inserting gm products into the food chain the market and welfare effects of different labeling and regulatory regimes the purpose of this article is to examine the system wide effects of the introduction of genetically modified gm products with and without labeling and to compare these two regimes to a third regime where gm products are not present either because they have not yet been developed or because they have been banned for each regime the decisions and welfare of consumers producers and life science companies are examined the article explicitly incorporates the consumer response to the introduction of gm technology and considers different market structures of the life science sector

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

genetically modified crops corporate pricing strategies and farmers adoption the case of bt cotton in argentina this article analyzes adoption and impacts of bt cotton in argentina against the background of monopoly pricing based on survey data it is shown that the technology significantly reduces insecticide applications and increases yields however these advantages are curbed by the high price charged for genetically modified seeds using the contingent valuation method it is shown that farmers average willingness to pay is less than half the actual technology price a lower price would not only increase benefits for growers but could also multiply company profits thus resulting in a pareto improvement implications of the sub optimal pricing strategy are discussed recently genetically modified gm crops have brought about important changes in the global market for agricultural technologies especially seeds prospects of high economic returns and tightened intellectual property rights iprs have provided new incentives for the private sector to invest in crop improvement and extend its business to nontraditional markets the increasingly proprietary nature of seed technologies has implications for farmers adoption and benefit distribution private innovators endowed with a patent on a technology will attempt to capture the gains from their innovation through monopoly pricing moschini and lapan recent studies have looked into the partitioning of welfare created by gm crops among agricultural producers consumers and innovating input firms e g moschini lapan and sobolevsky falckzepeda traxler and nelson in these studies however the market price of the technology is

anti corporate farming laws and industry structure the case of cattle feeding nine midwestern states have laws that restrict the involvement of publiclyheld corporations in agriculture opponents argue that the laws direct efforts to regulate ownership structure may have an adverse indirect impact on size structure restricting corporate involvement might stifle the emergence and growth of efficient large scale establishments if corporations have advantages over other organizational forms in meeting capital requirements since 1982 nebraska has had an anticorporate farming law that prohibits corporate ownership of feedlots we test whether the implementation of the nebraska law had an impact on the stochastic process governing the evolution of the state s feedlot size distribution nine states iowa kansas minnesota missouri nebraska north dakota oklahoma south dakota and wisconsin have laws that restrict corporate involvement in agricultural production haroldson 1992 the specific provisions of these laws commonly known as anti corporate farming laws stayton 1991 vary from state to state limitations on the size of corporations agricultural landholdings are a common provision in some states corporations are virtually prohibited from owning farmland or operating farms other states simply outlaw corporate involvement in specific agricultural activities edmondson and krause 1978 the laws in all of the nine states include an exemption for the authorized family farm corporation which is defined in various ways but generally means an incorporated farm enterprise with a limited number of stockholders at least one of whom resides on or operates the farm 1 most observers seem to agree with

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

agricultural profits and farm household wealth recent decades especially since 1973 have been an era of decreasing production profits that threaten the survival of many midand small sized american farms blank 2003 normally the survival of a firm depends on its profitability both in absolute and relative terms to remain viable a firm must offer returns that are both sufficient to cover the owner s financial obligations and competitive with returns from alternative investments if a firm is profitable the wealth of its owners can increase over time an unprofitable firm on the other hand reduces owners wealth yet american agriculture is full of firms that routinely earn low or negative returns on equity from production operations blank 2002 thus complicating the evaluation of the industry s economic health and prospects this suggests that macro level forecasts of american agriculture s future structure and performance require a micro level understanding of the relationship between farm profits and owner wealth this paper addresses that relationship

competition and privatization amidst weak institutions evidence from mongolia mongolia s mass privatization program was implanted in a country that lacked the very basic institutions of capitalism this paper examines the effects of competition and ownership on the efficiency of the newly privatized enterprises using a representative sample of enterprises and controlling for possible selection biases competition has quantitatively large effects perfectly competitive firms having nearly double the efficiency of monopolies enterprises with residual state ownership appear to be more efficient than other enterprises reflecting an environment where the government was pressured to focus on efficiency and institutions gave little voice to outsider owners jel p0 l1 l33 o12

economic impacts of the california one variety cotton law the california one variety cotton law is an important example of technological regulation in this case intended to serve as a de facto quality control and to mitigate externalities in production that can arise from the mixing of cottonseed at the gin this paper describes and interprets the economic history of the law presents a theoretical model of its economic effects and provides quantitative estimates of the impacts on output prices and economic welfare following a partial deregulation under a 1978 amendment to the law the analysis shows that large social costs have arisen from concentrating control over the genetic base for california cotton production in the hands of a single government cotton breeder and restricting production to the use of a single selection of a single variety some of these costs have been eliminated by the partial deregulation in 1978 to permit private breeders to compete in the provision of genetic material but production is still restricted to the acala variety of cot

combining revealed and stated preference data to estimate the nonmarket value of ecological services an assessment of the state of the science this paper reviews the marketing transportation and environmental economics literature on the joint estimation of revealed preference rp and stated preference sp data the rp and sp approaches are first described with a focus on the strengths and weaknesses of each recognizing these strengths and weaknesses the potential gains from combining data are described a classification system for combined data that emphasizes the type of data combination and the econometric models used is proposed a methodological review of the literature is pursued based on this classification system examples from the environmental economics literature are highlighted a discussion of the advantages and disadvantages of each type of jointly estimated model is then presented suggestions for future research in particular opportunities for application of these models to environmental quality valuation are presented

valuing water quality as a function of water quality measures employing a unique and rich data set of water quality attributes in conjunction with detailed household characteristics and trip information we develop a mixed logit model of recreational lake usage and undertake thorough model specification and fitting procedures to identify the best set of explanatory variables and their functional form for the estimated model our empirical analysis shows that individuals are responsive to the full set of water quality measures used by biologists to identify the impaired status of lakes thus changes in these quality measures are not simply a scientific exercise but they also translate into changes in the recreational usage patterns and well being of individual households willingness to pay wtp estimates are reported based on improvements in these physical measures

discount schedules and grower incentives in grain marketing in this paper we develop a microeconomic optimization model of grain elevator cleaning and commingling decisions when the firm is faced with different discounting schedules using generalizations of jensen s inequality it is shown that a convex concave discount schedule encourages commingling cleaning however a separate market for cleanings may qualitatively alter the optimal arrangement of grain wheat elevator records are studied to discern whether alternative discount schedules provide elevators with opportunities to cover the costs of rearranging grain composition rearrangement activities appear to be marginally profitable for some dockage levels

willingness to pay for curbside recycling with detection and mitigation of hypothetical bias in this article we estimate willingness to pay for curbside recycling using a unique data set we also test for and detect significant hypothetical bias using stated and revealed preference data a short scripted cheap talk statement is used to mitigate the bias and provide more efficient estimates of the welfare impacts of curbside recycling programs copyright 2003 oxford university press

market and welfare effects of second generation consumer oriented gm products we examine the economic effects of the introduction of consumer oriented genetically modified gm products into the food system by developing a model of heterogeneous consumers and producers that allows for vertical and horizontal differentiation between the products available to consumers the model facilitates the estimation of consumer and producer surpluses in the product utility and product net returns spaces results show that the introduction of consumer oriented gm products can change the relationship between gm and conventional and organic products from one of vertical to one of horizontal product differentiation and can enhance both economic welfare and the market acceptance and growth of agricultural biotechnology

genetically modified crops their market and welfare impacts a framework is developed for examining price and welfare effects of the introduction of genetically modified gm products in the short run non gm grain generally becomes another identity preserved product however more profound market effects are observed under some reasonable parameterizations when calibrated to reflect the u s corn market introducing gm technology increases aggregate welfare over a wide range of scenarios unless the corresponding production cost savings are small and consumers are seriously concerned about gm products the possibility that gm technology may reduce aggregate welfare is interesting because the model assumes rational agents and does not include regulatory constraints

modeling a household s choice among food store types a household s choice among the different types of food stores to patronize depends on characteristics of both the stores and the household store characteristics include prices and promotional deals two types of household characteristics are important the household s specific purchase history and demographics this study proposes a new multinomial logit model to account for these choice determinants in an empirical application to fluid milk we find that store characteristics and both household demographics and purchase history are significant determinants of a household s store type choices and must all be included in a choice model copyright 2012 oxford university press

consumption effects of genetic modification what if consumers are right this paper develops a model of differentiated consumers to examine the consumption effects of genetic modification gm under alternative labelling regimes and segregation enforcement scenarios analytical results show that if consumers perceive gm products as being different than their traditional counterparts gm affects consumer welfare and thus consumption decisions when the existence of market imperfections in one or more stages of the supply chain prevents the transmission of cost savings associated with the new technology to consumers gm results in welfare losses for consumers the analysis shows that the relative welfare ranking of the no labelling and mandatory labelling regimes depends on i the level of consumer aversion to gm products ii the size of marketing and segregation costs under mandatory labelling iii the share of the gm product in total production and iv the extent to which gm products are incorrectly labelled as non gm products

replicating ricardian equivalence tests with simulated series this paper replicates standard consumption function tests of ricardian equivalence using series generated from a model which nests ricardian equivalence within a non ricardian alternative due to finite horizons and or distortionary taxation the author shows that the estimates of the effects of taxation on consumption are not robust and that standard tests may have weaknesses which can lead to conflicting results whether ricardian equivalence holds or not the simulations also show that no clear conclusions about ricardian equivalence can be drawn from observing a low correlation between the current account and government budget deficits copyright 1997 by american economic association

estimating the demand for a new technology bt cotton and insecticide policies this article examines the potential demand for bt cotton in the southeast from information gathered in the first year of commercialization we combine revealed preference rp data on adoption of bt cotton varieties with stated preference sp data on willingness to adopt to estimate demand using a double bounded maximum likelihood procedure using estimated demand equations we simulate the costs of reducing conventional insecticide applications through subsidization of bt cotton results indicate that reducing cotton insecticide applications by 40 in the southeast would require a 21 acre subsidy with total annual program costs between 53 million and 60 million

policy evaluation with combined actual and contingent response data the city of marietta georgia experimentally switched from flat fee financing to volume based pricing for its trash services in january 1994 both before and during the experiment detailed data on individuals observed responses to the actual introduction and contingent behavioral responses to a hypothetical introduction of volume based pricing were collected this study applies these data and investigates the methodology of collecting contingent behavior data and their use in policy analysis in particular this study empirically evaluates the effect of experience with the policy on responses to contingent behavior questions and tests for potential bias in the contingent behavior data

who pays the costs of non gmo segregation and identity preservation our aim is to explore who pays the costs and who reaps the benefits of maintaining a dual market system of genetically modified organisms gmos and non gmos we analyze the welfare effects of the introduction of consumer hatred given gmo technology and the introduction of gmo technology given hatred making alternative assumptions of competitive and then monopolistic supply we recognize that identity preservation ip of non gmos creates costs for ip and non ip producers we model these costs as depending on the sizes of the two supply channels copyright 2003 oxford university press

the real effects of public investment on private investment one of the main policy questions that emanated from the macro rational expectations literature and the focus of many empirical studies is whether expected government policy has an effect on real output and or whether unanticipated government policy has a permanent effect on real output many of the empirical studies have examined this question directly by testing whether a statistically significant relationship exists between real output or employment and some form of an aggregate demand policy variable the conflicting results of these studies fail to either validate of refute the neutrality proposition a shortcoming of these empirical studies arises because government spending is viewed merely as an additive component of aggregate demand and is therefore modelled on the demand side only if however the productivity of private investment is correlated with aggregate demand policy there will exist supply side effects also another approach to determine any effects of public capital on private c

risk perceptions risk preference and acceptance of risky food consumers risk preferences are often overlooked in studies of consumer demand for risky food we find that risk preferences elicited through context less lottery choices are significantly related to consumers stated preferences for genetically modified gm food these results suggest risk preferences elicited in the laboratory are not artificial in the sense that they appear to be related to the same risk preferences that govern other individual decisions such as food choice consistent with theoretical expectations risk perceptions and risk preferences were found to be significant determinants of acceptance of gm food which has important implications for explaining consumer behavior

education and innovation adoption in agriculture evidence from hybrid rice in china this paper uses the diffusion of f1 hybrid rice as a case for examining the effects of education on the adoption of new technology in china a simple behavioral model that treats the adoption of hybrid rice as a portfolio selection problem is presented the implications of the model are tested with farm level data collected from a sample of 500 households in hunan province the results from a dichotomous probit model and a two limit tobit model are consistent with the hypothesis that education has a positive impact on the adoption of new technology

the tax versus debt controversy in a multivariate cointegrating system the empirical literature is replete with evidence that budget deficits and government debt affect traditional view or do not appreciably affect ricardian equivalence private consumption however the validity of the relative empirical estimates can be questioned to the extent that they do not adequately distinguish among countries with varying levels of indebtedness the present paper attempts to address this problem by using johansen s cointegration technique and by sorting the sample countries into groups according to the ratio of debt to gdp the empirical evidence generated finds support for the debt illusion hypothesis as a means of expounding variations in consumers behaviour among countries with varying degrees of indebtedness

is there a viable market for area based crop insurance the performance of area yield insurance and farm level multiple peril crop insurance is analyzed for cotton and soybean production in georgia and south carolina the analysis improves on many previous studies by utilizing actual farm level yield data and by comparing the two types of insurance products not only for actuarially fair premium rates but also for actual unsubsidized and subsidized premium rates results suggest that even in heterogeneous production regions area yield insurance may be a viable alternative to farm level insurance when premium rates for farm level insurance contain large positive wedges

ricardian equivalence and the public and private saving nexus in india abstractthis study tests the ricardian equivalence theorem ret and examines the responsiveness of private saving to public saving in india most estimators do not provide support for the empirical validity of ret and long run cointegration between public and private saving the increases in household saving hhs seem to have been engendered by the provision of saving incentives institution of saving schemes self driven motivation to save and the precautionary accumulations induced by uncovered uncertainties in incomes rather than by ricardian behaviour of households the self imposed aversion to debt and debt bequest borrowing and liquidity constraints and the intertemporal smoothing of consumption have been the added catalysts that contributed to the increases in hhs the households with binding borrowing constraints inadequate or no insurance and uncovered uncertainties in incomes seem to have been saving more to pay for higher inflation tax the fiscal consolidation and generation of public s

ethics welfare and markets an economic analysis the present article examines society s welfare when goods with identical physical attributes can be produced using two alternative technologies one of them less ethically desirable but less expensive for at least some producers for the scenario where identification costs must be borne by producers and consumers of the high quality good the outcome under unregulated markets is identical to the optimal solution of a central planner constrained to neither ban the undesirable technology nor segregate the low quality good however under certain circumstances the unregulated market equilibrium may be improved upon by government intervention that shifts the burden of identification costs to the producers of the low quality good or which bans the production of the low quality good the optimal intervention needs to be determined case by case and depends on consumer preferences relative production costs and relative costs of identification and fraud prevention

government debt government spending and private sector behavior reply and update the preceding articles by martin feldstein and douglas elmendorf and by franco modigliani and arlhe sterling give us a welcome opportunity to return to the effects of fiscal policy on private consumption at stake in this debate we believe is a potential paradigm change from what kormendi 1983 termed the standard approach which bases private consumption on disposable personal income to what he termed the consolidated approach which bases consumption on aggregate income government spending and transfer payments each with separate effects the standard approach excludes ricardian equivalence a priori the consolidated approach not only incorporates ricardian equivalence but in its augmented form allows one to nest the various hypotheses associated with the two approaches feldstein and elmendorf argue that kormendi s 1983 results and implicitly those of kormendi and meguire 1986 which reject the standard approach in favor of the consolidated ricardian alternative are not robust to the exclusion of data from world war ii and other specification changes modigliani and sterling argue that accounting for temporary taxes reverses our rebuttal of their 1986 comment we first take up the challenge of feldstein and elmendorf before turning to modigliani and sterling we then assess the validity of our preference for estimating in differences by testing whether consumption income and the fiscal variables are cointegrated finally we summarize what can be learned from the debate i feldstein and elmendorf

fiscal policy and private investment expenditure a study of australia and the united states the effect of government spending on private sector s investment and profitability is examined within the context of an open economy macro model the empirical results of the study indicate that the private investment expenditure in australia and the united states is crowed out by government investment and government consumption respectively these results are in conflict with the hypothesis of fiscal neutrality in addition the empirical results of corporate profitability provide no support for the complementary relationship between public and private investment expenditure

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

urban sprawl and farmland prices a theoretical model of farmland valuation is developed to explicitly account for three effects of urban sprawl conversion of farmland to urban uses effect on agricultural returns and speculative effect as represented by farmland conversion risk this model is estimated using county level data in the continental united states evidence is found for all three effects of urban sprawl on farmland values counties more accessible to major urban centers have higher net agricultural returns subsidiary evidence supports that the latter effect may be attributed to survival of or conversion to high valued agriculture around urban centers

impacts of declining u s retail beef demand on farm level beef prices and production a systems model was estimated to determine the effects of declining u s retail beef demand on farm level beef prices and production retail beef demand declined by nearly 66 from 1976 to 1999 results indicate autonomous shifts in retail demand significantly impacted farm level demands and production based on equilibrium multipliers the 1976 99 reduction in beef demand decreased real slaughter cattle prices and production by 32 1 and 11 2 respectively real feeder cattle prices and production decreased by 8 0 and 22 6 respectively combining the decreases in farm prices and production slaughter and feeder cattle producers experienced a real revenue reduction of 13 3 billion 61 due to the long term decline in demand

planting decisions and uncertain consumer acceptance of genetically modified crop varieties there exists much uncertainty about consumer attitudes towards genetically modified foods if it happens that sufficient insufficient acres are planted under non modified seed to meet post harvest demand then a price premium will not will emerge for the non modified varieties a non linearity originates in the fact that a price premium may be supported this non linearity interacts with the extent of demand uncertainty to determine equilibrium varietal plantings and the probability that post harvest varietal prices will differ also as planting approaches signals will be received by growers about the nature of demand they will be planting into we show how the non linearity affects the order on the types of signals that risk neutral growers will prefer to receive

imperfect price deflation in production systems numeraire prices that are measured with error create challenges for econometric estimation a straightforward approach for a model with linear input demands such as generated from a quadratic normalized profit function is proposed where the numeraire price is measured with error numeraire measurement error is likely because expected output price is measured imperfectly by actual output price an approach using generalized method of moments is developed to estimate such errors in variables systems that avoids use of extra sample data or additional structural specifications monte carlo examination of small sample properties shows promise measurement error is statistically significant using aggregate u s agricultural data

natural resource economics and conservation contributions of agricultural economics and agricultural economists research by agricultural economists on natural resources has been distinguished by an interdisciplinary emphasis and a dynamic perspective it has recognized technological and institutional constraints has been oriented toward solving concrete resource management and policy problems and has emphasized empirical and quantitative analysis agricultural economists have introduced methods for evaluating natural resource conservation efforts for predicting adoption of resource conservation technologies and for designing efficient and sustainable resource management policies they have identified ways of improving land management and preventing land degradation proposed reforms of institutions governing water allocation and water quality and introduced policies for balancing environmental and efficiency considerations in the management of pests biodiversity and livestock diseases their research has had substantial impacts on the formulation of resource conservation policies

does foreign aid really raise per capita income a time series perspective we analyze the relationship between per capita income and foreign aid we employ annual data and five year averages and carefully examine the time series properties of the data panel estimations with dynamic feasible generalized least squares dfgls show that aid generally has an insignificant or minute negative significant impact on per capita income particularly in highly aid dependent countries this holds true for countries with different levels of human development and income as well as for different regions we also find that aid has a small positive impact on investment but a significant negative impact on domestic savings crowding out and the real exchange rate appreciation jel classification f35 o11 c23 c51 on analyse la relation entre le revenu per capita et l aide etrangere on utilise des donnees annuelles et des moyennes quinquennales et on examine les proprietes de ces series chronologiques des estimations d un modele dynamique utilisant des donnees de panel a l aide de la methode des moindres carres quasi generalises montrent que l aide a generalement un effet negatif minime ou insignifiant sur le revenu per capita particulierement dans les pays qui dependent beaucoup de l aide etrangere ce resultat tient tant pour des pays a divers niveaux de developpement et de revenus que pour differentes regions on decouvre que l aide a un petit effet positif sur l investissement mais un effet negatif significatif sur l epargne effet d encombrement et sur le taux de change reel appreciation

assessing ricardian equivalence this paper reviews the literature on ricardian equivalence this hypothesis may be interpreted as a generalisation to the short and the long run of the theories which put no weight on the real effects of public policies on aggregate demand we argue that ricardian equivalence relies on both permanent income hypothesis and the fulfilment of the intertemporal government budget constraint the theoretical literature emphasises several reasons for departures from this hypothesis however the empirical literature is inconclusive when ricardian equivalence is tested in a life cycle framework the hypothesis is usually rejected while when the empirical analysis is based on optimising models it is usually accepted

diseconomies of size with fixed managerial ability managerial ability has important implications for farm growth in this article we first show in a production model that increasing output with a fixed level of managerial ability can lead to a decrease in profits next we discuss the effect that managerial ability has on economies of size in the empirical part economies of size are estimated for a sample of dairy farms using a proxy for managerial ability which is calculated as a technical efficiency index the results show that increasing farm size while holding managerial ability constant can be an important source of diseconomies of size copyright 2003 oxford university press

average crop revenue election a revenue based alternative to price based commodity payment programs this article develops a stochastic model of the average crop revenue election acre program which offers revenue based commodity payments under the 2008 farm act our analysis shows that adding acre revenue payments to gross revenue reduces downside revenue risk for corn wheat and soybean farmers in 2009 on average by 16 21 and 23 respectively results indicate that farms with higher expected yields and lower variance of yields tend to benefit the most from acre integrating federal crop insurance with acre lowers insurance premiums from 10 to 40 depending on the crop and location

on the dynamics of corporate size and illegal activity an empirical assessment this research relying on companies continuously listed on the fortune 500 over a five year period n 384 provides an empirical assessment of two hypotheses based on 334 violations over the period the results indicate 1 gross differences in illegal activity based on corporate size and 2 similar differences in corporate recidivism also based on size discussion includes a number of size related dynamics which may account in part for such results

on corporate governance a study of proxy contests abstract this paper examines a sample of firms experiencing proxy contests for seats on their board of directors dissident shareholders usually fail to obtain a majority of board seats nevertheless they capture some seats via mechanisms such as cumulative voting in over half of the sample contests regardless of proxy contest outcome positive and statistically significant share price performance is associated with the contest that finding is predicted by the standard economic analysis of proxy contests in which the challenges benefit shareholders by improving corporate performance the finding runs counter to the claim of berle 1962 that the economists view of proxy contests is a wholly imaginary picture a portion of the positive share price changes taking place in the early stages of some proxy contests is not permanent however and as suggested by manne 1962 is at least partially attributable to temporary increases in the market value of the vote attached to corporate shares

consistent estimation of censored demand systems using panel data we derive a joint continuous censored commodity demand system for panel data applications unobserved heterogeneity is controlled for using a correlated random effects specification and a generalized method of moments framework used to estimate the model while relatively small differences in elasticity estimates are found between a flexible random effects specification and one that restricts the random effect coefficient to be time invariant larger differences are observed when comparing the flexible model to a pooled cross sectional estimator the results suggest the limited ability of such estimators to control for preference heterogeneity and unit value endogeneity leads to parameter bias

consumer benefits of labels and bans on gm foods choice experiments with swedish consumers the european union has been relatively cautious about using biotechnology in food production a label regime combined with the right of individual member states to ban introduction of new genetically modified gm strains means that gm food products in effect are banned in many countries we show how it is possible to empirically test whether a ban can be motivated by reference to potential negative externalities this is followed up by results from a choice experiment we cannot reject the hypothesis of equal wtp for a ban and a labeling scheme

what is it about organic milk an experimental analysis auction experiments were used to examine demand relationships and willingness to pay wtp for organic rbst free no antibiotics used and conventional milk elasticities showed strong substitute and complement relationships between organic rbst free and no antibiotics varieties the sum of the latter two s premiums were not significantly different than the organic premium suggesting diminishing marginal utility for added attributes results from a two stage heteroskedastic tobit model demonstrated that wtp premiums for the varieties differ significantly by demographics and beliefs regarding the conventional version these suggest market segments for rbst free and no antibiotics versions could succeed alongside organic benefiting consumers and producers copyright 2007 oxford university press

on the adoption of genetically modified seeds in developing countries and the optimal types of government intervention given the proprietary nature of most genetically modified gm seed technologies the question arises as to how farmers in developing countries can gain proper access based on empirical observations a theoretical model is developed focusing on farmers adoption decisions in response to pricing strategies of a foreign monopolist and a domestic supplier of conventional seeds government interventions such as seed subsidies encouragement of r d and intellectual property rights ipr enforcement and their effects on gm coverage and national welfare are analyzed the possibility of the government obtaining a license to distribute gm seeds domestically through a transfer to the monopolist is also considered

does tourism promote cross border trade we estimate a simultaneous bivariate qualitative choice model of arizona agribusiness firms propensity to trade and visit as a tourist the cross border state of sonora mexico venture business visits quantified through the tourism equation were found to have the largest impact on a firm s propensity to trade tourist visits have a greater impact on trade when combined with other firm attributes such as age perceived need for geographic diversity foreign language fluency and firm size than if considered alone our results suggest that there is a role for government agencies to play in overcoming imperfect information related to trade opportunities through facilitating exploratory business venture and tourist visits

supply response to countercyclical payments and base acre updating under uncertainty an experimental study we design an experiment to simulate how people make agricultural production decisions under three policy scenarios each incorporating direct payments dps a price uncertainty without countercyclical payments ccps b price uncertainty with ccps and c price uncertainty ccps and uncertainty regarding base acreage updating results are the ccp program and perceived possibility of future base updating created incentives for subjects to invest more in program base crops despite payments being decoupled from current production decisions those choosing to reduce revenue risk by increasing plantings of base crops may face reduced incomes suggesting the efficiency of crop markets may be diminished

economic and welfare impacts of commercializing a herbicide tolerant biotech wheat abstract a transgenic variety of spring wheat was proposed for deregulation in north america in 2002 more recently the developer shelved this plan in this paper a quantitative model is used to analyze the possible economic impact of commercializing a crop for which there may be sizable consumer resistance at issue is whether and under what conditions the economic benefits from biotech wheat could be outweighed by economic costs the analysis also addresses the distribution of costs and benefits among stakeholders producers consumers and us taxpayers specific attention is given to the impacts on consumers in non biotech and biotech market segments and those in the united states and foreign countries under base case assumptions the analysis suggests that commercialization of biotech wheat could lead to a small net loss of total economic welfare results depend critically on several model parameters the rate of biotech adoption unit cost savings for biotech producers the share of the non biotech market segment and extra costs associated with a dual marketing system for wheat

a neoclassical perspective on budget deficits i n the 1988 presidential campaign virtually every serious candidate spoke of the urgent need to trim government budget deficits public opinion polls have identified federal deficits as a key economic issue second only to unemployment while many economists are relieved by what they perceive to be a long overdue political response to a critical economic problem others regard the fuss as much ado about nothing it is indeed remarkable that economists can disagree so severely over an issue which commands such a uniform reaction from laymen of widely different ideologies and political affiliations generally speaking there are three schools of thought concerning the economic effects of budget deficits neoclassical keynesian and ricardian before proceeding further it is useful to review the basic structure and implications of each paradigm the neoclassical paradigm envisions farsighted individuals planning consumption over their own life cycles budget deficits raise total lifetime consumption by shifting taxes to subsequent generations if economic resources are fully employed increased consumption necessarily implies decreased saving interest rates must then rise to bring capital markets into balance thus persistent deficits crowd out private capital accumulation in the current economic environment most economists would agree that these consequences would be highly detrimental

government expenditure and economic growth evidence from g7 countries this paper examines wagner s law of public expenditure which emphasizes economic growth as the fundamental determinant of public sector growth using time series data drawn from the g7 industrialized countries over the sample period 1960 1993 it presents evidence on both the short and long run effects of growth in national income on government expenditure by resorting to recent developments in the theory of cointegrated processes an attempt is also made in this study to examine if wagner s law holds between certain key components of government expenditure and income

share tenancy ownership structure and prevented planting claims in crop insurance a conceptual model based on opportunity cost and expected utility principles establishes linkages between the likelihood of prevented planting claims in crop insurance and existing share leasing arrangements internal farm business structures results of heteroskedastic probit estimation procedures indicate that simpler internal business structures and more dominant farmer tenant leasing position can increase the probability of submitting a prevented planting claim

statistical efficiency of double bounded dichotomous choice contingent valuation the statistical efficiency of conventional dichotomous choice contingent valuation surveys can be improved by asking each respondent a second dichotomous choice question which depends on the response to the first question if the first response is yes the second bid is some amount greater than the first bid while if the first response is no the second bid is some amount smaller this double bounded approach is shown to be asymptotically more efficient than the conventional singlebounded approach using data from a survey of californians regarding their willingness to pay for wetlands in the san joaquin valley we show that in a finite sample the gain in efficiency can be very substantial

government debt government spending and private sector behavior revisited comment perhaps no issue has generated as much controversy among economists in the past decade as the proposition that an increase in the government deficit induces an equal offsetting increase in private saving the truth of this so called ricardian equivalence proposition is central to whether budget deficits reduce capital accumulation to the feasibility of expansionary tax reductions and to the effects of social security on private saving and aggregate capital accumulation although the basic idea that the future tax liabilities associated with government deficits and debt induce individuals to increase their saving has been around since the time of david ricardo and was treated explicitly by don patinkin 1965 martin bailey 1971 and levis kochin 1974 the current debate was launched by robert barro 1974 the voluminous theoretical literature of recent years has shown that complete ricardian equivalence would be expected to prevail only under very special conditions see douglas bernheim 1987 for an especially useful survey and analysis but the theoretical restrictiveness of the assumptions required for complete ricardian equivalence does not constitute a practical refutation defenders of ricardian equivalence can argue that the theory is only an approximation and can claim that although the stringent conditions required for complete ricardian equivalence do not hold the economy s behavior in practice is close to the predictions of ricardian equivalence there are two key empirical questions the first is whether a higher level of taxes with government spending constant induces individuals to reduce their spending on consumption as traditional theory holds or has no effect on consumer spending as the ricardian equivalence proposition predicts the second deals with the effect of government outlays on goods and services although the absence of a negative effect on consumer spending of such government outlays is clearly contrary to the ricardian equivalence proposition the existence of a moderate negative effect of government outlays on consumer spending is not in itself evidence in favor of the ricardian equivalence proposition that individuals increase their saving to finance anticipated debt service as feldstein 1982 explained consumers may correctly believe that a rise in current government spending is a good indicator of a higher level of future government spending once a program is launched or budgets increased the process is unlikely to be reversed an increase in current government spending is therefore a good indication that future taxes will have to be higher to finance a higher level of future government spending individuals may rationally reduce their own spending when government outlays increase without a concurrent increase in taxes because they anticipate higher future taxes to finance higher future government spending even if they give little or no weight to the debt service implications of the current deficit the strongest direct evidence in favor of ricardian equivalence is roger kormendi s 1983 article in the american economic review he presents consumption regression equations that relate an estimate of consumption to net national product wealth martin feldstein is professor of economics at harvard university and president of the national bureau of economic research douglas elmendorf is assistant professor of economics at harvard university we are grateful to greg mankiw and lawrence summers for comments on an earlier draft the research reported here is part of the nber study of the government budget and the private economy ikormendi defines consumption as the sum of current expenditures on services and nondurables plus 10

innovation and trade with endogenous market failure the case of genetically modified products a partial equilibrium two country model is developed to analyze implications from the introduction of genetically modified gm products in the model innovators hold proprietary rights farmers are competitive adopters some consumers deem gm food to be inferior in quality to traditional food and the mere introduction of gm crops affects the costs of non gm food because of costly identity preservation among the results derived it is shown that although gm innovations have the potential to improve efficiency some groups can be made worse off indeed it is even possible that the costs induced by gm innovations outweigh the efficiency gains

combining contingent valuation and travel cost data for the valuation of non market goods the travel cost method tcm has long been used to infer the economic value of nonmarket resources and public goods more recently contingent valuation cvm survey methods have gained popularity for eliciting these values here cvm survey responses are combined with tcm data on actual market behavior to estimate jointly both the parameters of the underlying utility function and its corresponding ordinary demand function this is a prototypical empirical example of a new modeling strategy variants of which should prove useful in many applications especially where reliance on a single valuation method is undesirable

united states farm commodity programs and land use we estimate the impact of government payments on united states land use using county level data from the national resources inventory and the census of agriculture in 1987 1992 and 1997 although payments were made under decoupled support programs effects on land use are found to be significant on average for the years studied our simulations indicate that united states cropland acreage would have been 89 million acres 22 less if program payments had been reduced to half their observed level holding market prices of commodities constant percentage reductions are largest in marginal crop producing areas of the nation

organic production and ethical trade definition practice and links abstract in recent years there has been a growing debate about ethical aspects of production and trade this has evolved from concerns about fair trade safe working conditions for producers and employees and sustainable and environmentally safe natural resource management the principles of organic agriculture are wide ranging and include concerns for safe food production for the environment for animal welfare and for issues of social justice a working definition of ethical trading and an assessment of the links between organic production and ethical trading were obtained from 34 organisations in the uk involved in ethical or fair trading or organic agriculture interviewees were from major supermarkets independent and multiple retailers alternative trading organisations importers wholesalers accreditation bodies non governmental development agencies and lobby groups a definition of ethical trading based on the interviewees responses is developed and discussed the paper examines current practice in ethical and organic trading and assesses the role of the ethical trading initiative and major supermarkets current and potential links between organic production and ethical trade are explored constraints to linking the two concepts more fully both conceptual and practical are evaluated there is potential for organic production to be ethical using the holistic definition given here by the addition of social criteria to the standards of the organic regulatory authorities ethical trading is now becoming mainstream trading and internationally traded organic produce will therefore have to comply with the current view of what is ethical

is ricardian equivalence a good approximation ricardian equivalence may be a good approximation even if all households have finite horizons many households have short horizons and an appreciable fraction of wage income is received by liquidity constrained households the approximation is likely to be better the more imperfect annuity markets are

ricardian equivalence rational expectations and the permanent income hypothesis the ricardian equivalence proposition and the permanent income hypothesis are tested in an intertemporal consumption model with rational expectations the representative consumer incorporates the government budget constraint an alternative hypothesis of incomplete tax discounting is nested within this model a deterministic time trend is rejected for the variables of the model variables exhibit instead a stochastic trend the permanent income model is not rejected by annual u s data i e no excess sensitivity is found the evidence with respect to ricardian equivalence is mixed the empirical study employs theorems from the cointegration literature and specifically addresses issues of nonstationary regressors copyright 1990 by ohio state university press

marginal property tax effects of conservation easements a vermont case study conservation easements allow landowners to transfer their land s development rights to another entity usually a nontaxable conservation organization conservation reduces the town s tax base necessitating a tax rate increase to maintain service levels however conserving land also decreases the supply of developable land and provides open space amenities that may be capitalized into the value of nearby properties these effects may offset the decrease in the tax base caused by the easement using a sample of twenty nine vermont towns we show that private conservation easements increase property tax rates in the short run but are tax neutral or tax suppressing in the long run

differentiation and synergies in rural tourism estimation and simulation of the israeli market this article applies a discrete choice equilibrium model with product differentiation to study the rural tourism industry in israel and to jointly estimate the effect of lodging and farm characteristics on consumer preferences and firms costs the model accounts for heterogeneity in tastes and technologies and allows for unobservable product characteristics we find evidence for technological synergy in the joint production of agricultural goods and rural tourism services but none in the demand the differentiation in the industry is the major contributor to the price cost margin which averages 62 an additional minor cause is government regulation which restricts supply simulation results demonstrate the growth potential of the industry and show that the government can play an important role in catalyzing growth via investment subsidization deregulation of supply and information distribution

fiscal policy and private consumption instrumental variables tests of the consolidated approach since barro s 1974 restatement of the debt neutrality proposition economists have directed considerable research toward determining whether fiscal policy can affect aggregate demand most of the debate both theoretical and empirical has focused on the net wealth content of privately held government debt although existing research has hardly provided a definitive resolution to this debate see for example blinder and deaton 1985 bernheim 1987 barro 1989 recent efforts feldstein 1982 kormendi 1983 aschauer 1985 leiderman and razin 1988 have followed bailey 1971 and broadened the scope of the investigation to include the possibility that government expenditures substitute for private consumption expenditures in doing so feldstein kormendi and aschauer have shown that fiscal neutrality implies certain restrictions on private consumption behavior the first of these restrictions is what feldstein 1982 calls ex ante crowding out for complete ex ante crowding out government spending on goods and services must substitute dollar for dollar for private spending consequently an increase in government expenditures on consumption goods should lead to an equivalent decrease in private consumption expenditures a second restriction is that government finance decisions should not affect private consumption barro 1974 has derived conditions under which this result will obtain essentially maximizing consumers are assumed to be rational and forward looking accurately foreseeing future taxes implied by

the potential benefits of herbicide resistant transgenic rice in uruguay lessons for small developing countries abstract in many developing countries the potential benefits from adopting a transgenic variety developed by a multinational corporation are limited by the crop s small production base this paper presents an ex ante evaluation of the economic impact of herbicide resistant transgenic rice in a small developing country uruguay to fully account for the multinational s market power the firm s seed markup is assumed to affect the adoption rate for the variety stochastic simulation techniques are employed to understand how potential benefits may vary with changes in technology yield costs and adoption parameters the results indicate a 1 82 million mean net present value for producers from the development and utilization of transgenic rice in uruguay and 0 55 million for the multinational these relatively small multinational firm benefits suggest that a firm will not undertake significant efforts to develop transgenic varieties adapted to local conditions without either strategic partnerships with local institutions or access to wider regional markets

augmenting travel cost models with contingent behavior data this paper proposes contingent behavior survey questions as a valuable supplement to observed data in travel cost models of non market demand for recreational resources a set of observed and contingent behavior results for each survey respondent allows the researcher to control for individual heterogeneity by taking advantage of panel data methods when exploring the nature of respondent demands the contingent scenarios also provide opportunities to a test for differences between observed and contingent preferences and or b assess likely demands under conditionsbeyond the domain of observed variation in costs or resource attributes most importantly contingent scenarios allow the researcher to imposeexogenously varying travel costs exogenous imposition of travel costs together with panel methods reduces the omitted variables bias that plagues observed data travel cost models of recreational demand using a convenience sample of data for illustrative purposes we show how to estimate the demand for recreational angling by combining observed and contingent behavior data we begin with simple naive pooled poisson models and progress to more theoretically appropriate fixed effects panel poisson specifications

price analysis risk assessment and insurance for organic crops the agricultural risk protection act of 2000 recognized organic farming as a good farming practice making federal crop insurance coverage available for organiccrops and taking into account the idiosyncrasies of the organic production system inaddition to the production risks covered for conventional producers organic farmerswho sign up for coverage are compensated for production losses from damage due toinsects disease and or weeds however the incorporation of organic production intothe crop insurance rating structure has been limited organic producers are charged anarbitrary 5 premium surcharge over conventional crop insurance the actuarialfairness of this premium is at least questionable in addition in the case of crop failure organic farmers receive compensation based on the prices of conventionally producedcrops thus price premiums that organic producers are able to obtain in the market arenot compensated for under the current insurance policy structure the food conservation and energy act of 2008 which amends part of thefederal crop insurance act was written to investigate some of these claims requiringthe u s department of agriculture to examine the currently offered federal cropinsurance coverage for organic crops as described in the organic policy provisions of theact title xii such provisions established the need to review among other things theunderwriting risk and loss experience of organic crops determine whether significant consistent or systematic variations in loss history exist between organic and nonorganicproduction and modify the coverage for organic crops in accordance with the results here we present the major findings of three analyses we performed on keyelements of the insurance of organic crops prices yields and revenue in an effort tocontribute to the design of an organic crop insurance policy that covers organicproducers according to their idiosyncratic risks

deficits and the demand for money in recent years the large budget deficits of the federal government have renewed interest in the effects of government debt on private sector behavior to date empirical research has focused on the relationship between debt and two key variables consumption and interest rates by contrast empirical research on the effects of government debt on other variables of interest to macroeconomists is limited this paper examines the relationship between government debt and one such variable real money balances the neglect of government debt as a determinant of money demand is surprising many traditional macroeconomic models such as blinder and solow s 9 influential work include government debt as an argument to the money demand function moreover macroeconomic theorists have long been aware that a government debt money demand relationship has important implications for the efficacy of fiscal policy 2 this paper examines the relationship between government debt and real money holdings over the 1950 1990 period a positive money debt relationship was previously noted by butkiewicz 12 and deravi hegji and moberly 15 hereafter referred to as dhm our work improves upon this research in two ways first in contrast to butkiewicz 12 and dhm 15 we investigate the time series properties stationarity cointegration of relevant variables second we distinguish between supply side and demand side explanations of the debt money relationship the explanation advanced by butkiewicz 12 and dhm 15 is that an increase government debt is perceived by the private sector as an increase in net wealth and hence should increase money demand 3 this explanation ignores a potentially important connection between government debt and money supply if the federal reserve monetizes debt and if the private sector s adjustment to this monetization is lagged then debt and real money balances will exhibit a positive correla

the interest rate neutrality of fiscal deficits testing for ricardian equivalence and capital inflow abstract this paper examines the extent to which the ricardian equivalence theorem as restated by barro 1974 and the capital inflow hypothesis of dwyer 1985 provide valid explanations of the observed interest rate neutrality of fiscal policy in open economies a theoretical open economy macromodel is specified and subsequently tested on a multi country dataset which spans the recent period of floating exchange rates on balance the empirical results favour the capital inflow hypothesis which emphasizes the importance of international financial integration in facilitating the financing of public deficits by the savings of agents who reside across political frontiers

stock market reactions to announced corporate illegalities extending the work of davidson and worrell 1988 we further investigate the stock market s reaction to announced corporate illegalities we examine a sample of 535 announcements of corporate crime and obtain an overall insignificant stock market reaction however when the sample is divided by type of crime we find that the stock market reacts significantly to announcements of bribery tax evasion and violations of government contracts we also find a significantly negative reaction to announcements of corporate crime when the company had been previously accused of other illegal activity for companies accused of crime in the 1970s 51 of them were accused again in the 1980s

the impact of ad hoc disaster and crop insurance programs on the use of risk reducing conservation tillage practices the paper estimates the impacts of risk reducing government programs on the use of conservation tillage no till and other conservation tillage practices in agriculture conservation tillage can be used to reduce production risk from weather shocks however subsidized crop insurance and disaster payments also reduce risk through financial assistance the paper examines the extent to which risk reducing tillage practices and government programs are substitutes for each other the economic model shows that a decline in average weather conditions increases the use of conservation tillage the economic model also shows that the impact of weather risk and risk aversion on risk reducing practices like conservation tillage are ambiguous the effect depends on the degree that losses are offset by government payments the paper uses county level tillage practice data from the conservation tillage information center for the three state region of iowa nebraska and south dakota results are estimated using instrumental variables and spatial panel data techniques instruments for the program participation and payment data include political variables and weather data the empirical analysis shows that recent disaster and indemnity payments are associated with an increase in the use of no till and a decrease in the use of other conservation till results also show that producers in counties with recent drought and flood events are more likely to use other conservation tillage the results imply that there may be unintended impacts of changes to agricultural policies like disaster payments and crop insurance on the use of on farm conservation practices

are consumers ricardian when some are liquidity constrained evidence for the united states this paper formulates and estimates a revised specification of evans 1988 test for ricardian equivalence which incorporates the possible presence of liquidity constrained consumers if liquidity constrained consumers are significant in number tests using aggregate consumption data may tend to reject the ricardian equivalence hypothesis when the model allows for liquidity constraints a test which incorporated liquidity constrained consumers could not reject ricardian equivalence over the sample period 1946 91 while the proportion of aggregate consumption which is liquidity constrained is found to be significant it does not appear large enough to affect the test for ricardian equivalence

is public expenditure productive abstract this paper considers the relationship between aggregate productivity and stock and flow government spending variables the empirical results indicate that i the nonmilitary public capital stock is dramatically more important in determining productivity than is either the flow of nonmilitary or military spending ii military capital bears little relation to productivity and iii a core infrastructure of streets highways airports mass transit sewers water systems etc has most explanatory power for productivity the paper also suggests an important role for the net public capital stock in the productivity slowdown of the last fifteen years

supply response of u k milk producers short run own price response elasticities are estimated from two samples of panel data for specialist dairy farms in the northwest and southwest of england although these farms are subject to milk marketing quotas the free tradability of quotas enables them individually to adjust the output quite rapidly model specifications have been chosen to test the ability of panel data to directly reveal behavioral responses without the imposition of theoretical restrictions significantly the two independent samples generate quite similar results especially in terms of supply response measures stable and promising estimates are obtained with simultaneous models giving higher elasticities than single equation models

impact of openness on growth in different country groups this paper evaluates the impact of openness on growth in different country groups using a panel of 79 countries over the period 1970 98 it distinguishes itself from many existing studies in three aspects firstly both trade and fdi are included as measures of openness secondly countries are classified into high middle and low income groups to compare the roles of trade and fdi in these groups thirdly the possible problems of endogeneity and multicollinearity of trade and fdi are carefully dealt with in a panel data setting the main findings are as follows total trade has a general positive impact on growth in all country groups although the impact from imports is not significant in high income countries fdi has a positive impact on growth in high and middle income countries but not in low income countries with the existing absorptive capabilities low income countries can benefit from both exports and imports but not from fdi these findings suggest that trade and fdi affect growth through different channels and under different conditions the paper also discusses important policy implications

a theory of competition among pressure groups for political influence this paper presents a theory of competition among pressure groups for political influence political equilibrium depends on the efficiency of each group in producing pressure the effect of additional pressure on their influence the number of persons in different groups and the deadweight cost of taxes and subsidies an increase in deadweight costs discourages pressure by subsidized groups and encourages pressure by taxpayers this analysis unifies the view that governments correct market failures with the view that they favor the politically powerful both are produced by the competition for political favors

are consumers ricardian evidence for the united states this paper derives three empirical implications of a well specified model of consumer behavior a model that nests both ricardian equivalence and an alternative non ricardian theory ricardian equivalence is then tested against this alternative the tests reveal that ricardian equivalence cannot be rejected

ricardian equivalence and lucas critique an alternative test of ricardian equivalence using super exogeneity tests in simulated series this article considers an alternative methodology nested on super exogeneity tests to verify the occurrence of ricardian quivalence the advantage of this new procedure is based on the intuitive appeal and the statistical procedure more appropriated than the econometric techniques previously adopted in this literature

stages and determinants of fertilizer use in semiarid african agriculture the niger experience fertilization is a stepwise decision in niger survey data from a representative sample of 100 households were utilized with individual and joint estimation to evaluate the determinants of fertilizer use at its three different stages manure alone and two different types of inorganic fertilizer application the fertilizer price relative to the millet price was always a highly significant determinant of fertilizer adoption farmers experience in seeing the results of fertilization in the field was a principal factor influencing the use of manure and of the micro fertilization other studies in semiarid regions have emphasized risk liquidity or fertilizer responsiveness under harsh conditions but the shift to the micro doses of inorganic fertilizer was statistically associated here with the demonstration trials and the price ratios fertilizer millet a variable reflecting the millet price recovery approximately 6 months after harvest was the most important factor in the decision to raise further inorganic fertilizer use with side dressing policy implications were focused on the importance of demonstration trials and improvements in the economic conditions millet fertilizer price ratios