the amazon this paper shows that general tax policies special tax incentives the rules of land allocation and the agricultural credit system all accelerate deforestation in the amazon these policies increase the size of land holdings and reduce the chances of the poor to become farmers the following are the key provisions i the virtual exemption of agricultural income from income taxation makes agriculture a tax shelter ii rules of public land allocation provide incentives for deforestation because the rules used in determining the security of a claim and its land area encourage land clearing iii the progressive land tax contains provisions that encourage the conversion of forest to crop land or pasture iv the tax credit scheme aimed toward corporate livestock ranches subsidizes inefficient ranches established on cleared forest land and v subsidized credit is available for sudam approved ranches

issues relating to agricultural pricing policies and their analysis in developing countries abstract agricultural pricing policies in developing countries are often the result of complex interactions between producer consumer and merchant groups and their relative effectiveness in influencing government decision making even within governments various ministries often have opposing views in this environment one of the contributions a policy analyst can make is to attempt to quantify the effects of different policy options this permits a more informed discussion which hopefully leads to better decision making and an improved incentive environment many analyses of agricultural pricing policies have used the standard partial equilibrium analysis where no linkages between commodity markets were considered in this paper we have considered cross price effects also we have discussed issues relating to other adjustments refinements of the standard method so that a practitioner not familiar with the various methods can form an opinion of what the options are and what adjustments may be appropriate for a particular case in question the adjustments relate to overvaluation of currencies input price distortions differences in the degree of distortions between producers and consumers and variability of border prices the inclusion of cross price elasticities was important for assessing production consumption and trade effects for argentina but for the other countries it resulted in only somewhat improved accuracy the adjustment for exchange rates had a large impact in egypt and was important for other countries as well this underlines the importance of exchange rates as key variables for agricultural pricing policies in general the numbers show that the traditional taxation policies of agricultural products in the sample of developing countries is somewhat less widespread than in the past these policies however continue to favor consumers over producers with significant losses for some of the latter the large size of welfare losses especially compared to efficiency losses highlights the importance of correcting distorted prices that adversely affect the poorest sections of society also the usual government objective of taxing producers to raise revenues is frequently defeated by the large subsidies provided to consumers for the partitioner for whom time is often of the essence the assessment of welfare effects using the partial equilibrium method may provide reasonably good first cut estimates of the order of magnitude of the impact of distortions but often these base case estimates can and should be adjusted for a number of possible factors the analyst needs to determine how important accurate estimates of key variables are to the policy makers he or she then needs to compare the costs involved in generating or gathering the data and doing the calculations with the benefits of a broader and more accurate analysis of the distortionary effects of the particular case in question

aggregate agricultural supply response in developing countries a survey of selected issues the authors review several studies of the aggregate agricultural supply response using both economic and econometric reasons they argue that time series estimation typically generates a downward biased estimate of the response to a credible reform even though time series estimates can provide an accurate picture of past behavoiral relations they do not provide an adequate basis for forecasting the impact of policy reform this is especially true in developing countries where policy reforms involve large changes and have included agricultural price reform industrial trade liberalization financial sector reform and macroeconomic stabilization under those circumstances parameters values obtained under the former policy regime have little relevance in the new regime the authors also argue that investment in public goods should be viewed as complementary to not competitive with price policy they claim that to select the policy with the biggest impact on output makes no sense they provide what they consider to be better criteria for choosing the best from alternative policies

price volatility in niger millet markets price volatility of food staples is one of the most complex factors affecting food security recent food price crises have raised academic interest in improved volatility assessment the widely held assumption in econometric volatility models that long run volatility is constant has been recently questioned and partly blamed for these crises a multiplicative mgarch model recently proposed by bauwens et al is used in this article to model price volatility transmission along the niger millet marketing chain results suggest important volatility links between consumer and producer prices as well as noteworthy differences between short and long run price dynamics

futures for farmers hedging participation and the mexican corn scheme administered commodity price schemes in developing countries have proved ineffective in raising farmers incomes and price stabilisation through futures markets is increasingly advocated as the alternative policy objective a potential difficulty is that farmers tend not to hedge extensively even in developed countries where access to futures markets is long established explanations for this reticence are examined here with context provided by the mexican hedging programme which incorporates financial incentives to spur adoption applying representative data for corn to a well known analysis of the hedging decision suggests that limited participation may reflect rational calculation rather than farmer inertia a policy implication is that permanent access subsidies are difficult to justify from the national perspective

relative food prices under structural adjustment preliminary findings from latin america abstract this article examines the effects of changes in policies concerning exchange rates and consumer subsidies on relative prices of staple foods in selected latin american countries in countries where previously high subsidies on imported foods were reduced sharply or eliminated during the 1980s prices of imported tradables have risen relative to prices of domestically produced foods elsewhere the impact of structural adjustment programmes has not been very clear and more in depth research is needed

tenants landlords and soil conservation it has long been argued that tenants tend to overexploit land but this conventional wisdom has been derived largely without consideration of landlords actions we examine what happens when landlords can invest in durable conservation measures in addition to choosing rental contract terms when tenants are risk neutral landlords overinvest in conservation under cash rental contracts but can achieve first best levels of output and protection against land degradation when conservation investment is combined with share rental when tenants are risk averse the first best is unattainable in this case conservation investment combined with share rental results in output levels below the first best while equilibrium conservation investment may be greater or less than the first best these results suggest that contract form and conservation investments are likely made simultaneously so that econometric studies of conservation practice adoption that treat rental status as exogenous are likely subject to bias

accommodating heterogeneity and nonlinearity in price effects for predicting brand sales and profits abstract we propose a hierarchical bayesian semiparametric approach to account simultaneously for heterogeneity and functional flexibility in store sales models to estimate own and cross price response flexibly a bayesian version of p splines is used heterogeneity across stores is accommodated by embedding the semiparametric model into a hierarchical bayesian framework that yields store specific own and cross price response curves more specifically we propose multiplicative store specific random effects that scale the nonlinear price curves while their overall shape is preserved estimation is fully bayesian and based on novel mcmc techniques in an empirical study we demonstrate a higher predictive performance of our new flexible heterogeneous model over competing models that capture heterogeneity or functional flexibility only or neither of them for nearly all brands analyzed in particular allowing for heterogeneity in addition to functional flexibility can improve the predictive performance of a store sales model considerably while incorporating heterogeneity alone only moderately improved or even decreased predictive validity taking into account model uncertainty we show that the proposed model leads to higher expected profits as well as to materially different pricing recommendations

political preference functions and public policy reform a model of policy making is developed where governments seek to maximize support from social groups through the combination of both pert social welfare increasing and pert welfare transferring policies the implicit weights of a political preference function shift with a change in the relative cost of interest group organizing attention is paid to the degree of wealth transfers as total social welfare increases because of pert policy changes the model demonstrates that in the case of two competing groups the weight given to one group in the allocation of social surplus will increase as total social welfare increases with a bias toward the other group the relative weights placed on consumers and producers based on pest policies alone are misleading indicators of the political influence of groups a number of general implications of this political economic analysis for the reform of public policies are investigated

environmental issues and economic decisions in developing countries abstract this paper explains the key role of environmental economics in incorporating environmental concerns into decision making and in facilitating the more efficient management of natural resources as a step toward sustainable development it reviews concepts and techniques for valuation of environmental impacts for use in conventional cost benefits analysis as well as key related aspects including environmental impacts of economywide policies multicriteria analysis risk and uncertainty and discount rate issues several developing country case studies are summarized which cover a range of practical valuation methods the evidence presented suggests that the valuation techniques for determining use values may be applied successfully in appropriate cases but examples involving nonuse values are rare the use of multiobjective desicion methods also needs to be explored where economic valuation is not feasible

an empirical analysis of the demand for multiple peril crop insurance knowledge of factors affecting farmer purchases of crop insurance is essential for evaluating the soundness and profitability of crop insurance programs despite this importance the demand for crop insurance has received limited empirical attention the present paper reports on an empirical assessment of the demand for crop insurance by iowa corn producers adverse selection in the insured pool suggests that producers with differing levels of loss risk have different demand elasticities loss risk is included in the empirical analysis and is found to influence the elasticity of demand results show average demand elasticities of about 0 32 for relative insured acres and 0 73 for liability per planted acre implications for the actuarial soundness of the industry are provided

crop insurance acreage decisions and nonpoint source pollution the redirection of farm policy in the 1996 farm bill has generated much interest in seeking environmentally friendly and economically viable ways to protect farm income agricultural insurance has been suggested as such an instrument this article estimates the effect of crop insurance on crop mix and the resulting change in chemical use in the central nebraska basin providing corn insurance will shift land from hay and pasture to corn which will increase chemical use at the extensive margin this extensive margin effect dominates the effect of crop insurance on the application rate leading to an increase in total chemical use

investigating the effects of mailing variables and endogeneity on mailing decisions abstract determining the optimal amount of mailings being sent to customers is crucial however this decision depends on various aspects first it is important to specify relevant mailing variables by distinguishing different types of mailings and considering their sizes we set our study apart from the majority of existing studies to deal with unobserved heterogeneity we estimate a mixture of dirichlet processes mdp whose components are tobit 2 models a policy function approach is used to take endogeneity into account we investigate whether and how consideration of endogeneity leads to different managerial implications to this end we determine mailings by dynamic optimization for three individual customers which are prototypical for the segments discovered by the mdp model we find out that mailings should be avoided altogether more frequently for all three customer types according to the model which takes endogeneity into account

mailing decisions in the catalog sales industry catalog sales are among the fastest growing businesses in the u s the most important asset a company in this industry has is its list of customers called the house list building a house list is expensive since the response rate of names from rental lists is low cash management therefore plays a central role in this capital intensive business this paper studies optimal mailing policies in the catalog sales industry when there is limited access to capital we consider a stochastic environment given by the random responses of customers and a dynamic evolution of the house list given the size of real problems it is impossible to compute the optimal solutions we therefore develop a heuristic based on the optimal solutions of simplified versions of the problem the performance of this heuristic is evaluated by comparing its outcome with an upper bound derived for the original problem computational experiments show that it behaves satisfactorily the methodology presented permits the evaluation of potential catalog ventures thus proving useful to entrepreneurs in this industry

social influence and collective action effects on farm level soil conservation effort in rural kenya abstract this paper analyzes the effects of social influence and participation in collective action initiatives on soil conservation effort among smallholder farmers in lake naivasha basin kenya we apply binary and ordered probit models in a two stage regression procedure to cross sectional data collected through a household survey among randomly selected smallholder farmers smallholder farming systems in the research area are associated with practices that render farmlands susceptible to soil erosion causing negative impacts on land and the environment therefore strategies that encourage soil conservation are likely to also offer solutions for dealing with agri environmental challenges and poverty alleviation results indicate that social capital facilitates participation in collective action initiatives which then influence individual soil conservation efforts neighborhood social influences subjective norms gender education level farm size access to credit and livestock ownership also emerge as key determinants of soil conservation effort policy implications drawn by this study encourage strategies to increase participation and effectiveness in collective action initiatives as a boost to soil conservation implementation of soil conservation practices could also be encouraged through awareness increasing instruments facilitating access to agricultural micro credit and paying attention to gender related challenges on knowledge access and rights over land and other natural resources

attitudes and farmer conservation behavior conservation behavior is influenced by the attitudes of farmers and by context variables like income and farm terrain important attitudes were selected by using the theory that fundamental value ranks or weights affect attitudes and that only certain values are important to the conservation decision an extension of the tobit estimation approach handling both censored observations of the dependent variable and measurement error for the nonlimit observations was used conservation behavior models can be improved with a merger of concepts and approaches from social psychology and economics

the demand for multiple peril crop insurance evidence from montana wheat farms an econometric analysis of the demand for multiple peril crop insurance is carried out for a sample of 370 montana wheat farms the study is the first to model the farm s participation and coverage level decisions separately through heckman two stage estimation procedures these decisions are shown to be determined in different ways in addition farms with positive expected returns from insurance make coverage level decisions in different ways from farms with negative expected returns these differences indicate that adverse selection effects limit the efficacy of across the board premium rate increases as mechanisms for reducing loss ratios

semiparametric analysis to estimate the deal effect curve abstract the marketing literature suggests several phenomena that may contribute to the nature of the relationship between sales and price discounts these phenomena can produce complex nonlinearities and interactions in the deal effect curve that are best captured with a flexible approach because a fully nonparametric regression model suffers from the curse of dimensionality the authors propose a semiparametric regression model store level sales over time are modeled as a nonparametric function of own and cross item price discounts and a parametric function of other predictors the authors compare the predictive validity of the semiparametric model with that of two parametric benchmark models and obtain superior performance the results for three product categories indicate threshold and saturation effects for both ownand cross item temporary price cuts the authors also find that the nature of the own item curve depends on other items price discounts comparisons with restricted model specification

interactions between agricultural and environmental policies a conceptual framework agricultural policy has a well documented impact on farmers production decisions and those decisions land water and agricultural chemical use may in turn affect the environment there is a public perception that existing agricultural policies are linked to agricultural pollution as exemplified by the conclusions of the recent national research council report alternative agriculture 1989 there is only limited theoretical or empirical research addressing these linkages however this paper develops a conceptual framework that can be used to analyze the interactions between agricultural and environmental policies and pollution this framework integrates physical and economic models at a disaggregate level necessary to capture the heterogeneity of the physical environment and the economic behavior of farmers following e hochman and d zilberman 1978 the disaggregate units can be statistically aggregated to a level useful for policy analysis agricultural and environmental policies can be categorized according to their effects on the intensive and extensive margins combining the different policy instruments with the microeconomic heterogeneity we find that existing agricultural and environmental policies can have either positive or negative effects of nonpoint source pollution to infer an aggregate effect requires data that do not currently exist our framework provides a basis for empirical investigations of these effects given adequate data moreover we find that agricultural policy instruments can be used to mitigate pollution if used appropriately

risk management determinants affecting firms values in the gold mining industry new empirical results abstract the goal of this article is to isolate the significant determinants that affect the decision of non financial firms to hedge their risks our application is for the north american gold mining industry the random variable considered is the selling price of an ounce of gold we show that several factors related to maximizing the firm s value significantly affect the decision to hedge the price of gold

an empirical analysis of acreage effects of participation in the federal crop insurance program the extent to which crop insurance programs have resulted in additional land being brought into production has been a topic of considerable debate we consider multiequation structural models of acreage response insurance participation crp enrollment and input usage our analysis focuses on corn and soybean production in the corn belt and wheat and barley production in the upper great plains our results confirm that increased participation in insurance programs provokes statistically significant acreage responses in some cases though the response is very modest in every case in the most extreme cases 30 decreases in premiums as a result of increased subsidies provoke acreage increases ranging from 0 2 to 1 1 a number of policy simulations involving increases in premium subsidies are considered

adverse selection in crop insurance actuarial and asymmetric information incentives adverse selection is often blamed for crop insurance indemnities exceeding premiums plus subsidies however nationwide empirical evidence has been lacking or based on inadequate county level data this article uses nationwide farm level data on corn and soybeans to decompose incentives for participation in u s multiple peril crop insurance into a risk aversion incentive the conventional justification for insurance an actuarial or subsidy incentive reflecting government subsidization and an asymmetric information incentive which reflects farmers information advantage results show that the risk aversion incentive is small farmers participate in crop insurance primarily to receive the subsidy or because of adverse selection possibilities

from participation to adoption comparing the effectiveness of soil conservation programs in the peruvian andes many efforts are made to promote soil conservation in developing countries this paper compares the effect of two programs promoting soil conservation in peru on the adoption decision of households one program applies a top down approach with soil conservation as its core activity the other program applies a participatory approach offering a portfolio of activities in order to improve rural livelihoods the decisions on participation and adoption are estimated with a trivariate probit model the results show that each program attracts different types of households and achieves different outcomes in terms of soil conservation

creating an enabling environment policy conditions for less favored areas abstract within the rural areas those with a low productive potential usually home to poor agricultural households with limited access to assets are often the core of rural poverty and under constant threat of resource degradation there is ample evidence that neither trickle down effects in high potential areas nor structural adjustment measures have generated much poverty reduction in these less favored areas lfas often due a lack of attention to the development of factor and commodity markets sustainable and pro poor development of lfas therefore poses formidable challenges and requires special measures to achieve an enabling institutional and policy environment it needs to be based on viable sources of growth that imply considerable investments in physical and human capital and appropriate technology recognize positive externalities and add equity and natural resource management concerns in a context of heterogeneity to establish policy conditions that favor such development the role of and experience with major policy interventions incentives and institutions relevant to lfas is reviewed and an attempt is made to generalize these findings to this effect the different interventions are grouped into three broad categories viz price and market policies public services and investment and institutions and governance while countries should adopt the relevant market and trade policies the case is made for greater awareness of the adverse impact these policies can have in lfas and on their poor and complementary policies and investments need to be put in place to buffer or offset adverse outcomes key complementary interventions include public investments in infrastructure human capital and technology to enhance the competitiveness of lfas and policies to improve their market access there is also need for appropriate phasing of policy and market reforms to give people time to adjust and effective safety nets to cushion loss of livelihood options

limitations in evaluating environmental and agricultural policy coordination benefits agricultural policy has traditionally been concerned with the maintenance and stability of farm income and the provision of a stable food supply at low relative prices the food security act of 1985 was the first farm legislation to directly tie farm income and environmental concerns through the conservation reserve program conservation compliance sodbuster and swampbuster provisions the coordination of conservation and farm income policies contributed to commodity supply control by reducing the availability of arable land and it promoted environmental quality by removing some highly erodible land and wetlands from crop production a number of new environmental and food safety initiatives are also being enacted outside the agricultural policy process the most significant piece of legislation is the water quality act of 1987 designed to control

optimal selection for direct mail direct marketing mail is a growing area of marketing practice yet the academic journals contain very little research on this topic the most important issue for direct marketers is how to sample targets from a population for a direct mail campaign although some selection methods are described in the literature there seems to be not a single paper discussing the analytical and statistical aspects involved the objective of this paper is to introduce a comprehensive methodology for the selection of targets from a mailing list for direct mail at least theoretically this methodology leads to more efficient selection procedures than the existing ones the latter are not based on an optimal selection strategy whereas we explicitly take the profit function into account by equating marginal costs and marginal returns we determine which households should receive a mailing in order to maximize expected profit in the empirical part we show that our methodology has great predictive accuracy and generates higher net returns than traditional approaches

the economics of price scissors abstract in the context of a centrally planned developing economy evgeny preobrazhensky suggested the possibility of financing the accumulation process by turning the internal terms of trade against the peasantry without hurting the industrial proletariat which proposition has recently been questioned in a celebrated paper by sah and stiglitz 1984 in the present analysis we first show that consumer rationing is an essential component in preobrazhensky s analysis and that sah and stiglitz model since it relies on market equilibrium cannot be considered as a valid test of preobrazhensky s propositions the conditions under which preobrazhensky s thesis holds are then investigated together with an analysis of rural urban differential pricing policies

semiparametric versus parametric classification models an application to direct marketing in this paper we are concerned with estimation of a classification model using semiparametric and parametric methods benefits and limitations of semiparametric models in general and of manski s maximum score method in particular are discussed the maximum score method yields consistent estimates under very weak distributional assumptions the maximum score method can very easily be used in situations where it is mare serious to make one kind of classification error than another in this paper we use a so called threshold crossing model to discriminate between credit card holders and nonholders the estimated parameters of the logit model differ significantly from the estimates of maximum score given an loss function maximum score performs better than the logit model

the influence of direct payments on farmers hail insurance decisions we analyze determinants of hail insurance use of swiss farmers using fadn panel data covering the period 1990 2009 mixed effect logistic regression models are estimated to identify the most important farm and farmer characteristics that trigger insurance use in addition information on local hail risk is taken into account in these models it shows that larger farms with specialization in crop production and with larger local hail risks are more likely to adopt the hail insurance moreover insurance users are usually older and better educated since the early 1990s swiss agricultural policy has reduced price support and introduced general and ecological direct payments this has led to a much higher importance of direct payments for farmers incomes our analysis shows that this development has contributed to decreasing hail insurance adoption rates in switzerland over the period considered our results indicate that the larger the share of direct payments for total farm revenue the less attractive is insurance as a risk management strategy for farmers this interdependency should be explicitly considered by agricultural policy in the design of support mechanisms

empowering rural people for their own development abstract this elmhirst lecture first discusses the features of the institutional environment which allow rural people in low income countries to design plan and implement their own rural development these are divided into two broad groups the institutional environment for rural development environment for the private sector communities and civil society local government and sector institutions and the many factors governing profitability of investment in agriculture while in many poor countries the institutional environment has improved over the last 20 years the most poorly performing countries still have by far the poorest environment for local government in the world within an empowering institutional environment the rate of agricultural and rural development is determined by investments of many different types that in turn depend primarily on the profitability of agriculture the paper discusses the large number of factors which determine profitability few of these are under the direct control of farmers or agricultural sector institutions but depend on governance and investments in other sectors such as trade and transport in many of the poorest countries there has been considerable improvement in macro economic management and sector policies over the past 20 years but progress in international and intra regional trade policies in agricultural trade policies in transport infrastructure and in agricultural research and extension have been limited

understanding the uptake of organic farming accounting for heterogeneities among irish farmers abstract this paper examines the decisions of irish farmers to convert to organic farming by applying the theory of planned behaviour to control for social influence and technical constraints cluster analysis and principal component analysis are utilised to account for sample heterogeneity and to identify heterogeneities in farmer beliefs regarding adoption of organic methods the results indicate that the impact of economic incentives and technical barriers varies while social acceptance of organic farming constrains adoption these findings suggest that policy incentives mainly based on subsidy payments may be insufficient to increase the organic sector in the presence of social and technical barriers

modeling inter sectoral growth linkages an application to u s agriculture abstract general equilibrium and open economy trade theory are used along with time series data on the u s agricultural sector to provide insights into the structure of agricultural supply factor returns and linkages to the rest of the economy output expansion and factor returns are found to vary depending on relative factor intensities which we refer to as rybczynski and stolper samuelson like effects the effect of the rest of the economy particularly the increase in price of services is found to have relatively large negative impacts on agriculture the short run effects of prices and factor endowments on growth in agricultural supply and factor returns are dominated by the long run effects of technological change

deforestation and national accounting we construct a first best growing economy in which land is being switched continuously from use in forestry to an alternative use we find that implicitly for such activity to take place there must be no net loss to land owners this implies no deduction in the national accounts for deforestation with soil erosion on deforested land pigovian taxes must be levied to sustain a first best we also observe an optimal tax on households for their implicit use of forests as oxygenation sinks

integration of environmental concerns into agricultural policies of industrial and developing countries abstract the question which this paper addresses concerns the types of environmental and resource related agricultural policy adjustments that could properly address the costs of resource degradation and increase long term prospects for sustainable development various public policy approaches e g polluter pays principle fiscal measures regulations etc are discussed and analyzed with regard to their environmental and resource impacts the paper provides illustrative experiences from industrial and developing nations and where possible lessons and insights of relevance to policy making in developing countries are sought

allocation of catalogs to collective customers based on semiparametric response models most approaches to the problem of catalog allocation focus on the decision to send one catalog to an addressee in practice there is the important group of collective customers who submit catalogs to acquaintances to collect their orders therefore collective customers should often obtain more than one catalog we propose a profit maximization approach based on semiparametric generalized additive models gam for these customers responses to the number of allocated catalogs response variables considered are purchase monetary value of purchase returning goods and monetary value of returned goods an exchange algorithm is developed and implemented to maximize the firm s profit given a fixed total number of catalogs

food crops exports and the short run policy response of agriculture in africa the response of agriculture to changes in relative prices is an important factor in the success of structural adjustment programs in africa in this paper i estimate supply functions for total agricultural output food crops and export crops in 14 african countries for the years 1975 to 1990 food and export crops are substitutes in production in the short run total agricultural output responds negatively to increases in export prices and positively to increases in food prices a plausible explanation is that as farmers shift resources to export crop production food supply falls in the short run while the increase in export supply may take several years to materialize the exchange rate is significant in explaining both food and export crop production and aggregate agricultural supply suggesting that the exchange rate is acting as a proxy for excluded macroeconomic variables or that changes in the exchange rate are not passed immediately through to prices

factors influencing adoption of land enhancing technology in the sahel lessons from a case study in niger abstract technical change through the introduction of land enhancing conservation technologies is essential to economic growth in the sahel tobit analysis was used to identify factors that motivate level and intensity of adoption of specific soil and water management technologies the results show that higher percentage of degraded farmland extension education lower risk aversion and the availability of short term profits are important for increasing the adoption and intensity of use of improved tassa and half crescent shaped earthen mounds age and attitudes to differential gains between farm and non farm income showed no influence on adoption three main policy implications emerge from these findings first technologies should be targeted to locations that have large percentages of degraded farmlands the probability of adoption and intensity of use are likely to be high at such locations second there is the need to provide extension education that demonstrates risk reduction capacities of conservation techniques this will make available information capable of stimulating adoption of land enhancing technologies finally policy makers should not seek to target innovations to younger farmers because age has no relationship to adoption of the improved tassa and half crescent shaped earthen mounds lessons from the case study have broad relevance to cropped areas in the sahel

will farmers trade profits for stewardship heterogeneous motivations for farm practice selection we investigate the trade off agricultural producers face between profits and stewardly activities when selecting farm practices instead of the profit maximization framework we model producer behavior in an expanded utility framework built on production technology and including two utility components self and social interests the framework introduces inherent heterogeneity and social environmental motivations into farmer behavior based on this model we hypothesize that there are farmers that are willing to forego some profit to engage in stewardly farm practices with an empirical study we provide evidence that some farmers are willing to make this sacrifice results are consistent with the multi utility hypothesis

agricultural trade liberalization price changes and environmental effects many analyses of agricultural trade liberalization have been undertaken but few have considered the effects on the environment for the developed countries reducing the degree of protection would result in less intensive production therefore environmental stress would be reduced a reduction of trade barriers in industrial countries would result in higher world prices and in a somewhat lower world price variability assuming initially no policy changes for developing countries the question is how the liberalization would affect the environment higher prices in developing countries increase the level of production by intensifying production particularly in the commercial sector and by an area expansion both result in negative environmental effects these could be partly offset by an increase in hired labor in the commercial sector which might reduce pressure at the frontier and on marginal lands as well as by the income effect these off setting effects may be small however the direction of the overall environmental effects cannot be determined unambiguously without empirical examination at the global level the beneficial economic effects of agricultural trade liberalization probably outweigh the expected negative environmental effects in developing countries but this cannot be unambiguously established without valuation

incentives regulations and sustainable land use in costa rica deforestation in costa rica has proceeded at a rapid pace of the remaining 2 700 km2 of virgin forests on privately owned land over 300 km2 are being deforested each year pressure on national parks which cover about 27 percent of costa rica is likely to increase in the future preliminary information indicates that contrary to our expectations most of the deforestation at present is not being done by squatters but driven by profit and asset maximization motives of the timber industry banana companies and large cattle ranchers setting aside 27 percent of the country s land as parks and reserves was a major policy decision aside from the removal of some perverse incentives operating inside park areas the main issue there is one of sound management including protection from intruders strengthening enforcement and controlled tourism on the remaining primary and secondary forest areas on privately owned land outside the parks a key question is whether public interests connected with external costs of deforestation warrant public intervention the paper suggests that a differentiated approach to this and other questions is needed depending on the costs and benefits involved and it discusses incentives and regulations which influence land use and makes proposals for reforms

consequences of a coexistence policy on the adoption of gmht crops in the european union this article examines the adoption of genetically modified herbicide tolerant gmht crops in the european union eu prior to its commercial release a set of potential drivers including the implementation of coexistence measures by farmers farmers own motivational factors e g economic environmental and technical factors and perceived social pressure to accept or reject adoption may influence european union farmers willingness to adopt gmht oilseed rape and gmht maize the analysis includes economic and sociological factors results show that coexistence measures may hamper gmht adoption in the eu

multilateral trade negotiations european integration and farm policy reform trade negotiations and farm policy kym anderson why was it so hard to reach an agreement in the uruguay round to reduce agricultural protection after surveying the growth of agricultural protection in the 1980s i develop arguments based on political economy that imply a systematic tendency for governments to protect farmers increasingly at least up to some threshold as economic development proceeds agricultural protection growth in industrializing countries is therefore normal not exceptional liberalizing those policies before reaching that threshold is unattractive politically unless new influences e g from abroad upset the domestic political equilibrium the uruguay round provided such a force what made the early 1990s so significant a crossroads for farm policy reform was that coincidently there were other changes taking place in europe which lowered the domestic political cost of reforming the ec s common agricultural policy the paper argues that the reforms to farm policy during the rest of this decade as a result of the uruguay round agreement will at best be slow and messy but that is far preferable to the alternative of a failed uruguay round and continued growth of agricultural protection

integration of environmental concerns into economic analyses of projects and policies in an operational context abstract the efficient use of natural resources both mineral and biological as well as man made capital and human resources is a vital prerequisite for economic and social development one key role of ecological economics is to help value environmental and natural resources more precisely and internalize the cost and benefits of using such resources into the decision making process this paper reviews current economic approaches to the analysis of projects and policies and discusses possibilities for better intergrating environmental concerns into public decision making it reviews current practices as they relate to project analysis the analysis of economic policies and national income accounting a major need at present is not for more theory or techniques but for application of existing methodology and approaches to concrete problems particularly in developing countries the major objective should not be to provide fine turned numbers but to indicate orders of magnitude some project and policy alternatives can be ruled out in this fashion also one can often identify the key estimates to which the decision is sensitive and focus more refined analyses on them cost benefit analysis should be used to the extent possible alongside one needs to consider and to the extent possible rigorously analyze consequences and risks that cannot be measured in monetary terms and use for example multi criteria analysis where possible this together with sound judgement are at present the best inputs into decision making

trade liberalization economic specialization and the environment abstract a great deal has been written and a great deal of debate has raged on the effects of international trade and trade liberalization on the environment given that it is only recently that the general agreement on tariffs and trade has begun to address the interdependence of the international economy and the international environment in a systematic way it is likely that the debate will continue for quite some time it will be argued that the economic case for there being benign environmental consequences associated with trade liberalization is flawed in important ways this is due to statistical empirical and conceptual issues which affect the estimation of such effects moreover it will be argued that despite the intensity of the debate the effects of international trade on the environment have in fact only been addressed in an incidental manner rather the debate has concentrated on factors that may coexist with trade but not on the role of trade itself this has served to obscure the more fundamental environmental effects of trade liberalization through the homogenization and specialization of ecosystems

ex post moral hazard in prevented planting this article analyzes the existence of moral hazard in prevented planting pp in the united states the pp provision is defined as the failure to plant an insured crop by the final planting date due to adverse events if the farmer decides not to plant a crop the farmer receives a pp indemnity late planting lp is an option for farmers to plant a crop while maintaining crop insurance after the final planting date crop insurance may alter farmers behavior in selecting pp or lp and could increase the likelihood of pp claims even though farmers can choose lp this study finds evidence that a farmer with higher insurance coverage tends to choose pp more often ex post moral hazard spatial panel models attest to the existence of the ex post moral hazard in pp empirically empirical results show that the pp ratio has a positive relationship with insurance coverage in the case of corn production

international capital markets and interest groups capital market integration has increased the scale and mobility of capital movements within and among nations to unprecedented levels integration is fairly recent frankel concludes from his review of the literature that barriers in the major world financial markets were sufficiently low that by 1989 financial markets could be viewed as being fully integrated the scale and mobility of capital flows among nations has numerous implications to currency values interest rates wealth and through current capital account linkages to relative product and factor prices capital flows that have real economic effects also affect the functioning of policy instruments and how effective they are in remunerating an interest group at the expense if any of others this paper provides insights into the process and linkages by which the integration of capital markets has altered economic policy through interest group pressures on government if economic policy is viewed as the outcome of interest groups seeking through the power of the state that which cannot be provided by the market alone then capital market adjustments that affect the return to policy instruments can also affect the returns to lobbying resources and hence the balance of political influence among the various groups 2 this type of explanation for economic policy has been forwarded under the rubric of models of rent seeking krueger 1974 3 the paper is organized as follows 4 selected historical evidence linking capital markets to pressures for legislation in the united states and other countries is briefly reviewed in some cases capital market adjustments have eased pressures for protection while in other cases adjustments either forced policy change because of a liquidity constraint or made unprofitable the lobbying for sustaining policy in face of these adjustments the discussion in the next section provides deeper insight into capital market lobbying linkages discussion focuses on the results from a simple model of rent seeking where government intervenes in markets and provides sector specific public goods

agricultural pricing and public investment abstract aggregate agricultural supply is price inelastic but responsive to investment in agricultural infrastructure irrigation roads research extension thus the government should tax agriculture and finance infrastructure although unlikely to pay for itself directly it will increase taxable agricultural surplus but by raising rural living standards and therefore the supply price of urban labour it reduces urban tax revenue its marginal social product is therefore overstated when measured at world prices though understated at distorted agricultural prices with scale economies in industry the case for taxing and investing in agriculture is strengthened it may allow the economy to escape stagnation

smuggling and supply response coffee in ethiopia abstract during the 1980s substantial smuggling of coffee has been taking place in ethiopia the recent devaluation has raised hopes that substantial quantities of coffee will flow back to the official channels in this study data on the incentives to supply to the different channels are collated a model of official supplies is formulated which nests an empirical test between the smuggling models by bhagwati and hansen 1973 and by pitt 1981 the econometric results favor the latter and show a small but significant effect of the premium in the black market and a positive total supply response relative to the main competing crop chat the results imply that the increases in export earnings from the devaluation will be quite limited

why kill the golden goose a political economy model of export taxation why do governments tax exports at rates that are ultimately self defeating an answer may lie in the time inconsistent nature of a low tax policy using a dynamic model of export taxation i show that the sustainability of a low tax policy depends on three variables the ratio of sunk costs to total costs how heavily future export revenue is discounted and expected future export earnings using data on taxation leadership duration and profitability i test this theory for 32 countries and six crops from sub saharan africa these three variables are statistically and economically relevant predictors of tax regime

the allocation of catastrophe risk the potential losses from catastrophes have led financial researchers to address the following questions 1 to what extent is catastrophe risk being shared insured and is the allocation of catastrophe risk consistent with notions of optimal risk sharing 2 if not what market imperfections hinder the efficient allocation of catastrophe risk and 3 are there government policies or private market solutions that could lead to a more efficient allocation of catastrophe risk this paper summarizes the research that has been conducted on these questions 2002 elsevier science b v all rights reserved

do landlord tenant relationships influence rental contracts for farmland or the cash rental rate a considerable portion of north america s farmland is rented out by nonfarmer landlords our survey of farmers in southern ontario canada provides a refined understanding of who these landlords are and whether variations in landlord tenant relationships influence rental contract choice and or the magnitude of cash rent we find that crop share arrangements are more likely to emerge among family relations however we do not find strong evidence that family relations explain variation in the magnitude of cash rental rates

optimal mailing of catalogs a new methodology using estimable structural dynamic programming models we investigate the key determinants of the optimal direct mail policy in a dynamic environment where customers maximize utility and the direct mailer maximizes profits we measure the sensitivity of the customers to receiving a catalog in the mail while controlling for customer characteristics such as elapsed time in responses and number of purchases we apply our model to a database from a national cataloger that markets nonseasonal products we summarize the results of our model that are valid for these types of products we find that the dynamic model significantly outperforms its single period counterpart we find that it is not optimal to mail to individuals at low recency levels because they are likely to buy anyway it is better to save the mailing dollars for customers at higher recency levels we find that it is optimal to mail to customers who have purchased only a small or a medium number of times to induce them to continue to buy from this catalog and not switch to others it is not necessary to mail often to customers who have purchased many times before from the company unless they have high recency values we find that under the optimal mailing policy the cataloguer enjoys higher profits than under the current mailing policy

the impact of marketing systems on soil sustainability of agriculture in developing countries a method and an application this article is concerned with soil sustainability problems of agriculture in developing countries in particular with soil erosion the aim of our study is to develop a comprehensive model that explains the adoption of sustainable agricultural practices with respect to soil conservation our approach includes the following special features a the model is comprehensive in that it includes a large number of institutional personal social economic and physical explanatory variables b particular attention is paid to the influence of marketing systems on the adoption of sustainable agricultural practices which to our knowledge has been neglected in past research c the concept of adopting sustainable agricultural practices asap is differentiated into a limited number of basic components of soil conservation and d the model is estimated by principal component regression which enhances efficient estimation of the impact of many explanatory variables on asap our model is applied to cabuyal hillside farming in colombia the application demonstrates the usefulness of the proposed model asap is differentiated into three basic components soil disturbance control soil protection practices and run off control it appears that soil disturbance control is particularly influenced by farmers characteristics such as education and managerial variables the second component soil protection practices appears to be strongly influenced not only by farmers managerial variables but also by their relationship with their environment in particular marketing institutions the third soil conservation component run off control is influenced by the physical characteristics of the plot and by the available farm labor our empirical results demonstrate the usefulness of the proposed model in designing agricultural policies because it can determine which variables are more likely to influence the adoption of a specific type of soil conservation

agriculture in the uruguay round interests of developing countries agriculture has been favored and protected in developed countries while trade policies in developing countries frequently support industry at the expense of exportables and unprotected importables in agriculture this protection constrains expansion of temperate and subtropical agricultural exports from developing countries several studies have estimated the effects of liberalization of trade restrictions on world prices export earnings and import costs while developing countries generally would benefit from having the agricultural policies of the most powerful countries bound by international rules on trade there are differences among the developing countries as to which products should be liberalized even if such conflicts did not exist politically feasible means to obtain such compliance are elusive the potentially most feasible approaches for developing countries to obtain some measure of liberalization in the uruguay round of trade negotiations are discussed

crop insurance policies and purchases in france while many crop insurance systems have been reformed around the world few academic researches have addressed the determinants of the decision on crop insurance at the farm s micro level in this article both the financial and the agricultural literature lead to the identification of many rationales for the crop insurance decision using data from the period 2003 2006 on a representative survey of french farms fadn rica we investigate the different factors that incite farmers to insure against crop risk we emphasize that the highest risk farms are more likely to have insurance and this decision is positively related to the past amount of claims insurance is subscribed by larger farms because insurance appears too expensive for smaller farms which are indeed naturally less diversified interestingly financial variables such as capital structure or return on investment do not significantly determine the insurance decision

ecological economic modeling and valuation of ecosystems abstract we are attempting to integrate ecological and economic modeling and analysis in order to improve our understanding of regional systems assess potential future impacts of various land use development and agricultural policy options and to better assess the value of ecological systems starting with an existing spatially articulated ecosystem model of the patuxent river drainage basin in maryland we are adding modules to endogenize the agricultural components of the system especially the impacts of agricultural practices and crop choice and the process of land use decision making the integrated model will allow us to evaluate the indirect effects over long time horizons of current policy options these effects are almost always ignored in partial analyses although they may be very significant and may reverse many long held assumptions and policy predictions this paper is a progress report on this modeling effort indicating our motivations ideas and plans for completion

on the determinants of corporate hedging finance theory indicates that hedging increases firm value by reducing expected taxes expected costs of financial distress or other agency costs this paper provides evidence on these hypotheses using survey data on firm s use of forwards futures swaps and options combined with computstat data on firm characteristics of 169 firms in the sample 104 firms use hedging instruments in 1986 the data suggest that firms which hedge face more convex tax functions have less coverage of fixed claims are larger have more growth options in their investment opportunity set and employ fewer hedging substitutes

an analysis of short run response of export and domestic agriculture in sub saharan africa abstract short run responses of export and domestic shares of total agricultural output to changes in stocks of domestic savings sav development assistance oda private foreign commercial capital pfx and other variables is investigated a profit function approach is used time series data for 19 sub saharan african countries are pooled into three panels using similarities in changes in economic policy regime statistical evidence suggests that for the panel of countries that were undertaking liberalized economic reforms the slope coefficients of some of the variables in the models have changed significantly between 1970 1980 and 1981 1993 for the 1981 1993 period the impacts of oda pfx and sav on export and domestic shares were different for this panel the effect of increases in agricultural labor was different across the three panels there is also evidence that productivity growth in the export agriculture sub sector is negative in all the groups it is recommended that to halt the decline in export share of agricultural output in the group of countries that have undertaken substantial improvements in economic policy environment efforts must be made to reduce the negative impact of domestic savings and agricultural labor while at the same time working to reduce the bias of development assistance against food security