bluuebunny/crossref_metadata_2025 huggingface dataset:
Why Do Farmers Fail? Farm Bankruptcies 1910–78
Authors: Shepard Lawrence E. , Collins Robert A.
Published: July 2006

Econometric analysis of aggregate time‐series farm‐sector data suggests that prior to World War II the farm bankruptcy rate appears to be associated with financial risk variables, while postwar data show a strong association with business risk variables. There does not appear to be any evidence that agricultural support payments since World War II have induced, deferred, or reduced farm failures.
Australian Wheat Policy 1948–79: A Welfare Evaluation
Authors: Longworth John W. , Knopke Philip
Published: July 2006

Australian wheat policy has remained relatively unaltered for thirty‐one years. This paper evaluates its major effects on wheat growers, taxpayers, wheat users, and others. Conventional Marshallian policy analysis was augmented with production and price uncertainty. When policy gains and losses were expressed in net terminal values as of 1979, wheat users gained $‐1,122 million, wheat growers lost $‐995 million, taxpayers contributed $‐1,009 million, and the net social welfare loss was $‐882 million. For growers, the interrelationship between production uncertainty and policy was unfavorable and much larger than the favorable price uncertainty/wheat policy interaction.
Relative Prices and Money: A Vector Autoregression on Brazilian Data
Authors: Bessler David A.
Published: July 2006

Recent data on Brazilian agricultural prices, industrial prices, and money supply are analyzed in a vector autoregression. The empirical findings show strong, one‐way, Granger‐type causality from money supply to agricultural prices; while feedback is observed between industrial prices and money supply. Under the usual monetarist ordering of contemporaneous innovation covariance, agricultural prices do not adjust faster than industrial prices to a shock in the money supply.
Evaluating Price Enhancement by Processing Cooperatives
Authors: Wills Robert L.
Published: July 2006

Section 2 of the Capper‐Volstead Act requires the secretary of agriculture to determine whether a cooperative has unduly enhanced its prices. There has been no consensus about what level of price enhancement is too high. This paper contrasts pricing of cooperative and proprietary brands of differentiated food products. Empirical evidence indicates that market share and advertising do not generally provide cooperatives any more power to enhance prices than they give proprietary firms. The paper suggests a standard for undue price enhancement, the predicted price level of proprietary brands in similarly structured markets.
Nonpecuniary Job Preferences and Welfare Losses among Migrant Agricultural Workers
Authors: Dunn L. F.
Published: July 2006

Effects of nonprovision of job benefits and desirable working conditions are examined empirically for a sample of Mexican‐American and illegal alien migrant agricultural workers. Welfare losses are identified in that the monetary value to workers of some absent benefits is greater than the cost to farm employers of providing the benefits. Workers' preferences for nonpecuniary benefits are also examined by socioeconomic characteristics. Illegal aliens exhibit equal or greater preference for fourteen of the fifteen nonpecuniary items under consideration.
A Consideration in Estimating “Almost Nonsimultaneous” Market Models
Authors: Binkley James K.
Published: July 2006

Feedback effects in markets with simultaneously determined variables create problems for OLS estimation. When only a component of a market is modeled, feedbacks are weakened. If the component is small enough, the model may become “almost nonsimultaneous,” and most researchers then consider OLS as generally acceptable. However, even without strong feedbacks, equilibrium market behavior may nonetheless create the same estimation problems as in the larger simultaneous model. This can arise when behavior in the component markets represents similar responses to factors in the overall market. Then the criterion of market size in selecting an estimation technique may be insufficient.
Steady‐State Solutions to Soil Salinity Optimization Problems
Authors: Knapp Keith C.
Published: July 2006

This paper is concerned with the profit‐maximizing choice of water quantities given the choice of crop and water quality but taking into account the dynamics of salt accumulation over time. The optimization model formulated in this paper is based on a detailed representation of the salt transport process in soils but assumes known or average rainfall levels. Optimal water quantities and soil salinities in steady state were calculated for navel oranges in two areas of California. Water applications sufficient to maintain maximum yields were found to be optimal in many cases.
Measuring Stochastic Technology: The Case of Tulare Milk Production
Authors: Antle J. M. , Goodger W. J.
Published: July 2006

The flexible moment‐based approach to production analysis is used to measure the stochastic structure of large‐scale dairy production in Tulare County, California. This approach is flexible because it does not impose restrictions on the relationships between decision variables and the moments of the probability distribution of output. The parameter estimates support the hypothesis that second and third moments are functions of inputs and indicate that capital‐intensive dairies are riskier. The implied behavior of a risk‐averse dairy manager changed markedly when the effects of inputs on the skewness of the output distribution were included in a decision model.
European Community Enlargement and World Trade in Fruits and Vegetables
Authors: Sarris Alexander H.
Published: July 2006

World trade models for the product classes fresh fruits, dried fruits, processed fruits, fresh vegetables, and processed vegetables are estimated and used to project the impact on export prices and trade patterns likely to arise after the European Economic Community enlargement with Greece, Portugal, and Spain. The results indicate that current world trends in import demands and export supplies if continued, and in the absence of enlargement, will cause marked declines of export prices for four of the above product categories (except dried fruits). The enlargement will not significantly modify these price projections, but it will divert a significant part of European Community imports of these products to the three new member countries.
Market Integration: An Application to International Trade in Cotton
Authors: Monke Eric , Petzel Todd
Published: July 2006

Agricultural commodities are differentiated frequently by quality or country of origin. This paper proposes two complementary tests—bivariate price regressions and hedonic index estimation—as methods to identify whether differentiated products are amenable to treatment as a homogenous commodity. These price linkage tests represent necessary, rather than sufficient, conditions for aggregation and must be supplemented by information on market structure. Analysis of the international cotton market suggests a distinction between extra long and other staple lengths, but not by country of origin after controlling for staple length.
Output, Input, and Productivity Measurement in U.S. Agriculture 1948–79
Authors: Ball V. Eldon
Published: July 2006

Tornqvist‐Theil indexes of outputs and inputs are constructed. These data are used to construct indexes of productivity growth over the postwar period. The productivity indexes can be derived from a flexible multioutput‐multifactor representation of the structure of production constrained to constant returns to scale. Total factor productivity grew at an average annual rate of 1.75%, compared with 1.70% per year estimated by the U.S. Department of Agriculture. The similar estimates of productivity growth overshadow some important differences in measurement of individual inputs.
Pricing Efficiency in Centralized and Noncentralized Markets
Authors: Buccola Steven T.
Published: July 2006

Pricing efficiency in centralized markets is compared with that in noncentralized markets. On the basis of a price formation model, centrally discovered prices are hypothesized to adjust more slowly to equilibrium, but to have lower unpredictable variability, than noncentrally discovered prices. These hypotheses are borne out strongly in market experiments. Mean‐squared error is found to be lower in centralized than in noncentralized trading, suggesting centralized markets are the more price efficient.
Methods of Estimating the Input Coefficients for Linear Programming Models
Authors: Ray Subhash C.
Published: July 2006

In order to apply the linear programming method to determine the most profitable product mix of a farm, it is often necessary to estimate the input coefficients from sample data. The estimated coefficients must all be nonnegative. Estimates from regression models of input demand equations are not always nonnegative. The sample average of inputs used per acre of various crops provides nonnegative estimates but may suffer from selectivity bias. In this study the methods of minimizing the mean of absolute deviations and of minimizing the maximum absolute deviation are discussed as alternatives to inequality‐constrained least squares.
Import Substitution for Livestock Feed the Caribbean Community
Authors: Charles Clifton , Blandford David , Boisvert Richard N.
Published: July 2006

This paper evaluates the economic feasibility of substituting domestically produced corn and soya for imports in the Caribbean Community. A linear programming model is used to minimize the costs of meeting feed demands under free trade and two self‐sufficiency scenarios. Special emphasis is given to the availability of land suitable for feed production, domestic production costs relative to import costs, and the implications for employment and the balance of payments. The model also identifies optimal quotas or tariffs to achieve self‐sufficiency.
The Economic Feasibility of Crop Residues as Auxiliary Fuel in Coal‐Fired Power Plants
Authors: English Burton C. , Short Cameron , Heady Earl O.
Published: July 2006

Rising fossil fuel costs spark interest in crop residues as a renewable energy source. Residue costs for combustion in power plants are estimated in 1975 prices to evaluate their feasibility. Costs are estimated for farm production, transportation, and processing and handling at the energy recovery level. They are incorporated into an Iowa agricultural programming model which includes an electric utility sector. The model, including crop production, is solved for several scenarios—a base solution, energy price increases, and a sulfur constraint. Under these scenarios, crop residue replaces coal at 20%,40%, and 60% of the 1975 Btu's consumed.
The Formation of Cooperatives: A Game‐Theoretic Approach with Implications for Cooperative Finance, Decision Making, and Stability
Authors: Sexton Richard J.
Published: July 2006

This paper departs from the traditional organization‐oriented approach to cooperative analysis. It exploits cooperation's functional similarity to vertical integration to examine individuals' incentives to form cooperatives. A model of formation of a purchasing cooperative is presented and developed as an n‐person game with the core as a solution concept. Core existence is examined for both single‐ and multiple‐cooperative configurations, and cooperative finance methods are examined relative to finding core‐compatible allocation rules. The results provide insight into a cooperative's equilibrium output, stability, decision making, financing methods, and choice of open or restricted membership.
A Stochastic Dominance Comparison of Water‐Conserving Irrigation Strategies
Authors: Harris Thomas R. , Mapp Harry P.
Published: July 2006

Stochastic dominance and stochastic dominance with respect to a function are used to compare water‐conserving irrigation strategies in an area of declining ground water supplies. A computerized grain sorghum plant growth model using daily weather observations provides the basis for stochastic dominance comparisons. Six irrigation strategies dominate contemporary intensive irrigation practices by first‐degree stochastic dominance and two additional strategies exhibit second‐degree stochastic dominance over contemporary practices. Dominant strategies involve irrigating based on a 45 percent soil water criterion and eliminating early season irrigations. Some dominant strategies reduce water use by as much as 40 percent while increasing expected net returns.
Sales Loss Determination in Food Contamination Incidents: An Application to Milk Bans in Hawaii
Authors: Smith Mark E. , van Ravenswaay Eileen O. , Thompson Stanley R.
Published: July 2006

This article presents a procedure for estimating sales loss following a food contamination incident with application to the case of heptachlor contamination of fresh fluid milk in Oahu, Hawaii, in 1982. A major finding is that media coverage following the incident had a significant impact on milk purchases and that negative coverage had a larger effect than positive coverage. This conclusion implies that public statements by producers or government to assure the public of safe food supplies may be ineffective in restoring consumer confidence following the discovery of a food safety problem.
Valuing Environmental Quality: Weak Complementarity with Sets of Goods
Authors: Bockstael Nancy E. , Kling Catherine L.
Published: July 2006

In practice, it is frequently impossible to identify a single good which is a weak complement to an environmental amenity for which welfare measures are desired. However, a set of goods exhibiting this property sometimes exists, e.g., water‐related recreational activities when the nonmarket good to be valued is water quality. A set of weak complements is defined and implications for welfare measurement presented. The proper welfare measure now involves evaluation of a line integral and simple additions of areas under demand curves will not always be correct. However, under certain econometric circumstances, approximate welfare measures can be obtained from estimated functions.
The Output Bias of Technological Change in Postwar Japanese Agriculture
Authors: Kuroda Yoshimi
Published: July 2006

In order to explain the rapid change in the output mix, this study tests the hypothesis that technological change in postwar Japanese agriculture was biased towards livestock production. A multioutput translog cost function was estimated for the 1958–84 period in which results are consistent with the hypothesis. Furthermore, changes in the composition of crop and livestock production had significant impacts on relative factor uses. Above all, expanding livestock production required relatively less labor than expanding crop production, implying a positive contribution to the rapid exodus of labor to the nonagricultural sectors.
Prices as Proxies for Prices
Authors: Garrod Peter V. , Roberts Roland K.
Published: July 2006

It is unusual for the precise price data required by economic theory to be available, and as a result, many applied studies use information on regional or average prices as proxies for the specific prices required. The use of one price as a proxy for another, however, introduces all the problems associated with the use of proxy variables into the analysis; and these problems may persist, particularly those associated with specification errors, even if the proxy is highly correlated with the true variable. It is possible, however, to minimize the impact of specification errors by adding additional variables.
The Relative Efficiency of Agricultural Source Water Pollution Control Policies
Authors: Shortle James S. , Dunn James W.
Published: July 2006

This paper examines the relative expected efficiency of four general strategies which have been proposed for achieving agricultural nonpoint pollution abatement. Emphasis is placed on the implications of differential information about the costs of changes in farm management practices, the impracticality of accurate direct monitoring, and the stochastic nature of nonpoint pollution. The possibility of using hydrological models to reduce, but not eliminate, the uncertainty about the magnitude of nonpoint loadings is incorporated into the analysis. The principal result is that appropriately specified management practice incentives should generally outperform estimated runoff standards, estimated runoff incentives, and management practice standards for reducing agricultural nonpoint pollution.
Optimal Governing Instrument, Operation Level, and Enforcement in Natural Resource Regulation: The Case of the Fishery
Authors: Anderson Lee G. , Lee Dwight R.
Published: July 2006

Most regulation studies have used industry output or inputs as the control variable(s), but these are only indirectly controlled by government action through its choice of governing instrument, enforcement procedure, and penalty structure and the operational level of each. A model is developed which demonstrates how profit‐maximizing firms will react to these control variables taking into account the benefits (extra production) and costs (possible penalties) of noncompliance and the ability to avoid detection of noncompliance. The optimal operation level for two sets of control variables is derived and discussed.
Investment and Disinvestment Principles with Nonconstant Prices and Varying Firm Size Applied to Beef‐Breeding Herds
Authors: Trapp James N.
Published: July 2006

Variable beef‐breeding herd sizes are found to be optimal given cyclical beef prices. Traditional replacement theory does not allow variable firm size because unequal investment (replacement) and disinvestment (culling) rates are not possible. If firm size changes, cost of production per unit endogenously changes given a u‐shaped cost curve. Optimal investment and disinvestment rules for variable firm size are developed based upon the firm's cost curve and discounted net revenue flows for a finite rolling planning horizon. Current and future investment and disinvestment decisions are linked by their mutual effect on firm size and hence production cost per unit.
An Alternative Approach to Decisions under Uncertainty Using the Empirical Moment‐Generating Function
Authors: Collender Robert Neil , Chalfant James A.
Published: July 2006

Objections to mean‐variance analysis center on the requirement that the distributions be normal or the resulting inattention to higher‐order moments when the solution is viewed as an approximation. A nonparametric approach to decision making under uncertainty is developed in this paper using expected utility maximization, the exponential utility function, and an empirical moment‐generating function. A decision rule is obtained for land allocation under uncertainty which is not tied to a particular family of distributions and accounts for all moments of the distribution.
Sources of Growth in French Agriculture
Authors: Bouchet Frédéric , Orden David , Norton George W.
Published: July 2006

Growth of French agriculture is addressed with production disaggregated among cereals, noncereal crops, milk, and animal products. Short‐run and long‐run supply functions are derived from a restricted profit function model in which capital and family labor are assumed quasi‐fixed and measures of French public agricultural research expenditures and international technology availability are included. Production is found to be price responsive, but the estimated supply functions are inelastic even when the quasi‐fixed factors adjust optimally. Technical change as a source of output growth is also supported. Domestic research is estimated to be the primary cause of increased cereals output over the 1960–84 period, while international technology transfers and domestic research seem to be important for milk production.
Mandatory Production Controls and Asset Values: A Case Study of Burley Tobacco Quotas
Authors: Vantreese Valerie L. , Reed Michael R. , Skees Jerry R.
Published: July 2006

Mandatory production control programs affect asset values. Changes in the implied value of burley tobacco quota and impacts on agricultural land values are estimated using a capitalization approach. Recent instability in the tobacco program has created uncertainty about the future profitability of quota ownership. The procedure uses data on individual parcel transactions and regresses the parcel's price on hedonic factors including the parcel's tobacco quota. Results indicate tobacco quota values have fluctuated as much as 75% between some years. The implication is that mandatory controls affect both the value and risk associated with ownership of the production right.
Rice in Asia: Is It Becoming an Inferior Good?
Authors: Ito Shoichi , Peterson E. Wesley F. , Grant Warren R.
Published: July 2006

Empirical results using time‐series and cross‐sectional data indicate that rice in Asia is becoming an inferior good. Income elasticities declined and in some cases became negative between 1961 and 1985 in most of the fourteen Asian countries studied. Accordingly, domestic demand for rice in these countries is not likely to grow as rapidly as it has in the past. As a consequence, there is a potential for excess supplies of rice to develop in Asia, putting downward pressure on rice prices. While governments in Asian countries may need to adjust their rice policies in the future, world rice suppliers may need to develop new markets for rice.
Estimating Production Activity Costs for Multioutput Firms with a Random Coefficient Regression Model
Authors: Hornbaker Robert H. , Dixon Bruce L. , Sonka Steven T.
Published: July 2006

A random coefficient regression model provides an approach for estimating the mean variable costs of specific enterprise production activities for each output over a population of multioutput firms. The model specifically acknowledges that these farm‐level costs vary from farm to farm. In addition, best linear unbiased predictions can be estimated for each activity for an individual farm. The mean estimates are quite useful for ex post cost analysis, thereby providing per unit cost estimates for farmers, governmental agencies, and researchers. The best linear unbiased predictions can be used by individual farmers for planning yearly operations, applying for operating loans, and analyzing marketing strategies.
Testing a von Liebig Crop Response Function against Polynomial Specifications
Authors: Ackello‐Ogutu Christopher , Paris Quirino , Williams William A.
Published: July 2006

Crop responses to fertilizers traditionally have been specified as polynomial functions. Recently, criticisms were raised against such specifications because they force substitution between nutrients and overestimate the optimal fertilizer quantity. With those criticisms, an alternative crop response function was presented in the form of a minimum function which equates the realized output to the production potential associated with a limiting input. In this paper a nonnested test is performed to discriminate between the two rival specifications. The results of this test reject the hypothesis that a crop response is of the polynomial type, while they do not reject the hypothesis that it is of the minimum and plateau type.
Multiple Use Benefits on Public Rangelands: An Incentive‐Based Fee System
Authors: Huffaker Ray G. , Wilen James E. , Gardner B. Delworth
Published: July 2006

A grazing fee system is developed which induces multiple‐use compliance by present‐value‐maximizing permittees with stewardship responsibilities. The fee system increases grazing fees per animal stocked when needed to induce permittees to supply increased vegetation for nongrazing uses competing with livestock. The negative impact of increased fees on permittee wealth is offset by compensatory transfer payments. Taken together, grazing fees and compensation payments induce the multiple‐use required by the Federal Land Policy and Management Act and protect against the economic disruption of the western livestock industry as required by the Taylor Grazing Act.
Profit Function Approximations and Duality Applications to Agriculture
Authors: Thompson Gary D. , Langworthy Mark
Published: July 2006

Monte Carlo simulations of profit functions indicate that flexible functional forms may be ranked nearly the same with respect to Allen‐Uzawa partial substitution elasticities or price and fixed factor elasticities. Flexible functional form approximations of output price elasticities are generally worse than approximations of input price or fixed factor elasticities. Minflex Laurent functional forms did not appear to approximate underlying elasticities any better than did their translog and generalized Leontief counterparts.
A Nonparametric Analysis of Agricultural Technology
Authors: Chavas Jean‐Paul , Cox Thomas L.
Published: July 2006

U.S. agricultural technology and technical change are analyzed nonparametrically under cost minimization and profit maximization. Based on annual data for 1948–83, various separability hypotheses concerning the aggregate production function for U.S. agriculture are investigated. The proposed nonparametric approach also provides some insights into the nature of technical change.
Arbitrage Pricing, Capital Asset Pricing, and Agricultural Assets
Authors: Arthur Louise M. , Carter Colin A. , Abizadeh Fay
Published: July 2006

A new asset pricing model, the arbitrage pricing theory, has been developed as an alternative to the capital asset pricing model. The arbitrage pricing theory model is used to analyze the relationship between risk and return for agricultural assets. The major conclusion is that the arbitrage pricing theory results support previous capital asset pricing model findings that the estimated risk associated with agricultural assets is low. This conclusion is more robust for the arbitrage pricing theory application because it provides a better explanation of the relationship between risk and returns than does the capital asset pricing model.
Dynamic Input Decisions in Econometric Production Models
Authors: Antle John M. , Hatchett Stephen A.
Published: July 2006

This study develops an econometric methodology for estimating dynamic production models with sequential intermediate input decisions. Two problems arise in the study of intermediate inputs: intermediate input decisions may be endogenous to final output, and intermediate inputs are likely to be correlated with each other and other variables, making identification and estimation difficult. The econometric model measures the productivity of intermediate inputs, taking into account the farmer's sequential input decisions and input productivity differences during the growing season. A multistage Cobb‐Douglas model of wheat response to irrigation water is used to illustrate the proposed methods.
Food Pricing Policy in Developing Countries: Bias against Agriculture or for Urban Consumers?
Authors: Byerlee Derek , Sain Gustavo
Published: July 2006

Price policy discrimination against agricultural producers, in order to provide cheap food for urban consumers, has been widely cited in development forums as a cause of agricultural stagnation. Evidence is presented that suggests no consistent pattern of discrimination against producers for a major food commodity, wheat. However, consumer subsidies and trade policies have reduced bread prices to urban consumers in many countries. Price data from the early 1980s are assembled for thirty‐one developing countries. Nominal protection coefficients for producers and consumers at official and corrected exchange rates and wheat‐fertilizer price ratios are estimated for each country.
A Variance Components Approach to Food Grain Market Integration in Northern Nigeria
Authors: Delgado Christopher L.
Published: July 2006

A variance components methodology is developed for joint tests on a sample of time series of prices for seasonal differences in the price integration of markets. The approach requires a statistically adequate number of observations for each market within seasons characterized by constancy of transactions costs among markets. The model is applied to eighteen months of weekly grain prices for twenty‐two villages in northern Nigeria. Results suggest that markets are not well integrated in the six months covering the harvest period. Implications are drawn for research on market performance in the region.
Stochastic Dominance over Potential Portfolios: Caution Regarding Covariance
Authors: McCarl Bruce A. , Knight Thomas O. , Wilson James R. , Hastie James B.
Published: July 2006

Stochastic dominance historically has been applied to the pair‐wise comparison of alternatives. However, difficulties can arise when the alternatives are not mutually exclusive but can be used to form portfolio strategies. In such cases rules can be derived based on normality and the distribution moments. In general, the pure alternatives may be compared as long as the correlation coefficient exceeds the ratio of the standard errors less a potential correction for the difference between the means. The rules inherent in the last statement were empirically verified using normal, uniform, and beta distributions and empirical data. Results indicated that the rules were highly reliable but conservative.
Agricultural Price Policy in General Equilibrium Models: Results and Comparisons
Authors: de Janvry Alain , Sadoulet Elisabeth
Published: July 2006

A number of alternative policies toward agricultural prices, food subsidies, and intersectoral allocation of investment are analyzed with computable general equilibrium models for six countries. The models generally allow us to trace the intersectoral and intertemporal growth effects of these policies as well as their income distribution effects across social groups. The results obtained are shown to be eventually quite different from those derived from partial equilibrium and multimarket approaches. Sensitivity analysis to alternative specifications of the mechanism of wage determination shows that the real income effects of price policies are critically dependent upon the particular theory of wage determination used.
Time and the Recreational Demand Model
Authors: Bockstael Nancy E. , Strand Ivar E. , Hanemann W. Michael
Published: July 2006

In this paper, a theoretically consistent approach to including time costs in recreational demand models is developed. The demand model is conditional on the recreationist's labor market situation. For individuals at corner solutions in the labor market, utility maximization is subject to two constraints, leading to a demand function with travel costs and travel time as independent variables. With interior solutions in the labor market, time is valued at the wage rate and combined with travel costs to produce one “full cost” variable. In an illustration, welfare measures based on the new model are estimated for a sample of sportfishermen.
The Production Structure and Demand for Labor in Postwar Japanese Agriculture, 1952–82
Authors: Kuroda Yoshimi
Published: July 2006

This paper analyzes the factor relations of postwar Japanese agriculture to identify the factors which explain a significant decline in labor in the agricultural sector. A nonhomothetic and Hicks‐non‐neutral translog cost function is estimated. The results of the decomposition analysis based on the estimates show that biased technical changes and nonhomotheticity together with price‐induced factor substitutions play an important role in easing the transfer of agricultural labor to the nonagricultural sectors. The results also suggest that the biased technical change is consistent with the Hicksian‐induced innovation hypothesis.
The Farm‐Retail Price Spread in an Imperfectly Competitive Food Industry
Authors: Holloway Garth J.
Published: July 2006

Gardner's popular model of perfect competition in the marketing sector is extended to a conjectural‐variations oligopoly with endogenous entry. Revising Gardner's comparative statics on the “farm‐retail price ratio,” tests of hypotheses about food industry conduct are derived. Using data from a recent article by Wohlgenanr, which employs Gardner's framework, tests are made of the validity of his maintained hypothesis—that the food industries are perfectly competitive. No evidence is found of departures from competition in the output markets of the food industries of eight commodity groups: (a) beef and veal, (b) pork, (c) poultry, (d) eggs, (e) dairy, (f) processed fruits and vegetables, (g) fresh fruit. and (h) fresh vegetables.
Food‐Pricing Policy in Developing Countries: Further Evidence on Cereal Producer Prices
Authors: Taylor Daphne S. , Phillips Truman P.
Published: July 2006

Recently, two independent studies have produced contradicting evidence regarding the extent of price discrimination in developing countries. The objective of this study is to reexamine the evidence of direct and indirect distortion in cereal producer prices. Nominal protection coefficients for wheat, maize, and rice are calculated for fifty‐one developing countries spanning the period 1980–86. Black market exchange rates are used to adjust the nominal protection coefficients to reflect the indirect effect of price interventions through exchange rate policies. The results confirm the conventional wisdom that, although developing countries tend to protect domestic cereal producers, taxation caused by overvaluation of official exchange rates exceeds any direct price protection offered domestic producers.
Modeling Interdependence: An Approach to Simulation and Elicitation
Authors: Fackler Paul L.
Published: July 2006

A method for eliciting probability information about jointly dependent random variables and incorporating that information directly in a method for generating simulated random variables is developed. The method is particularly useful in situations in which information on several interdependent variables is required. Applications in agriculture include whole‐farm planning with uncertainty about multiple crop yields and prices.
Agricultural Trade Liberalization and Low Income Countries: A General Equilibrium‐Multimarket Approach
Authors: Sadoulet Elisabeth , de Janvry Alain
Published: July 2006

Integrated multimarket‐general‐equilibrium models are constructed to analyze the impact on poor cereal importers of rising world prices following OECD trade liberalization. Archetypes contrast African countries in which cereal imports are not competitive with domestic production (Africa I) to African and Asian countries where they are competitive. Results show rising food import bills and exchange rate depreciation in Africa I and the opposite in the other two regions. Policy implications include promoting agricultural exports from Africa I and promoting food crops for import substitution in the other regions. Food aid needed to shelter the poor during the transition period is calculated.
Solving Empirical Bioeconomic Models: A Rangeland Management Application
Authors: Standiford Richard B. , Howitt Richard E.
Published: July 2006

An empirical bioeconomic model was developed for private ranches conducting firewood, cattle, and hunting enterprises on California's hardwood rangelands. Hunting, forage, cattle, and oak firewood production functions were derived. Nonlinear optimal control was used to solve for two state and four control variables to give optimal time pathways for oak density and cattle stocking. Risk was considered through use of chance constraints, rainfall variability, and price expectations. Commercial hunting is shown to be the dominant economic value on these rangelands. Inclusion of stochastics shifts production away from cattle to less risky firewood and hunting enterprises.
Inter‐Firm Differences in Fed Cattle Prices in the Southern Plains
Authors: Ward Clement E.
Published: July 2006

Pooled cross‐section time‐series data were used to assess inter‐firm differences in fed cattle prices paid by southern plains meatpackers during June 1989. Significant price differences were found among packers, even after accounting for numerous factors affecting fed cattle value. Some buyers paid higher prices and some lower prices than did one of the three largest packers. As a group, the Big Three firms paid lower prices than did smaller firms, both in the southern plains as a whole and in three of its subregions.
End‐Use Performance Uncertainty and Competition in International Wheat Markets
Authors: Wilson William W. , Preszler Todd
Published: July 2006

The input characteristic model (ICM) is expanded in this paper to account for technical coefficient uncertainty. The model is used to analyze effects of price and quality on competition in the U.K. wheat import market. Results are used to identify critical quality characteristics and impacts of technical coefficient uncertainty on import demand. The expected values for most characteristics of U.S. wheat have greater variances than those of Canadian wheat. Results show that both the characteristic's level and variance are important in determining import market shares.
Welfare Effects of the National Pseudorabies Eradication Program
Authors: Ebel Eric D. , Hornbaker Robert H. , Nelson Carl H.
Published: July 2006

A welfare methodology is adapted to evaluate market and distributional effects of a completed pseudorabies eradication effort in the U.S. The model predicts small market effects from pseudorabies eradication. Welfare analysis suggests that, in states generating relatively large hog numbers, producers will experience a net gain from eradication in all scenarios considered, yet in smaller hog producing areas individual hog operations may lose producer surplus. Consumer surplus changes vary by scenario but are always positive. In general, the national pseudorabies eradication program is shown to be economically efficient.
The Effects of Management Decisions on Agricultural Bank Failures
Authors: Belongia Michael T. , Gilbert R. Alton
Published: July 2006

The assertion that local economic conditions have been responsible for the failures of large numbers of agricultural banks is investigated by pairing solvent and failed banks within rural counties and examining whether balance sheet items alone explain differences in the probability of failure for the two groups of banks. Estimation of a probit model indicates that higher ratios of loans to assets and agricultural to total loans were associated with higher probabilities of failure; banks with higher capital ratios and those affiliated with multibank holding companies had lower probabilities of failure.
Education and Innovation Adoption in Agriculture: Evidence from Hybrid Rice in China
Authors: Lin Justin Yifu
Published: July 2006

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.
Production, Hedging, and Speculative Decisions with Options and Futures Markets
Authors: Lapan Harvey , Moschini Giancarlo , Hanson Steven D.
Published: July 2006

This paper analyzes production, hedging, and speculative decisions when both futures and options can be used in an expected utility model of price and basis uncertainty. When futures and option prices are unbiased, optimal hedging requires only futures (options are redundant). Options are used together with futures as speculative tools when market prices are perceived as biased. Straddles are used to speculate on beliefs about price volatility and to hedge the futures position used to speculate on beliefs about the expected value of the futures price. Mean‐variance analysis in general is not consistent with expected utility when options are allowed.
The Silence of the Lambdas: A Test of the Almost Ideal and Rotterdam Models
Authors: Alston Julian M. , Chalfant James A.
Published: July 2006

During the past decade, the Linear Approximate (LA) Almost Ideal Demand System and the Rotterdam model have been by agricultural economists as the demand systems of choice in most applications. The apparent explanation is that the two models are both (second‐order) locally flexible and compatible with demand theory, they have identical data requirements and are equally parsimonious with respect to parameters, and both are linear in the parameters. While the two models are thus equally attractive in most respects, and indeed appear very similar in structure, they lead to different results in some applications. This article develops a test of each against the other. In an illustrative application to U.S. meat demand, the Almost Ideal model is rejected while the Rotterdam model is not.
An Empirical Analysis of the Demand for Multiple Peril Crop Insurance
Authors: Goodwin Barry K.
Published: July 2006

Knowledge of factors affecting farmer purchases of crop insurance is essential for evaluating the soundness and profitability of crop insurance programs. Despite this importance, the demand for crop insurance has received limited empirical attention. The present paper reports on an empirical assessment of the demand for crop insurance by Iowa corn producers. Adverse selection in the insured pool suggests that producers with differing levels of loss‐risk have different demand elasticities. Loss‐risk is included in the empirical analysis and is found to influence the elasticity of demand. Results show average demand elasticities of about −0.32 for relative insured acres and −0.73 for liability per planted acre. Implications for the actuarial soundness of the industry are provided.
Farm Consumption and Liquidity Constraints
Authors: Langemeier Michael R. , Patrick George F.
Published: July 2006

This study examines whether farm family consumption is liquidity‐constrained. Results, using 1976 to 1990 data for groups of Illinois and Kansas farms, indicate that consumption behavior is not liquidity‐constrained. Analysis of 207 Kansas farms in 1989 and 1990 provides similar results. These results are in contrast to findings for nonfarm families, and support the validity of using the life cycle‐permanent income hypothesis for farm level modeling and analysis.
Productivity Effects of Indigenous Land Tenure Systems in Sub‐Saharan Africa
Authors: Place Frank , Hazell Peter
Published: July 2006

This article uses household survey data from Ghana, Kenya, and Rwanda to test if the indigenous land rights systems in sub‐Saharan Africa are a constraint on agricultural productivity. Rights which farmers hold over individual parcels of land vary widely, and are in many cases surprisingly privatized. Yet with few exceptions, land rights are not found to be a significant factor in determining investments in land improvements, use of inputs, access to credit, or the productivity of land. These results cast doubt on the need for ambitious land registration and titling programs at this time.
Intraseasonal Demand for Fall Potatoes under Rational Expectations
Authors: Miranda Mario J. , Glauber Joseph W.
Published: July 2006

An iterative numerical strategy combining maximum likelihood methods and stochastic‐dynamic programming is used to estimate a dynamic nonlinear rational expectations model of the U.S. fall potato market. The model captures the essential processes governing the intraseasonal dynamics of potato consumption and storage, including the impact of price expectations on stockholding decisions. The model is used to analyze the temporal pattern of demand for fall potatoes.
Decision Rules for the Dynamic Animal Feeding Problem
Authors: Burt Oscar R.
Published: July 2006

Under a criterion of maximum expected present value, dynamic programming is used to derive sequential decision rules that give feed rations as a function of animal weight and indicate the critical weight at which to sell a batch of animals. These rules are adaptable to short‐term random changes in prices of inputs and outputs, and typically require solution of a single equation at a given weight. A new stochastic model is introduced that encompasses both the infinite sequence and single batch models found in the literature; the infinite chain of batches is randomly terminated after each batch is marketed.
Impacts of Liberalizing Trade in the World Rice Market
Authors: Cramer Gail L. , Wailes Eric J. , Shui Shangnan
Published: July 2006

A multi‐product quadratic programming model is used to investigate impacts of trade liberalization on the world rice market, recognizing product differentiation and allowing substitution among various rice types and qualities. Model simulations predict a large increase in both trade volumes and prices for all rice types and a significant welfare gain for most rice exporters and importers. Japan, South Korea, Philippines, Taiwan, and Brazil would be the major importers. Trade liberalization would increase total U.S. export revenue by 109%. Movement to free trade by Japan has significant effects on world rice trade and on Japanese rice production.
Sectoral Implications of Farm Program Modifications
Authors: Chang Ching‐Cheng , McCarl Bruce A. , Mjelde James W. , Richardson James W.
Published: July 2006

The overall and distributional effects of farm programs and selected revisions are examined using a mathematical programming sector model. The model incorporates market distortions caused by price supports, target prices, program participation, deficiency payments and marketing loans. Current farm programs are found to increase producer prices, depress consumer prices, and in turn result in excess production and higher consumption and exports. Domestic and foreign consumers as well as domestic producers are subsidized by farm programs. Social deadweight loss occurs as government payments exceed welfare benefits received by consumers and producers. Society as a whole benefits from reductions in program provisions.
Testing Hypotheses of Functional Structure: Some Rules for Determining Flexibility of Restricted Production Models
Authors: Driscoll Paul , Alwang Jeff , McGuirk Anya
Published: July 2006

Rules are proposed to help determine whether a production function maintains flexibility under parametric restrictions required to impose homogeneity, homotheticity, and forms of separability. After imposing restrictions and applying the rules, many second‐order “flexible” forms are found to be more inflexible than formerly believed.
Another Look at Returns to Agricultural and Nonagricultural Assets
Authors: Bjornson Bruce , Innes Robert
Published: July 2006

This paper presents econometric tests of whether mean returns on agricultural assets have been higher or lower than those on comparable‐risk assets in nonagricultural capital markets. The tests are based on alternate maintained hypotheses that the capital asset pricing model (CAPM) or the arbitrage pricing theory (APT) characterize nonagricultural asset returns. Results indicate that mean returns to farmer‐operators have been lower than those to owners of comparable‐risk nonagricultural assets and that mean returns to farmland owners have been higher than those to owners of comparable‐risk nonagricultural assets.
Modeling Supply Response with Implicit Revenue Functions: A Policy‐Switching Procedure for Rice
Authors: Chen Dean T. , Ito Shoichi
Published: July 2006

An econometric method of estimating implicit revenue with a policy switching mechanism is proposed for supply response analysis. The model develops important linkages between farm program instruments and commodity market equilibrium and allows evaluation of supply response decisions under conditions of major policy shifts. The econometric procedure developed here is applied to the U.S. rice sector to determine program compliance/noncompliance decisions under three alternative rice program periods. A change in farm prices was found to affect significantly producers' net returns and participation rate. Results indicate price impacts on acreage planted are inelastic for program participants but elastic for nonparticipants.