bluuebunny/crossref_metadata_2025 huggingface dataset:
Modeling Agricultural Growth Multipliers
Authors: Haggblade Steven , Hammer Jeffrey , Hazell Peter
Published: July 2006

Agriculture's potential as an engine of third world growth depends, in large part, on the size of the production and consumption linkages it stimulates in rural regions. Current estimates of agricultural growth multipliers within rural regions vary widely, not only because economic structures differ across regions but also because the array of fixed‐price models most commonly used embody widely differing basic assumptions. Among fixed‐price models, the semi‐input‐output formulation projects the most plausible multipliers. But even they overstate the magnitude of growth multipliers by 10% to 25% according to the price‐endogenous model developed here.
A Comparison of Video Cattle Auction and Regional Market Prices
Authors: Bailey DeeVon , Peterson Monte C. , Brorsen B. Wade
Published: July 2006

The number of cattle sold through video auctions has increased substantially during the past five years. The nation's largest video cattle auction offered over 450,000 cattle for sale in 1988. This study compares price differences between the nation's largest satellite video cattle auction and three large regional auctions. Prices for both the regional and video auctions were adjusted for quality differences, transportation costs, commissions, and days to delivery. Net prices paid by buyers and received by sellers in video auctions exceeded the prices for three major regional auction markets.
Market Integration, Efficiency of Arbitrage, and Imperfect Competition: Methodology and Application to U.S. Celery
Authors: Sexton Richard J. , Kling Catherine L. , Carman Hoy F.
Published: July 2006

This paper develops and applies a methodology to test for efficiency of interregional commodity arbitrage. Application of the methodology requires only time‐series data on prices for alternative cities, regions, countries, or product forms. Yet, the approach is capable of generating evidence on a number of market parameters including market integration, arbitrage efficiency, the magnitude of marketing margins, product substitutability, and competitiveness of markets. Estimation is based on a switching regression model with three regimes: efficient arbitrage, relative shortage, and relative glut. Results from application of the model to U.S. celery marketing indicated significant departures from efficient arbitrage for both California and Florida celery.
Government Intervention in Imperfectly Competitive Agricultural Input Markets
Authors: McCorriston Steve , Sheldon Ian M.
Published: July 2006

The frequent demands for protection by the fertilizer industry in many developed countries may have important implications for the agricultural sector. This paper provides a theoretical justification for government intervention in the fertilizer market in the form of an import tariff against foreign competitors. However, a superior policy would be for the government to counter the competitive distortion that exists in the market. An even better outcome is attained by using both policies simultaneously. Moreover, since the fertilizer industry undergoes continuous structural change, the extent to which optimal policies should vary is also investigated.
Labor Contracting and a Theory of Contract Choice in California Agriculture
Authors: Vandeman Ann , Sadoulet Elisabeth , de Janvry Alain
Published: July 2006

We present a model of labor contracts, where seasonality, the sensitivity of output to labor quality and work intensity, and the relative advantages of labor contractors in recruitment and growers in supervision of seasonal farm workers determine the choice of employment contract. Differences in the optimal means of extracting work result in lower wages paid under labor contracting than direct hiring. We derive and estimate the probability of labor contracting and wages as functions of worker and job characteristics using data on California farm workers and employers. From estimated expected wages, our results indicate that successful unionization or reducing the flow of undocumented workers into California agriculture both would reduce contracting and increase wages.
Long‐Run versus Short‐Run Planning Horizons and the Rangeland Stocking Rate Decision
Authors: Torell L. Allen , Lyon Kenneth S. , Godfrey E. Bruce
Published: July 2006

Reduced future forage production, diminished range condition, and reduced animal performance have been major factors considered when setting rangeland stocking rates. The relative economic importance of diminished current period animal performance versus intertemporal forage production impacts was investigated using a dynamic optimal control model. The model is applied to yearling stocker production in eastern Colorado. Results indicate that intertemporal grazing impacts to forage production are not that important; reduced weight gain during the current period drives the economic stocking rate decision. Further, ranchers have no economic incentive as profit maximizers to continually overgraze the range.
Optimal Control of Fish Growth
Authors: Cacho Oscar J. , Kinnucan Henry , Hatch Upton
Published: July 2006

Fish culture is an efficient means of protein production. However, in contrast to land animals, fish cannot be fed ad libitum because feed not consumed within a few hours is decomposed. This paper presents a bioeconomic model for determining cost‐effective feeding regimes for pond‐reared fish. The interplay among feed allowance, diet quality, and harvest date is explored. The optimal control model used is flexible, incorporates the effects of water temperature on fish appetite, and can be used to gain insight into efficient management of aquacultural production systems in different geographical regions.
Grain Policy in Chinese Villages: Yield Response to Pricing, Procurement, and Loan Policies
Authors: Rozelle Scott , Boisvert Richard N.
Published: July 2006

This paper assesses the effects of pricing, procurement, and loan policies on China's grain economy. A dynamic control model of the village leader is specified. Parameters of structural and control equations are estimated using time‐series cross‐section data. Simulation results show that pricing and procurement policies are not effective in raising yields, because of conflicting objectives of local officials. Loan policies can increase yields. The paper concludes that rural policies often have contradictory effects that can arise for a number of reasons. An important reason is the fact that local officials in a reforming economy have greater decision‐making discretion than higher‐level officials and execute policies to meet their own objectives.
Worker Turnover, Farm Labor Contractors, and IRCA's Impact on the California Farm Labor Market
Authors: Taylor J. Edward , Thilmany Dawn
Published: July 2006

Employer sanctions under the 1986 Immigration Reform and Control Act (IRCA) were intended to encourage U.S. employers to adjust to a smaller, more legal workforce. This paper presents findings of an econometric analysis of farm worker turnover as a vehicle to test IRCA's effectiveness. Our findings do not support the hypothesis that IRCA initially succeeded in reducing the reliance on new immigrants in California agriculture.
A Farm‐Level Analysis of Economic and Agronomic Impacts of Gradual Climate Warming
Authors: Kaiser Harry M. , Riha Susan J. , Wilks Daniel S. , Rossiter David G. , Sampath Radha
Published: July 2006

The potential economic and agronomic impacts of gradual climate warming are examined at the farm level. Three models of the relevant climatic, agronomic, and economic processes are developed and linked to address climate change impacts and agricultural adaptability. Several climate warming scenarios are analyzed, which vary in severity. The results indicate that grain farmers in southern Minnesota can effectively adapt to a gradually changing climate (warmer and either wetter or drier) by adopting later maturing cultivars, changing crop mix, and altering the timing of field operations to take advantage of a longer growing season resulting from climate warming.
A State‐Space Forecasting Approach to Optimal Intertemporal Cross‐Hedging
Authors: Vukina Tomislav , Anderson James L.
Published: July 2006

Cross‐commodity hedging between fishmeal and soybean meal is investigated. The approach uses successively updated out‐of‐sample forecasts to approximate subjective price expectations, and forecast error variance‐covariance matrices to measure risk. Forecasts are generated by state‐space models of vector‐valued time series. In a stationary environment, uncertainty reduces to the difference between the historical autocovariance of the random process and the variance‐covariance of out‐of‐sample forecasts. Results indicate that weakly risk‐averse agents can increase average marketing returns within acceptable risk levels by combining information from price forecasting models with an appropriate hedging strategy.
On Sustainability and the Economics of Survival
Authors: Chavas Jean‐Paul
Published: July 2006

This paper investigates the implications of sustainability and survival strategies for economic analysis. It reviews connections between the approaches used by economists and biological scientists in the study of survival. The paper emphasizes the role of irreversibility and uncertainty in the investigation of sustainability issues. Implications of the results for the analysis of economic behavior are discussed.
Testing Nonnested Models
Authors: Doran Howard
Published: July 2006

Applied economic research often involves testing between nonnested models. In such situations informal criteria are often used in preference to readily available testing procedures. This article deals with regression‐based tests between nonnested models, showing the development of the J‐ and JA‐tests from the Cox principle. Testing between linear and log‐linear models is discussed as an example of how tests can be constructed when the dependent variables of competing models have a monotonic functional relationship. An empirical example is given to illustrate the procedures.
The Inconsistency of Land Values, Land Rents, and Capitalization Formulas
Authors: Clark J. Stephen , Fulton Murray , Scott John T.
Published: July 2006

This paper examines relationships that exist between farm income, land values, and capital asset pricing theory. Using two commonly referenced data sets, it is shown that land prices and land rents do not have the same time‐series representations, a necessary condition for the simple capital asset pricing theory to hold. This suggests that a fundamental rethinking of the way in which land prices are viewed and modeled is needed. More complex models that allow for rational bubbles, risk aversion, and future shifts in government policy or commodity prices may be required.
Aggregate Sources of Relative Price Variability Among Agricultural Commodities
Authors: Lapp John S. , Smith Vincent H.
Published: July 2006

A measure of relative price variability among forty‐seven agricultural commodities is developed for the period 1962 to 1987. Econometric models are used to explore the effects of macroeconomic instability on relative price variability within the agricultural sector. The results show that these relative prices are more variable when actual and unanticipated inflation rates are higher. They may also be more variable during periods when real shocks to the macroeconomy are relatively large. Thus, monetary and fiscal events are not neutral with respect to the agricultural sector because macroeconomic instability appears to create instability and increased uncertainty in agricultural markets.
Effects of Irrigation‐Induced Technological Change in Bangladesh Rice Production
Authors: Ahmed Akhter U. , Sampath Rajan K.
Published: July 2006

This paper evaluates the welfare implications of the irrigation‐induced technological change in rice production, based on the conceptual framework of Hayami and Herdt and using a modified formulation of the problem. The analytical model used incorporates demand and supply shifts, provides exact measures of changes in consumers' and producers' surpluses, and examines the implications for distributive justice in terms of impacts on incidence and severity of poverty and inequality in income distribution. The results of the analysis suggest that irrigation‐induced technological change would significantly promote distributive justice.
The Determinants of the Migration of Labor out of Agriculture in the United States, 1940–85
Authors: Barkley Andrew P.
Published: July 2006

The flow of labor out of production agriculture is analyzed using a two‐sector model of occupational choice. A migration equation is specified and tested empirically using aggregate data for the United States. The economic determinants of the migration of all farm workers and farm operators are established. Farm labor is found to be responsive to changes in the returns to agricultural labor relative to nonfarm labor returns. Given this responsiveness, policies intended to increase farm income will affect the level of agricultural employment.
Imperfect Competition in Agricultural Markets and the Role of Cooperatives: A Spatial Analysis
Authors: Sexton Richard J.
Published: July 2006

Important characteristics of many agricultural markets are costly to transport raw products and relatively few processors, one or more of which is often a cooperative. This paper analyzes pricing behavior in these oligopsonistic, spatial markets and focuses specifically upon the conjecture that cooperatives may have a procompetitive effect on the behavior of rival non‐co‐op processors. The existence and magnitude of a procompetitive effect is shown to depend upon a number of structural and strategic factors including competitive relations among the non‐co‐op processors and a cooperative's membership and pricing policies.
Integration of Spatial Markets
Authors: Faminow Merle D. , Benson Bruce L.
Published: July 2006

Studies of spatial market integration draw their implications from a theory which assumes that there are no intraregional transport costs. An alternative theory is offered, based on the assumptions that buyers and sellers are spatially dispersed and intraregional transport costs are significant. This implies that the market is a linked oligopoly (or oligopsony) and that market integration tests are tests of alternative oligopoly price formation processes. For example, collusive basing‐point pricing produces results typically assumed to imply efficiently integrated markets, while competitive FOB pricing does not. The theoretical implications are illustrated with an analysis of hog prices in Canada.
Rural Road Abandonment: Policy Criteria and Empirical Analysis
Authors: Hamlett Cathy A. , Baumel C. Phillip
Published: July 2006

Deterioration and changing use patterns of the rural road system have coalesced into difficult policy decisions for local government officials. One option for consideration is abandonment of some low‐volume roads. A model is developed, using utility maximization and Pareto‐optimal criteria, that allows identification of policy criteria for abandonment. The criteria are empirically estimated and 4% to 12% of the roads were found to be good candidates for abandonment without a net social loss.
Input Allocation in Multicrop Systems
Authors: Just Richard E. , Zilberman David , Hochman Eithan , Bar‐Shira Ziv
Published: July 2006

Using data only on aggregate variable input use and land allocation, this paper suggests a methodology for allocating variable input use among crops and improvement of regional crop budget information. Two approaches for estimation of variable input allocations among production activities are examined. One relies on behavioral rules whereby input allocations follow accepted rules of thumb. The alternative approach is derived from profit maximization where input use responds instantaneously to changes in input and output prices. The behavioral rules dominate instantaneous response to prices in explaining the data analyzed in this paper and suggest the validity of a simple behavioral approach for developing enterprise budgets and cost of production estimates.
Two Practical Procedures for Estimating Multivariate Nonnormal Probability Density Functions
Authors: Taylor C. Robert
Published: July 2006

This article presents two procedures for empirically estimating nonnormal joint probability density functions (pdf's) that are operational with small samples. One procedure empirically estimates marginal distributions. Estimated marginal distributions are then used to transform variates to univariate normality; the transformed variates are assumed to have a multivariate normal distribution. The second approach exploits the identity that a joint distribution is the product of a conditional pdf and a marginal pdf. Conditional and marginal pdfs are individually estimated with this approach. Statistical tests for multivariate normality are also reviewed.
On‐Site Time in the Demand for Recreation
Authors: McConnell K. E.
Published: July 2006

The standard travel cost model has treated on‐site time ambiguously over the years. This paper shows how to handle on‐site time by exploring the implications of two assumptions in the travel cost model: first, people choose the amount of time that they spend on a site, and second, the time spent on‐site is exogenous. This paper uses a duality result to show that when on‐site time is chosen, the standard travel cost demand function takes a particularly simple form. With slight modification, standard estimation and welfare calculations continue to hold.
“Don't Count Your Chickens...”: Risk and Risk Shifting in the Broiler Industry
Authors: Knoeber Charles R. , Thurman Walter N.
Published: July 2006

The contracts used to reward growers of broiler chickens in the United States base pay on a grower's performance relative to other growers. From a panel of data covering seventy‐five growers over four years, we use simulation methods to measure the price and production risk shifted from growers to integrator companies by these contracts. We also decompose the risk in broiler production variability. We conclude that the bulk of the risk in our sample, which is primarily price risk, is shifted from growers through the use of production contracts.
Measurement of Economic Efficiency in Pakistani Agriculture
Authors: Parikh Ashok , Ali Farman , Shah Mir Kalan
Published: July 2006

The behavioral and stochastic cost frontier functions are applied to estimate cost inefficiency by farms. The behavioral approach satisfies most of the assumptions of dual cost function and the likelihood ratio test rejects the market efficiency hypothesis implying less than optimum use of manures, labor, and fertilizers. A suboptimal use is explained by holding size, education, credit, and subsistence needs. Small farms seem to be more efficient than large farms in the region. A measure of inefficiency based on a stochastic cost frontier approach confirms the results of the behavioral approach.
The Dynamic Responses of Crop and Livestock Prices to Money‐Supply Shocks: A Bayesian Analysis Using Long‐Run Identifying Restrictions
Authors: Dorfman Jeffrey H. , Lastrapes William D.
Published: July 2006

The impact of monetary policy on agriculture has been much debated. This study examines the dynamic responses of U.S. agricultural prices to money‐supply shocks using three innovations. First, the variables' responses are identified by long‐run money neutrality restrictions instead of the more common contemporaneous ordering. Second, a Bayesian approach to model uncertainty is used to add robustness to the estimation process. Third, agricultural prices are disaggregated into crop and livestock components. The empirical results find that both agricultural sectors benefit in the short run from positive money‐supply shocks with agricultural prices increasing relative to the general price level.
Generalization of Nonparametric Tests for Homothetic Production
Authors: Silva Elvira , Stefanou Spiro E.
Published: July 2006

The nonparametric tests for homotheticity proposed by Hanoch and Rothschild and by Varian (1984) are a special case of the tests proposed in this paper. The previous tests are generalized by relaxing the linear homogeneity assumption. A range for the degree of homogeneity as well as a region for the input demands are constructed using a dual approach.
Testing the Monopsony‐Inefficiency Incentive for Backward Integration
Authors: Azzam Azzeddine
Published: July 2006

In theory, monopsony at one stage in a vertically related market provides an incentive for backward integration into the adjacent competitive stages. By integrating backward, a monopsonist internalizes the monopsony inefficiency due to underemployment of the factor produced upstream. However, little is known about the importance of such incentive in practice. In this paper I provide an empirically implementable model to test the monopsony‐inefficiency incentive for vertical integration. For illustration, the model is applied to the U.S. beef slaughter industry. Findings seem to support the monopsony‐inefficiency incentive for backward integration by the industry into the live cattle market.
A Probit Latent Variable Model of Nutrition Information and Dietary Fiber Intake
Authors: Variyam Jayachandran N. , Blaylock James , Smallwood David
Published: July 2006

Nutrition information and intake data for a sample of U.S. household meal planners are used to estimate the effects of fiber‐specific information on dietary fiber intake. The information variables are measured using survey questions on fiber content of foods, attitude toward consuming fiber‐rich foods, and awareness of fiber‐health links. The evidence confirms the influence of nutrition information on fiber intake. Household income, meal planner age, smoking status, vegetarian status, race, and ethnicity are major determinants of both information and intake. Education exerts a sizable intake effect by enhancing the information level. Direct and indirect effects of exogenous variables are reported.
Impact of the U.S. Export Enhancement Program on Exports of Canadian Durum to the U.S.
Authors: Lavoie Nathalie
Published: July 2006

The Export Enhancement Program (EEP) of the United States creates a price wedge between those countries that receive this subsidy and those that do not. At the same time, the EEP has made the U.S. market profitable for Canadian exports. The objective of this study is to assess the impact of the EEP on Canadian exports of durum wheat to the U.S. For this purpose, a conceptual framework is developed and tested with a quarterly econometric model. The empirical results support the conceptual characterization and suggest that the EEP for durum has stimulated about half of Canadian durum exports to the United States.
Endowments, Technology, and Factor Markets: A Natural Experiment of Induced Institutional Innovation from China's Rural Reform
Authors: Lin Justin Yifu
Published: July 2006

The induced institutional innovation hypothesis postulates that new institutions are innovated to exploit profitable opportunities arising from institutional disequilibrium. The removal of legal restrictions on factor market exchanges after recent reforms in China resulted in institutional disequilibrium. This paper utilizes data from a household survey in China to explore (i) the relationship between the emergence of land, labor, and rental markets in a region and the distribution of factor endowments across rural households in that region, and (ii) the impact of hybrid rice on the emergence of factor markets in that region. The results are consistent with the induced institutional innovation hypothesis.
The Economic Value of Minimum‐Variance Hedges
Authors: Lence Sergio H.
Published: July 2006

The present article examines the potential economic gains from “better” minimum‐variance hedge (MVH) estimates, focusing on the assumptions that yield MVHs consistent with expected‐utility maximization. It is found that the economic value of “better” MVH estimates is negligible, and that optimal hedges are substantially different from MVHs when the usual MVH restrictions are relaxed. Among other things, findings suggest that the hedging research's recent emphasis on “better” MVHs has been a waste of resources. Investigating the consequences of relaxing the standard MVH assumptions seems to be much more important than recent literature contributions.
Multiattribute Assessment of Alternative Cropping Systems
Authors: Foltz John C. , Lee John G. , Martin Marshall A. , Preckel Paul V.
Published: July 2006

Multiattribute rankings of seventy‐two alternative midwestern cropping systems involving corn, soybeans, and alfalfa hay are analyzed from profitability and environmental quality perspectives. Environmental consequences are simulated using EPIC and GLEAMS, and profitability is based on budget analysis. Results are analyzed using an algorithm based on multiattribute decision theory. A corn‐soybean rotation using low input levels and minimum tillage on high‐productivity soil, and continuous corn using low input levels and minimum tillage on low‐productivity soil are in the preferred set regardless of whether profits or preserving the environment is the first priority for the decision maker.
Production Economics of Private Forestry: A Comparison of Industrial and Nonindustrial Forest Owners
Authors: Newman David H. , Wear David N.
Published: July 2006

This paper compares the production behavior of industrial and nonindustrial private forestland owners in the southeastern U.S. using a restricted profit function. Profits are modeled as a function of two outputs, sawtimber and pulpwood, one variable input, regeneration effort, and two quasi‐fixed inputs, land and growing stock. Although an identical profit function is rejected, the results indicate behavior consistent with profit‐maximizing motives under both ownerships. The two ownerships have similar responses to input and output price changes, both in the short‐run and in the long‐run. However, nonindustrial owners appear to place a higher value on their standing timber and forestland than do industrial owners. The difference in estimated shadow values indicates that significant nonmarket benefits are being captured by nonindustrial owners and the benefits are reflected in their production behavior.
Using Shadow Wages to Estimate Labor Supply of Agricultural Households
Authors: Skoufias Emmanuel
Published: July 2006

With few exceptions, most studies of the labor demand and supply decisions of agricultural households in developing countries have relied on the empirical advantages of separability. Given the questionable nature of some of the assumptions sufficient for separability, I apply a recent methodology that accounts for the simultaneity between the production and consumption decisions of a farm household. Using data from rural India, direct estimates of the marginal productivities (shadow wages) of family male and female labor are derived from a Cobb‐Douglas agricultural production function. The estimated shadow wages and income are then used as regressors in a structural model of labor supply.
Futures Hedging Under Price, Basis, and Production Risk
Authors: Lapan Harvey , Moschini Giancarlo
Published: July 2006

We consider the hedging problem of a firm that has three sources of risk: price, basis, and yield uncertainty. An exact solution for the optimal futures hedge is derived under the assumption that the three random variables are jointly normally distributed and that utility is of the CARA type. Unlike the mean‐variance approximation applied in previous research, we show that the optimal hedge does depend on risk attitudes, even when the agent perceives the futures price as being unbiased. The theoretical results are applied empirically to the problem of hedging soybean production in Iowa. The exact solution, relying on CARA and normality, is compared with numerical solutions under lognormal distributions and CRRA utility.
A Household Model of On‐Farm Storage Under Price Risk
Authors: Saha Atanu , Stroud Janice
Published: July 2006

We present an agricultural household model of consumption, storage, savings, and labor decisions and argue that food crop storage under price risk cannot be fully explained by “risk taking” or speculative behavior alone, as the commodity storage literature suggests. Often, and especially in the case of small farmers, the explanation lies in the household's aversion to risk and in food security considerations. The empirical analysis, using ICRISAT quarterly panel data from Shirapur, provides evidence against risk‐neutral preferences. We find that risk response is particularly significant in the storage and labor decisions of small farm households.
The Demand for Multiple Peril Crop Insurance: Evidence from Montana Wheat Farms
Authors: Smith Vincent H. , Baquet Alan E.
Published: July 2006

An econometric analysis of the demand for multiple peril crop insurance is carried out for a sample of 370 Montana wheat farms. The study is the first to model the farm's participation and coverage‐level decisions separately through Heckman two‐stage estimation procedures. These decisions are shown to be determined in different ways. In addition, farms with positive expected returns from insurance make coverage‐level decisions in different ways from farms with negative expected returns. These differences indicate that adverse selection effects limit the efficacy of across‐the‐board premium rate increases as mechanisms for reducing loss ratios.
The Tradeoff between Oligopsony Power and Cost Efficiency in Horizontal Consolidation: An Example from Beef Packing
Authors: Azzam Azzeddine M. , Schroeter John R.
Published: July 2006

In this paper we model the tradeoff between regional oligopsony power and cost efficiency resulting from consolidation in a food processing industry. The model can be used to calculate the cost reductions necessary to offset the anticompetitive effects of market power and to compare them to actual cost savings achieved through plant scale or multiplant operating economies. For an application, we choose the beef packing industry. For this case, we find that the estimated cost savings necessary to neutralize the anticompetitive effects of consolidation in beef packing are about half the actual cost savings from scale economies.
Measuring Goodness of Fit for the Double‐Bounded Logit Model
Authors: Kanninen Barbara J. , Khawaja M. Sami
Published: July 2006

The traditional approaches of measuring goodness of fit are shown to be inappropriate in the case of the double‐bounded logit model. An alternate approach called the “sequential classification procedure” is presented as a possible alternative to the standard tests. The double‐bounded logit model is reviewed along with the standard goodness‐of‐fit measures. The sequential classification procedure and its features are presented in the context of an empirical example.
An Econometric Decomposition of Dairy Output Growth
Authors: Ahmad Munir , Bravo‐Ureta Boris E.
Published: July 2006

Fixed effects production functions and stochastic production frontiers are estimated and used to decompose dairy farm output growth into technological progress, technical efficiency, and increased input use or the size effect. Unbalanced panel data for ninety‐six Vermont dairy farmers for the 1971–84 period are utilized. The results show a 2.5% average annual increase in milk output. About 56% of this growth is attributed to the size effect and the remaining 44% to productivity growth. Technological progress contributed about 94% to total productivity growth, while improvements in technical efficiency accounted for only 6%.
Microeconomics of Agricultural Grading: Impacts on the Marketing Channel
Authors: Hennessy David A.
Published: July 2006

In this paper I focus on how grade prices affect the provision of product transformation skills in the food marketing system. A self‐protection model is used to show how resources are allocated to protect the potential value of commodities in the marketing channel. Resource allocations may be complementary, and complementarity may be exploited to expand an industry. Further, uncertainty concerning skill levels may inhibit expansion. Because two primary objectives of agricultural extension involve facilitating skill acquisition and disseminating market information, the model confirms roles for extension personnel. The optimal location of transformation skills in a sequence of operations is also studied.
Efficiency of the Multiplant, Multiproduct Firm
Authors: Sil Jayashree , Buccola Steven
Published: July 2006

A general framework is provided for assessing the technology, cost, and efficient scale of a multiplant, multiproduct firm. We show sufficient conditions for the existence of a plant cost function, and necessary and sufficient conditions for using plant‐level data to draw exact firm‐level cost inferences. We also distinguish between plant and input nonjointness and show the optimal relation between plant‐level and firm‐level cost elasticity in a multiproduct setting. The framework is applied to a vegetable processing cooperative, which is found to operate below its efficient scale.
FLC Usage Among California Growers under IRCA: An Empirical Analysis of Farm Labor Market Risk Management
Authors: Thilmany Dawn D.
Published: July 2006

Recent immigration reform efforts have been ineffective at controlling the flow of illegal immigration. Concurrently, a structural change occured in the agricultural sector as farm labor contractor (FLC) usage expanded. The FLC sector is, arguably, evolving due to the tighter regulatory and risk environment faced by producers. Using probit analysis of survey data from California growers, this study analyzes labor contracting patterns. Differences are found among regions, commodities, and several grower characteristics. However, the significant role of risk perceptions and management attitudes are of greatest interest given the absence of labor issues in agricultural risk management programs.
On Nonparametric Supply Response Analysis
Authors: Chavas Jean‐Paul , Cox Thomas L.
Published: July 2006

In this paper, we explore the usefulness of nonparametric methods in the investigation of production behavior and the estimation of price elasticities of output supply and input demand functions. The approach can handle the situation where some data points are not consistent with production theory. The method is illustrated by estimating supply‐demand elasticities of outputs and inputs in U.S. agriculture.
Effects of Health Information and Generic Advertising on U.S. Meat Demand
Authors: Kinnucan Henry W. , Xiao Hui , Hsia Chung‐Jen , Jackson John D.
Published: July 2006

The dominant pattern in U.S. meat consumption over the past two decades has been a steady increase in per capita poultry consumption, largely at the expense of beef consumption. Our findings suggest that the major factor governing this pattern is structural change. Specifically, health information or trend was found to be significant in each of the four equations estimated in the Rotterdam system. Moreover, the health‐information elasticities in general are larger in absolute value than price elasticities, which suggests that small percentage changes in health information have larger impacts on meat consumption than equivalently small percentage changes in relative prices. The estimated effects of generic advertising, in contrast, were found to be modest and fragile.
The Economics of Cosmetic Pesticide Use
Authors: Lichtenberg Erik
Published: July 2006

It has been argued that so‐called “cosmetic” standards for produce quality increase pesticide use on fruits and vegetables. This paper shows that stricter quality standards unambiguously increase farm‐level pesticide demand only when produce is sold in mixed lots with tolerances for characteristics determined by quality standards and there is no sampling error. Under more commonly encountered conditions, stricter quality standards may reduce pesticide demand. An empirical example of apple production suggests that grading standards have non‐negligible effects and that more stringent grading standards lead to reduced pesticide use under plausible conditions.
Estimation and Use of a Multivariate Parametric Model for Simulating Heteroskedastic, Correlated, Nonnormal Random Variables: The Case of Corn Belt Corn, Soybean, and Wheat Yields
Authors: Ramírez Octavio A.
Published: July 2006

This study develops a multivariate, nonnormal density function that can accurately and separately account for skewness, kurtosis, heteroskedasticity, and the correlation among the random variables of interest. The statistical attributes of the underlying random variables and correlation processes are examined. The potential applications of this modeling tool are discussed and exemplified by analyzing and simulating Corn Belt corn, soybean, and wheat yields. While corn and soybean yields are found to be skewed and kurtotic and exhibit different variances through time, wheat yields appear normal but also heteroskedastic. A strong correlation is detected between corn and soybean yields.
Estimating Yield Distributions with a Stochastic Trend and Nonnormal Errors
Authors: Moss Charles B. , Shonkwiler J. S.
Published: July 2006

Randomness in crop yields can be decomposed into two broad modeling focuses: the estimation of the mean or central tendency of the distribution and the dispersion around that central tendency. We propose modeling the central tendency of the distribution with a stochastic trend model and allowing for nonnonnality within the stochastic trend through an inverse hyperbolic sine distribution. Results are consistent with this construction. First, residuals around the stochastic trend model are found to be non normal. Second, the inverse hyperbolic sine modification of the stochastic trend model corrects both skewness and kurtosis of corn yields.
Product Aggregation, Market Integration, and Relationships between Prices: An Application to World Salmon Markets
Authors: Asche Frank , Bremnes Helge , Wessells Cathy R.
Published: July 2006

Relationships between prices of goods offer motives of interest in at least two areas: market integration and product aggregation. There is a close relationship between market integration and aggregation, which may increase the usefulness of market integration studies. In this article, these relationships are developed and illustrated by an application to the world salmon market. It is shown that the Law of One Price holds for an international market with five salmon species. This result has significant implications for the world salmon market regarding both product aggregation in demand analyses and international trade policy.
Privatization, Market Liberalization, and Learning in Transition Economies
Authors: Goodhue Rachael E. , Rausser Gordon C. , Simon Leo K.
Published: July 2006

Privatization and market liberalization are widely considered to be complementary reforms in transition economies. This article challenges this view and the closely related “big bang” approach: when pursued too vigorously, privatization may impede the transition process following liberalization. Our result is based on an explicit model of market learning. Compared to a mature market, a market in transition is characterized by greater uncertainty regarding market conditions, including equilibrium prices and quantities. Economic actors must learn about these conditions through their participation in the market process. Less than full privatization is optimal if the costs of learning are sufficiently important.
Generalized Models of Japanese Demand for Fish
Authors: Eales James , Durham Catherine , Wessells Cathy R.
Published: July 2006

Given a relative lack of knowledge about Japanese consumer preferences for fish, Japanese fish demand is modeled using both Marshallian (ordinary) and inverse demand systems, each of which nests a number of competing specifications. Results indicate that the inverse demand systems dominate the ordinary demand systems in forecasting performance and in nonnested tests. The inverse system suggests that Japanese fish prices are less responsive to changes in consumption than found in previous studies.
Intellectual Property Rights and the Welfare Effects of Agricultural R…D
Authors: Moschini Giancarlo , Lapan Harvey
Published: July 2006

We review intellectual property rights in agriculture and outline a modeling framework that accounts for relevant institutional features of agricultural R…D. The analysis emphasizes vertical market linkages whereby agricultural innovations adopted by farmers are produced upstream by input suppliers. It is argued that the conventional assumption of competitive pricing cannot hold when new technologies are produced by private firms because such innovations are typically protected by intellectual property rights (such as patents) that confer (limited) monopoly rights to discoverers. The implications of intellectual property rights for the welfare evaluation of agricultural R…D are derived, and it is shown that conventional methods usually overestimate the welfare gains from agricultural innovations.
Are Eco‐Labels Valuable? Evidence From the Apparel Industry
Authors: Nimon Wesley , Beghin John
Published: July 2006

Using apparel catalog data from the United States, we estimate hedonic price functions to identify market valuation of environmental attributes of apparel goods. We identify a significant and robust premium for the organic fibers embodied in the apparel goods. We also find a discount for the “no‐dye” label. We do not, however, find any evidence of a premium for environment‐friendly dyes. We further investigate the pricing behavior of apparel suppliers for potential heterogeneous pricing of the organic‐fiber attribute and find no evidence of different premia across firms.
Adverse Selection in Crop Insurance: Actuarial and Asymmetric Information Incentives
Authors: Just Richard E. , Calvin Linda , Quiggin John
Published: July 2006

Adverse selection is often blamed for crop insurance indemnities exceeding premiums plus subsidies. However, nationwide empirical evidence has been lacking or based on inadequate county‐level data. This article uses nationwide farm‐level data on corn and soybeans to decompose incentives for participation in U.S. multiple peril crop insurance into a risk‐aversion incentive (the conventional justification for insurance), an actuarial or subsidy incentive (reflecting government subsidization), and an asymmetric information incentive (which reflects farmers' information advantage). Results show that the risk‐aversion incentive is small. Farmers participate in crop insurance primarily to receive the subsidy or because of adverse selection possibilities.
On Interpreting Inverse Demand Systems: A Primal Comparison of Scale Flexibilities and Income Elasticities
Authors: Park Hoanjae , Thurman Walter N.
Published: July 2006

Scale flexibilities in inverse demand systems describe how marginal valuations change with expansions in the consumption bundle. Such effects clearly are related to income elasticities in direct demand systems. However, the connection is not so close as it first appears. We argue that the link between scale flexibilities and income elasticities is tight only if preferences are homothetic, a situation where neither measure is interesting, or if all elasticities of substitution are unitary. We make clear the relationship between the two measures in a coordinate system focusing on how marginal rates of substitution change with consumption scale and proportion.
A Two‐Stage Analysis of the Effectiveness of Promotion Programs for U.S. Apples
Authors: Richards Timothy J. , Van Ispelen Pieter. , Kagan Albert
Published: July 2006

Export promotion programs are intended to help U.S. exporters enter, maintain, and expand foreign markets, but little is known of their success in achieving each of these goals. In this paper we attempt to determine the effectiveness of export promotion in increasing both U.S. market share and total import consumption using apple imports by Singapore and the United Kingdom as case studies. Estimates of a two‐stage Linear Expenditure System (LES)/Almost Ideal Demand System (AIDS) model show that promotion increases consumption of apples in both the United Kingdom and Singapore, but increases U.S. market share only in the United Kingdom. The results suggest that free‐riding on U.S. promotion can be significant.
Economic Evaluation of the Farmers' Market Nutrition Program
Authors: Just Richard E. , Weninger Quinn
Published: July 2006

A framework is developed to evaluate food assistance programs and is applied to the Farmers' Market Nutrition Program—a program intended to increase consumption of fresh fruits and vegetables (F…V) by providing coupons and information. Because individuals differ, some coupons are unused, some replace existing consumption and simply enhance income, and some induce increased consumption. Results show that coupons alone reduce social welfare because recipients value F…V less than society. However, when coupons are used as a lure to distribute information, demand increases. In a household production framework the program is shown to enhance social welfare by correcting a market failure.
Allocation and Pricing at the Water District Level
Authors: Brill Eyal , Hochman Eithan , Zilberman David
Published: July 2006

Efficient water pricing schemes are introduced for nonprofit water agencies, where members have property rights based upon historical usage. The existing average cost rate design is compared with the proposed designs, “active trading” and “passive trading.” Both schemes lead to efficiency, but “passive trading” has operational advantages since it generates less transaction costs than “active trading.” Block rate pricing is shown to be suboptimal and inferior to “passive trading.” An example from the Israeli water economy is used as an empirical illustration.
A Cointegration Analysis of Canadian Wood Pulp Prices
Authors: Alavalapati Janaki R.R. , Adamowicz Wiktor L. , Luckert Martin K.
Published: July 2006

The effects of the Canada‐U.S. exchange rate, the U.S. pulp price, and the domestic use of pulp on the Canadian pulp price are investigated using a cointegration analysis. Results suggest that the U.S. pulp price is more important than other variables in determining the price of pulp in Canada. The incomplete pass‐through of the exchange rate indicates that Canadian pulp producers may not have market power to increase their price of pulp. The temporary increase in the price of Canadian pulp in response to a devaluation of the Canadian dollar may be due to short‐term contracts which Canadian pulp producers have with their importers.
An Integrated Model of Québec‐Ontario‐U.S. Northeast Softwood Lumber Markets
Authors: Bernard Jean‐Thomas , Bouthillier Luc , Catimel Jérôme , Gélinas Nancy
Published: July 2006

We analyze an interregional softwood lumber trade model for the three main species (spruce, pine, and fir [SPF]) which are indigenous to Québec, Ontario, and the U.S. Northeast. Demand for SPF softwood lumber is price elastic in Ontario and the U.S. Northeast, but not in Québec. It is inelastic with respect to residential construction. Supply price elasticities are less than one. Policy instruments such as exchange rate, export taxes, Canadian federal sales tax, and cost of logs change exports and imports but with minor effects on prices. Export (import) duties are more effective in redirecting trade than is a stumpage fee applied by the provinces.