bluuebunny/crossref_metadata_2025 huggingface dataset:
The Effects of Changing Input Costs on Food Prices
Authors: Lamm R. McFall , Westcott Paul C.
Published: July 2006

The relationships between changes in food sector input costs and retail food prices are examined. Results indicate that increases in factor prices pass quickly to consumers, within two quarters for most foods. In addition, rising farm‐level prices and substantial increases in nonfarm resource prices appear to explain why food prices rose more rapidly than nonfood prices in the 1970s. The analysis is based on a twenty‐equation econometric model of the food‐price determination process, specified following Popkin's “stage of processing” approach. Causality and validation test statistics for the model are presented.
Beekeeping, Pollination, and Externalities in California Agriculture
Authors: Siebert John W.
Published: July 2006

Pesticide‐induced beekills cost California beekeepers almost $@@‐@@1 million in 1975. California almond growers depend on bees for crop pollination and thus lost approximately $@@‐@@200,000 from beekills during this same year. A partial equilibrium framework is employed to calculate the marginal revenue product of a bee colony to the beekeeper and the marginal value product of a bee colony employed by an almond grower. The issue of bee protection is addressed in the context of the Tulare County citrus nectary. It is found that substantial net gains in total income were realized from the establishment ofa bee protection area.
Optimal Pesticide Application for Controlling the Boll Weevil on Cotton
Authors: Talpaz H. , Curry G. L. , Sharpe P. J. H. , DeMichele D. W. , Frisbie R. E.
Published: July 2006

A simulation model of interaction between the boll weevil insect subsystem and the cotton plant subsystem is presented. Field experiments provide the basis for validation of the model. Pesticide control scheme is introduced, and optimal control is achieved by using a numerical nonlinear dynamic optimization technique. Results of sensitivity analysis with respect to price changes are provided. Optimal policy for a single producer calls for three applications. Timing is robust, but dosage levels are sensitive to price changes.
Determinants of Milk Advertising Effectiveness
Authors: Thompson Stanley R. , Eiler Doyle A.
Published: July 2006

An analysis of the net returns to dairy farmers from generic fluid milk advertising is made in terms of the ability of advertising to increase the blend price of milk in excess of the cost of advertising. The evaluation of the economic effectiveness of generic fluid milk advertising programs extends beyond the measurement of the direct sales response to advertising. Specifically, the class I‐class II price differential and the class I utilization rate are found to be extremely important factors influencing the effectiveness of generic milk advertising programs, while the impact of the price elasticity of supply is relatively minor.
On Two Strategies for Choosing Principal Components in Regression Analysis
Authors: Mittelhammer Ron C. , Baritelle John L.
Published: July 2006

Two traditional methods used to form principal components (PC) regression estimates are reviewed, and small sample properties of the estimates are compared with OLS estimates. A Monte Carlo experiment is used to facilitate comparisons. Theoretical considerations and empirical observation indicate that the PC techniques tend to produce estimates lower in mean square error (MSE) than OLS estimates under conditions of high multicollinearity, low R2, and small sample size. Although under these conditions the PC techniques may be preferred to OLS in the relative MSE sense, MSE in the absolute sense may still render the PC estimates useless in applications.
The Impact of Technical Change on Income Distribution: The Case of Rice in Colombia
Authors: Scobie Grant M. , T. Rafael Posada
Published: July 2006

A national rice research program adapted and developed modern rice varieties for irrigated culture. Their rapid and widespread adoption led to substantial increases in production, and a concomitant fall in the price of rice. This paper examines the incidence of both the gross benefits and the costs of the research program, by income level. As rice is a principal foodstuff, the net benefits, both absolute and relative, accrued disproportionately to the poorest households.
Attitudes Toward Risk: Experimental Measurement in Rural India
Authors: Binswanger Hans P.
Published: July 2006

Attitudes toward risk were measured in 240 households using two methods: an interview method eliciting certainty equivalents and an experimental gambling approach with real payoffs which, at their maximum, exceeded monthly incomes of unskilled laborers. The interview method is subject to interviewer bias and its results were totally inconsistent with the experimental measures of risk aversion. Experimental measures indicate that, at high payoff levels, virtually all individuals are moderately risk‐averse with little variation according to personal characteristics. Wealth tends to reduce risk aversion slightly, but its effect is not statistically significant.
Economics of Electrical Energy from Crop Residue Combustion with High Sulfur Coal
Authors: Hitzhusen F. J. , Abdallah Mohammed
Published: July 2006

The economic feasibility of utilizing corn stover as a coal supplement in small to medium‐sized, coal‐burning steam‐electric plants appears promising, particularly when the low sulfur emission value of corn stover is considered. Two case steam‐electric power plants located in Ames, Iowa, and Peru, Indiana, are analyzed utilizing three harvest and collection systems and alternative values for several key technical and economic parameters. These results combined with data from a sample of steam‐electric plants in the north central United States are used to assess the potential for this renewable low sulfur energy source.
Valuing Increments and Decrements in Natural Resource Service Flows
Authors: Brookshire David S. , Randall Alan , Stoll John R.
Published: July 2006

A general model for valuation of changes in natural resource service flows, entirely consistent with Hicksian concepts of consumer surplus, is developed. It is a total value model, applicable to all classes of goods: divisible and indivisible in production, divisible and indivisible in consumption, exclusive and nonexclusive. The standard result of partial equilibrium microeconomics—price is equal to value at the margin‐may be derived as a special case from this model. An empirical application involving the valuation of changes in the provision of wildlife‐related amenities is presented.
Economic and Policy Implications of the 160‐Acre Limitation in Federal Reclamation Law
Authors: Seckler David , Young Robert A.
Published: July 2006

Proposals for strict enforcement and, conversely, for relaxation or elimination of acreage limitations in federal irrigation projects have arisen in response to recent court decisions regarding two large California irrigation districts. These proposals are examined against criteria including distributive justice, allocative efficiency, and administrative workability. Empirical evidence is offered which shows that proposed regulations would permit overly generous family incomes in the two areas and brings into question the existence of significant economies associated with larger size farms. An alternative policy instrument, based on control of the water supply, rather than of the land, is proposed so as to reconcile more effectively conflicting policy objectives.
Modeling the Decision to Produce Vegetables at Home
Authors: Blaylock James R. , Gallo Anthony E.
Published: July 2006

The household decision to produce vegetables at home was found to be influenced significantly by the area of household residence, homeownership, race, source of income, the number and ages of adults in the household, and the potential for saving money. It was estimated that an average gardening household saved approximately $‐40 per year on vegetables. This is approximately twenty percent of the average amount spent on vegetables in 1977 by nongardening households. A simultaneous equation model was estimated to derive these results.
Testing Asset Fixity for U.S. Agriculture
Authors: Chambers Robert G. , Vasavada Utpal
Published: July 2006

The asset fixity hypothesis is formulated in terms of a putty‐clay technology. Statistical tests for asset fixity based on an estimated cost function are performed. All forms of fixity considered are rejected statistically. Estimated cost function parameters are used to investigate substitution and technical change in U.S. agriculture. Inputs are generally substitutes and technical change is cost reducing. Implications for the investigation of agricultural investment are discussed.
Income Distribution in Agriculture: A Unified Approach
Authors: Quizon Jaime B. , Binswanger Hans P.
Published: July 2006

This paper develops a class of partial equilibrium models capable of analyzing in a unified way a number of market‐transmitted distributional consequences of a variety of exogenous shocks in agriculture. The shocks include technical change (neutral or biased), changes in the supply of agricultural inputs or in the demand for agricultural outputs, and government interventions. The models accommodate more than two primary factors of production and more than one region with or without constraints on factor mobility.
Forecasting Short‐Run Fed Beef Supplies with Estimated Data
Authors: Trapp James N.
Published: July 2006

Unknown aggregate data series for the placement weight, growth rate, and sex composition of cattle placed on feed are estimated. The estimates are made by treating the unknown data as time‐varying parameters of a cattle‐on‐feed growth and inventory stimulation model. A nonlinear optimization algorithm is used to estimate the unknown parameter series that optimize the model's simulation accuracy. Incorporation of the estimated series into a traditional econometric fed‐beef‐supply forecast model improved the model's forecast accuracy. The methodology used provides a general procedure for estimating unknown aggregate data using simulation models based upon microrelationships.
The Supply and Demand of Marketing Contracts under Risk
Authors: Buccola Steven T.
Published: July 2006

Bernoullian decision theory is used to characterize a firm's willingness to purchase or sell a good under contract. Contract supply and demand functions are then specified in which willingness to contract is related to contract‐pricing provisions, to decision maker risk aversion, to open market opportunities, and to other factors. On the basis of these relations, a theory of exchange is proposed which incorporates decision making under risk. Implications of the analysis differ by contract type; cost‐plus and fixed‐price forward deliverable contracts are emphasized.
Imports and the Supply of Winter Tomatoes: An Application of Rational Expectations
Authors: Shonkwiler J. Scott , Emerson Robert D.
Published: July 2006

A model of the Florida tomato industry is formulated under the hypothesis that growers make production decisions as rational economic agents. This assumption implies that anticipated Mexican tomato imports as well as other economic variables are taken into account when the planting decision is made. Maximum likelihood estimation methods are used to solve the simultaneous equations model, and the implications of the model's reduced form are analyzed. The empirical findings are consistent with the rational expectations hypothesis that producers respond to market information in its entirety when making acreage decisions.
Migration to the United States and Mexican Rural Development: A Case Study
Authors: Mines Richard , de Janvry Alain
Published: July 2006

In‐depth study of Las Animas, Mexico, allows us to analyze the impact of migration to the United States on both sending community and receiving labor markets. As the community becomes increasingly involved in migration, tendencies can be identified regarding changing migration patterns, class differentiation among villagers, impact of migration on village economy, and the changing role of Mexican workers in California labor markets. Results indicate the importance of social networks in determining the outcome of migration; while migration is individually rational, it is a factor of stagnation for village economy, and it helps reproduce segmented California labor markets.
U.S. Demand for Selected Groundfish Products, 1967–80
Authors: Tsoa Eugene , Schrank William E. , Roy Noel
Published: July 2006

The expansion of national fisheries jurisdiction to the two‐hundred‐mile limit enabled maritime nations to allocate increased shares of the fish catch off their shores to their own fishermen. The Atlantic groundfish catches of Canada and the United States are sold primarily on the American market. A Nerlovian inventory adjustment‐price expectations model is estimated for the American demand for groundfish. Income and price elasticities are perverse. The ability of the American market to absorb the increased anticipated catches are therefore limited, and benefits of extended fisheries jurisdiction will be lost unless marketing arrangements are substantially changed.
The Off‐Farm Labor Supply of Farmers
Authors: Sumner Daniel A.
Published: July 2006

Theoretical and empirical models are developed to examine the off‐farm wages, labor force participation, and hours of work of farmers. Econometric estimates use data from a 1971 survey of Illinois farmers. The off‐farm wage depends on farmer human capital and the local labor market. The major result confirms the. sensitivity of off‐farm work to economic incentives. A 10% increase in the off‐farm wage entails an 11% increase in hours of off‐farm work holding farm characteristics constant. Results also indicate effects of seasonality, risk, and life cycle factors on off‐farm work.
Use of Life Insurance to Fund the Farm Purchase from Heirs
Authors: Tauer Loren W.
Published: July 2006

General stochastic dominance is used to analyze the use of life insurance versus installment payments to fund the purchase of a decedent's business interest from off‐farm heirs. Generally, a risk preferrer prefers an installment purchase. The percentage of insurance funding preferred increases as aversion to risk increases. Higher income tax rates, lower discount rates, and lower premium costs move the preference for greater percentages of life insurance to lower levels of risk aversion. The funding decision clearly depends upon the characteristics of the individuals involved in the business. Nevertheless, partial funding with life insurance appears optimal in many cases.
“Small” or “Large” Farm: Some Methodological Considerations
Authors: Doran Howard E.
Published: July 2006

Often the estimation of agricultural production technologies in less developed countries is achieved by dividing the sample arbitrarily into “small” and “large” farms and estimating a separate production function for each group. This is equivalent to including an appropriate dummy variable in a single regression on the whole sample. A modification of this approach is to replace the dummy variable (a step‐function) by either a cumulative normal or logistic function. The parameters of such a “generalized dummy variable” convey valuable information on whether a small‐large categorization is appropriate and, if so, where the division should be made.
Efficient Redistribution through Commodity Markets
Authors: Gardner Bruce
Published: July 2006

Efficiency in redistribution is measured in terms of deadweight loss generated per dollar of economic surplus transferred between consumers and producers of a commodity by means of market intervention. The implications of supply and demand elasticities for efficiency in redistribution are examined with special attention to the comparison of production control and deficiency payment programs. The results may be used to aid in the evaluation of commodity programs and as a basis for consideration of the hypothesis that observed policies are efficient, given the political power of interest groups.
The Adoption of Reduced Tillage: The Role of Human Capital and Other Variables
Authors: Rahm Michael R. , Huffman Wallace E.
Published: July 2006

This paper presents a model of adoption behavior and explains differences econometrically in farmers' decisions to adopt reduced‐tillage practices and in the efficiency of farmers' adoption decisions. The empirical results, obtained from microdata, show that the probability of adopting reduced tillage in corn enterprises differs widely across farms and depends on soil characteristics, cropping systems, and size of farming operation. The results also show that farmers' schooling enhances the efficiency of the adoption decision.
Heterogenous Expectations and Farmland Prices
Authors: Brown Keith C. , Brown Deborah J.
Published: July 2006

This paper examines the effect of heterogenous expectations about the future among potential farmland buyers. It is optimal for each seller to have a reservation price in excess of the value he attaches to the future stream of income attributable to owning the land if he thinks that some potential buyers may be more optimistic than he. A formula for the optimal reservation price is presented, and a numerical illustration is shown. An extremely preliminary empirical test using Corn Belt and Lake State data is made of the importance of optimists in determining land prices for 1968–81.
Constraints on Oxen Cultivation in the Sahel
Authors: Delgado Christopher L. , McIntire John
Published: July 2006

Ox‐powered cultivation is common in parts of the Sahel, yet most farmers in the region continue to cultivate manually. Insights from oxen farms in Mali are compared to nonadopters in Upper Volta. Ox‐driven technology in the Sahel may be more labor shifting than labor saving. Linear programming models indicate a prohibitive opportunity cost of extra labor required for team maintenance and use on small, rainfed farms growing traditional millets and sorghums in Upper Volta. Farm simulations suggest that ox plowing increases cash crop acreage, but clearly profitable adoption requires companion innovations to boost labor productivity in peak periods.
Private Investment in Forest Management and the Long‐Term Supply of Timber
Authors: Adams Darius M. , Haynes Richard W. , Dutrow George F. , Barber Richard L. , Vasievich Joseph M.
Published: July 2006

Timber supply behavior of private forest owners is a major uncertainty in long‐term forest product market projections. A model of private supply is developed that explains both harvest and forest management investment decisions. Comparison of two fifty‐year projections, one assuming constant management intensity and a second using the harvest‐investment model, indicates that projected levels of investment would (a) have little impact on markets prior to the year 2000, (b) stabilize real wood product prices after 2000, (c) eliminate softwood lumber imports by 2030, and (d) expand the dominant role of southern forest regions in wood product markets.
Optimal Expenditures for Agricultural Research and Extension: Implications of Underfunding
Authors: White Fred C. , Havlicek Joseph
Published: July 2006

Significant increases in agricultural productivity will be needed for the United States to meet its future food policy goals related to an abundant and stable food supply. The nation's ability to meet this challenge will depend on the level of investment in agricultural research and extension. Each dollar of underfunding relative to the economically efficient level of research and extension expenditures (a) will cost the government $@@‐@@2.56 ($@@‐@@1.50 discounted) if it later makes up for the low investment level or (b) will cost consumers $@@‐@@4.39 ($@@‐@@3.07 discounted) if the government does not make up for the low level of investment.
Agricultural Export Dumping: The Case of Mexican Winter Vegetables in the U.S. Market
Authors: Schmitz Andrew , Firch Robert S. , Hillman Jimmye S.
Published: July 2006

This paper examines the 1978 agricultural dumping charge brought by Florida winter vegetable producers against Mexican growers. It discusses “fair value” in the context of three antidumping criteria: prices at home and abroad, selling below cost of production, and third‐market test. The U.S. Department of Commerce found in favor of the Mexican producers by using the third‐market test—a test which leads to ambiguous results. It is the authors' contention that the law should be changed so that future cases can be decided on a “normal business practice” concept, accounting for production and costing decisions unique to highly perishable products.
Adjustment Costs and Rational Expectations: An Application to a Tobacco Export Model
Authors: Zanias George P.
Published: July 2006

The effect of adjustment costs on international trade has been captured in an ad hoc fashion in past analysis, whereas a certainty environment is many times assumed. In this article adjustment costs are explicitly considered in the modeling procedure of tobacco exports from Greece, and rational expectations are introduced. The results are consistent with considerable price competition, and a large difference between immediate and long‐run responses, due to adjustment costs, that explain in part the evolution of tobacco exports from Greece and suggest that higher elasticities might be found in international trade if adjustment costs are properly treated.
The Poultry Market: Demand Stability and Industry Structure
Authors: Thurman Walter N.
Published: July 2006

The stability of the demand for poultry meat and specification issues in its estimation are explored. The analysis concludes that the demand for poultry meat shifted out in the early 1970s. At the same time, the demand relationship between poultry and pork changed from substitution to independence. A second conclusion is that poultry price is predetermined for demand in annual U.S. data, while quantity is not. A predetermined price suggests several market structures. Exogeneity tests are performed to distinguish among them. The results are consistent with a competitive, constant returns‐to‐scale‐industry facing elastic factor supplies.
Multiple Objectives in Agricultural Planning: A Compromise Programming Application
Authors: Romero Carlos , Amador Francisco , Barco Antonio
Published: July 2006

This article shows how multiobjective programming, compromise programming, and filtering techniques can be used to tackle some problems found in agricultural planning. A real case involving the establishment of workers' cooperatives within an agrarian reform program in Andalusia (Spain) is studied. The underlying problem is to find a compromise between the following objectives: employment, seasonal labor, and business profitability. The multiobjective programming approach is used to find the efficient set among these objectives, and after a filtering procedure, a compromise between the objectives is established based on the compromise programming approach.
Freight Charge Variations in Truck Transport Markets: Price Discrimination or Competitive Pricing?
Authors: Beilock Richard , Garrod Peter , Miklius Walter
Published: July 2006

It is well known that truck freight rates for different commodities over a given route vary and that rates per unit distance for the same commodity over different routes vary. In previous studies this variation has been attributed to noncompetitive behavior. In this paper a hypothesis that observed variations in truck rates are consistent with competitive behavior is tested using conjoint analysis. Trade‐offs between costs or rates and other attributes of transport service are estimated from experiments using panels of truck brokers and carriers. The results are consistent with competitive behavior in the trucking industry.
Adult Equivalent Scales Once More—A Developmental Approach
Authors: Tedford John R. , Capps Oral , Havlicek Joseph
Published: July 2006

Descriptions of adult equivalent scale models typically do not explain why or provide the explicit rationale underlying their selected age classes and life cycle components. A model is presented where the life cycle is comprised of a sequence of developmental and transitional phases. A comparison of adult scale parameter estimates for total food expenditure from this model is made with estimates from the Blokland and Buse‐Salathe models. The findings suggest that the Blokland model is too restrictive to portray consumer behavior over the life cycle. Empirical results based on the proposed model are similar to those based on the Buse‐Salathe model.
Causality of U.S. Agricultural Prices and the Money Supply: Further Empirical Evidence
Authors: Saunders Peter J.
Published: July 2006

Empirical evidence presented in this study indicates that the results of causality tests of U.S. agricultural prices and the money supply are sensitive to the lag selection. Relying on the minimum final prediction error causality testing technique, a unidirectional causal flow is established from the monetary base to retail level agricultural prices. No such flow is found to exist from M2 to retail agricultural prices. When farm‐level agricultural prices are investigated, no causal flow exists from any of the measures of the money supply to farm prices.
Incorporating Environmental Considerations in Pest Control Advice for Farmers
Authors: Moffitt L. Joe
Published: July 2006

This article develops a model for incorporating environmental quality objectives into pest control advice provided to farmers by agricultural agencies. The model relies on existing institutions and current pest management decision practice and its use has potential for improvements in farm profit as well as environmental quality.
Does an Exhaustible Resource Usually Have Many Near‐Optimal Depletion Paths?
Authors: Rowse John
Published: July 2006

In a recent article Chapman finds that different depletion paths for a highly abstract world oil model yield objective function values close to the optimal level. In this article the near optimality of Chapman's marginal cost pricing solution is explained and many other near‐optimal solutions to his competitive model are identified. Furthermore, evidence is cited that multiple near optima emerge from numerical exhaustible resource models incorporating several important real‐world complexities and reasons for this occurrence are provided. The principal implications for public policy and economic theory are also discussed.
Vector Autoregression Forecasting Models: Recent Developments Applied to the U.S. Hog Market
Authors: Kaylen Michael S.
Published: July 2006

Bayesian estimation and the exclusion of variables are two basic approaches to the improvement of vector autoregression forecasting models. This study presents a method which combines and extends several techniques within the exclusion‐of‐variables approach. Several quarterly hog market models are estimated and out‐of‐sample forecasts from 1977 through 1984 are evaluated. The results suggest the proposed method compares favorably to other exclusion‐of‐variables techniques as well as to the more sophisticated bayesian approaches.
A Sure Bet on Symmetry
Authors: Paris Quirino
Published: July 2006

This paper argues that assertions appearing in the literature about alleged failure of duality to recover all the desired information about the case of multiple outputs with fixed allocatable inputs are incorrect. The paper shows that through the use of shadow prices of fixed inputs, it is possible to apply the familiar Euler‐Legendre transformation and recover all the desired information. The principal avenue for achieving these results is the process of decoupling the primal from the dual problem.
Market Intervention and International Price Stability
Authors: Zwart Anthony C. , Blandford David
Published: July 2006

A simple model is used to analyze the impact of domestic policies on international price stability. The impact of policies on the variance of world prices depends on the type of measures used, policy parameters, and whether instruments are used singly or in combination. Domestic agricultural policies are normally assumed to destabilize world prices. The model demonstrates that this may not occur, particularly when multiple interventions are used. Currently there is considerable emphasis on the reduction of protection. How this is achieved may have important implications for the stability of international prices as well as their average level.
Econometric Modeling of the Capitalization Formula for Farmland Prices
Authors: Burt Oscar R.
Published: July 2006

An econometric model is formulated to explain the dynamic behavior in farmland prices. A second‐order rational distributed lag on net crop‐share rents received by landlords captures the dynamic movements of prices and performs well in conditional post‐sample forecasts. The adjustment path of land prices in response to a perturbation in rents is a protracted dampened cycle. The implicitly estimated tax‐free capitalization rate on rent associated with equilibrium land price is 4.0%. Neither the expected rate of inflation nor an exponential trend on rent expectations has a significant effect on land prices.
Estimation of a Two‐Level Demand System with Limited Dependent Variables
Authors: Yen Steven T. , Roe Terry L.
Published: July 2006

A two‐level demand model was derived from a strongly separable conditional indirect utility function to analyze Dominican rural and urban household consumption at different income levels. For samples with significant zero consumption, a multivariate limited dependent variable model utilizing the concept of virtual prices was used to obtain consistent estimates of consumption parameters. Results show that households with higher incomes tend to be less responsive to own‐price and income changes in consumption of most food and nonfood commodities. For demographic variates, the elasticities of rice and aggregate food with respect to household composition variables are all positive with few exceptions.
Measuring Productive Efficiency in Multiple Product Agribusiness Firms: A Dual Approach
Authors: Akridge Jay T.
Published: July 2006

Measuring retail fertilizer plant efficiency is difficult, given the range of outputs produced by these multiple product firms. A frontier multiproduct cost function was employed to measure productive efficiency. Results suggest the average plant could lower variable costs by 10% through more effective operations. Allocative inefficiency was minimal, indicating management should focus on improving technical efficiency. The limitations of employing a single‐product model in a multiproduct situation are demonstrated.
Supply Response in the U.S. Sheep Industry
Authors: Whipple Glen D. , Menkhaus Dale J.
Published: July 2006

A dynamic supply model of the U.S. sheep industry is constructed. The model incorporates restrictions on fixed capital and the demographic characteristics of the breeding flock. The model is estimated using least squares techniques and simulated to generate a matrix of short‐ and intermediate‐run elasticity estimates. The estimates indicate that sheep supply is positively related to lamb price in the short run and the intermediate run (ten plus years), although inelastic in the short run. The supply response to wool price also is positive and quite elastic in the intermediate term. These results imply that both lamb and wool prices are important to the maintenance of the U.S. sheep industry.
An Economic Analysis of Alternative Grazing Fee Systems
Authors: McCarl Bruce A. , Brokken Ray F.
Published: July 2006

Congress called for an evaluation of potential grazing fees and fee alternatives by 1985. This study contributes to that evaluation and constitutes an economic evaluation of the current and seven other fee systems. Fee systems are evaluated for total welfare, income distribution, future discrepancies between fees and forage values, public administration cost, usage potential, administrative feasibility, and data requirements. These criteria are found to be mutually inconsistent, particularly for welfare, future discrepancies, public administration cost, and income distribution. Fee systems most consistent with these criteria involve ones based on private land lease rates, government administration costs, or competitive bidding.
Regulation in a Dynamic Market: The U.S. Dairy Industry
Authors: LaFrance Jeffrey T. , de Gorter Harry
Published: July 2006

An econometric model of the U.S. dairy market is estimated for the period 1950–80. The economic costs of the dairy program for the period 1965–80 are calculated using ex ante, ex post, and long‐run demand and supply functions. Results indicate that the costs of the dairy program averaged from 430 to 590 million 1980dollars per year, depending upon the choice of economic surplus measure. The cost estimates depend only slightly on the year that the dairy program is assumed to have been terminated.
Human Capital, Adjustments in Subjective Probabilities, and the Demand for Pest Controls
Authors: Pingali Prabhu L. , Carlson Gerald A.
Published: July 2006

In addition to risk aversion, farmer behavior in an uncertain environment is governed by subjective probability estimates of random events. The estimates given here lend support to the idea that human capital development can improve farmers' ability to estimate pest damage probabilities. More accurate assessment of subjective probabilities leads to lower pesticide use and increases the use of labor‐intensive pest controls. The human capital variables with the largest effects are formal schooling and farmer experience, with smaller impacts from field scouting and extension schools.
The Grain Sector of the European Community: Policy Formation, Price Determination, and Implications for Trade
Authors: Gallagher Paul
Published: July 2006

A coresponsibility levy was added to high domestic prices and export subsidies in the EC. Levels for policy instruments could result from negotiations which favor producers but are acceptable to the public. Higher domestic prices and levies but lower export subsidies would occur if levy exemptions cover domestic marketings. If exemptions are excluded, low domestic prices, producer subsidies, and export taxes would occur. With exemptions, improved farm income and treasury surpluses would be achieved without injury to the public. Exemptions might be excluded because producers are better off and public cost is about the same with either program but producer subsidies require expanded public financing. Export reductions would occur under either program, given prevailing market conditions.
Systematic and Nonsystematic Risk in Farm Portfolio Selection
Authors: Turvey Calum G. , Driver H. C. , Baker Timothy G.
Published: July 2006

The concepts of systematic and nonsystematic risk are evaluated as risk measures in farm planning models. A diagonal quadratic programming model based upon a single‐index model yields farm plans similar to the full variance‐covariance quadratic program with four of thirteen farm plans being identical. Surprisingly, a linear programming model using only systematic risk produces farm plans that are identical to the full variance‐covariance quadratic program for eleven of thirteen income levels. Accordingly, it is suggested that single‐index‐based programming models may prove to be practical alternatives for deriving mean‐variance‐efficient farm plans.
The Effects of the Dairy Termination Program on Live Cattle and Wholesale Beef Prices
Authors: Marsh John M.
Published: July 2006

Distributed lags were used to estimate the beef price effects of the 1986‐87 Dairy Termination Program. The model estimated the direct effects of dairy slaughter and indirect effects of fed and nonfed supply response on the feeder, slaughter, and carcass markets. The results showed that, without offsetting U.S. Department of Agriculture red meat purchases, price reductions would have ranged from about $@@‐@@1.60 to $@@‐@@4.00 per hundredweight but were reduced by one‐half with the red meat purchases. If the Department of Agriculture had scheduled dairy slaughter more evenly over eighteen months, price reductions would have been 34% less.
Does the Law of One Price Really Hold for Commodity Prices?
Authors: Ardeni Pier Giorgio
Published: July 2006

In spite of the empirical failure of the “Law of One Price,” it is usually assumed that commodity prices are perfectly arbitraged, at least in the long run. This paper argues that this assumption is counterfactual and that much of the empirical evidence provided to support it is flawed and affected by econometric shortcomings (spurious regressions, nonstationarity in the data, inappropriate use of first differences). An alternative methodology (co‐integration), by which a long‐run relationship between nonstationary series can be tested, is proposed. Tests of nonstationarity and co‐integration for a group of commodities show quite uniformly that the “Law of One Price,” as a long‐run relationship, fails, and that deviations from the pattern are permanent.
Utilizing Scanner Data to Estimate Retail Demand Functions for Meat Products
Authors: Capps Oral
Published: July 2006

Retail demand relationships for steak, ground beef, roast beef, chicken, pork chops, ham, and pork loin were examined using scanner data from a retail food firm located in Houston. Own‐price elasticities were negative, statistically significant, and—except for roast beef—in the inelastic range. With few exceptions, cross‐price elasticities were positive and statistically significant. Nearness to payday was not a key factor, but seasonal patterns were evident. Except for pork commodities, own‐advertisement elasticities were positive and statistically significant. Generally speaking, cross‐advertisement effects were marginal.
The Value of Ideal Contingency Markets in Agriculture
Authors: Myers Robert J.
Published: July 2006

An incomplete markets equilibrium, in which no contingency markets are available, is compared to a complete markets equilibrium formed by introducing a futures market and a crop insurance market. The two regimes are compared using comparative static and welfare analyses. Numerical examples highlight important characteristics of the model and illustrate how the effects of introducing contingency markets can be quantified. The main conclusions are that contingency markets in agriculture increase economic efficiency, but there is no guarantee that farmers and consumers both benefit. It is found that futures and crop insurance markets may reduce farmer welfare when the demand for farm products is price inelastic.
Ranking of Agricultural Economics Departments: Influence of Regional Journals, Joint Authorship, and Self‐Citations
Authors: Beilock Richard , Polopolus Leo
Published: July 2006

Citations are increasingly used to indicate the quality of an academic unit's work. The set of literature or journals, however, becomes crucial to any ranking scheme. Citations from the broadly based Social Science Citations Index suggest a different ranking of departments than the ranking obtained from a somewhat narrowly focused set of North American journals of agricultural economics. The paper seeks to determine the influence of regional journals, joint authorship, and self‐citations on departmental rankings. Data bases of citations are developed for the faculty of seventy‐three departments of agricultural economics in the United States and Canada.
Expenditure Constraints and Profit Maximization in U.S. Agriculture
Authors: Lee Hyunok , Chambers Robert G.
Published: July 2006

This paper considers the effect of expenditure constraints on producer profit maximization. A theory of expenditure‐constrained profit maximization that provides restrictions for testing the competing null hypotheses of unconstrained and expenditure‐constrained profit maximization is developed. The resulting model is fitted to aggregate U.S. agricultural data. The hypothesis of unconstrained profit maximization is rejected, while expenditure‐constrained profit maximization cannot be rejected for U.S. agriculture. U.S. farmers apparently experience binding constraints in financing their variable production costs.
An Empirical Analysis of Intertemporal and Demographic Variations in Consumer Preferences
Authors: Kokoski Mary F.
Published: July 2006

Analysis of consumer demand behavior typically focusses on either the cross‐sectional dimension or takes a time‐series approach. The former ignores intertemporal changes in preferences, and the latter ignores differences in preferences among different groups of consumers. In this study two identically defined cross sections of expenditure data are used to estimate a nonhomothetic demand system for food at home for three demographic groups. The results indicate that both demographic and intertemporal differences in preferences are significant and that the method of incorporating demographic variables into the estimation is also important.
The Effect of the Value of Time on Food Consumption Patterns in Developing Countries: Evidence from Sri Lanka
Authors: Senauer Ben , Sahn David , Alderman Harold
Published: July 2006

This study shows that the opportunity cost of women's time can affect household food consumption patterns in developing countries. Demand equations for rice, bread, and the ratio of bread to total cereal consumption are estimated for urban Sri Lankan households. The demand specification, which is based on the “New Household Economics,” includes as explanatory variables the woman's estimated market wage and the household's “full income,” and alternatively “observed income.” Wages are estimated using the Heckman procedure to correct for sample selection bias.
Hog Cycles and Countercyclical Production Response
Authors: Hayes Dermot J. , Schmitz Andrew
Published: July 2006

The cycle in prices and output is not a permanent fixture of the pork industry. Exogenous shocks occasionally give rise to predictable cycles in pork prices, but these are eventually eliminated in a manner that is consistent with the existence of countercyclical producers. It normally takes several revolutions of the cycle before a sufficient number of countercyclical producers notice that a cycle has begun and are able to alter their production patterns sufficiently to eliminate it. Consequently, the more compelling the evidence is in favor of a cycle the less likely it is to continue.
Relative Prices and Money: Further Results for the United States
Authors: Devadoss S. , Meyers William H.
Published: July 2006

Empirical results support the hypothesis that agricultural prices respond faster than manufactured product prices to a change in money supply in the United States. Sims' vector autoregression (VAR) technique was applied in examining this hypothesis. The monte‐carlo integration method was used to test the significance of the impulse responses generated by the VAR technique.
The EEC's Wheat Price Policies and International Trade in Differentiated Products
Authors: de Gorter Harry , Meilke Karl D.
Published: July 2006

Several features of the EC wheat market are analyzed including the imperfect substitutability between imports and domestic supplies, the simultaneous import and export of wheat, and the distinct impact of threshold versus intervention policy prices. In theory, the impact of EC price policies on wheat consumption and net trade are found to be indeterminate a priori. Empirical results show that intervention prices have a positive impact on EC net exports, while increases in threshold (import) prices have decreased EC net wheat exports. Competing wheat exporters would prefer the EC to lower the intervention price to world levels but maintain threshold prices.
Asymmetry in Farm‐Retail Price Transmission for Major Dairy Products
Authors: Kinnucan Henry W. , Forker Olan D.
Published: July 2006

An econometric model is used to estimate the net relationship between changes in the farm‐level price of milk and changes in the retail prices of four major dairy products—fluid milk, butter, cheese, and ice cream. Results indicate that the farm‐retail price transmission process in the dairy sector is asymmetric. Retail dairy product prices adjust more rapidly and more fully to increases in the farm price of milk than to decreases. The role in pricing asymmetry of retail demand versus farm supply shifts is tested via a Chow‐type test. Asymmetry is tested using the Houck procedure for estimating nonreversible functions.
Signals or Noise? Explaining the Variation in Recreation Benefit Estimates
Authors: Smith V. Kerry , Kaoru Yoshiaki
Published: July 2006

This paper uses meta analysis to summarize the benefit estimates derived from travel cost recreation demand models. After reviewing approximately 200 published and unpublished studies prepared from 1970 to 1986, 77 were found to report either consumer surplus estimates or sufficient information to derive them. Using these estimates of the consumer surplus per unit of use from each study, it was possible to evaluate the influence of variables describing the site characteristics, the activities undertaken at each site, the behavioral assumptions, and the specification decisions. The findings provide clear support for using econometric methods to summarize results from diverse empirical studies. They highlight the important research issues in model development and offer a consistency check to the procedures used in benefit transfer analyses for policy evaluations.
The Creation of Dominant Firm Market Power in the Coconut Oil Export Market
Authors: Buschena David E. , Perloff Jeffrey M.
Published: July 2006

Econometric results show that prior to the 1970s the Philippine coconut oil export market was competitive but that legal and institutional changes in the early 1970s, which centralized control of the Philippine coconut oil‐refining and exporting industries, allowed the Philippines to exercise some of its potential dominant firm market power.
Dynamic Decisions under Risk: Application of Ito Stochastic Control in Agriculture
Authors: Hertzler Greg
Published: July 2006

In agricultural economics, most studies of dynamic decisions under risk have been empirical with less emphasis on theory. In finance, resource economics, and general economics, however, Ito stochastic control is popular for theoretical work. Optimal decisions can be characterized using the powerful Ito stochastic calculus. This paper describes the assumptions and methods of Ito control, constructs a dynamic model of agricultural decisions under risk, and illustrates with four examples.
Quality Variation and Quantity Aggregation in Consumer Demand for Food
Authors: Nelson Julie A.
Published: July 2006

Viewing the problem of “quality” variation in consumer demand for food asa problem of valid aggregation over goods leads to new insights. The simple sum of physical quantities, used as the measure of demand in the “quality” literature, is found to be a theoretically arbitrary and potentially misleading measure of demand when goods are heterogenous. Alternative measures of demand derived from restrictions on quality variation, consumer preferences, or relative prices, are investigated. A hypothetical example illustrates the use of a Hicksian composite commodity assumption. The empirical as well as conceptual merits of the various measures are discussed.
Measuring the Degree of Market Power Exerted by Government Trade Agencies
Authors: Love H. Alan , Murniningtyas Endah
Published: July 2006

The principle of profit maximization is used to derive an equilibrium condition for noncompetitive markets and to provide explicit parametric tests for market power exerted in both domestic and foreign markets by a government trade agency. Our study goes beyond previous work by considering simultaneous exertion of market power in both domestic and foreign markets and by jointly estimating market power parameters with cost and demand parameters. These innovations allow nested tests of market power as opposed to prevailing nonnested tests based on simulation models or conditional tests based on prior estimates of demand and cost parameters. Japan is found to exert a high degree of monopsony power in the world wheat market and no monopoly power in the domestic market.