the economics of a blend mandate for biofuels a biofuel blend mandate may increase or decrease consumer fuel prices with endogenous oil prices depending on relative supply elasticities biofuel tax credits always reduce fuel prices tax credits result in lower fuel prices than under a mandate for the same level of biofuel production if tax credits are implemented alongside mandates then tax credits subsidize fuel consumption instead of biofuels this contradicts energy policy goals by increasing oil dependency co 2 emissions and traffic congestion while providing little benefit to either corn or ethanol producers these social costs will be substantial with tax credits costing taxpayers 28 7 billion annually by 2022 copyright 2008 oxford university press

uncertainty effects on production mix and on hedging decisions the case of brazilian ethanol and sugar abstract the use of food crops to produce biofuels has been subject of interest in literature the relationship between food and fuel prices can remarkably affect production strategies these prices are subject to high uncertainty and producers must adopt hedging and storage strategies in order to avoid financial losses this study investigates the effect of uncertainty on production storage and hedging of ethanol and sugar in brazilian mills a robust optimization model to define production storage and hedging strategies is proposed uncertainty sets on returns are constructed based on a state space model kalman filter the presented model was applied to brazilian ethanol and sugar markets in different economic scenarios the study analyses efficient frontiers and optimal strategies and the results indicate that even adopting good price forecast models the optimal strategies can be deeply affected by uncertainty

a case study for sustainable development action using financial gradients energy access is critical for sustainable development and therefore financing energy access is a necessity the key is whether to focus on grants or public finance for sustainable development projects or move to a more diffused financing mechanism involving investment grade financing sources like debt and equity in other words financing sustainable development action via grants is becoming a constraint to address this constraint it is important to consider the relationship between the nature and sources of financial flows the concept of financial gradients emerged while analysing the financial and business strategy developed for lighting a billion lives labl campaign this paper espouses the idea of financial gradients which is a potential financial mechanism for sustainable development action financial gradients can contribute in three different ways first as an approach to analyse financial flows in projects second as a tool to generate a single long term and stable inflow of finance third as a financial mechanism to help in creating long term strategies to sustain projects this paper will concentrate on financial gradients as a potential approach to analyse financial flows in a sustainable development programme

the transmission of democracy from the village to the nation state we provide evidence that a history of democracy at the local level is associated with contemporary democracy at the national level auxiliary estimates show that a tradition of local democracy is also associated with attitudes that favor democracy with better quality institutions and higher level of economic development

long run cultural divergence evidence from the neolithic revolution this paper investigates the long run influence of the neolithic revolution on contemporary cultural norms as reflected in the dimension of collectivism individualism we present a theory of agricultural origins of cultural divergence where we claim that the advent of farming in a core region was characterized by collectivist values and eventually triggered the out migration of individualistic farmers towards more and more peripheral areas this migration pattern caused the initial cultural divergence which remained persistent over generations using detailed data on the date of adoption of neolithic agriculture among western regions and countries the empirical findings show that the regions which adopted agriculture early also value obedience more and feel less in control of their lives the findings add to the literature by suggesting the possibility of extremely long lasting norms and beliefs influencing today s socioeconomic outcomes

a proposal for integration of the ecosystem water food land energy ewfle nexus concept into life cycle assessment a synthesis matrix system for food security ensuring secure access to food and energy worldwide relies on win win share of sectoral use of constrained natural resources such as land and water taking also into account the crucial role of ecosystems and their services the increase in global population and the related growing demand for food and other services are exerting unsustainable pressures on natural resources compromising their use within the ecosystems carrying capacity progressively studies and initiatives have been developed with the aim of identifying win win share strategies which may compensate the sectoral demands of natural resources addressing the need of a holistic and interdisciplinary nexus approach in this study thus emphasizing the importance of a holistic approach and highlighting the fundamental role of ecosystems we propose a synthesis matrix system that describes the complex and closely bound relationship between natural resources use for food specifically water land energy defined as ecosystem service flows in our matrix system and ecosystems along the lines of the concept of ecosystem water food land energy nexus the synthesis matrix system could be defined for different scales both from the global to the local scale and has been designed to include impacts and nexus with climate change the matrix aims at integrating quantitative and qualitative aspects which are often neglected in traditional approaches of impact assessment the complexity of the interactions between the different components of the nexus requires relying not only on quantitative evidences but also on expert judgment a sensitivity check has been conducted to illustrate how to verify the convergence of expert judgment from different experts moreover being the matrix meant for supporting holistic assessment of supply chain in the present study the integration of the matrix within life cycle assessment lca is proposed however in order to support the analysis of interconnections among impacts further methodological development of the lca methods is needed an illustrative example related to the competition for water land and food bioenergy production is depicted the matrices show that there are predominantly negative impacts given by sectoral uses of resources on the provision of ecosystem services an issue that requires most focus on resource efficiency and on the environmental and economic impacts of natural resources use while reducing the trade offs between the sectoral demands

a global general equilibrium analysis of biofuel mandates and greenhouse gas emissions in the last decade global biofuel production has grown rapidly as a result of oil price increases and government policies promoting the development of biofuels though reducing greenhouse gas ghg emissions is one of the stated policy goals along with increasing energy security and promoting rural development the ghg implications of biofuels have come under intense scrutiny particular attention has been focused on ghg impacts of the direct and indirect land use change luc associated with feedstock production for the commercially viable first generation biofuels global biofuel production currently represents about 3 of total transportation fuels with the vast majority of production concentrated in the united states brazil and the european union the primary sources are maize feedstock ethanol in the united states sugarcane feedstock ethanol in brazil and oilseed feedstock biodiesel in the european union all three regions have mandatory requirements to increase production or consumptionofbiofuelsoverthenextfivetoseven years as well as other policies in place to promote production the conventional wisdom has been that substituting ethanol for gasoline will reduce ghg emissions modestly with maize feedstock and substantially with sugarcane or second generation cellulosic feedstocks and

historical legacies a model linking africa s past to its current underdevelopment abstract recent studies have found evidence linking africa s current under development to colonial rule and the slave trade given that these events ended long ago why do they continue to matter today i develop a model exhibiting path dependence which provides one explanation for why these past events may have lasting impacts the model has multiple equilibria one equilibrium with secure property rights and a high level of production and others with insecure property rights and low levels of production i show that external extraction when severe enough causes a society initially in the high production equilibrium to move to a low production equilibrium because of the stability of low production equilibria the society remains trapped in this suboptimal equilibrium even after the period of external extraction ends the model provides one explanation why africa s past events continue to matter today

the new competition for land food energy and climate change abstract the paper addresses the new competition for land arising from growing and changing demand for food when combined with increasing global demand for transport energy under conditions of declining petro chemical resources and the urgent need to reduce greenhouse gas emissions the paper starts from the premise of a food energy and environment trilemma tilman et al 2009 where all demands to expand the area of cultivated land present high risks of increasing the carbon footprint of agriculture having reviewed the main drivers of demand for food and for liquid transport fuels the paper weighs the controversies surrounding biofuels arising from food price spikes the demand for land and consequent direct and indirect land use change it suggests that we need a more complex and geographically differentiated analysis of the interactions between direct and indirect land use change the paper then reviews evidence of land availability and suggests that in addition to technical availability in terms of soil water and climate political social and technological factors have significantly shaped the competition for land in different global regions particularly the three major biofuel producing ones of the usa brazil and europe this point is further developed by reviewing the different innovation pathways for biofuels in these three regions the main conclusion of this review is firstly that any analysis requires an integrated approach to the food energy environment trilemma and secondly that strategic political direction of innovation and sustainability regulation are required to bring about major shifts in agriculture leading to sustainable intensification of cultivation royal society 2009 rather than the continued expansion of cultivated area the consequent perspective is one of considerable global variety in technologies agricultural productive systems and use of natural resources this contrasts sharply with the world of a dominant global and integrated technology platform based on petro chemicals to which we have become accustomed

does britain or the united states have the right gasoline tax this paper develops an analytical framework to assess the second best optimal level of gasoline taxation taking into account unpriced pollution congestion and accident externalities as well as interactions with the broader fiscal system we provide calculations of the optimal taxes for the us and the uk under a variety of parameter scenarios under our central parameter values the second best optimal gasoline tax is 1 01 gal for the us and 1 34 gal for the uk current tax rates are much lower than this in the us and higher in the uk the calculations are moderately sensitive to alternative parameter assumptions the congestion externality is the largest component in both nations revenue raising needs also play a significant role as do accident externalities and local air pollution potential welfare gains from reducing the current uk tax rate are estimated at nearly one fourth the production cost of all gasoline used in the uk even larger gains could be achieved by switching to a tax on vehicle miles with equal revenue yield for the us the welfare gains from optimizing the gasoline tax are smaller but those from switching to an optimal tax on vehicle miles are very large

the impact of ethanol production on us and regional gasoline markets an update to may 2009 we update the findings of the impact of ethanol production on u s and regional gasoline markets as reported previously in du and hayes 2009 and 2011 by extending the data to december 2011 the results indicate that over the period of january 2000 to december 2011 the growth in ethanol production reduced wholesale gasoline prices by 0 29 per gallon on average across all regions the midwest region experienced the biggest negative impact of 0 45 gallon while the regions of east coast west coast and gulf coast experienced negative impacts of similar magnitudes around 0 20 gallon based on the data of 2011 only the marginal impacts on gasoline prices are found to be substantially higher given the increasing ethanol production and higher crude oil prices the average effect across all regions increases to 1 09 gallon and the regional impact ranges from 0 73 gallon in the gulf coast to 1 69 gallon in the midwest

history institutions and economic performance the legacy of colonial land tenure systems in india we analyze the colonial land revenue institutions set up by the british in india and show that differences in historical property rights institutions lead to sustained differences in economic outcomes areas in which proprietary rights in land were historically given to landlords have significantly lower agricultural investments and productivity in the post independence period than areas in which these rights were given to the cultivators these areas also have significantly lower investments in health and education these differences are not driven by omitted variables or endogeneity problems they probably arise because differences in historical institutions lead to very different policy choices

the impact of diesel price on upstream and downstream food prices evidence from sao paulo abstract the literature on the transmission of oil price shocks to prices along the food supply chain has widely ignored how shocks upstream differ from downstream ones this article examines this issue by modelling upstream and downstream diesel price shocks along the nutritional high value food supply chain in sao paulo using a vector error correction approach and monthly data from july 2001 to december 2013 we estimate short run and long run dynamics in producer and retail prices of meat eggs dairy and fats oil due to changes in the average monthly price of diesel the results of the granger causality analysis show that the price of diesel cannot be used to predict the behaviour of producer prices in all the markets under study and the price of diesel predicts retail price only in the egg market this result is in line with the nature of price controls in brazil as of january 2002 the prices charged by distributors and retailers have been liberalized although wholesale prices of the derivatives including that of diesel continue to be set by the state oil company with the objective of controlling inflationary pressures the results of the response of food prices to diesel price shocks show a positive response of both upstream and downstream prices of egg and dairy products both upstream and downstream while the opposite direction occurs in the fat and meat markets albeit the initial positive shock of the producer price of meat the findings of the study show the important role of public policy in determining the nature of price transmission along the food supply chain

on the origins of gender roles women and the plough the study examines the historical origins of existing cross cultural differences in beliefs and values regarding the appropriate role of women in society we test the hypothesis that traditional agricultural practices influenced the historical gender division of labor and the evolution of gender norms we find that consistent with existing hypotheses the descendants of societies that traditionally practiced plough agriculture today have less equal gender norms measured using reported gender role attitudes and female participation in the workplace politics and entrepreneurial activities our results hold looking across countries across districts within countries and across ethnicities within districts to test for the importance of cultural persistence we examine the children of immigrants living in europe and the united states we find that even among these individuals all born and raised in the same country those with a heritage of traditional plough use exhibit less equal beliefs about gender roles today jel codes d03 j16 n30 copyright 2013 oxford university press

estimating maximum land use change potential from a regional biofuel industry abstract the maximum amount of land for growing switchgrass for ethanol is estimated for a region in the southeastern u s breakeven capacities are calculated for land in row crops hay pasture and marginal land characteristics of land categories inform potential land use change impacts as well as switchgrass profitability variable yields within and across land categories are translated into distributions of switchgrass net revenue breakeven curves are generated for a range of switchgrass prices these curves provide upper bounds for further analysis of actual switchgrass adoption in context of broader economic forces and possible policy mechanisms to minimize environmental impacts a farm gate price of 55 mg 1 is estimated for half of marginal and pasturelands to break even with switchgrass at this price only 20 of land in hay and a small fraction of row crop hectares break even half of hay and row crops hectares break even at approximately 90 mg 1 and 100 mg 1 respectively at 60 mg 1 sufficient land area can profitably produce switchgrass for ethanol to displace approximately 10 of gasoline consumed in georgia north carolina and south carolina however this price only indicates breakeven capacity implying that higher prices may be necessary to realize 10 displacement

biofuels and food security the biofuel market created the linkage between energy and agricultural market prices biofuel policies and energy prices set the floor price of feedstock prices and the energy prices and the upper limit of the biofuel blend ratio can decide the ceiling of feedstock prices on the other hand biofuels can also transmit price volatility from energy to agricultural markets despite not always being the cause of price volatility of feedstock and related agricultural commodity prices brazilian bioethanol can play a crucial role in stabilizing the sugar market one of the most crucial problems for increasing biofuel production is the competition with food and food related demand and agricultural resources the definition of competition between biofuels and food can be divided into two dimensions the competition with food and food related demand and the competition with the agricultural resources the feedstock of the second generation biofuels can compete with food and food related demand and agricultural resources the development of second generation biofuels may not solve the problems associated with the competition between biofuels and food however the competition between biofuels and food doesn t always have a negative impact on food security the competition and food security impact on different dimensions biofuels can contribute to agricultural and rural development and can have a positive impact on a national and sub national level but they can also have a negative impact on household levels in the same country international action is required to monitor whether biofuels can have a negative impact on food security and nutrition security at national sub national and household levels biofuels should be compatible with and must not threaten food security the fao in collaboration with other international organizations will have the responsibility of monitoring the impact of biofuels on food security and proposing policy recommendations to individual countries based on the results of the monitoring

decompositions of corn price effects implications for feed grain demand and livestock supply this article examines how corn prices affect the demand for feed grains and the supply of livestock outputs the differential approach to the theory of the multiproduct firm is employed to examine ex ante decisions about feed grain demand and livestock supply the estimation results suggest that livestock producers have little flexibility in adjusting the demand for corn in response to an increase in corn prices the substitutable relationship between corn and distillers grains contributes to alleviating pressures on feed costs in response to high corn prices in addition the estimation results highlight that the composition of livestock supply can be altered by changes in livestock prices on the basis of the estimated elasticities the decompositions of profit maximizing input demand are conducted to examine the effects of changes in corn prices on feed grain demand and livestock supply the decomposition results reveal that an increase in corn prices reduces corn demand but raises the demand for distillers grains mainly due to the substitution effects of corn price changes the decomposition results also show that an increase in the price of corn reduces cattle supply but raises the supply of chicken and pork due to the output relationships in supply

the impact of rising ethanol production on the brazilian market for basic food commodities an econometric assessment the controversial debate on the impacts of rising biofuel production on food commodity markets is of great policy relevance in brazil this paper contributes to the discussion by applying panel data regression models with fixed effects using ols our dataset comprises annual production harvested area data for sugar ethanol and five other staple commodities ranging from 1981 to 2009 for 24 brazilian states our results indicate that rising ethanol production exerts statistically significant positive impacts on sugarcane negative impacts on rice beans and soybeans acreage but no statistically significant effect on the areas for corn and manioc the negative impacts on commodities acreage have implications for the associated prices ceteris paribus rising ethanol production puts some upward pressure on the prices for rice beans and soybeans however the economic implication of these direct land use effects is attenuated due to the moderate scale of any effect

the varieties of resource experience natural resource export structures and the political economy of economic growth many oil mineral and plantation crop based economies experienced a substantial deceleration in growth following the commodity boom and bust of the 1970s and early 1980s this article illustrates how countries dependent on point source natural resources those extracted from a narrow geographic or economic base such as oil and minerals and plantation crops are predisposed to heightened economic and social divisions and weakened institutional capacity this in turn impedes their ability to respond effectively to shocks which previous studies have shown to be essential for sustaining rising levels of prosperity analysis of data on classifications of export structure controlling for a wide array of other potential determinants of governance shows that point source and coffee and cocoa exporting countries do relatively poorly across an array of governance indicators these governance effects are not associated simply with being a natural resource exporter countries with natural resource exports that are diffuse relying primarily on livestock and agricultural produce from small family farms do not show the same strong effects and have had more robust growth recoveries

land use change impacts of biofuels near var evidence from the us abstract the present paper studies the land use change impacts of fuels and biofuels we test the theoretical hypothesis which says that changes in fuel prices cause changes in land use both directly and indirectly and that because of price inter dependencies biofuels reinforce the land use change impacts we apply time series analytical mechanisms to five major traded agricultural commodities the cultivated area of agricultural land and crude oil price our data consists of yearly observations extending from 1950 to 2007 for the us the empirical findings confirm that markets for crude oil and cultivated agricultural land are interdependent an increase in oil price by 1 dollar barrel increases land use between 54 000 and 68 000 ha we also find that the increase of bioenergy sector accelerates land use change in the us i e food commodities are being substituted for bioenergy crops

how market efficiency and the theory of storage link corn and ethanol markets this article uses the theories of market efficiency and supply of storage to develop a conceptual link between the corn and ethanol markets and explores statistical evidence for the link we propose that a long run no profit condition is established in distant futures markets for ethanol corn and natural gas and then use the theory of storage to define an inter temporal equilibrium among these prices the relationship shows that under certain conditions future price expectations will influence nearby futures prices and that a short term relationship between input and output prices will exist we demonstrate validity of the theory using a structural price model and then by means of time series techniques

price transmission and asymmetric adjustment in the spanish dairy sector asymmetric threshold vector error correction models are applied to monthly price data to analyse price relationships and patterns of transmission among farm and retail markets for a variety of dairy products in spain the results suggest that asymmetries affect a conspicuous part of the raw milk processed in spain implications for the organizational structure of spanish dairy markets are offered

how does petroleum price and corn yield volatility affect ethanol markets with and without an ethanol use mandate the recent increase in ethanol use in the us strengthens and changes the nature of links between agricultural and energy markets here we explore the interaction of market volatility and the scope for policy to affect this interaction with a focus on how corn yields and petroleum prices affect ethanol prices mandates associated with new us energy legislation may intervene in these links in the medium term future we simulate stochastically a structural model that represents these markets and that includes mandates in order to assess how shocks to corn or oil markets can affect ethanol price and use we estimate that the mandate makes ethanol producer prices more sensitive to corn yields and less sensitive to changes in petroleum prices overall we note a discontinuity in these links that is caused by the mandate ethanol use can exceed the mandate if petroleum prices and corn yields are high enough but the mandate limits downside adjustments in ethanol use to low petroleum prices or corn yields

can biomass energy be an efficient policy tool for sustainable development abstract this paper first reviews the potential causality from biomass energy to co2 emissions and economic development within relevant literature later the paper examines statistically the impacts of biomass energy consumption on co2 emissions and gdp in the us to this end paper observes environmental and economic implications of biomass fuel usage throughout energy literature and launches asymmetric causality test to confirm disconfirm the literature output the findings of the tests indicate that biomass energy consumption per capita mitigates co2 emissions per capita and increases gdp per capita eventually upon its output this research asserts that biomass energy consumption can be an efficient policy tool for environmentally sustainable development in the us and that hence biomass production technologies and biomass consumption need to be promoted in other countries as well as in the us on the other hand analyses underline the fact that policy makers should consider as well some potential constraints of biomass energy usage such as land use constraints and carbon leakage from biomass production therefore although this paper explores the remedial impact of biomass on environment and growth one may suggest also that further possible works consider the effects of biomass sources in detail to minimize the some worsening influence of biomass usage on climate change

food versus fuel an updated and expanded evidence abstract this paper replicates the study of zhang et al 2010 food versus fuel what do prices tell us energy policy 38 pp 445 451 we confirm the findings of the original paper that there was only a weak relationship between ethanol and food commodities in the period between march 1989 and july 2008 in addition we extend that study and examine the cointegration relationship between biofuels and related commodities for a considerably enlarged dataset 3 vs 1 market 26 vs 8 commodities analysis up till 2017 vs 2008 weekly vs monthly data frequency focusing on the biofuel markets of brazil the eu and the usa in the three separate periods before during and after the food crisis of 2007 and 2008 we show that studying the time variation of the relationships plays an essential role in their proper understanding our results help to clarify the wide extensive discussion about the role of biofuels prices in food shortages manifested particularly during the food crises in agreement with the original study we confirm that price series data do not support strong statements about biofuels uniformly serving as main leading source of high food prices and consequently the food shortages

correlations between biofuels and related commodities before and during the food crisis a taxonomy perspective abstract in this paper we analyze the relationships between the prices of biodiesel ethanol and related fuels and agricultural commodities with a use of minimal spanning trees and hierarchical trees to distinguish between short term and medium term effects we construct these trees for different frequencies weekly and monthly we find that in short term both ethanol and biodiesel are very weakly connected with the other commodities in medium term the biofuels network becomes more structured the system splits into two well separated branches a fuels part and a food part biodiesel tends to the fuels branch and ethanol to the food branch when the periods before and after the food crisis of 2007 2008 are compared the connections are much stronger for the post crisis period this is the first application of this methodology on the biofuel systems

a life cycle perspective on land use and project economics of electricity from wind and anaerobic digestion abstract feed in tariffs and renewable portfolio standards rps are among the most prominent policies to address anthropogenic influence on climate change implementation of rps favorably affects renewable energy supply and rural development while reducing the land available for meeting demand for food and feed resulting from global population growth even in the vast great plains of the united states land requirements are primary considerations between increasing renewable energy capacity and food and feed production this study applied life cycle assessment lca and project economics to estimate and compare the land intensity and profitability of anaerobic digestion and wind energy projects in the great plains the results show that significantly more energy and revenue can be generated per hectare of land using wind versus anaerobic digestion economically the benefit to cost ratios of wind farms were almost twice as favorable as anaerobic digester facilities wind farms have consistent benefit to cost ratios of 2 15 while the anaerobic digester facilities benefit to cost ratios range from 1 2 to 1 25 legislature changes to rps could incentivize increasing the number of anaerobic digesters while also assisting in reversing the current trend of diminishing dairy farms while reducing climate change risks and creating new economic opportunities for renewable energy

the political economy of resource driven growth abstract in recent decades resource poor countries have out performed resource abundant ones a stylised facts model of competitive industrialisation describes the long run development of a resource poor country with a political state that is developmental only minor change is required to adapt the model to trace the development trajectory of a resource abundant country with a similar political state however most resource abundant countries engender a political state that is factional or predatory and distorts the economy in the pursuit of rents a staple trap model describes the development trajectory under these conditions the model predicts a growth collapse from which recovery is protracted especially for small economies that lack a niche trade link with a large economy

occupational choice and the spirit of capitalism the british industrial revolution triggered a socioeconomic transformation whereby the landowning aristocracy was replaced by industrial capitalists rising from the middle classes as the economically dominant group we propose a theory of preference formation under financial market imperfections that can account for this pattern parents shape their children s preferences in response to economic incentives middle class families in occupations requiring effort skill and experience develop patience and a work ethic whereas upper class families relying on rental income cultivate a refined taste for leisure these class specific attitudes which are rooted in the nature of preindustrial professions become key determinants of success once industrialization transforms the economic landscape i introduction the industrial revolution was more than capital accumulation and growth it also set off a social and political transformation that redefined hierarchies in society and reshaped the distribution of income and wealth before the onset of industrialization in eighteenth century britain wealth and political power were associated with the possession of land over the course of the nineteenth century a new class of entrepreneurs and businessmen emerged as the economic elite for the most part the members of this class rose from humble beginnings and had their social origins in the urban middle classes the landed elite was left behind and eventually lost its political and economic predominance many observers of the time linked this reversal in economic fortunes to differences in values attitudes and ultimately preferences across social classes there are countless examples both in scholarly and in fictional writing of portrayals of members of the landowning class as averse to work unwilling to save ill disposed tocommercialactivity andunabletoconsidermoneyassomething

bioenergy and global land use change this is the first article that econometrically estimates the global land use change impact of bioenergy applying time series analytical mechanisms to fuel biofuel and agricultural commodity prices and production we estimate the long run relationship between energy prices bioenergy production and the global land use change our results suggest that rising energy prices and bioenergy production significantly contribute to the global land use change both through the direct and indirect land use change impact globally the total agricultural area yearly increases by 35 578 1 thousand ha due to increasing oil price and by 12 125 1 thousand ha due to increasing biofuel production which corresponds to 0 73 and 0 25 of the total worldwide agricultural area respectively soya land use change and wheat land use change have the highest elasticities with respect to both oil price and biofuel production in contrast nonbiomass crops grassland and rice have negative land use change elasticities region spe

resource intensity institutions and development summary we examine the relationship between resource abundance and several indicators of human welfare consistent with the existing literature on the relationship between resource abundance and economic growth we find that given an initial income level resource intensive countries tend to suffer lower levels of human development while we find only weak support for a direct link between resources and welfare there is an indirect link that operates through institutional quality there are also significant differences in the effects that resources have on different measures of institutional quality these results imply that the resource curse is a more encompassing phenomenon than previously considered and that key differences exist between the effects of different resource types on various aspects of governance and human welfare 2005 elsevier ltd all rights reserved

colonialism and modern income islands as natural experiments abstract using a new database of islands throughout the atlantic pacific and indian oceans we find a robust positive relationship between the number of years spent as a european colony and current gdp per capita we argue that the nature of discovery and colonization of islands provides random variation in the length and type of colonial experience we instrument for length of colonization using variation in prevailing wind patterns we argue that wind speed and direction had a significant effect on historical colonial rule but do not have a direct effect on gdp today the data also suggest that years as a colony after 1700 are more beneficial than earlier years we also find a discernable pecking order among the colonial powers with years under u s british french and dutch rule having more beneficial effects than spanish or portuguese rule our finding of a strong connection between modern income and years of colonization is conditional on being colonized at all since each of the islands in our da

history lessons institutions factor endowments and paths of development in the new world the explanations offered for the contrasting records of long run growth and development among the societies of north and south america most often focus on institutions the traditional explanations for the sources of these differences in institutions typically highlight the significance of national heritage or religion we in contrast argue that a hemispheric perspective across the wide range of colonies established in the new world by the europeans suggests that although there were many influences factor endowments or initial conditions had profound and enduring effects on the long run paths of institutional and economic development followed by the respective economies

the integration of energy and agricultural markets this article addresses the evolving links between energy and agricultural markets prior to 2005 there was little correlation between energy and agricultural commodity prices in 2006 2008 with the ethanol boom in the united states there emerged a strong link between crude oil gasoline and corn prices there was little link between ethanol and corn however in late 2008 and 2009 the markets changed as ethanol production came under severe economic pressure and 2 billion out of 12 billion gallons of capacity shut down during this period ethanol became priced more on corn as the breakeven corn price helped drive the ethanol market this article explores the drivers in these markets as well as other major issues facing the corn ethanol industry in the united states such as the blend wall the article concludes with a review of prospects of a future cellulosic biofuels industry

switching to perennial energy crops under uncertainty and costly reversibility we study a farmer s decision to convert traditional cropland into land for growing dedicated energy crops taking into account sunk conversion costs and uncertainties in crop returns the optimal decision rules differ significantly from the expected net present value rule which ignores uncertainties and from real options models that allow only one way conversion into energy crops these models also predict drastically different patterns of land conversions into and out of energy crops over time using corn soybean rotation and switchgrass as examples we show that the model predictions are sensitive to assumptions about stochastic processes of the returns government policies might have unintended consequences subsidizing conversion costs into switchgrass may not much affect proportions of land in switchgrass in the long run

exogenous impacts on the links between energy and agricultural commodity markets abstract the main purpose of this paper is to identify the effects of exogenous factors which have been somewhat controversial on the price links between the energy and agricultural commodity markets our study differs from other studies by employing multivariate normal mixture models to capture the structural properties of the price dependencies in the underlying states this paper investigates price dependencies from both quantitative and structural perspectives by analyzing the overall dependencies and structural heterogeneity in the empirical results we conclude that the global financial crisis is the most influential shock on the price links between energy and agricultural commodities because price links are vulnerable to financial shocks our results also suggest introducing state based analysis to risk management and portfolio diversification across the energy and agriculture markets during times of turmoil

emerging biofuels outlook of effects on u s grain oilseed and livestock markets projections of u s ethanol production and its impacts on planted acreage crop prices livestock production and prices trade and retail food costs are presented under the assumption that current tax credits and trade policies are maintained the projections were made using a multi product multi country deterministic partial equilibrium model the impacts of higher oil prices a drought combined with an ethanol mandate and removal of land from the conservation reserve program crp relative to baseline projections are also presented the results indicate that expanded u s ethanol production will cause long run crop prices to increase in response to higher feed costs livestock farmgate prices will increase enough to cover the feed cost increases retail meat egg and dairy prices will also increase if oil prices are permanently 10 per barrel higher than assumed in the baseline projections u s ethanol will expand significantly the magnitude of the expansion will depend on the future makeup of the u s automobile fleet if sufficient demand for e 85 from flex fuel vehicles is available corn based ethanol production is projected to increase to over 30 billion gallons per year with the higher oil prices the direct effect of higher feed costs is that u s food prices would increase by a minimum of 1 1 over baseline levels results of a model of a 1988 type drought combined with a large mandate for continued ethanol production show sharply higher crop prices a drop in livestock production and higher food prices corn exports would drop significantly and feed costs would rise wheat feed use would rise sharply taking additional land out of the crp would lower crop prices in the short run but because long run corn prices are determined by ethanol prices and not by corn acreage the long run impacts on commodity prices and food prices of a smaller crp are modest cellulosic ethanol from switchgrass and biodiesel from soybeans do not become economically viable in the corn belt under any of the scenarios this is so because high energy costs that increase the prices of biodiesel and switchgrass ethanol also increase the price of corn based ethanol so long as producers can choose between soybeans for biodiesel switchgrass for ethanol and corn for ethanol they will choose to grow corn cellulosic ethanol from corn stover does not enter into any scenario because of the high cost of collecting and transporting corn stover over the large distances required to supply a commercial sized ethanol facility

the origins of ethnolinguistic diversity this study explores the determinants of ethnolinguistic diversity within as well as across countries shedding light on its geographic origins the empirical analysis conducted across countries virtual countries and pairs of contiguous regions establishes that geographic variability captured by variation in regional land quality and elevation is a fundamental determinant of contemporary linguistic diversity the findings are consistent with the proposed hypothesis that differences in land endowments gave rise to location specific human capital leading to the formation of localized ethnicities jel j15 j24 z13

the trade off between bioenergy and emissions with land constraints abstract agricultural biofuels require the use of scarce land and this land has opportunity cost we explore the objective function of a social planner who includes a land constraint in the optimization decision to minimize environmental cost the inclusion of this land constraint in our optimization model motivates the measurement of emissions on a per hectare basis switchgrass and corn are modeled as competing alternatives to show how the inclusion of a land constraint can influence life cycle rankings and alter policy conclusions with land use unconstrained ethanol produced from switchgrass is always an optimal feedstock relative to ethanol produced from corn with land use constrained however our results show that it is unlikely that switchgrass would be optimal in the midwestern united states but may be optimal in southern states if carbon is priced relatively high whether biofuel policy advocates for one feedstock over another should consider these contrasting results

global land use implications of first and second generation biofuel targets recently an active debate has emerged around greenhouse gas emissions due to indirect land use change iluc of expanding agricultural areas dedicated to biofuel production in this paper we provide a detailed analysis of the iluc effect and further address the issues of deforestation irrigation water use and crop price increases due to expanding biofuel acreage we use globiom an economic partial equilibrium model of the global forest agriculture and biomass sectors with a bottom up representation of agricultural and forestry management practices the results indicate that second generation biofuel production fed by wood from sustainably managed existing forests would lead to a negative iluc factor meaning that overall emissions are 27 lower compared to the no biofuel scenario by 2030 the iluc factor of first generation biofuels global expansion is generally positive requiring some 25 years to be paid back by the ghg savings from the substitution of biofuels for conventional fuels second generation biofuels perform better also with respect to the other investigated criteria on the condition that they are not sourced from dedicated plantations directly competing for agricultural land if so then efficient first generation systems are preferable since no clear technology champion for all situations exists we would recommend targeting policy instruments directly at the positive and negative effects of biofuel production rather than at the production itself

blending under uncertainty real options analysis of ethanol plants and biofuels mandates abstract the value of a representative ethanol producer that benefits from both low and high gasoline prices in the short run is modeled ethanol producers make a modest competitive profit in the mandate induced region of production a low price of gasoline increases the demand for blend ethanol and consequently increases the profit of ethanol producers on the other hand when gasoline becomes costlier than ethanol the capacity constraints of the biofuels sector bind and ethanol producers gain large quasi monopoly margins this is an interesting example of a market where two commodities are complement up to a point and then substitute after that we postulate the value of an ethanol producer as a strangle option consisting of two real options the option to substitute gasoline at times of expensive crude oil and the option to expand supply of blend at times of cheap gasoline using a dynamic model we show that the higher volatilities of crude oil and ethanol costs increase biofuels firms value we also find non monotonic relationships between the value of an ethanol plant and several underlying variables including gasoline price level we estimate the value provided by a 10 blend mandate to be around 150 000 000 for a representative ethanol unit our results offer a novel view of oil and feedstock price risks in contrast to the common belief that considers those risks as a negative factor for the biofuels sector

understanding carbon lock in abstract this paper narrative argues that industrial economies have been locked into fossil fuel based energy systems through a process of technological and institutional co evolution driven by path dependent increasing returns to scale it is asserted that this condition termed carbon lock in creates persistent market and policy failures that can inhibit the diffusion of carbon saving technologies despite their apparent environmental and economic advantages the notion of a techno institutional complex is introduced to capture the idea that lock in occurs through combined interactions among technological systems and governing institutions while carbon lock in provides a conceptual basis for understanding macro level barriers to the diffusion of carbon saving technologies it also generates questions for standard economic modeling approaches that abstract away technological and institutional evolution in their elaboration the question of escaping carbon lock in is left for a future paper

biofuel related price transmission literature a review abstract in this article an extensive review of the rapidly growing biofuel related time series literature is carried out the data used the modeling techniques and the main findings of this literature are discussed providing a review of this flourishing research area is relevant as a guidepost for future research this literature concludes that energy prices drive long run agricultural price levels and that instability in energy markets is transferred to food markets

the impact of ethanol production on us and regional gasoline markets abstract this study quantifies the impact of increasing ethanol production on wholesale retail gasoline prices employing pooled regional time series data from january 1995 to march 2008 we find that the growth in ethanol production kept wholesale gasoline prices 0 14 gallon lower than would otherwise have been the case the negative impact of ethanol on retail gasoline prices is found to vary considerably across regions the midwest region has the biggest impact at 0 28 gallon while the rocky mountain region had the smallest impact at 0 07 gallon the results also indicate that the ethanol induced reduction in gasoline prices comes at the expense of refiners profits we find a net welfare loss of 0 5 billion from the ethanol support policies in multiple markets

asymmetric price transmission in the hungarian retail electricity market abstract the article compares the market power of hungarian electricity traders during the partially liberalised transitional market model from 2004 to 2008 and the fully liberalised period lasting since 2008 in our empirical work we use an econometric modelling technique based on asymmetric price transmission apt theory to measure the market power of traders in the electricity market the aim of our work is to conduct a quantitative analysis of the hungarian electricity trading market by applying the apt modelling technique used widely in agro economic analyses to electricity markets the intuition behind the method is the assumption that asymmetric price transmission refers to deviations from perfect competition the research has found that different regulation regimes lead to different patterns of asymmetry in price transmission and the results underline that the market position of electricity traders have improved since the introduction of the liberalised market model by mapping the results of the apt model to the actual policy and market changes we argue that the apt method is a useful tool for analysing the competition on electricity markets

food versus fuel what do prices tell us abstract sorting out the impacts of biofuels on global agricultural commodity prices is impossible without turning to data and distinguishing between the short run versus the long run impacts using time series prices on fuels and agricultural commodities the aim is to investigate the long run cointegration of these prices simultaneously with their multivariate short run interactions results indicate no direct long run price relations between fuel and agricultural commodity prices and limited if any direct short run relationships in terms of short run price movements sugar prices are influencing all the other agricultural commodity prices except rice with sugar the number one world input for ethanol results indicate increased ethanol production is potentially influencing short run agricultural commodity prices overall results support the effect of agricultural commodity prices as market signals which restore commodity markets to their equilibria after a demand or supply event shock

how is volatility in commodity markets linked to oil price shocks abstract this study investigates the effects of oil price shocks on volatility of agricultural and metal commodities we decompose an oil price shock to its underlying components including macroeconomics and oil specific shocks the applied method is the structural vector autoregressive svar model and the time span is from april 1983 to may 2014 the investigation is divided into two subsamples before and after may 2006 for agriculture taking into account the 2006 2008 food crisis and change in u s ethanol production policy and before and after january 2008 for metals considering the recent global financial crisis we find that based on impulse response functions the response of volatility of each commodity to an oil price shock differs significantly depending on the underlying cause of the shock for the both periods moreover according to variance decomposition the explanatory power of oil shocks becomes stronger after the crisis the different responses of commodities are described in detail by investigating market characteristics in each period

irrigation and autocracy irrigated agriculture makes societies more likely to be ruled by authoritarian regimes ancient societies have long been thought to follow this pattern we empirically show that irrigation affects political regimes even in the present to avoid endogeneity we use geographical and climatic variation to identify irrigation dependent societies we find that countries whose agriculture depended on irrigation are about six points less democratic on the 21 point polity2 scale than countries where agriculture has been rainfed we find qualitatively similar results across regions within countries we argue that the effect has historical origins irrigation allowed landed elites in arid areas to monopolize water and arable land this made elites more powerful and better able to oppose democratization consistent with this conjecture we show that irrigation dependence predicts land inequality both at the country level and in premodern societies surveyed by ethnographers

macro economic impact of large scale deployment of biomass resources for energy and materials on a national level a combined approach for the netherlands biomass is considered one of the most important options in the transition to a sustainable energy system with reduced greenhouse gas ghg emissions and increased security of enegry supply in order to facilitate this transition with targeted policies and implementation strategies it is of vital importance to understand the economic benefits uncertainties and risks of this transition this article presents a quantification of the economic impacts on value added employment shares and the trade balance as well as required biomass and avoided primary energy and greenhouse gases related to large scale biomass deployment on a country level the netherlands for different future scenarios to 2030 this is done by using the macro economic computable general equilibrium cge model leitap capable of quantifying direct and indirect effects of a bio based economy combined with a spread sheet tool to address underlying technological details although the combined approach has limitations the results of the projections show that substitution of fossil energy carriers by biomass could have positive economic effects as well as reducing ghg emissions and fossil energy requirement key factors to achieve these targets are enhanced technological development and the import of sustainable biomass resources to the netherlands

how policies affect international biofuel price linkages abstract we estimate the role of biofuel policies in determining which country is the price leader in world biofuel markets using a cointegration analysis and a vector error correction vec model weekly prices are analyzed for the eu us and brazilian ethanol and biodiesel markets in the 2002 2010 and 2005 2010 time periods respectively the us blender s tax credit and brazil s consumer tax exemption are found to play a role in determining the ethanol prices in other countries for biodiesel our results demonstrate that eu policies the consumer tax exemption and blending target tend to determine the world biodiesel price

first evidence of asymmetric cost pass through of eu emissions allowances examining wholesale electricity prices in germany abstract we test the hypothesis that rising prices of emission allowances have a stronger impact on wholesale electricity prices than falling prices asymmetric cost pass through using an autoregressive distributed lag model we confirm this hypothesis for the german market

shining a light on the resource curse an empirical analysis of the relationship between natural resources transparency and economic growth summary one of the most common policy prescriptions for overcoming the so called resource curse particularly for extractive industries has been to call for greater transparency and accountability from governments however despite the conceptual attraction of this policy it has never been empirically proven that resource rich countries are actually less transparent than other countries and whether this lack of transparency has had a significant negative effect on economic growth using a relatively new index of transparency that has extensive coverage both across countries and time the results suggest a strong and robust negative causal association running from point resource export revenues to transparency furthermore there is also some evidence that this lack of transparency is associated with a subsequent decrease in economic growth

the welfare economics of a biofuel tax credit and the interaction effects with price contingent farm subsidies a framework is developed to analyze the effects of a biofuel consumer tax exemption and the interaction effects with a price contingent farm subsidy ethanol prices rise above the gasoline price by the amount of the tax credit corn farmers gain directly while gasoline consumers only gain from any reduction in world oil prices due to the extra ethanol production domestic oil producers lose historically the intercept of the ethanol supply curve is above the gasoline price hence part of the tax credit is redundant and represents rectangular deadweight costs that dwarf triangular deadweight cost measures of traditional farm subsidies copyright 2007 oxford university press

asymmetry in retail wholesale and shipping point pricing for fresh vegetables the linkage among retail wholesale and shipping point prices for a select group of fresh vegetables is measured using wolffram s asymmetry model procedures for dealing with discontinuous time series are shown and granger s causality test is used to show the direction of the price linkage wholesale prices are shown to lead both retail and shipping point prices asymmetry in the retail wholesale response indicates that wholesale price decreases are reflected at the retail more so than are wholesale price increases wholesale price decreases are more fully passed through to the shipping point relative to wholesale increases

biofuels what a biopact between north and south could achieve abstract with very few exceptions such as the recent remarks by international energy agency iea head claude mandil commentators on the world s energy issues have yet to recognize the enormous contribution that biofuels producers from the south could make to solving the world s greenhouse gas emission problems and problems to do with the peaking of oil supplies once the equation between biofuels and high cost land intensive cultivation in the north is broken and a quite different scenario involving production in the south is adopted then the possibilities are dramatically changed the argument of this paper is that a transition to substitution of 20 percent of oecd gasoline needs by 2020 could be met from the south by creating the equivalent of 18 brazils over the course of the next decade such an enormous transition will not occur by itself or through the operation of market forces alone it needs an institutional framework one that guarantees for the countries of the north regular supplies of biofuels produced in a responsible manner and guarantees for the countries of the south open markets for the biofuels produced the oecd is in the best position to bring about such an arrangement through taking the initiative of offering developing countries a biopact between north and south thereby creating for the first time a global market for biofuels the launch of an international biofuels forum under the auspices of the un in early 2007 is a step towards the creation of such an international framework where north south issues on biofuels may be fruitfully addressed

higher us crop prices trigger little area expansion so marginal land for biofuel crops is limited abstract by expanding energy biomass production on marginal lands that are not currently used for crops food prices increase and indirect climate change effects can be mitigated studies of the availability of marginal lands for dedicated bioenergy crops have focused on biophysical land traits ignoring the human role in decisions to convert marginal land to bioenergy crops recent history offers insights about farmer willingness to put non crop land into crop production the 2006 09 leap in field crop prices and the attendant 64 gain in typical profitability led to only a 2 increase in crop planted area mostly in the prairie states at this rate a doubling of expected profitability from biomass crops would expand cropland supply by only 3 2 yet targets for cellulosic ethanol production in the us energy independence and security act imply boosting us planted area by 10 or more with perennial biomass crops given landowner reluctance to expand crop area with familiar crops in the short run large scale expansion of the area in dedicated bioenergy crops will likely be difficult and costly to achieve

demystifying rins a partial equilibrium model of u s biofuels markets abstract we explore four fundamental channels of mandate compliance available under current u s biofuel policy increased ethanol blending through e10 or e85 increased biodiesel blending and a reduction in the overall compliance base simulation results highlight the interplay and varying importance of these channels at increasing blend mandate levels in addition we establish how rin prices are formed the value of a rin in equilibrium is shown to reflect the marginal cost of compensating the blender for employing one additional ethanol equivalent unit of biofuel this contrasts with existing research equating the price of rins to the gap between ethanol supply and demand evaluated at the mandate level we demonstrate the importance of this distinction in case of binding demand side infrastructure constraints such as the ethanol blend wall as percentage blend mandates increase the market for low ethanol blends may contract in order to reduce the overall compliance base this has important implications for implied ethanol demand in the economy

examining crop price effects on production decision and resource allocation an ex ante approach this article examines the output price effects on the us crop production employing an ex ante approach to the differential systems of input demand and output supply the estimation results of the

agriculture diffusion and development ripple effects of the neolithic revolution are the effects of the neolithic revolution still impacting on incomes across the world today i find strong support for this proposition using new country specific estimates of the timing of the agricultural transition and provide evidence that the differences are due to how technological diffusion is accounted for a correction for world migrations since 1500 significantly improves the fit transition year also helps to explain income in 1500 itself and an alternative measure of pre modern development state history has similar ability to predict income in 1500 and 1997

understanding the reductions in us corn ethanol production costs an experience curve approach the us is currently the world s largest ethanol producer an increasing percentage is used as transportation fuel but debates continue on its costs competitiveness and energy balance in this study technological development of ethanol production and resulting cost reductions are investigated by using the experience curve approach scrutinizing costs of dry grind ethanol production over the timeframe 1980 2005 cost reductions are differentiated between feedstock corn production and industrial ethanol processing corn production costs in the us have declined by 62 over 30 years down to 100 2005 tonne in 2005 while corn production volumes almost doubled since 1975 a progress ratio pr of 0 55 is calculated indicating a 45 cost decline over each doubling in cumulative production higher corn yields and increasing farm sizes are the most important drivers behind this cost decline industrial processing costs of ethanol have declined by 45 since 1983 to below 130 2005 m3 in 2005 excluding costs for corn and capital equivalent to a pr of 0 87 total ethanol production costs including capital and net corn costs have declined approximately 60 from 800 2005 m3 in the early 1980s to 300 2005 m3 in 2005 higher ethanol yields lower energy use and the replacement of beverage alcohol based production technologies have mostly contributed to this substantial cost decline in addition the average size of dry grind ethanol plants increased by 235 since 1990 for the future it is estimated that solely due to technological learning production costs of ethanol may decline 28 44 though this excludes effects of the current rising corn and fossil fuel costs it is also concluded that experience curves are a valuable tool to describe both past and potential future cost reductions in us corn based ethanol production

resource curse or not a question of appropriability this thesis presents three self contained essays focusing on empirical questions in growth and development economics each article addresses specific questions on why countries perform differently in particular i analyse the effect of democracy on economic development the relationship between natural resources and growth and the efficiency of foreign development assistance in the first essay democracy consolidation and growth i analyse the effect of democracy on economic growth in this context i argue that an important aspect to consider is how consolidated political systems are put simply i find that it is not only a question of how democratic countries are but also how long they have been democratic in other words economic performance tends to improve with the duration of uninterrupted democracy the performance of autocracies on the other hand tends to deteriorate over time however for newly established political systems there seems to be a cost of being democratic this implies that democracies only bear their fruit after some time the analysis has important policy implications to overcome initial straits international assistance focused on democratic consolidation may be important and a very good investment in fostering long run development the second essay resource curse or not a question of appropriability together with anne boschini and jesper roine is concerned with the relation between natural resources and economic development for most laymen as well as for most economists it would seem reasonable that countries richly endowed in natural resources also benefit from this wealth however a large literature has found a systematic negative effect of natural resource abundance on economic growth we suggest that this so called resource curse is not determined by resource endowments alone but rather by the interaction between the type of resources a country possesses and the quality of institutions in the country this combination of factors determines what we call the appropriability of a resource the concept of appropriability captures the likelihood of natural resources leading to rentseeking corruption or conflicts which in turn will harm economic development our results suggest that if institutions are good enough the curse may be turned into a blessing this may explain why some countries such as norway and botswana tend to benefit from their resources while others such as angola and sierra leone do not the third and final essay of this thesis foreign sectoral aid fungibility growth and poverty reduction is a contribution to the aid efficiency literature which is concerned with the question of whether aid helps or hinders economic development foreign development assistance is often targeted on specific public expenditure sectors if this aid is not used in the sector for which it was granted e g health education it is said to be fungible and donors may end up financing something completely different from what they intended e g military expenditures the major concern about sectoral fungibility is that the alternative use of aid may be less productive or less socially useful however measuring fungibility is not sufficient to determine whether foreign sectoral aid fungibility is actually harmful what is important is how the funds treated as fungible are used the essay starts by obtaining estimates of fungibility for 57 countries the results suggest that sectoral aid is indeed largely treated as fungible by recipient countries next to assess the economic and health effects of fungibility these estimates are incorporated into an empirical model of aid and growth as well as into a model of aid and infant mortality altogether i find no evidence of more fungible sectoral aid leading to worse performance

the slave trade and the origins of mistrust in africa in a recent study nunn 2008 examines the long term impacts of africa s slave trade he finds that the slave trade which occurred over a period of more than 400 years had a significant negative effect on long term economic development although the article arguably identifies a negative causal relationship between the slave trade and income today the analysis is unable to establish the exact causal mechanisms underlying this reduced form relationship in this article we examine one of the channels through which the slave trade may affect economic development today combining contemporary individual level survey data with historical data on slave shipments by ethnic group we ask whether the slave trade caused a culture of mistrust to develop within africa initially slaves were captured primarily through state organized raids and warfare but as the trade progressed the environment of ubiquitous insecurity caused individuals to turn on others including friends and family members and to kidnap trick and sell each other into slavery sigismund wilhelm koelle 1854 p e h hair 1965 charles piot 1996 we hypothesize that in this environment a culture of mistrust may have evolved which may persist to this day we show that current differences in trust levels within africa can be traced back to the transatlantic and indian ocean slave trades combining contemporary individual level survey data with historical data on slave shipments by ethnic group we find that individuals whose ancestors were heavily raided during the slave trade are less trusting today evidence from a variety of identification strategies suggests that the relationship is causal examining causal mechanisms we show that most of the impact of the slave trade is through factors that are internal to the individual such as cultural norms beliefs and values jel j15 n57 z13

policy incentives for switchgrass production using valuation of non market ecosystem services abstract this study presents a linear profit model with combined economic and environmental factors for a switchgrass for biofuels agricultural system in the southeastern u s the objectives are to establish conversion to switchgrass thresholds for various market prices and identify policy incentives that would ensure economic profit while also maximizing environmental benefits carbon sequestration displacement of fossil fuels and minimizing negative impacts global warming potential nitrate loss weighting factors are chosen to represent incentives and penalties by assigning value to the impacts with no other incentives switchgrass market prices of at least 51 and 58 dton would be needed in order to make a profitable switch from corn conservation reserve program crp lands and cotton respectively at a mid range offering of 50 dton feasible carbon credit prices of 3 8 23 per metric tonne co 2 e would incentivize conversion from corn crp or cotton respectively similarly a water quality penalty of 0 20 3 2 per kilogram no 3 n leached would incentivize the same conversions with resultant watershed improvement at a lower price of 30 dton switchgrass incentives based on valuation of ecosystem services begin to exceed feasible ranges of these valuations

competing land uses and fossil fuel and optimal energy conversion rates during the transition toward a green economy under a pollution stock constraint abstract we study the transition to a carbon free economy in a model with a polluting non renewable resource and a clean renewable resource transforming primary energy into ready to use energy services is costly and more efficient energy transformation rates are more costly to achieve renewable energy competes with food production for land and the food productivity of land can be improved at some cost to avoid catastrophic climate damages the pollution stock is mandated to stay below a given cap when the economy is not constrained by the cap the efficiency of energy transformation increases steadily until the transition toward the ultimate green economy when renewable energy is exploited its land use rises at the expense of food production food productivity increases together with the land rent but food production drops the food and energy prices increase and renewables substitute for non renewable energy during the constrained phase the economy follows a constant path of prices quantities efficiency rates food productivity and land rent a phenomenon we call the ceiling efficiency paradox

investigation of production sales and inventory relationships using multicointegration and non symmetric error correction models the accumulated sum of a stationary series is called integrated if a linear combination of some of the integrated series is stationary it is said to be cointegrated this paper presents empirical results on inventories to consider the possibility of a deeper form of cointegration called multicointegration which is introduced in granger and lee 1989 a vector integrated series is multicointegrated if the accumulated sum of its stationary cointegrated linear combination is again cointegrated with itself inventory which is the accumulated sum of production minus sales is probably cointegrated with production and sales the empirical results generally support the presence of multicointegration of production and sales in many u s industries and industrial aggregates the results also favour the non symmetric error correction model providing evidence that the strength of attraction is different on both sides of the attractor a modified s s rule for inventory control is investigated in the context of a non symmetric error correction model and the results generally do not support the s s rule sufficient evidence is found to conclude that multicointegration is a useful concept in the area of inventory determination

privatizing and liberalizing electricity the case of hungary abstract hungary a forerunner in eastern reforms has boldly privatized its energy sector with foreign capital while in the west liberalization resulted in electricity abundance and dramatical tariff cuts in hungary as a result of asymmetric market opening it brought excess capacites transparent cost base prices but lower tariffs are still ahead foreign investors made the branch profitable and are planning to expand capacities

selection on observed and unobserved variables assessing the effectiveness of catholic schools in this paper we measure the effect of catholic high school attendance on educational attainment and test scores because we do not have a good instrumental variable for catholic school attendance we develop new estimation methods based on the idea that the amount of selection on the observed explanatory variables in a model provides a guide to the amount of selection on the unobservables we also propose an informal way to assess selectivity bias based on measuring the ratio of selection on unobservables to selection on observables that would be required if one is to attribute the entire effect of catholic school attendance to selection bias we use our methods to estimate the effect of attending a catholic high school on a variety of outcomes our main conclusion is that catholic high schools substantially increase the probability of graduating from high school and more tentatively attending college we find little evidence of an effect on test scores

the effect of ethanol policies on the vertical price transmission in corn and food markets this paper analyzes the impact of ethanol policies on price transmission along the food supply chain we consider the us corn sector and its vertical links with food and ethanol energy markets we find that ethanol is a source of imperfect price transmission in the food supply chain ethanol however alters price transmission only under a binding blender s tax credit and only from food to corn not vice versa our results indicate that ethanol weakens the response of corn and food prices in terms of their level changes to shocks occurring in agricultural corn and food markets the results are robust to different assumptions on the model parameters although market power has previously been identified as a source of imperfect price transmission in the food supply chain our findings show that in the presence of ethanol the imperfect price transmission may occur even if markets are perfectly competitive this warrants careful evaluation of markets before any policy intervention

factor endowments inequality and paths of development among new world economies whereas traditional explanations of differences in long run paths of development across the americas generally point to the significance of differences in national heritage or religion we highlight the relevance of stark contrasts in the degree of inequality in wealth human capital and political power in accounting for how fundamental economic institutions evolved over time we argue moreover that the roots of these disparities in the extent of inequality lay in differences in the initial factor endowments dating back to the era of european colonization we document through comparative studies of suffrage public land and schooling policies systematic patterns by which societies in the americas that began with more extreme inequality or heterogeneity in the population were more likely to develop institutional structures that greatly advantaged members of elite classes and disadvantaging the bulk of the population by providing them with more political influence and access to economic opportunities the clear implication is that institutions should not be presumed to be exogenous economists need to learn more about where they come from to understand their relation to economic development our findings not only contribute to our knowledge of why extreme differences in the extent of inequality across new world economies have persisted for centuries but also to the study of processes of long run economic growth past and present

inequality does cause underdevelopment insights from a new instrument consistent with the provocative hypothesis of engerman and sokoloff 1997 2000 this paper confirms with cross country data that agricultural endowments predict inequality and inequality predicts development the use of agricultural endowments specifically the abundance of land suitable for growing wheat relative to that suitable for growing sugarcane as an instrument for inequality is this paper s approach to problems of measurement and endogeneity of inequality the paper finds inequality also affects other development outcomes institutions and schooling which the literature has emphasized as mechanisms by which higher inequality lowers per capita income it tests the inequality hypothesis for development institutional quality and schooling against other recent hypotheses in the literature while finding some evidence consistent with other development fundamentals the paper finds high inequality to independently be a large and statistically significant barrier to prosperity good quality institutions and high schooling

when do the usda forecasters make mistakes this study analysed forecasts for all us corn soya bean and wheat categories published within the world agricultural supply and demand estimates wasde reports over the 1987 88 through 2009 10 marketing years in an attempt to identify patterns and better understand when the usda forecasters make mistakes two general sources of errors were investigated behavioural and macroeconomic factors the first objective was to examine how these factors affect the size of the forecast error and the second concentrated on the direction of the error due to these effects our findings suggest that the largest increase in the size of usda forecast errors was associated with structural changes in commodity markets that took place in the mid 2000s corn soya bean and wheat forecast errors also grew during the periods of economic growth and with changes in exchange rates while inflation and changes in oil price had a much smaller impact with respect to behavioural sources we identified patterns consistent with leni

dynamics and stagnation in the malthusian epoch this paper examines the central hypothesis of the influential malthusian theory according to which improvements in the technological environment during the pre industrial era had generated only temporary gains in income per capita eventually leading to a larger but not significantly richer population exploiting exogenous sources of cross country variations in land productivity and the level of technological advancement the analysis demonstrates that in accordance with the theory technological superiority and higher land productivity had significant positive effects on population density but insignificant effects on the standard of living during the time period 1 1500 ce

three bubbles and a panic an explanatory review of recent food commodity price events abstract this paper is a summary of the behaviour of food commodity prices in 2007 2008 and a review of the causes of the price increases extracted from a report to the chief scientific advisor to her majesty s government thirtle c piesse j 2008 an explanatory review of the world food commodity price events of 2007 2008 a report to the chief scientific advisor department for innovation universities and skills london the historical background shows that the price spike was much less severe than in the 1970s the conventional wisdom that prices of the main food commodities were falling prior to 2006 is questioned most ceased falling and were quite stable from the 1980s the paper separates the causes of the spike from the underlying changes driving the long run trends the literature on the causes of the spike is critically reviewed and summarised there is a reasonably broad consensus on most of the causes but much less on the impact of the depreciation of the us dollar there are also concluding speculations on the future

european union leadership in biofuels regulation europe as a normative power the rapid emergence of the european union eu as a leader in global environmental politics has led many scholars to argue in favour of the eu being a normative power in international relations this paper critically examines the eu s biofuels policy and evaluates whether its attempts to lead by example and shape international practice in this field could support such arguments europe s biofuel policies are evaluated through a sustainable development lens so as to determine the extent to which it has embraced a holistic approach to sustainability while not dismissing that the identity of the eu is indeed an explanatory factor and that normative intentions may well be regarded as a motivating force this study argues that an interest based perspective on international environmental regulation offers a supplementary view of how an actor s preferences for an international regime are shaped by erecting barriers aimed at shielding its own inefficient domestic biofuels production the eu is in essence placing trade competitiveness and economic growth above environmental protection thus permitting sustainability concerns to be addressed only in part

do oil price increases cause higher food prices us retail food price increases in recent years may seem large in nominal terms but after adjusting for inflation have been quite modest even after the change in us biofuel policies in 2006 in contrast increases in the real prices of corn soybeans wheat and rice received by us farmers have been more substantial and can be linked in part to increases in the real price of oil that link however appears largely driven by common macroeconomic determinants of the prices of oil and of agricultural commodities rather than the pass through from higher oil prices we show that there is no evidence that corn ethanol mandates have created a tight link between oil and agricultural markets moreover increases in agricultural commodity prices have contributed little to us retail food price increases because of the small cost share of agricultural products in food prices in short there is no evidence that oil price shocks have been associated with more than a negligible increase in us retail food prices in recent years nor is there evidence for the prevailing wisdom that oil price driven increases in the cost of food processing packaging transportation and distribution have been responsible for higher retail food prices similar results hold for other industrialized countries there is reason however to expect food commodity prices to be more tightly linked to retail food prices in developing countries christiane baumeister and lutz kilian

policy shocks and market based regulations evidence from the renewable fuel standard the renewable fuel standard mandates large increases in u s biofuel consumption and is implemented using tradable compliance credits known as rins in early 2013 rin prices soared causing the regulator to propose reducing future mandates we estimate empirically the effect of three policy shocks that reduced the expected mandates in 2013 we find that the largest of these shocks decreased the value of the fuel industry s 2013 compliance obligation by 7 billion we then study the effects of the shocks on commodity markets and the market value of publicly traded biofuel firms results show that the burden of the mandate reductions fell primarily on advanced biofuel firms and commodity markets of the marginal compliance biofuel we argue that the policy shocks reduced the incentive to invest in the technologies required to meet the future objectives of the rfs and discuss alternative policy designs to address the problems that arose in 2013

the effect of biodiesel policies on world biodiesel and oilseed prices a theoretical and empirical model is developed to analyze the effect of a biodiesel mandate a tax exemption tax credit and an exogenous diesel price shock on world soybean and canola markets the jointness in crushing oil and meal from the oilseed reduces the size of the link between biodiesel and oilseed prices a diesel price shock with a mandate results in a smaller change in oilseed prices compared with a tax exemption higher diesel prices increase biodiesel prices under a tax exemption but lower them with a blend mandate when both canola and soybeans are used to produce biodiesel an increase in the diesel price leads to higher canola prices but the effect on soybean prices is ambiguous and depends on relative elasticities of meal demand and canola supply because canola produces more oil than soybeans