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

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

heterogeneous response of disaggregate inflation to monetary policy regime change the role of price stickiness abstract this paper explores how a monetary regime change affects headline inflation via differential effects on various sectors in the economy using disaggregated cpi data for canada we find that the response to the adoption of inflation targeting it was quite heterogeneous across sectors while sticky price sectors experienced a notable change in inflation dynamics following it adoption little structural change was observed in flexible price sectors our analysis based on a common factor model suggests that the structural changes in the sticky price sectors are driven by a decline in their responses to common aggregate shocks including a monetary shock

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

real rigidities and the non neutrality of money rigidities in real prices are not sufficient to create rigidities in nominal prices and real effects of nominal shocks and by themselves small frictions in nominal adjustment such as costs of changing prices create only small non neutralities but this paper shows that substantial nominal rigidity can arise from a combination of real rigidities and small nominal frictions the paper shows the connection between real and nominal rigidity given the presence of nominal frictions both in general and for two specific sources of real rigidity one arising from goods market imperfections and the other from labour market imperfections

agricultural payments and land concentration a semiparametric spatial regression analysis over the last twenty years both crop production and agricultural payments have shifted toward larger operations this study examines whether payments from federal farm programs contributed to increased concentration of cropland and farmland using zip code level data constructed from the microfiles of the 1987 2002 agriculture censuses we examine the association between government payments per acre and subsequent growth in land concentration a semiparametric generalized additive model gam controls for location and historical concentration sales per acre and ratio of cropland area to zip code area findings indicate both with and without nonparametric controls government payments are strongly associated with subsequent concentration growth copyright 2008 oxford university press

on the effect of business and economic university education on political ideology an empirical note we empirically test the hypothesis that a major in economics management business administration or accounting for simplicity referred to as business economics leads to more conservative right wing political views we use a panel dataset of individuals repeated observations for the same individuals over time living in the netherlands drawing data from the longitudinal internet studies for the social sciences from 2008 through 2013 our results show that when using a simple fixed effects model which fully controls for individuals time invariant traits any statistically and quantitatively significant effect of a major in business economics on the political ideology of these individuals disappears we posit that at least in our sample there is no evidence for a causal effect of a major in business economics on individuals political ideology

why farmers quit a county level analysis we identify the effects of alternative explanatory variables on the propensity of u s farmers to cease farming with a particular emphasis on understanding the roles of off farm employment and federal farm program payments conventional ordinary least squares analysis using all counties suggests that off farm employment has no statistical effect on the net number of farmers quitting between 1987 and 1997 ceteris paribus a more refined analysis which separates counties losing farmers from those that gained farmers reveals subtle and less clear cut effects of off farm employment and federal program payments on farm exits copyright 2001 oxford university press

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

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

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

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

menu costs and the long run output inflation trade off abstract in standard new keynesian models there exists an unlimited long run trade off between output and inflation but when we allow for an endogenous frequency of price adjustment this is replaced by an inverted u shaped relationship

ethical differentiation and market behavior an experimental approach abstract does ethical differentiation of products affect market behavior we examined this issue in triopolistic experimental markets where producers set prices one producer s costs were higher than the others in two treatments the additional costs were attributed to compliance with ethical guidelines in the third no justification was provided many consumers reduced their experimental gains by purchasing the ethically differentiated products at higher prices individual differences were important business economics students paid smaller premia finally we speculate about the observed demand function for ethics and emphasize using experimental methodology to complement empirical studies in assessing markets for ethically differentiated products

testing for indeterminacy an application to u s monetary policy reply this paper considers a prototypical new keynesian model in which the equilibrium is undetermined if monetary policy is passive the likelihood based estimation of dynamic equilibrium models is extended to allow for indeterminacies and sunspot fluctuations we construct posterior weights for the determinacy and indeterminacy region of the parameter space and estimates for the propagation of fundamental and sunspot shocks according to the estimated model u s monetary policy post 1982 is consistent with determinacy whereas the pre volcker policy is not we find that before 1979 indeterminacy substantially altered the propagation of shocks

contract and exit decisions in finisher hog production finisher hog production in north america has shifted toward larger units and contract format since 1990 exit among independent growers has been high we develop a model showing that growers with any of three efficiency attributes lower innate hazard of exit variable costs or contract adoption costs are more likely to contract produce more and expend more on business protection using 2004 agricultural resource management survey data a recursive bivariate probit model confirms that contracting producers are less likely to exit specialization increases the probability of contracting education nonfarm income and older production facilities are significant in increasing expected exit

optimal monetary policy in open versus closed economies an integrated approach in clarida et al 1999 hereafter cgg we presented a normative analysis of monetary policy within a simple optimization based closedeconomy framework we derived the optimal policy rule and among other things characterized the gains from commitment also we made precise the implications for the kind of instrument feedback rule that a central bank should follow in practice in this paper we show how our analysis extends to the case of a small open economy openness complicates the problem of monetary management to the extent the central bank must take into account the impact of the exchange rate on real activity and inflation how to factor the exchange rate into the overall design of monetary policy accordingly becomes a central consideration here we show that under certain conditions the monetary policy design problem for the small open economy is isomorphic to the problem of the closed economy that we considered earlier hence all our qualitative results for the closed economy carry over to this case openness does affect the parameters of the model suggesting quantitative implications though the general form of the optimal interest rate feedback rule remains the same as in the closedeconomy case for example how aggressively a central bank should adjust the interest rate in response to inflationary pressures depends on the degree of openness in addition openness gives rise to an important distinction between domestic inflation and consumer price inflation as defined by the cpi to the extent that there is perfect exchange rate pass through we find that the central bank should target domestic inflation and allow the exchange rate to float despite the impact of the resulting exchangerate variability on the cpi kosuki aoki 1999 gali and tommaso monacelli 2000

real wage rigidities and the new keynesian model most central banks perceive a trade off between stabilizing inflation and stabilizing the gap between output and desired output however the standard new keynesian framework implies no such trade off in that framework stabilizing inflation is equivalent to stabilizing the welfare relevant output gap in this paper we argue that this property of the new keynesian framework which we call the divine coincidence is due to a special feature of the model the absence of nontrivial real imperfections we focus on one such real imperfection namely real wage rigidities when the baseline new keynesian model is extended to allow for real wage rigidities the divine coincidence disappears and central banks indeed face a trade off between stabilizing inflation and stabilizing the welfare relevant output gap we show that not only does the extended model have more realistic normative implications but it also has appealing positive properties in particular it provides a natural interpretation for the dynamic inflation unemployment relation found in the data

menu costs and phillips curves this paper develops a model of a monetary economy in which individual firms are subject to idiosyncratic productivity shocks as well as general inflation sellers can change price only by incurring a real menu cost we calibrate this cost and the variance and autocorrelation of the idiosyncratic shock using a new u s data set of individual prices due to klenow and kryvtsov the prediction of the calibrated model for the effects of high inflation on the frequency of price changes accords well with international evidence from various studies the model is also used to conduct numerical experiments on the economy s response to various shocks in none of the simulations we conducted did monetary shocks induce large or persistent real responses

reconsidering the natural rate hypothesis in a new keynesian framework abstract this paper formulates a stylized new keynesian model in which each individual firm can select the frequency of its price adjustments the endogeneity of contract duration has a dramatic impact on the magnitude of the aggregate effects of steady state inflation with a plausible calibration of the magnitude of menu costs and other structural parameters this model predicts a relationship between steady state inflation and the frequency of price adjustment that is reasonably close to the empirical findings of cross country studies furthermore at moderate inflation rates steady state inflation generates relative price distortions that have a non trivial impact on aggregate output but this impact wanes and eventually disappears at much higher annual inflation rates because the frequency of price adjustment approaches that of the flexible price economy

does studying economics discourage cooperation watch what we do not what we say or how we play based on what economics students say and how they play games economics students appear less cooperative than other students but appearances can be deceiving the evidence in this paper indicates that the actual behavior of economics students is more cooperative than that of other students the authors carried out a lost letter experiment in which envelopes containing currency were dropped in classrooms and the return rate measured in this test of actual behavior the economics students returned a significantly larger percentage of lost letters exhibiting more cooperative behavior than other students

optimal timing of farm transferal from parent to child when farm income is first increasing and then decreasing in the operator s age the timing of farm transferal from parent to child is optimally determined by families who seek to maximize joint income or utility using a sample of israeli farms in which the operation of the farm changed from parent to child between 1971 and 1981 equations of transfer time and child s education are derived a simultaneous equation censored regression model is estimated using a two stage method results support the theoretical predictions that transfer time is decreasing with parent s age and with child s schooling and increasing with parent s experience

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

measuring market power in the ready to eat cereal industry the ready to eat cereal industry is characterized by high concentration high price cost margins large advertising to sales ratios and numerous introductions of new products previous researchers have concluded that the ready to eat cereal industry is a classic example of an industry with nearly collusive pricing behavior and intense nonprice competition this paper empirically examines this conclusion in particular i estimate price cost margins but more importantly i am able empirically to separate these margins into three sources i that which is due to product differentiation ii that which is due to multi product firm pricing and iii that due to potential price collusion the results suggest that given the demand for different brands of cereal the first two effects explain most of the observed price cost margins i conclude that prices in the industry are consistent with noncollusive pricing behavior despite the high price cost margins leading firms are able to maintain a portfolio of differentiated products and influence the perceived product quality it is these two factors that lead to high price cost margins

the effect of nesting structure specification on welfare estimation in a random utility model of recreation demand an application to the demand for recreational fishing nested logit has become common in estimating random utility models of recreation demand because welfare analysis is often the objective of estimating these models it seems natural to ask what effect does the choice of nesting structure have on the welfare estimates generated by these models therefore we compare the results of nine nesting structures andfindthat the variation in welfare estimates across the models is not large our results are contrary to those of kling and thomson and shaw and ozog the difference appears to originate with differences in the estimated dissimilarity coefficients in the nested models

trade openness and inflation the role of real and nominal price rigidities the paper revisits the long standing question of the impact of trade openness on the inflation output trade off by accounting for the effects of product market competition on price flexibility the study develops a new keynesian open economy dynamic stochastic general equilibrium model with non constant price elasticity of demand and calvo price setting in which the frequency of price adjustment is endogenously determined it demonstrates that trade openness has two opposing effects on the sensitivity of inflation to output fluctuations on the one hand it raises strategic complementarity in firms pricing decisions and the degree of real price rigidities which makes inflation less responsive to changes in real marginal cost on the other hand it strengthens firms incentives to adjust their prices thereby reducing the degree of nominal price rigidities and increasing the sensitivity of inflation to changes in marginal cost the study explains the positive relationship between competition and the frequency of price adjustment observed in the data it also provides new insights into the effects of global economic integration on the phillips curve

endogenous price stickiness trend inflation and macroeconomic stability previous studies show that higher trend inflation is more likely to induce indeterminacy of equilibrium in sticky price models based on micro evidence that each period a fraction of prices is kept unchanged this paper demonstrates that when the degree of price stickiness is endogenously determined in a calvo model indeterminacy caused by higher trend inflation is less likely a key factor for determinacy is the long run inflation elasticity of output implied by the new keynesian phillips curve this elasticity declines substantially with higher trend inflation in the case of exogenously given price stickiness whereas in the case of endogenous price stickiness the decline in the elasticity is mitigated because higher trend inflation leads to a higher probability of price adjustment

differential human capital investments and the choice of successor in family farms economic development typically is characterized by occupational migration away from agriculture migrants commonly are more educated than average on the other hand the remaining farmers are expected to master more sophisticated production techniques hence the pace of development depends on human capital accumulation of the population as a whole and of farmers in particular for this reason it is important to understand the way human capital investment decisions are made in the rural sector human capital levels are determined to a large extent within the family i e through investments of parents in their children becker chap 6 investments in children are motivated by altruism becker pp 362 79 by concern about family succession chu and by expectations of receiving benefits from descendants in the future bernheim schleifer and summers parents care for migrating children as well as for succeeding children they can also influence the decisions of succession versus migration both directly through their authority and indirectly through differential investments in sector specific human capital intergenerational succession is common in the farm sector as the value of the farm within the family is higher than its market value kimhi 1994b farms in developed economies generally are not large enough to permit division among several successors hence this discussion will focus on the case of a single successor one of the difficult decisions facing the farm family is the choice of a suitable successor birth order and age differentials of children affect this decision since the choice is not independent of the timing of farm transfer kimhi 1994a the emphasis in this paper is on differential ability if one child has an absolute advantage in farming and the other in off farm jobs the choice is easy it is more difficult when one child is more able to run the farm and can also do better off the farm on the one

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

should central banks respond to movements in asset prices in recent decades asset booms and busts have been important factors in macroeconomic fluctuations in both industrial and developing countries in light of this experience how if at all should central bankers respond to asset price volatility we have addressed this issue in previous work bernanke and gertler 1999 the context of our earlier study was the relatively new but increasingly popular monetary policy framework known as inflation targeting see e g bernanke and frederic mishkin 1997 in an inflation targeting framework publicly announced medium term inflation targets provide a nominal anchor for monetary policy while allowing the central bank some flexibility to help stabilize the real economy in the short run the inflation targeting approach gives a specific answer to the question of how central bankers should respond to asset prices changes in asset prices should affect monetary policy only to the extent that they affect the central bank s forecast of inflation to a first approximation once the predictive content of asset prices for inflation has been accounted for there should be no additional response of monetary policy to assetprice fluctuations in use now for about a decade inflationtargeting has generally performed well in practice however so far this approach has not often been stress tested by large swings in asset prices our earlier research employed simulations of a small calibrated macroeconomic model to examine how an inflation targeting policy defined as one in which the central bank s instrument interest rate responds primarily to changes in expected inflation might fare in the face of a boom and bust cycle in asset prices we found that an aggressive inflationtargeting policy rule in our simulations one in which the coefficient relating the instrument interest rate to expected inflation is 2 0 substantially stabilizes both output and inflation in scenarios in which a bubble in stock prices develops and then collapses as well as in scenarios in which technology shocks drive stock prices intuitively inflation targeting central banks automatically accommodate productivity gains that lift stock prices while offsetting purely speculative increases or decreases in stock values whose primary effects are through aggregate demand conditional on a strong policy response to expected inflation we found little if any additional gains from allowing an independent response of central bank policy to the level of asset prices in our view there are good reasons outside of our formal model to worry about attempts by central banks to influence asset prices including the fact that as history has shown the effects of such attempts on market psychology are dangerously unpredictable hence we concluded that inflationtargeting central banks need not respond to asset prices except insofar as they affect the inflation forecast in the spirit of recent work on robust control the exercises in our earlier paper analyzed the performance of policy rules in worst case discussants robert shiller yale university glenn rudebusch federal reserve bank of san francisco kenneth rogoff harvard university

farm income variability and the supply of off farm labor if farmers are risk averse greater farm income variability should increase off farm labor supply this effect is confirmed for a sample of kansas farmers off farm employment of farmers and their spouses is also found to be significantly influenced by farm experience off farm work experience farm size leverage efficiency and farm specific education in addition farm operators and spouses who receive significant income support through government farm programs are less likely to work off the farm this may suggest that policy changes reducing farm income support payments may increase off farm employment of farmers and their spouses

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

new evidence on inflation persistence and price stickiness in the euro area implications for macro modeling this paper evaluates new evidence on price setting practices and inflation persistence in the euro area with respect to its implications for macro modeling it argues that several of the most commonly used assumptions in micro founded macro models are seriously challenged by the new findings jel e31 e52

farm level production effects from participation in government commodity programs did the 1996 federal agricultural improvement and reform act make a difference in theory lump sum transfers are a way to redistribute wealth without distorting production decisions recent agricultural policy reforms are an unusual large scale application of this concept the 1996 federal agricultural improvement and reform fair act removed most price contingent agricultural subsidies and replaced them with production flexibility contracts lump sum payments with few ties to farmers production decisions the payments were envisioned as way to maintain income transfers to agricultural interests while minimizing production distortions the united states has argued that these decoupled agricultural payments are minimally trade distorting usda ers there is a great deal of uncertainty about how the system of agricultural payments established under the 1996 reforms affects production some including representatives from developing nations with domestic agricultural sectors that compete with the united states contend that decoupled payments significantly affect agricultural production and trade two general arguments underpin this assertion first decoupled payments are not really lump sum that is despite the reforms important links to production remain for example there are restrictions in the fair act that preclude new vegetable plantings or the conversion of land to nonagricultural uses second the perfect market assumptions underpinning the

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

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

family farm dynamics in canada and israel the case of farm exits abstract canada is one of the few countries for which data exist on individual family farms over time using these data researchers have been able to show that much of the microdynamics of family farms in canada e g changes in size distribution can be attributed to farmer entry and exit however the behavioral aspects of the exit decision received little attention in the literature a comparison of canadian and israeli data could help us understand these behavioral aspects because of the vast institutional differences between the farm sectors in the two countries and the possible effect of the institutional setup on exit decisions comparison of exit patterns may enable us to identify the dependence of farmers mobility on the institutional setup this may also have policy relevance in both canada and israel exit probability decreases with the extent of off farm work we conclude that off farm work is complementary rather than a substitute for farm work perhaps due to its less volatile nature both canadian and israeli farmers over a certain age are more likely to exit as they become older which is a natural result but exit probability in canada rises much faster with age than in israel the major difference between canadian and israeli farm exit patterns lies in the farm size farm size decreases exit probability in canada but increases it in israel perhaps this is because israeli farm exits are less planned in advance than canadian exits institutional constraints on land transactions in israel may also play a role

endogenous nominal rigidities and monetary policy monetary policy analysis with exogenously given nominal rigidities is subject to lucas critique if the degree of them varies over policy regimes as recent empirical studies point out in a calvo style sticky price model we endogenize nominal rigidities and examine its implications for monetary policy while previous studies stress that the frequency of price adjustment changes with steady state inflation we focus on how this frequency varies in response to changes in the taylor rule in the same steady state we find that a more aggressive policy response to inflation makes firms less likely to reset their prices resulting in a flat slope of the new keynesian phillips curve as observed in the post 1982 u s economy and a small variance of shocks to the curve as in the great moderation we also find that an aggressive policy response to inflation can stabilize both inflation and the output gap by exploiting the feedback effect of the policy stance on firms price setting taking into account this effect is thus crucial to the policy conduct further we show that an endogenous inflation weight of the social welfare loss function is critical to policy evaluation since this weight changes significantly with the frequency of price adjustment jel classification e31 e32 e52

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

has monetary policy become more effective we investigate the implications of changes in the structure of the u s economy for monetary policy effectiveness estimating a vector autoregression over the pre and post 1980 periods we provide evidence of a reduced effect of monetary policy shocks in the latter period we estimate a structural model that replicates well the economy s response in both periods and perform counterfactual experiments to determine the source of the change in the monetary transmission mechanism and in the economy s volatility we find that by responding more strongly to inflation expectations monetary policy has stabilized the economy more effectively in the post 1980 period

staggered price setting with endogenous frequency of adjustment abstract a model of staggered price setting in which the frequency of price changes is endogenous is presented

the american economic association dues structure because consumers have an incentive to misrepresent their incomes and accurate information about consumers incomes is costly for sellers to obtain income based pricing of goods or services seems unlikely to survive for long indeed income based pricing is extremely rare however the american economic association s dues structure in which members voluntarily pay dues according to income has survived for twenty years the authors survey results reveal that while some cheating does occur there is substantial compliance with the income based dues structure they offer several explanations for their findings

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

farm size and growth in canada in this paper we empirically examine the relationship between farm size and growth in canada over the period 1966 81 the analysis is undertaken by testing gibrat s law of proportionate effect gibrat offered the hypothesis that the percentage growth rates of firms are independent of their initial size thus growth is a purely stochastic process that arises from the cumulative effect of the random operation of a multitude of forces acting independently of each other an important outcome of models based on gibrat s law is that the stochastic process results in a size distribution of firms which is skewed and not unlike the size distribution actually observed in particular it is well known that depending on the precise formulation the operation of gibrat s law leads to a skewed size distribution which is either log normal prais or pareto steindl ijiri and simon although it is difficult to determine the exact form of observed size distributions it is generally agreed that either of the above provides a reasonable approximation to reality depending on the industry or sector being observed by contrast a deterministic model of firm growth based strictly on standard cost theory either predicts the facts incorrectly or it makes no prediction at all ijiri and simon p 10 although there are models combining cost theory with assumptions about the adjustment process which result in skewed size distributions e g lucas the testing of gibrat s law remains as an important point of departure for the analysis of firm growth an additional feature of models based on

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

government payments and farm business survival using farm level panel data from recent u s agricultural censuses this study examines how direct government payments influence the survival of farm businesses paying particular attention to the differential effect of payments across farm size categories a cox proportional hazards model is used to estimate the effect of government payments on the instantaneous probability of a farm business failure controlling for farm and operator characteristics results indicate that an increase in government payments has a small but statistically significant negative effect on the rate of business failure and the magnitude of this effect increases with farm size

estimating the effect of tax reform in differentiated product oligopolistic markets abstract the incidence of taxation has been extensively discussed in the public finance literature but mainly within a competitive market setting or within a homogenous good cournot type oligopoly in a differentiated product oligopoly the effect of taxation can be more complex as the rate of taxation may affect not only the prices but also the profile and quality of products that are sold in the market in this paper we examine the effects of changing tax regimes in a differentiated product oligopoly in order to illustrate our approach we employ data from one such market the automobile market in israel

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

state dependent pricing and the general equilibrium dynamics of money and output economists have long suggested that nominal product prices are changed infrequently because of fixed costs in such a setting optimal price adjustment should depend on the state of the economy yet while widely discussed statedependent pricing has proved difficult to incorporate into macroeconomic models this paper develops a new tractable theoretical state dependent pricing framework we use it to study how optimal pricing depends on the persistence of monetary shocks the elasticities of labor supply and goods demand and the interest sensitivity of money demand