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

how should we incentivize private landowners to produce more biodiversity globally much biodiversity is found on private land acting to conserve such biodiversity thus requires the design of policies which influence the decision making of farmers and foresters in this paper we outline the economic characteristics of this problem before reviewing a number of policy options such as conservation auctions and conservation easements we then discuss a number of policy design problems such as the need for spatial coordination and the choice between paying for outcomes rather than actions before summarizing what the evidence and theory developed to date tell us about those aspects of biodiversity policy design which need careful attention from policy makers and environmental regulators

expanding the solution set organizational economics and agri environmental policy abstract the market failure paradigm dominates agri environmental research and policy organizational economics provides an alternative framework for analyzing agri environmental problems and points to alternative solutions in this paper the traditional approach of creating markets for environmental goods and services is critiqued and set aside to provide space for an organizational analysis from an organizational perspective the relationship between the state and agricultural agents is viewed as grounded in an over arching exchange relationship including elements of cooperation and trust such a collaborative exchange relationship may prove useful in supporting exchange between agricultural agents and the state leading to the provision of ecological goods and services highlighting the potential of organizational economics the analysis suggests that agri environmental research and policy go further in accounting for and investigating the unique organizational modes of exchange governing the production of food fiber and ecological goods and services

the relationship between the markup and inflation in the g7 economies and australia an i 2 analysis of inflation and the markup is undertaken for the g7 economies and australia we find that the levels of prices and costs are best described as i 2 processes and that except for japan a linear combination of the log levels of prices and costs cointegrate to the markup that is integrated of order 1 it is also shown that the markup in each case co integrates with inflation and that higher inflation is associated with a lower markup in the long run

agent heterogeneity in adoption of anaerobic digestion technology integrating economic diffusion and behavioral innovation theories anaerobic digestion technology addresses environmental issues of waste disposal and greenhouse gas emission reduction this paper examines attitudes toward adoption of this conservation technology on dairy farms to specify an appropriate dependent variable without a large number of adopters an ordered probit model is constructed the empirical analysis uses data from a 2006 survey of pacific northwest dairy farms aggregate variables are constructed based on behavioral economics and conservation adoption literature variables include private and social costs social motives capacity innovation receptivity and opportunity costs most of which are found to be highly related to the decision to seriously consider adoption

the factor content of foreign trade in the factor proportions trade theory the heckscher ohlin theory the factor content of the pattern of trade plays a major role both in theoretical and in empirical investigations it is therefore valuable to identify restrictions on permissible vectors of the factor content of trade which necessarily hold in equilibrium if certain restrictions are empirically testable they can be used for preliminary testing of the theory before a more thorough examination is undertaken or they can be used to reject the theory it is my intention to develop in this paper a set of restrictions on the vectors of the factor content of trade which can be used for these purposes it is well known that autarky commodity prices impose restrictions on possible patterns of trade these restrictions provide a precise prediction of the pattern of trade for a two country two commodity world in the sense that the exporter of a good is readily identifiable from autarky price data as the country with the lower relative price of the good i will start by showing that in the presence of factor price equalisation autarky factor rewards impose restrictions on the factor content of trade patterns which are completely analogous to the restrictions imposed by autarky commodity prices on the commodity patterns of trade this result is in line with the view that in the factor proportions model trade in commodities represents indirect trade in factor services unfortunately these restrictions rely on autarky information and they are therefore not very useful for empirical work in order to overcome this difficulty i explore an alternative approach i argue that common predictions of the factor content of trade flows which are based on post trade observable data the data relevant for empirical studies rely on unnecessarily restrictive assumptions i e the assumption that preferences are homothetic and identical across countries and the assumption of factor price equalisation the assumption of identical homothetic preferences seems to be necessary when factor price equalisation is assumed because in this case there is an indeterminancy in the pattern of production nevertheless the two assumptions taken together imply the same factor content of a country s net import vector from the rest of the world for every equilibrium production pattern however in a many country world the factor content of bilateral trade flows depends on the realised production patterns and they cannot therefore be predicted i will show that in the absence of factor price equalisation which many

the impact of state government subsidies and tax credits in an emerging industry ethanol production 1980 2007 this article examines the effects of state economic development incentives in the emerging ethanol industry we compiled data on ethanol production capacity and subsidies tax credits for all states for the years 1980 2007 a period that covers the complete emergence of the biofuel industry in the united states importantly this time period was characterized by the passage of several state level subsidies and tax breaks aimed at increasing ethanol production hence this panel documents a substantial amount of within state variation in policies from which to identify an effect we find that some incentives directed at ethanol production have a significant effect on a state s production capacity

money inflation and output in romania 1992 2000 abstract money inflation and output are tested for stationarity and found to be integrated of order one we apply the johansen procedure for cointegration to test for the rank of the matrix of cointegration relations one to test for the weak exogeneity of output accepted inflation rejected and money rejected we interpret the unique cointegrating relationship as an extended cagan money demand function we then estimate error correction mechanisms which explain the short run movements of real money and inflation the evidence suggests that in the period considered including the sub sample between the liberalization shocks inflation was largely a monetary phenomenon

addressing social dilemmas with mascots information and graphics acknolwedgements this research was supported by funding from the national science foundation for the north east water resources network newrnet grant iia 1330406 and from the center for behavioral and experimental agri environmental research cbear which is supported by the u s department of agriculture economic research service we are grateful for comments received during the 2015 northeastern agricultural and resource economics association annual meeting and the 2015 behavioral and experimental economists of the mid atlantic conference authors listed in alphabetical order

moral dimensions of the wta wtp disparity an experimental examination abstract contrary to welfare economic theory empirical evidence suggests that the amount of money people are willing to accept wta to forego a commodity will generally exceed the amount of money they are willing to pay wtp to gain the commodity this paper undertakes an experimental examination of the wta wtp disparity using conventional and ecologically produced eggs the results of this experiment reveal that the difference between the mean wtp and wta for conventional eggs is negligible while the mean wta is more than 1 5 times higher than the mean wtp in the case of ecological eggs an explanation for this result is offered following the boyce et al boyce r b brown t c mcclelland g h peterson g l schulze w d 1992 an experimental examination of intrinsic values as a source of the wta wtp disparity am econ rev 82 1366 1373 notion that an asymmetrical assignment of moral responsibility may cause wta to exceed wtp by comparing the two studies a tentative conclusion is that the valuation disparity is likely to increase with a corresponding increase in the degree of assigned moral responsibility

a reexamination of the role of thermodynamics for environmental economics abstract as the discussion about the role of thermodynamics in environmental economics has not led to a conclusion yet a more fundamental approach seems to be necessary which also takes into consideration the relationship between economics and the natural sciences in general to this end value theory is chosen as a starting point because it is the centerpiece of every economic theory it is shown that neoclassical environmental economics suffers from serious deficiencies because of its value concept heedlessly copied from classical mechanics thermodynamics can be expected to be helpful to redress these defects because the economy can be thought of as a dissipative structure dependent on its environment the obvious way to integrate thermodynamics consists in the formulation of thermodynamic constraints to complement neoclassical environmental economics but this approach remains unsatisfactory because the neoclassical mechanical hardcore is incompatible with the entropy law and its implications evidently the neoclassical paradigm and its value concept have to be given up but the alternative of the energy theory of value must be rejected because its determinism cannot be reconciled with the richness of human behaviour as thermodynamic analogies offer no solution either there is a dilemma between the necessity and the apparent impossibility of adequately integrating thermodynamic concepts it turns out that a normative inconsistency is responsible which is due to the demand for intergenerational justice therefore the integration of thermodynamics into environmental economics hinges on a meta economic value decision if sustainability is adopted as the guiding principle the insights of thermodynamics call for a macro economic environmental policy setting absolute limits to the economy but this macro policy is incompatible with neoclassical economics so that a social reconstruction of economics based on a social theory of value becomes necessary in sum thermodynamics is important for environmental economics besides fulfilling a general heuristic function it also fulfils a decisive conceptual and an analytical function insofar as it helps to justify sustainability and to operationalize macro economic environmental policy

willingness to pay attitudes and fundamental values on the cognitive context of public preferences for diversity in agricultural landscapes abstract our study set out to investigate if and how willingness to pay both hypothetical and actual might reflect individuals wider cognitive networks we draw on the idea of cognitive hierarchies i e the notion that concrete preferences and attitudes are embedded in networks of more abstract beliefs and values and explore if willingness to pay wtp as expressed through contingent valuation can be understood as part of such hierarchies to this end we elicited stated and actual wtp in a survey of public preferences and attitudes towards the establishment of an agri environmental payment scheme in northeim germany that rewards farmers for the provision of riparian buffer strips two main findings emerged from the study first only a very small proportion of those stating positive wtp did actually transfer the money second contrary to our hypotheses results from a structural equation model suggest that stated wtp was only poorly connected to attitudes towards the payment scheme and other potentially relevant more abstract beliefs and values this casts doubts on the meaningfulness of such statements of the ten different fundamental value types included only universalism and conformity played a significant role in the cognitive hierarchy and informed generalised environmental beliefs as well as attitudes towards the payment scheme as attitudes seemed to be better integrated in the cognitive network than wtp we discuss if surveys of public preferences should rely on attitude statements rather than solely on monetary values

a learning design for reducing hypothetical bias in the contingent valuation method over the last few years a great deal of research has focussed on hypothetical bias in value estimates obtained with the contingent valuation cv method and on means for ameliorating if not eliminating such bias to date efforts to eliminate hypothetical bias have relied on calibration techniques or on word smithing of one kind or another to induce subjects to provide responses to hypothetical questions that mimic responses made by subjects facing actual payments in the valuation experiment this paper introduces a different approach for eliminating hypothetical bias a design for a cv survey format is presented which provides subjects with the opportunity to learn how the cv institution works sequential referenda are conducted where respondents gain experience in cv settings by participating in both hypothetical and real referenda the logic of this learning design is a straightforward application of the trials process used in experimental economics we demonstrate that the learning design is effective in eliminating hypothetical bias in surveys concerning donations to two different public goods

utility consistent discrete continuous choices in soil conservation a utility consistent model of participation and participation intensity choices for a voluntary soil conservation program is developed a modified form of roy s identity is used to derive a two equation system that links the discrete dichotomous choice participation and the continuous choice intensity to the same utility function the model corrects for selectivity bias that arises in single equation approaches an application to a filter strip program in two counties in illinois and michigan demonstrates that different factors affect responses to the program across the sample regions estimated willingness to accept payments for participation in the program suggest policy impacts are not uniform across locations

behavioral innovations the missing capital in sustainable development abstract many scholars argue that environmental issues can be addressed through technological innovation a proposal which echoes a lasting debate between environmental and ecological economics about the substitution rate between natural and manufactured capital in addition to these two established types of capital this paper introduces the idea of behavioral capital we define behavioral capital as the latent potential of behavioral change to affect improvement in environmental quality our contribution argues that technological and traditional regulatory innovations serve as insufficient tools for addressing modern environmental issues and ensuring sustainable development without discarding these solutions we contend that because human behavior is a significant contributor to environmental problems it should be regarded as a key component of continued solutions we suggest that the dual interest theory can serve as an integrative framework for behavioral innovations related to environmental issues in suggesting this we assume that behavioral innovations can both overcome some of the limitations of technological innovations and offer new solutions our main insight is to suggest that some depletion of natural capital but not all can be offset by behavioral changes without decreasing or even increasing subjective well being

modeling monetary trends in italy using historical data the demand for broad money 1861 1990 in this paper we estimate a stable demand for money relationship for italy using a long series of historical data we extend previously available data sets to obtain a sample for the years 1861 to 1990 and use cointegration analysis and two stage estimation procedures to obtain a dynamic model for m2 demand by employing a small number of explanatory variables and a nonlinear error correction model we find a stable demand for money relationship our model incorporates significant inflation and interest rate effects in contrast to previous studies of this type

does environmental concern change the tragedy of the commons factors affecting energy saving behaviors and electricity usage electricity consumption produces private goods such as heat for homes but fossil fuel consumption impacts the public goods of clean air and water while self interests can increase usage social interests such as global climate change can impact an individual s attitude toward energy consumption this paper examines the tragedy of the commons using household data and compares the impact of self and social interests in predicting electricity consumption using both stated and observed behavioral data the results show that self interests have a greater impact on energy saving behaviors and electricity use we extend the analysis to control for an individual s environmental concern and perceived behavioral impact finding similar results and supporting the notion that the tragedy of the commons occurs regardless of a person s perception or environmental concern these findings may explain why pro environmental attitudes do not necessarily lead to pro environmental behaviors and it contributes to our understanding of the motivating factors for energy savings and electricity use by examining both stated and observed behaviors policies aimed at electricity reduction may have a greater impact if they focus on private interests such as pricing rebates subsidies and taxes rather than social interests alone

the demand for money a rational expectations approach the authors derive a model of money demand for an optimizing consumer with rational expectations in a discrete time infinte hortizon framework under uncertainty mone y demand responds to unanticipated changes in income one period expe ctations of future bond and money interest rates unanticipated curre nt interest rates and past anticipations of current rates the deriv ed consumption function mirrors money demand behavior joint estimati on of the consumption and money demand equations by weighted nonlinea r least squares corroborates the predicted effects particularly inco me neutrality this money demand model substantially outperforms a co nventional specification in post sample simulation over 1975 85 copyright 1988 by mit press

natural rate doubts abstract we study the low frequency comovements in unemployment inflation and the federal funds rate in the u s from 1970 through 1979 all three series trended up together after 1979 they all trended down the conventional explanation for the buildup of inflation in the 1970s is that the fed reacted to an increase in the natural rate of unemployment by conducting an overly passive monetary policy we show that this explanation is difficult to reconcile with the observed comovement of the fed funds rate and inflation we argue instead that the source of the inflation buildup in the 1970s was a downward drift in the real interest rate that was translated into a simultaneous increase in unemployment and inflation by passive fed policy our explanation relies on the existence in the data of a positive long run unemployment inflation relationship this is consistent with non superneutrality of money in the long run and hence the title of our paper natural rate doubts

on long run solutions to dynamic econometric equations under rational expectations models of this type abound in the re literature and include inter alia the permanent income model of consumption hall i 978 sargent i 978 a models of factor demand sargent i978 b portfolio balance during hyperinflations sargent i977 foreign exchange rate determination mussa i976 i982 the term structure of interest rates shiller i972 modigliani and shiller i973 and the demand for money cuthbertson and taylor i987 the general formulation and estimation of such models is discussed in hansen and sargent i 980 in particular this type of equation arises naturally in models displaying the familiar re saddle path properties where the unstable root is solved forward sargent i979 if we define x zt i a e ai xt i o 3 may be written yt kytt1 te t et

the failure of the profit motive e f schumacher used the phrase the failure of the modern experiment by modern experiment he meant two interrelated things in its 300 year or so duration modernity occupies an eye blink of time in the vast span of millennia of human history secondly it is an experiment because this is the first time in this vast history that a society attempted to live without motives and principles that were higher than the material or economic that is without some form of the transcendental schumacher proposed that this experiment is a failure because in its brief history modern society is well on its way to destroying both the natural and the social world the absence of higher motives or principles means that another organizing and motivational principle takes its place and that this principle becomes the core characteristic of modern society the thesis is advanced here that this principle is the profit motive both as a personal psychology and as an economic institution in other words the absence of the transcendental means the presence of the profit motive and the failure of modern society means the failure of the profit motive since the profit motive means the continuous expansion of economic wealth a society based on the profit motive must by necessity be a society committed to perpetual economic growth modern society then present us with a yield equation of terms self interest profit motive growth many writers advocating sustainability still endorse this equation and expect the profit motive with proper manipulation to yield a sustainable society they do not recognize that traditional economic motivation must be replaced by something else if this new sustainable economic world is to come into being this article makes the claim that the replacement of the profit motive does not require a change in human nature but a restoration of human nature in this restoration the profit motive will be replaced by a concern for the common good which can be seen as a practical implementation of the transcendental as an illustration of how this can be brought about it is shown that the motivational principle of the common good can be instituted through two policies a maximum wage that is a ratio of the minimum wage and the statutory transformation of all companies into non profit then we have common good non profit sustainability

monetary economic myth and econometric reality few of the main macro economic forecasting systems can produce sensible forecasts without the tender loving care of their proprietors many econometric equations in com mon use show significant deterioration in the accuracy with which they characterise data as time passes and many economists are sceptical about empirical evidence feeling it lacks credibility monetary relationships have the dubious distinction of being among the leaders in this field as witnessed by the very large mispredictions of m1 models in the usa over what is now known as the missing money period 1973 76 as well as during the recent great velocity decline 1979 82 in the uk models of m1 and m3 demand experienced large structural breaks following the competition and credit control regu lation changes and the move to floating exchange rates perhaps it is no surprise that goodhart s law should have been formulated with respect to money demand equations

an alternative approach to the american demand for money with a decade of evidence behind it the profession seems to have agreed on the fact that a structural break shifted the american demand for money shortly after 1973 it is difficult to pinpoint the source of the trouble precisely let alone to explain the event with an econometric model in their survey judd and scadding 1982 tentatively concluded that financial innovation is the source of the problem while this conclusion has not been universally accepted the instability of the money demand function is largely taken as a given stylized fact the primary goal of this article is to provide an alternative solution to the case of the missing money using the methods of hendry 1979 it should be stressed at the outset that as this paper deals with a problem in the applied literature it is unabashedly empirical in nature the paper attempts to explain an empirical difficulty without presenting a new theoretical model of money demand rather in the context of the standard transactions demand theory for narrow money a number of questions are analyzed with an atypical econometric model was there actually a shift or a series of shifts in the demand for money if not why have other investigators concluded that there was in fact a shift most importantly what function seems to be the most reasonable approximation to the data generation process during the period in question

the search for a stable money demand function a survey of the post 1973 literature phe question of whether the demnand function for money is stable is one of the most important recurring issues in the theory and application of macroeconomic policy what is being sought in a stable demand function is a set of necessary conditions for money to exert a predictable influence on the economy so that the central bank s control of the money supply can be a useful instrument of economic policy as such the notion of a stable demand function appears to involve three key elements e g john t boorman 1976 p 317 and david e w laidler 1977 pp 34 35 first the demand for money relation should be highly predictable in a statistical sense as measured by the usual goodness of fit statistics precision of estimated coefficients and presumably its ability to forecast accurately out of sample second a stable demand function for money has relatively few arguments a relationship that requires knowledge about a large number of variables in order to pin it down is in effect not predictable finally the variables that appear as arguments in the function should represent significant links to spending and economic activity in the real sector in sum a stable demand function for money means that the quantity of money is predictably related to a small set of key variables linking money to the real sector of the economy the importance of a stable money demand function for monetary policy can be illustrated with the standard is lm model in which interest rates and gnp are the endogenous variables in this context a stable demand function for money translates into a well defined relationship between money interest rates and gnp

australasian money demand stability application of structural break tests estimates of the demand for money provide important foundations for monetary policy setting but if the estimation technique does not explicitly account for structural changes then such estimates will be biased this paper presents an investigation into the level and stability of money demand m1 for australia and new zealand over the 1960 2009 period and demonstrates that both countries experienced regime shifts australia also experienced an intercept shift application of four time series methods provide consistent results with 1984 and 1998 break dates cusum and cusumsq stability tests reveal that m1 demand functions were unstable over the 1984 to 1998 period for both countries although tests for stability are not rejected thereafter

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 role of fairness norms the household based natural forest conservation the case of wolong china the shadow of the tragedy of the commons with its popularized assumption of selfish individual behavior concerns policy makers and consequently the cooperative capability of local communities in common resource management is usually underrated nevertheless here we propose a hypothesis based on a game theory model that the social norm of fairness rather than self interest might motivate cooperation in natural resource conservation by discounting the utility gain from illegal logging at the cost of another household s subsidy loss in wolong nature reserve of china a recent household based natural forest conservation program has led to remarkable progress in protecting the habitat of giant pandas ailuropoda melanoleuca with low monitoring pressure we undertook experiments based on a one shot ultimatum game to test the prevalence of the norm of fairness in the local communities most proposers in the experiments showed strong preferences for fair offers in spite of the responders reluctance to reject low offers and the result contradicted the expectation of pure self interest taking into account the norm of fairness the prediction of the model is consistent with the local performance of the household based conservation policy it highlights the potential of local social norms to facilitate participation and cooperation by the local community in common natural resource conservation c 2010 published by elsevier b v

towards a centerpiece for ecological economics this paper offers a hypothesis with cognitive claims for a social theory that is relevant for ecological economics as background a fable has ego metaphorically viewed as a horse driven to problematic extremes with the solution becoming an integration and balance of means with the other horse empathy the ego n empathy hypothesis starting with a new root metaphor which is extended with a pre analytic vision the main support for the cognitive claims is with a mathematical model and a metaeconomic analysis armed with both scope and precision along with an assortment of corroborative evidence from different disciplines the paper provides support for establishing a new center cognitive claims have ego and empathy apart giving value and possibilities and together as ego empathy giving an emergent value possibility this possibility suggests a rallying point for transdisciplinary work and a theoretical centerpiece for ecological economics suited as such the economic ego of homo economicus is distinguished from the political ego of sacro egoismo corroboration with adam smith s moral philosophy political economy is highlighted the individual person of an empirical ethics stemming from both self interest and fellow feeling is resurrected to support the hypothesis awareness emerges like a complementary consciousness an added value strikingly similar to smith s impartial spectator empirical demonstration concludes this integration of interests with a metaeconomic analysis for the case of soil and water conservation policy in the north american farming population taken together the root metaphor with reasonable scope and precision corroboration and demonstration help to structure the ego n empathy hypothesis d 2004 elsevier b v all rights reserved

walk in my shoes nudging for empathy conservation abstract the traditional policy approaches to encourage conservation including offering monetary incentives and direct regulation may lead to unintended consequences which may undermine their effectiveness in this paper we experimentally test the effectiveness of complementing financial nudging incentives with nudging for empathy our framed experiment models a situation in which an upstream farmer influences the water quality downstream by choosing the level of conservation financial nudging is represented by a crop insurance subsidy conditional on conservation compliance consistent with the 2014 farm bill policy empathy nudging is represented by a downstream water user sending a message to the upstream farmer encouraging the latter to walk in the shoes take the perspective of the former we found that empathy nudging can counteract the elimination of financial incentives however it is less effective than financial nudging empathy nudging coupled with financial incentives has a synergic effect and conservation increased significantly compared to using one of the nudges alone furthermore the combination of empathy and financial nudging was particularly effective in low initial conservation cases we argue that policy makers and the public should encourage empathy conservation and that the environmental policy narrative should appeal to empathy and call for farmers to join the cause for conservation and environmental protection

measurement of the factor content of foreign trade with traded intermediate goods abstract in a recent article helpman 1984 develops readily testable bilateral restrictions in a model of international trade which preserves the spirit of heckscher ohlin trade theory important in any empirical exploration of the heckscher ohlin model is the decision of whether to employ direct or direct plus indirect calculations in determining the factor content of trade this paper extends helpman s analysis to a world of freely traded intermediate goods and shows that direct factor content calculations are the theoretically appropriate measure for use in evaluating these empirical implications of the heckscher ohlin model

the monetary model in the presence of i 2 components long run relationships short run dynamics and forecasting of the greek drachma this paper re examines the long run properties of the monetary exchange rate model using data for the drachma dollar and drachma mark exchange rates under the hypothesis that the system contains variables that are i 2 using the recent i 2 test by paruolo on the determination of integration indices in i 2 systems j economet 72 1996 313 356 to examine the presence of i 2 and i 1 components in a multivariate context we find that the system contains two i 2 variables in both cases and this finding is reconfirmed by the estimated roots of the companion matrix do purchasing power parity and uncovered interest rate parity hold in the long run an example of likelihood inference in a multivariate time series model juselius j economet 69 1995 211 240 the i 2 component led to the transformation of the estimated model by imposing long run but not short run proportionality between domestic and foreign money two statistically significant cointegrating vectors were found and by imposing linear restrictions on each vector as suggested by johansen and juselius identification of the long run and the short run structure an applicaion to the islm model j economet 63 1994 7 36 and johansen identifying restrictions of linear equations with applications to simultaneous equations and cointegration j economet 69 1995b 111 132 the order and rank conditions for identification are satisfied but the test for overidentifying restrictions was not significant only for the case of the drachma mark rate the main findings suggest that we reject the forward looking version of the monetary model for the drachma dollar case but not when the drachma mark rate is used a result that is attributed to the monetary and exchange rate policy followed by the greek authorities since greece s joining of the european union furthermore we test for parameter stability using the tests developed by hansen and johansen recursive estimation in cointegrated var models working paper 1993 university of copenhagen and it is shown that the dimension of the cointegration rank is sample independent while the estimated coefficients do not exhibit instabilities in recursive estimations finally it is shown that the monetary model outperforms the random walk model in an out of sample forecasting contest

allocatable fixed inputs and jointness in agricultural production implications for economic modeling comment some of the most challenging production economic concepts are those of technical interdependence and jointness as pertaining to the products in a multiproduct firm thus shumway pope and nash should be applauded for their attempt to clarify these notions however their contention that allocatable fixed inputs can lead to jointness has mainly added to the confusion it is demonstrated here that jointness as traditionally represented exists only with nonallocatable inputs in direct contrast to what is suggested by shumway pope and nash this paper favors the jointness concepts from carlson and lau and suggests another kind of jointness based on shumway pope and nash carlson s classic book still represents one of the most concise statements about the reasons for and the character of multiproduct firms and jointness carlson saw jointness as the primary reason for the existence of the multiproduct firm as shown below carlson made the key points a technical product complementarity may induce jointness b all joint production which arises from jointness has the feature of being technically interdependent whether of the complementary or competitive variety and c over some ranges of multiproduct production there could actually be technical independence seemingly because of this last feature we could find multiproduct firms without jointness in their technologies however carlson would likely have argued that this situation does not occur bcause multiproduct firms are due to the lower costs under technically complementary products or simply because the products can not be separated for the technically competitive case the raison d etre of the multiproduct firm rests in the jointness

the demand for money a dynamic rational expectations model macroeconomic modelling generally has widely adopted the use of forwardlooking variables in behavioural relationships studies of the demand for money being something of an exception the aim of this paper is to provide preliminary empirical results of a model which explicitly incorporates expectations of the future into the demand function for narrow money the approach adopted is the modelling of the demand for money within a multi period costs of adjustment framework under the assumption of rational expectations agents are assumed to pursue a target or long run level of money balances which is itself a function of prices income and interest rates this results in an empirical specification which consists of both backwardlooking and forward looking components the model is estimated using uk data for the period i963i i983iii the remainder of the paper is divided into four sections in section i we outline the framework in which our model is derived in the following section we discuss the econometric techniques used and in section iii we present our empirical results a final section concludes

spatiotemporal analysis of ethanol market penetration abstract consumption of ethanol in the united states has increased rapidly over the last few years fueled by both higher crude oil prices and generous public support measures for renewable fuels the contribution of ethanol to the transport energy mix varies markedly by state heterogeneity in ethanol adoption and market development is investigated using a hierarchical spatiotemporal model a bayesian markov chain monte carlo method is employed for estimation of the proposed flexible model structure besides spatial dependence among neighboring states differential inclusion rates of ethanol are found to be largely determined by national and state level biofuel incentive policies relative gasoline prices feedstock availability household median income mtbe bans and density of fuel retail infrastructure our findings imply that increasing renewable fuel support as well as investing in extending the transportation and fuel retail infrastructure can result in higher ethanol consumption

conservation versus equity can payments for environmental services achieve both this paper investigates the trade off between conservation and equity considerations in the use of payments for environmental services pes that implicitly incorporate different distributive justice principles using a public good experiment with heterogeneous participants we compare the effects on additional area conserved and distribution of earnings of two pes schemes an equal payment and a payment based on rawls distributional principle which we refer to as maxi min payment scheme the main findings of the framed field experiment conducted in jambi province indonesia indicate that the introduction of a maxi min pes scheme can function as a multi purpose instrument it realigns the income distribution in favor of low endowed participants and does not necessarily need to be compromised by lower environmental additionality at the group level

the long run stability of the demand for money italy 1861 1996 this paper examines the stability of the demand for money in italy using a newly extended data set for the period 1861 1996 we examine how the evolution of the financial system in italy and policy shifts have affected the behavior of the long run demand for money and present tests of structural stability we find the demand for broad money to be remarkably stable despite periods of considerable economic turbulence in addition we present evidence on the monetary transmission mechanism our results shed light on attempts to model long run relationships in other countries such as the uk and the us

from microlevel decisions to landscape changes an assessment of agricultural conservation policies the growth in conservation programs has created a need for modeling frameworks capable of measuring microlevel behavioral responses and macrolevel landscape changes this paper presents an empirical model that predicts farmers production practices and the resulting levels of agricultural runoffs at more than 42 000 agricultural sites in the upper mississippi river basin under alternative conservation policies results suggest that payments for conservation tillage and crop rotations increase the use of these conservation practices however the acreage response is inelastic and the programs are not likely to be cost effective on their own for addressing hypoxia problem in the gulf of mexico

an i 2 analysis of inflation and the markup an i 2 analysis of australian inflation and the markup is undertaken within an imperfect competition model it is found that the levels of prices and costs are best characterized as integrated of order 2 and that a linear combination of the levels which may be defined as the markup cointegrates with price inflation from the empirical analysis we obtain a long run relationship where higher inflation is associated with a lower markup and vice versa the impact in the long run of inflation on the markup is interpreted as the cost to firms of overcoming missing information when adjusting prices in an inflationary environment copyright 2001 john wiley sons ltd

values ideology and politics in ecological economics abstract ecological economics is built on a value commitment to study environmental issues and to contribute constructively to a more sustainable development path however many ecological economists still hesitate it appears to depart too much from other scholars by openly addressing issues of values and ideology in this essay the role of the scholar s orientation with respect to values and ideology is addressed it is observed that not only scholars but also actors in society are guided by their ideological orientation this leads to the idea that some of the weaknesses of economic man and profit maximising firm assumptions can be mitigated by introducing a political economic person and a political economic organisation

money demand instability expectations and policy regimes a note on the case of italy 1964 1986 abstract this paper compares the stability performance of feedback and feedforward specifications of the demand for m2 in italy over the period 1962 1986 a clear change in the monetary policy regime occurred in 1969 1970 together with marked breaks in the processes generating several relevant variables in the mid 70s making this period particularly appropriate for the investigation of the potential role of expectations our main results show that the feedback specification suffers from instability at both relevant dates whereas the feedforward specification is remarkably stable during the policy regime change but displays signs of instability during the mid 70s

a cautionary note on the interpretation of long run equilibrium solutions in conventional macro models in recent years the modelling methodology associated with hendry and mizon i978 and davidson et al i978 has become standard practice in the econometric estimation of many key relationships in uk macro models this note takes issue with one aspect of this methodology namely the recommendation that the static equilibrium solution of final estimated forms should conform with static steady state economic theory the main contention is that dynamic estimated forms that make no explicit acknowledgement of expectational processes will often prove incapable on their own of yielding estimates of true steady state equilibrium or long run parameters particularly under rational expectations it is stressed that the long run solutions of conventional distributed lag equations cannot be interpreted in isolation from the parameters of the sample period datageneration processes for the rationally expected variables the point applies equally well to the interpretation of either staticor dynamic equilibrium solutions after developing the reasoning in a static equilibrium framework the natural extension to the context of dynamic equilibrium as characterised by currie i98i is presented the basic principles on which the argument is based are in no way new they were originally developed by sargent i97i and lucas i972 and have gained widespread application in the rational expectations literature for example in lucas s i976 critique of econometric policy evaluation recently mccallum i984 has applied them to discredit the general validity of using the lowfrequency or long periodicity components of economic time series to test the long run propositions of economic theory this note merely attempts a reexposition with particular reference to the evaluation of equation properties in models that purport to represent intertemporal behaviour without explicitly characterising expectational processes were it not a prevalent practice to identify the long run solutions particularly the static versions of such equations with the parameters of static steady state economic theory this note would not be necessary however the evidence suggests otherwise and seems to justify the need for a restatement that exposes the potential for this procedure to give rise to seriously misleading conclusions when expectational processes are important in the case of rational expectations it is shown that if proper thought is given to the dependence of expectations formation on sample period time series behaviour then the problems are by no means insurmountable

the demand for ethanol as a gasoline substitute abstract this paper estimates household preferences for ethanol e85 as a gasoline e10 substitute i develop a theoretical model linking the shape of the ethanol demand curve to the underlying distribution among households of willingness to pay for ethanol i estimate the model using instrumental variables techniques and data from many retail fueling stations i find that a 0 10 per gallon increase in ethanol s price relative to gasoline leads to a 12 16 decrease in the quantity of ethanol demanded my findings imply that preferences for ethanol are heterogeneous and that a substantial fraction of households are willing to pay a premium for the fuel this reduces substantially the simulated efficiency cost of an ethanol content standard since some households choose ethanol without large subsidies mitigating deadweight losses

prosocial behavior and incentives evidence from field experiments in rural mexico and tanzania abstract incentive based schemes for natural resource conservation are based on the premise that offering payments to groups of land users will motivate them to organize collectively to provide environmental services in contrast research from behavioral economics shows that introducing monetary incentives can undermine collective action that is motivated by social norms in such a case payment could have perverse impacts in view of this dichotomy we conducted choice and field experiments in rural mexico and tanzania to test the response of prosocial behavior to incentives the field experiments involved voluntary participation in real communal tasks under different incentive structures findings suggest that payments help raise participation where people are otherwise uninterested but that participation in communal tasks can be high irrespective of the incentive if social norms favoring participation are present in tanzania high individual payments do not undermine participation although they appear to reduce people s satisfaction from the task relative to when there is no payment in mexico group payments made through village authorities yield lower participation where people distrust leaders challenges to conducting field experiments in our research settings limit what we can conclude from our work but the findings raise important points and suggest areas for further research

monetary transmission mechanisms in spain the effect of monetization financial deregulation and the ems the paper presents a cointegrated var analysis of monetary transmission mechanisms and changes in them after spain joined the ems in 1989 analyses of long run price homogeneity within the i 2 model turned out to be crucial for understanding the joint behavior of money income and prices the empirical findings point to real monetization effects in the pre ems period and the crucial role of shocks to nominal interest rates in particular to the long term bond rate in addition the paper provides further insights on the macroeconomic effects of joining the ems and financial deregulation the increased economic integration within the eu is shown to have fundamentally changed the dynamics of the conventional is lm transmission mechanism and led to decreased effectiveness of monetary policy

the general validity of the heckscher ohlin theorem despite a number of attempts to extend it the heckscher ohlin theorem remains woefully restricted in terms of the generality of the assumptions needed for its proof in its traditional form as a statement about the commodity composition of trade the theorem is valid only in the highly abstract environment of the two factor two good twocountry model that has been the mainstay of trade theory for half a century a weaker version of the theorem involving the factor content of trade rather than its commodity composition has been proved for any number of factors goods and countries but this generality has so far been bought only at the cost of other and perhaps equally restrictive assumptions 2 the purpose of this paper is to provide statements and proofs of the heckscher ohlin h o theorem that are more general than those currently available the approach taken is similar to that used in my 1980 article for an extension of the theory of comparative advantage in terms of correlations between autarky prices and trade in section i i lay out the assumptions on which the analysis is based these assumptions provide the outlines of a reasonably general model in which there may be any numbers of goods and factors and in which factor prices may be equalized or not trade impediments in the form of tariffs or export taxes are permitted though transportation costs are not 3 in section ii i discuss the difficulty of inferring the factor content of trade in a world of unequal factor prices and i provide several alternative definitions of that concept for use later in the paper these together with the assumptions of section i are used in section iii to prove a theorem on the value at autarky prices of the factor content of trade in section iv this theorem is used to prove a first corollary that makes a more direct statement about the pattern of trade it says that worldwide there must be a negative correlation between the factor content of trade by factor and country and the corresponding autarky factor prices it is precisely these autarky factor prices that constitute the ohlin measure of factor scarcity therefore the corollary provides a formal statement of the general idea that countries tend to export the services of those factors which they have in relative abundance and it may be regarded as a generalization of the factor content version of the h o theorem finally a generalization of the commodity version of the theorem is proved in section v the concept of a covariance is generalized university of michigan i have benefitted greatly from the comments of paul degrauwe wolfgang mayer michael mussa carl simon and robert stern as well as others who participated in seminars at the universities of michigan chicago and cincinnati and at the national bureau of economic research an anonymous referee also made valuable comments with additional goods and factor price equalization the theorem runs afoul of the indeterminacy of production and trade noted by paul samuelson 1953 and james melvin 1968 without factor price equalization trade impediments and intermediate production can cause reversals of the pattern of trade as shown in my 1979 article if additional factors and countries are also added it becomes difficult even to state the theorem let alone to prove it 2melvin stated such a theorem for the three good two factor case and jaroslav vanek 1968 proved it for the general case but only by assuming factor price equalization trent bertrand 1972 and jon harkness 1979 were able to drop the factor price equalization assumption but replaced it with restrictions on consumption of either goods or factors by country of origin it is unclear to me however that these restrictions can ever be met in a model that is otherwise plausible harkness 1978 has also used the factor content version of the theorems as the motivation for a regression equation relating commodity trade to factor intensities this bears some resemblance to my analysis below in section v see however james anderson 1981 and edward leamer and harry bowen 1981 who have criticized his result with a reply by harkness 1981 3for ease of exposition i do not allow here for transportation costs these were included in an earlier version of this paper following the technique in my 1980 article

the price puzzle in the monetary transmission vars with long run restrictions abstract this study addresses the price puzzle a positive response of prices to monetary tightening in var models by using long run instead of the usual short run restrictions on the us data including output prices and interest rate we find that monetary tightening had a negative effect on prices

conservation when landowners have bargaining power continuous conservation investments and cost uncertainty spatially heterogeneous costs of securing conservation agreements should be accounted for when prioritizing properties for conservation investment most researchers incorporating conservation costs into analyses have relied on estimates of landowners opportunity costs of accepting a conservation agreement implicitly assumed in such studies is therefore that those who produce biodiversity landowners receive none of the surplus available from trade instead landowners could use their bargaining power to gain profits from conservation investments we employ game theory to determine the surplus landowners could obtain in negotiations over conservation agreements and the consequent effects on conservation outcomes when enrolment decisions are governed by continuous variables e g the proportion of a property to enrol in addition we consider how landowner uncertainty regarding the opportunity costs of other landowners affects these outcomes landowners ability to gain surplus is highly variable and reflects variation in the substitutability of different properties for achieving a specified conservation objective the ability of landowners to obtain profits from conservation agreements results in conservation outcomes that are substantially diminished relative to when landowners accept investment at opportunity costs uncertainty increases landowner profits leading to a greater diminution in conservation benefits

additionality and the adoption of farm conservation practices we use propensity score matching to estimate additionality from enrollment in federal cost share programs for six practices we analyze farmer adoption decisions based on farmer survey data in ohio we develop a new methodological approach to decompose the average treatment effect on the treated according to relative contributions of voluntary adopters and new adopters our results indicate that cost share programs achieve positive levels of additionality for each practice but percent additionality varies dramatically between practices specifically percent additionality is highest for hayfield establishment 93 3 cover crops 90 6 and filter strips 88 9 while it is lowest for conservation tillage 19 3 jel q24 q28

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

interactions between cap agricultural and agri environmental subsidies and their effects on the uptake of organic farming we analyze the effects of the interactions that the two pillars of the european union common agricultural policy market support and rural development have on farmers uptake of organic farming practices special attention is given to the 2003 reform which substantially altered the relative importance of the two types of support by decoupling direct agricultural payments from the production of a specific crop in our empirical analysis we study the case of sweden making use of the variation in the timing of farmers decisions regarding participation in support programs we estimate a dynamic non linear unobserved effects probit model to account for unobserved individual heterogeneity and state dependence our results indicate the existence of a negative effect of the market support system in place when organic farming techniques were adopted before the 2003 reform however this effect is reversed by the introduction of decoupling furthermore the effects of support differ between certified and non certified organic production both pillars have significant effects on non certified organic farming whereas certified organic farming is exclusively driven by agro environmental subsidies

european integration and monetary transmission mechanisms the case of italy the focus in this paper is on the monetary transmission mechanism in italy and how it has changed with the increased independence of the italian central bank and the increasingly fixed exchange rates of the erm the sample period 1974 1994 is divided into two parts approximately corresponding to the different systems based on a var model for money income prices and interest rates the cointegration properties of the data in nominal and real terms are analysed long run price homogeneity is empirically rejected and the economic and econometric consequences for a real money analysis are described altogether we find little evidence that the use of m2 and the short interest rate as intermediate targets has effectively controlled price inflation in this period copyright 2001 john wiley sons ltd

the impact of information provision on agglomeration bonus performance an experimental study on local networks the agglomeration bonus is an incentive mechanism to induce adjacent landowners to spatially coordinate their land use for the delivery of ecosystem services from farmland this paper uses laboratory experiments to explore the performance of the agglomeration bonus in achieving the socially optimal land management configuration in a local network environment where the information available to subjects varies and the strategic setting is unfavorable for efficient coordination the experiments indicate that if subjects are informed about both their direct and indirect neighbors actions they are more likely to produce the socially optimal configuration thus effectiveness of the policy can be improved by implementing information dissemination exercises among landowners however given the adverse strategic setting increased game experience leads to coordination failure and optimal land choices only at the localized level independent of the information available to subjects thus success of the agglomeration bonus scheme on real landscapes will have to take account of the roles of both information and experience on participant behavior

the conduct of monetary policy nowadays the central bank of a country is the monopoly supplier of legal tender currency the commercial banks are committed to making their deposits convertible at par into such currency so the banks need to keep reserves in the form of currency and deposits at the central bank the central bank primarily conducts its policy by buying and selling financial securities e g treasury bills or foreign exchange in exchange for its own liabilities i e open market operations academic economists generally regard such operations as adjusting the quantitative volume of the banks reserve base and hence of the money stock with rates prices in such markets simultaneously determined by the interplay of demand and supply central bank practitioners almost always view themselves as unable to deny the banks the reserve base that the banking system requires and see themselves as setting the level of interest rates at which such reserve requirements are met with the quantity of money then simultaneously determined by the portfolio preferences of private sector banks and non banks this difference in perceptions is discussed again in section iii whether the monetary policy operations of central banks should be viewed primarily in terms of quantity or rate setting actions though of course one is the dual of the other these had allowed inflation and inflationary expectations to become entrenched by the end of the i970s a selection of representative statistics for a number of the leading industrialised countries is given in table i below this table indicates a common pattern among the countries of interaction between interest rates inflation and the growth of output the first period i969 78 is marked by high inflation negative real interest rates and slightly above average growth the second period i979 82 by very high nominal and high real interest rates high but falling inflation and very low output growth the final period i983 7 is marked by much lower inflation lower nominal but still high real interest rates and a recovery in output growth in some cases to above average rates in contrast the relationship in these countries between the growth of their chosen key monetary aggregate and nominal incomes appears much weaker also see clinton and chouraqui i987 especially p 7 whether measured in terms of monetary growth or in terms of real interest rates i e after adjustment for prospective future inflation policy during the

macroeconomics and agriculture in tunisia this article aims to analyse the impact of changes in the monetary policy and the exchange rate on agricultural supply prices and exports the methodology used is based on the multivariate cointegration approach ten variables are considered interest and exchange rates money supply inflation agricultural output and input prices agricultural supply and exports income and the rate of commercial openness the sample period covers annual data from 1967 to 2002 due to the short sample period two subsystems are considered first long run relationships are identified in each subsystem second both subsystems are merged in order to calculate the short run dynamics the results indicate that changes in macroeconomic variables have an effect on the agricultural sector but the reverse effect does not hold

a structured var for denmark under changing monetary regimes using recently developed statistical tools for analyzing cointegrated 1 2 data this article models money income prices and interest rates in denmark the final model describes the dynamic adjustment to short run changes of the process to deviations from long run steady states and to several political interventions it provides new insights about the effects of the liberalization of trade and capital in a small open european economy

policy design and conservation compliance on highly erodible lands we develop a game theoretic model of heterogeneous producers in order to identify the economic determinants of producer noncompliance with the conservation provisions of the united states department of agriculture usda policy on highly erodible lands we evaluate the policy effectiveness in inducing compliance and adoption of conservation practices the current policy design creates economic incentives for all noncompliant producers to masquerade as adopters and to claim government payments for which they are not entitled both theoretical and empirical results indicate that the increased income transfers to agriculture enacted under the latest farm bill will increase producer compliance and conservation activity on highly erodible lands

to certify or not to certify separating the organic production and certification decisions this article separates the decision to be certified organic into the decision to use organic practices and the subsequent decision to certify those practices using data from a survey of us fruit and vegetable producers we document that many producers are using organic practices but choosing not to certify philosophical beliefs and perceived risk of losses due to disease weeds and insects have the largest impact on the decision to use organic practices producers who use organic practices and direct market are less likely to certify moreover we find that the certification process discourages certification

sustainable development in a post brundtland world not yet two decades after the publication of our common future the world s political and environmental landscape has changed significantly nonetheless we argue that the concept and practice of sustainable development sd as guiding institutional principle as concrete policy goal and as focus of political struggle remains salient in confronting the multiple challenges of this new global order yet how sd is conceptualized and practiced hinges crucially on the willingness of scholars and practitioners to embrace a plurality of epistemological and normative perspectives on sustainability the multiple interpretations and practices associated with the evolving concept of development and efforts to open up a continuum of local to global public spaces to debate and enact a politics of sustainability embracing pluralism provides a way out of the ideological and epistemological straightjackets that deter more cohesive and politically effective interpretations of sd using pluralism as a starting point for the analysis and normative construction of sustainable development we pay particular attention to how an amalgam of ideas from recent work in ecological economics political ecology and the development as freedom literature might advance the sd debate beyond its post brundtland quagmire enhanced levels of ecological degradation vast inequalities in economic opportunities both within and across societies and a fractured set of institutional arrangements for global environmental governance all represent seemingly insurmountable obstacles to a move towards sustainability while these obstacles are significant we suggest how they might be overcome through a reinvigorated set of notions and practices associated with sustainable development one that explicitly examines the linkages between sustainability policies and sustainability politics

market penetration of biodiesel abstract this research examines in detail the technology and economics of substituting biodiesel for diesel 2 this endeavor examines three areas first the benefits of biodiesel are examined and the technical problems of large scale implementation second the biodiesel production possibilities are examined for soybean oil corn oil tallow and yellow grease which are the largest sources of feedstocks for the united states examining in detail the production possibilities allows to identity the extent of technological change production costs byproducts and greenhouse gas ghg emissions finally a u s agricultural model fasomghg was used to predict market penetration of biodiesel given technological progress variety of technologies and feedstocks market interactions energy prices and carbon dioxide equivalent prices fasomghg has several interesting results first diesel fuel prices have an expansionary impact on the biodiesel industry the higher the diesel fuel prices the more biodiesel is produced however given the most favorable circumstances the maximum biodiesel market penetration is 9 in 2030 with a wholesale diesel price of 4 per gallon second the two dominant sources of biodiesel are from corn and soybeans sources like tallow and yellow grease are more limited because they are byproducts of other industries third ghg prices have an expansionary impact on the biodiesel prices because biodiesel is quite ghg efficient finally u s government subsidies on biofuels have an expansionary impact on biodiesel production and increase market penetration at least an additional 3

farmers adoption of integrated crop protection and organic farming do moral and social concerns matter we investigate empirically the role of moral and social concerns in farmers decision to adopt integrated crop protection ip and organic farming of a survey questionnaire has been sent to 1286 fruit growers and vegetable producers located in the french areas of alpes de haute provence hautes alpes and vaucluse analysis of individual responses n 243 shows that although economic concerns play a strong role a significant number of respondents give high importance to moral and social ones we also examine how these considerations matter according to different crop protection strategies that is conventional farming ip and of using a multinomial logistic regression we find that 1 social concerns e g showing to others one s environmental commitment drive both ip and of adoption 2 moral concerns e g do not feel guilty about one s choices increase the probability of organic farming adoption only and 3 farmers who give high importance to economic concerns e g cutting production costs are less likely to adopt of

temporal spillovers in land conservation abstract temporal spillovers occur when a conservation program changes what happens to land outside the temporal window of the conservation contract this may happen when conservation improves land so that returns to non conservation uses are increased or when landowners preferences become more pro conservation as they see land flourish under conservation for example these post contract changes may occur on the extensive margin acres of land conserved or intensive margin intensity of land in a given use if temporal spillovers exist benefits from conservation programs estimated by focusing solely on the effects that occur during the conservation contract will overstate or understate the true benefits of the program i lay out a simple model of temporal spillovers i test this model in the context of the united states conservation reserve program crp i use a pre analysis sample specification step to choose counterfactual land most like the crp land on the extensive margin i find that crp causes some land to be 20 25 more likely to be farmed potentially offsetting some environmental benefits however farmed ex crp land is slightly more likely to use a conservation practice this is a mitigating factor on the intensive margin

does realism matter in contingent valuation surveys the importance of stressing the realism or policy relevance of a contingent valuation cv survey is commonly recognized by cv researchers this paper focuses on the relationship between the probability that a subject s response will result in real consequences and the subject s accurate reporting of willingness to pay results from experiments support the argument that efforts to make contingent valuation surveys real are important however our results also suggest that the connection between the survey and the likelihood of a payment must be rather powerful before surveys generate accurate reporting of willingness to pay for a public good

a re interpretation of the linear quadratic model when inventories and sales are polynomially cointegrated summary estimation of the linear quadratic model the workhorse of the inventory literature traditionally takes inventories and sales to be first difference stationary series and the ratio of the two variables to be stationary however these assumptions do not always match the properties of the data for the last two decades in the united states we propose a model that allows for the non stationary characteristics of the data using polynomial cointegration we show that the closed form solution has other recent models as special cases the resulting model performs well on aggregate and disaggregated data copyright 2006 john wiley sons ltd

demand for money in the selected oecd countries a time series panel data approach and structural breaks time series panel data estimation methods are used to estimate the cointegrating equations for the demand for money m1 for a panel of 11 organization for economic cooperation and development oecd countries for which consistent quarterly data are available the effects of financial reforms are analysed with structural break tests and estimates for alternative sub samples our results for the post reform sub samples show that the income elasticity of the demand for money has decreased and response to interest rate changes has increased

spatiotemporal modeling of asian citrus canker risks implications for insurance and indemnification fund models asiatic citrus canker is an infectious disease that is a signiflcant hazard to commercial citrus production in florida our paper examines spatio temporal models of the risks of citrus canker transmission the state of florida implemented an inspection program that checks every commercial grove several times each year we use data from over 338 000 inspections over the 1998 2004 period to evaluate the risks associated with canker infection simple models describing the risks of infection are used to evaluate risks and associated indemnity insurance fund contribution rates fruit type grove size and a history of recent infections in neighboring areas are found to be important determinants of canker infection risks conditional risks are estimated from the models and are used to price annual contracts which would pay producers a pre specifled indemnity in the event that their grove is found to be infected with canker

incentive payments to encourage farmer adoption of water quality protection practices farmers can be encouraged to voluntarily adopt environmentally sound management practices through the use of incentive payments this paper uses both a bivariate probit with sample selection model and a double hurdle model on data from a survey of farmers to predict farmer adoption of the practices as a function of the payment offer the five management practices addressed here are integrated pest management legume crediting manure testing split applications of nitrogen and soil moisture testing also estimated are models that predict the acreage on which these practices would be applied given the decision to accept the incentive payments estimated