bluuebunny/crossref_metadata_2025 huggingface dataset:
An Analysis of Growth of U.S. Farmland Prices, 1963–82
Authors: Alston Julian M.
Published: July 2006

Increases in expected inflation or real growth in net rental income to land have been proposed as alternative explanations of the dramatic real growth in U.S. farmland prices in the 1970s. In this paper the effect of inflation is shown to be theoretically ambiguous. An empirical analysis, using U.S. and international farmland prices, suggests that most of the real land price growth can be explained by real growth in net rental income to land. Increases in expected inflation have had a negative effect on real land prices, but the effect of inflation has been comparatively small.
A Spatial Analysis of Primary Health Care Markets in Rural Areas
Authors: Cowper Patricia A. , Kushman John E.
Published: July 2006

An exponential spatial interaction model was used to analyze primary‐health‐care‐seeking patterns of rural consumers in northern California. A macrotheory of spatial interaction and a microtheory of consumer search were combined as a logically consistent rationale for the model. Ordinary least squares proved superior to nonlinear least squares and a limited dependent variable maximum likelihood technique in predicting health‐care‐seeking patterns. The model was used to address policy questions including the impact of removing local providers on patient flows to remaining providers and the market shares that could be expected by a new provider.
Political Economy of U.S. Sugar Policies
Authors: Lopez Rigoberto A.
Published: July 2006

This article examines political‐economic decision making with respect to U.S. sugar policies. It evaluates the responsiveness of target prices and import quotas levels to changes in (a) the economic surpluses of market participants and (b) the federal budget deficit. Results indicate a weak linkage between sugar producer surplus and subsequent target prices levels but a strong linkage between the federal budget deficit and subsequent import quota levels. The influences of sugar users, corn sweetener producers, and foreign countries are also examined.
Risk Aversion and the Recommended Hedging Ratio
Authors: Bond Gary E. , Thompson Stanley R.
Published: July 2006

Individual risk preferences can have important implications for commodity hedging decisions. Existing literature suggests that when cash and futures positions are treated as endogenous, the optimal hedge ratio is independent of the risk parameter. Under similar conditions we demonstrate that the existence of nonlinear transaction or storage costs makes the decision maker's attitude toward risk a relevant determinant of the size of the optimal hedge ratio.
The Effects of Supply Shifts on Producers' Surplus
Authors: Miller Gay Y. , Rosenblatt Joseph M. , Hushak Leroy J.
Published: July 2006

Changes in the supply curve caused by technological improvements in production or changes in national policy may or may not benefit producers as a whole, depending on the type of shift in the supply curve. A structured analysis of different changes in the supply curve that model this situation is given, and the change in producers' surplus is examined depending on quantitative aspects of the supply and demand curves. For supply and demand curves that are linear or power functions, a small downward pivot of the supply curve will increase producers' surplus only if the equilibrium point is far enough into the elastic region of the demand curve, and any downward pivot of the supply curve will decrease producers' surplus if the equilibrium point is in the inelastic region of the demand curve. Similar results are obtained for the more general case of convex supply and demand curves.
The Reliability of Estimates of Environmental Benefits from Recreation Demand Models
Authors: Kling Catherine L.
Published: July 2006

Recreation demand models are commonly employed tools of economists interested in valuing improvements in environmental amenities. Despite their importance, little comparative work has been undertaken to examine the ability of the models to accurately estimate welfare changes. A simulation study designed to compare the reliability of estimated welfare measures (compensating variation and consumer surplus) from several commonly employed recreation demand models is presented. Results of the study indicate that choice of functional form and model specification are important determinants of the resulting estimates of benefits.
An Inverse Demand System for U.S. Composite Foods
Authors: Huang Kuo S.
Published: July 2006

This article provides a theoretically consistent framework for estimating a complete price dependent demand system, where the concept of distance function and its related substitution and scale effects are used. The approach is applied to a U.S. demand system consisting of thirteen food and one nonfood categories.
Producer Attitudes Toward Peanut Market Alternatives: An Application of Multivariate Probit Joint Estimation
Authors: Fu Tsu‐tan , Epperson James E. , Terza Joseph V. , Fletcher Stanley M.
Published: July 2006

Attitudes of peanut producers toward different market alternatives were analyzed assuming the absence of the government support program. A multivariate probit (joint estimation) model for ungrouped data was utilized to ascertain profiles of producers favoring private treaty markets and proposed organized markets. The joint estimation model allows for and measures correlation among market alternatives for greater accuracy in profile analysis. The analysis suggests considerable support for all three of the proposed organized markets. However, choice of alternatives should be considered by a group of potential traders selected on the basis of the profile analysis.
The Demand for Canadian Fats and Oils: A Case Study of Advertising Effectiveness
Authors: Goddard Ellen W. , Amuah Alex K.
Published: July 2006

The fats and oils market in Canada is characterized by generic (butter) and brand (margarine, shortening, vegetable oils) advertising. In this study the economic interrelationships in the consumption of fats and oils are examined and the effectiveness of the advertising programs is evaluated. The two‐stage demand model used is made up of a single equation determining Canadian aggregate expenditure on fats and oils and an expenditure share system derived from a translog indirect utility function for each of four products; butter, margarine, shortening, and vegetable oils. The demand for individual fats and oils is significantly affected by lagged advertising expenditure levels, habit persistence and a time trend, as well as the traditional variables of price and expenditure.
Tax Policy and U.S. Agriculture: A General Equilibrium Analysis
Authors: Hertel Thomas W. , Tsigas Marinos E.
Published: July 2006

This article emloys a computable general equilibrium model to analyze the effects of eliminating farm and food tax preferences in 1977. Tax differentials on capital income, labor payments, and production and sales taxes are each examined. Results indicate that these combined preferences lowered food costs by about $@@‐@@4.5 billion while enhancing after‐tax returns to farm land, labor, and capital. The associated general equilibrium tax expenditure is estimated to have been between $@@‐@@5.5 and $@@‐@@6.6 billion.
Evaluating Institutional Alternatives for Managing an Interrelated Stream‐Aquifer System
Authors: Young Robert A. , Morel‐Seytoux Hubert J. , Daubert John T.
Published: July 2006

Farmers relying on the South Platte River in northeastern Colorado for irrigation water have been found to be adversely affected by pumping from a groundwater deposit associated with the river. A simulation model of the hydrologic‐legal‐farmer decision system is developed and employed to analyze several institutional alternatives for managing the system. The “augmentation plan” approach recently developed by the state was shown to yield highest net incomes under both normal water supply and drought scenarios while protecting the prior rights of river water users. Anticipated opportunity costs of ground water use are internalized into pumpers' decisions.
Cross‐Compliance as a Soil Conservation Strategy: A Case Study
Authors: Batie Sandra S. , Sappington Alyson G.
Published: July 2006

The financial impacts of a hypothetical cross‐compliance program were estimated for seventy‐six farmers in Gibson County, Tennessee. Several federal program benefits were compared to the least‐cost method of achieving one of four different soil displacement limits to determine if the costs of voluntarily participating in a cross‐compliance program were greater than the benefits. If cost‐sharing were available, farmers would have a positive incentive to cross comply to 5 tons per acre per year on 57.3 percent of all fields. This figure rises to 90.9 percent compliance at 20 tons per acre per year.
A Market Equilibrium Analysis of the Impact of Risk on the U.S. Rice Industry
Authors: Brorsen B. Wade , Chavas Jean‐Paul , Grant Warren R.
Published: July 2006

An economic model of supply/demand for U.S. rice suggests that increases in risk result in decreased acreage and increased marketing margins. In a market equilibrium context, the empirical results also suggest rice production and rice prices are more responsive to changes in risk faced by marketing firms than changes in risk faced by producing firms.
Quasi‐Experimental Price Elasticities of Cigarette Demand and the Bootlegging Effect
Authors: Baltagi Badi H. , Goel Rajeev K.
Published: July 2006

This paper updates the Lyon and Simon quasi‐experimental price elasticities of cigarette demand and studies their sensitivity to changes in the cigarette market over time as well as their sensitivity to the effects of bootlegging. The results indicate a downward trend in these elasticities over time and an upward bias for states where bootlegging exists. However, once the comparison group is modified to include bootlegging‐free states only, this difference over time and across groups becomes statistically insignificant.
An Analysis of Rubber Supply in Sri Lanka
Authors: Hartley Michael J. , Nerlove Marc , Peters R. Kyle
Published: July 2006

An analysis of the supply response for perennial crops is undertaken for rubber in Sri Lanka, focusing on the uprooting‐replanting decision and disaggregating the typical “reduced‐form” supply response equation into several structural relationships. This approach is compared and contrasted with Dowling's analysis of supply response for rubber in Thailand, which is based upon a sophisticated reduced‐form supply function developed by Wickens and Greenfield for Brazilian coffee. Because the uprooting‐replanting decision is central to understanding rubber supply response in Sri Lanka and for other perennial crops where replanting activities dominate new planting, the standard approaches do not adequately capture supply response.
U.S. Soybean Yields: Estimation and Forecasting with Nonsymmetric Disturbances
Authors: Gallagher Paul
Published: July 2006

National average soybean yields are skewed with a relatively high chance of low yields. Maximum likelihood estimates support this hypothesis. Revised forecasts which account for skewed yields are positioned higher than forecasts based on the illusion of a symmetric distribution. Also, yield instability has been increasing steadily; the standard deviation of the soybean yield distribution is twenty‐five percent higher in the late 1980s than it was in the early 1970s.
Taxes, Farm Programs, and Competitive Advantage for U.S. and Canadian Farmers: A Case Study
Authors: Perry Gregory M. , Nixon Clair J. , Bunnage Kenneth J.
Published: July 2006

The objective of this study was to understand the impact of tax and social program policies on competitiveness in trade. A case study approach was used, comparing returns to representative wheat farms located in Montana and Alberta. The principal analytical tool was a financial simulation model. The results suggest farmers in Alberta have significant tax and social program advantages and that, for the base scenario, these advantages outweighed government farm program and production cost advantages enjoyed by the Montana farmer. Taxes and social program advantages became relatively less important with an increase in farm size.
Relationships among Labor, Bullock, and Tractor Inputs in Pakistan Agriculture
Authors: Ali Farman , Parikh Ashok
Published: July 2006

The purpose of this study is to examine relationships among different inputs on tractorized and non‐tractorized plots in the North West Frontier Province of Pakistan. The analysis is based on survey data for 1987–88 covering two seasons. A duality approach with a translog cost function is used to estimate cost and input shares. The estimated Allen elasticities of substitution, after correcting for sample selectivity bias, indicate that tractors are a substitute for human and animal labor. All the assumptions of the duality approach are fulfilled by the estimation procedure and the restrictions of theory are not rejected by the data.
The Supply of Off‐Farm Labor: A Random Coefficients Approach
Authors: Lass Daniel A. , Gempesaw Conrado M.
Published: July 2006

A joint model of off‐farm labor decisions for farm operator and spouse is presented. Attention is given to operator and spouse participation decisions as well as associated problems of multiple sample selectivity biases. Two‐stage fixed and random coefficient methods, corrected for possible selectivity biases, are used to estimate supply function parameters. Results indicate that supply function parameters are random. Variation in important supply parameters is investigated. Results also illustrate the importance of spouse decisions on off‐farm labor supply function structure.
Computer Adoption Decision—Implications for Research and Extension: The Case of Texas Rice Producers
Authors: Jarvis Anne Marie
Published: July 2006

This study identifies the characteristics of Texas rice producers who have adopted computers relative to nonadopters. Primary survey data obtained in the spring of 1990 was examined using logit adoption. Thirty–seven percent of the respondents use computers in their business. The results indicate that as farm size and business complexity increase so does the probability of computer adoption. Some evidence that the adoption of computer technology differs from production technology surfaced. Producers' decisions to adopt a computer are associated with the actions of their peers and family. Encouraging computer user groups and computer training courses for producers could encourage the adoption of computer technology.
United States Export Subsidies in Wheat: Strategic Trade Policy or Expensive Beggar‐Thy‐Neighbor Tactic?
Authors: Anania Giovanni , Bohman Mary , Carter Colin A.
Published: July 2006

This paper examines the domestic and international impacts of the U.S. Export Enhancement Program (EEP) for wheat. EEP uses targeted in‐kind subsidies to expand U.S. exports and was designed specifically to compete with subsidized exports from the European Community (EC). We argue EEP cannot be welfare‐improving for the U.S., even considering strategic trade theory. We then model EEP as an in‐kind, constrained, targeted export subsidy and determine its price, quantity, and budgetary effects. Empirical results show that no exporting country gains from EEP and that the intended loser, the EC, is only slightly harmed. We find the export subsidies generate only a small increase in U.S. wheat exports. EEP is an expensive program; based on our estimates for 1988, government cost of additional wheat exports under EEP reached $@@‐@@469 per metric ton.
Engel's Law and Linear‐in‐Moments Aggregation
Authors: Chambers Robert G. , Pope Rulon D.
Published: July 2006

Aggregation of individual Engel curves is considered such that aggregate food demand depends on the moments of the distribution of income across individuals. Given that aggregate demand is the sum of individual demands, consistent aggregation imposes a structure called the Linear‐in‐Moments form. This form is used to test whether the mean and second moment of income must be used to capture aggregate food demand. Empirical analysis strongly supports the proposition that both the mean and variance of income are required. Hence, our results show that aggregate food demand under consistent aggregation is inherently sensitive to changes in the distribution of income.
Acreage Decisions under Marketing Quotas and Yield Uncertainty
Authors: Babcock Bruce A.
Published: July 2006

A conceptual model examines how quotas and yield uncertainty affect acreage decisions. Production in excess of a quota can occur if the price for quota production is large relative to marginal costs. Increasing risk aversion increases expected production further if the risk of forfeiting quota revenue is given greater weight than avoiding production risk. Allowing quota carryover decreases production levels. Simulations indicate the most important factors determining expected production levels are (a) the existence of a carryover provision, (b) the price differential given to quota production relative to nonquota production, and (c) the level of marginal costs relative to the quota price.
Are Farrowing Intentions Rational Forecasts?
Authors: Runkle David E.
Published: July 2006

This paper tests whether quarterly data on hog farmers' sow‐farrowing intentions released in Hogs and Pigs are rational forecasts of actual farrowings. The empirical results show that neither one‐ nor two‐quarter‐ahead intentions are rational forecasts. Econometric methods and the implications of the empirical results for the rational expectations hypothesis are also discussed.
Campaign Contributions and House Voting on Sugar and Dairy Legislation
Authors: Abler David G.
Published: July 2006

In this article, I explore the determinants of campaign contributions by sugar and dairy producer PACs and their role in voting on sugar and dairy legislation in the U.S. House of Representatives. Contributions and voting may be linked in two ways. First, a group can buy votes from a legislator who would otherwise not support the group. Second, it can help elect a legislator who is ideologically predisposed to support the group. Results indicate that the first linkage is not important. Virtually the entire observed association between money and voting is a result of the second linkage.
An Econometric Model of the U.S. Beekeeping Industry
Authors: Willett Lois Schertz , French Ben C.
Published: July 2006

This paper presents a dynamic econometric model of the U.S. beekeeping industry for policy analysis and economic projections. Data from 1952 to 1984 were used to estimate the model by three‐stage least squares. The model indicates that, when the federal price support for honey exceeded the market price, the federal program had a significant impact on several sectors of the industry. A comparison of beekeeper revenue, consumer expenditures, and federal government expenditures suggests the honey support program was an ineffective means of supporting honey prices from 1982 through 1984.
Flexible Specification of Mixed Demand Systems
Authors: Moschini Giancarlo , Anuradha Vissa
Published: July 2006

Common flexible functional forms are not very useful for modeling mixed demand systems because derivation of mixed demands requires closed forms for both direct and indirect utility functions. In this paper we study the alternative of using a direct approximation to mixed demands. We develop a new approach to Slutsky relations for mixed demand functions allowing formulation of a Rotterdam mixed demand model. The resulting mixed demand system is illustrated with an application to meat demand in Canada.
Pricing Commodity Options when the Underlying Futures Price Exhibits Time‐Varying Volatility
Authors: Myers Robert J. , Hanson Steven D.
Published: July 2006

Standard commodity option pricing models assume proportional changes in the underlying futures price are i.i.d. normal. Empirical evidence suggests commodity futures price movements exhibit excess kurtosis and time‐varying volatility. This paper presents option pricing models when time‐varying volatility and excess kurtosis in the underlying futures price can be modeled as a GARCH process. Empirical results suggest that the GARCH option pricing model outperforms the standard Black option‐pricing model, which uses historical volatilities. A closed‐form approximation model using a variance forecast generated from the estimated GARCH process also outperforms Black's model and in many cases the general GARCH model as well.
Dynamic Fertilizer Nutrient Demands for Corn: A Cointegrated and Error‐Correcting System
Authors: Denbaly Mark , Vroomen Harry
Published: July 2006

Past studies of the demand for fertilizer have typically been based on static models which assume that adjustments toward equilibrium are instantaneous. This article builds on past studies by developing a dynamic model of nutrient demands of corn. Unit root and cointegration tests demonstrate that fertilizer demands of corn are dynamic. Therefore, statistically correct estimates can be obtained using a dynamic model. A set of error‐correction models for nitrogen, phosphate, and potash use in corn production are estimated. Results provide strong statistical evidence that nutrient demands of corn are price inelastic both in the short and the long run.
A Multimarket Bounded Price Variation Model under Rational Expectations: Corn and Soybeans in the United States
Authors: Holt Matthew T.
Published: July 2006

The bounded prices model under rational expectations is extended to a multimarket setting. Because the resulting rational expectations model is highly nonlinear, Fair and Taylor's iterative procedure is employed in conjunction with the multimarket framework to obtain maximum likelihood estimates of a supply‐demand model for corn and soybeans. The estimated model is then used to simulate the market equilibrium effects associated with removing price support and acreage set‐aside programs over the sample period. Among other things, the results reveal that acreage set‐asides have dominated the induced supply effects of price support programs for corn.
The Transition of Punjab Agriculture: A Choice of Technique Approach
Authors: McGuirk Anya M. , Mundlak Yair
Published: July 2006

The introduction of modern crop varieties in Punjab, India, led to rapid income growth. Adoption rate and level of the new varieties is examined using a choice‐of‐technique approach, in which techniques of production are identified by crop variety, season of growth, and method of production. Modeling the dynamic effects of technology, resource availability, and incentives reveals a consistent picture of the transition process. The results show the importance of incentives and availability of quasi‐fixed inputs such as irrigation, fertilizers, and roads. By the late 1970s, the long‐run aggregate supply elasticity was between 1.3–1.5.
Impact of Damage Control and Quality of Output: Estimating Pest Control Effectiveness
Authors: Babcock Bruce A. , Lichtenberg Erik , Zilberman David
Published: July 2006

Damage control affects both realized output and product quality; ignoring quality leads to underestimates of damage control agent productivity. Empirical analysis of pesticide use in North Carolina apple production using the damage control approach shows that fungicides and pruning reduce both yield losses and quality degradation, while insecticides reduce quality damage. Quality accounts for substantial shares of profit‐maximizing insecticide and fungicide use. Use of both insecticides and fungicides appears excessive, while the potential for substitution between mechanical and chemical disease control appears large. A Cobb‐Douglas specification of the quantity production function gives substantially larger estimates of fungicide productivity than the damage control specification.
Nonparametric Measures of Scale and Technical Change for Competitive Firms under Uncertainty
Authors: Flacco Paul R. , Larson Douglas M.
Published: July 2006

Measures of scale elasticity and rate of technical change can be obtained nonparametrically in the Sandmo model of competitive firms with nonlinear risk preference responding to output price risk. Information on risk attitudes is not needed for measurement of scale elasticity because it is observable as the ratio of average to marginal cost, as in certainty models. The cross section of panel data sets can be used to develop a nonparametric marginal cost measure, which permits identification of scale elasticity; the technical change measure then follows from the scale measure and the time‐series portion of the panel data set.
Earnings of Kansas State University Agriculture Graduates: 1978–88
Authors: Barkley Andrew P.
Published: July 2006

Survey data were utilized to identify salary determinants of agriculture graduates at Kansas State University. Findings include a secular decline in real annual starting salaries for Bachelor of Science degree holders. Salary determinants include major field, double major, job location, type of occupation, grade point average, sex, marital status, and highest degree earned. Implications for teaching, advising, and curricula change are discussed.
Nonparametric and Semiparametric Estimation: An Analysis of Multiproduct Returns to Scale
Authors: Moschini Giancarlo
Published: July 2006

The nonparametric and semiparametric regression models based on kernel density estimation are reviewed, and they are applied to the analysis of returns to scale in dairy farms using a multioutput cost function. Semiparametric tests of constant returns to scale and homogeneity of production are developed, and their implementation show that both of these hypotheses are rejected. Kernel estimation of the local degree of multiproduct returns to scale confirms that the sample's dairy farms are characterized by a considerable degree of scale economies.
A Comparison of Alternative Crop Response Models
Authors: Frank Michael D. , Beattie Bruce R. , Embleton Mary E.
Published: July 2006

Three parsimonious models are hypothesized to represent com yield response to nitrogen and phosphorus. Each model imposes specific restrictions with regard to the elasticity of factor substitution and growth plateau. Nonnested hypothesis tests are used to evaluate the competing hypotheses. The results support the restrictions imposed by the Mitscherlich‐Baule model. For these data, corn response is characterized by limited substitution between nitrogen and phosphorus and a growth plateau. Further, the cost of using optimal input levels implied by the Mitscherlich‐Baule if it were not “true” is small relative to the other parsimonious forms and a translog approximation.
A Policy Preference Function for Government Intervention in the U.S. Wheat Market
Authors: Oehmke James F. , Yao Xianbin
Published: July 2006

This paper estimates a policy preference function that explains the government's choices of target prices, government held wheat stocks, and public wheat research funding. The policy preference function depends on producers' surplus, consumers' surplus, and budget expenditures. An important innovation in this paper is the inclusion of interactions between public research expenditures and other public policy variables. Results indicate that the government places a premium of 25% to 45% on the welfare of wheat producers of relative to budget expenditures, while wheat consumers' welfare is discounted as much as 50% relative to budget expenditures.
The Value of Weather Information in Market Equilibrium
Authors: Babcock Bruce A.
Published: July 2006

Increased accuracy of weather forecasts does not necessarily increase commodity supply or farmer welfare. This study presents a stylized model of competitive production with rational expectations and demonstrates that improved weather information harms farmers facing an inelastic demand. Contrary to the conclusions of previous studies, the decline in farmer welfare does not require an expansion in expected supply. Better weather information may signal farmers to produce less on average under an inelastic demand. A supply decrease occurs when increases in the physical productivity of applied inputs are dominated by adverse price consequences.
Earnings and Mobility of Legal and Illegal Immigrant Workers in Agriculture
Authors: Taylor J. Edward
Published: July 2006

This paper presents theoretical and empirical evidence that unauthorized immigrants are more likely to be selected into low‐wage, low‐skill farm jobs than are otherwise similar legal workers. Controlling for this selection process, the earnings of unauthorized workers are significantly lower than the earnings of legal workers in high‐skill farm jobs. These findings are shown to be consistent with expected profit maximization by farm employers. Legalization of farmworkers under the Special Agricultural Worker (SAW) program is not likely to increase farmworker earnings and may result in wage decreases in some farm jobs.
Optimal Storage and Marketing Over Space and Time
Authors: Benirschka Martin , Binkley James K.
Published: July 2006

Borrowing from the theory of optimal resource extraction, we develop the mechanism guiding efficient commodity storage and marketing over producing regions through the crop year. Optimal storage occurs at producing areas, and time in storage varies directly with distance to market. Prices grow with interest rates in locations where storage is efficient but more slowly elsewhere, which explains why market prices (i.e., prices at the market) grow more slowly than interest rates. The model is empirically supported by examining storage in the Corn Belt, rates of price growth at various points, and quarterly grain marketings.
The Inefficiency of Interest‐Rate Subsidies in Commodity Price Stabilization
Authors: Gardner Bruce L. , López Ramón
Published: July 2006

Interest‐rate subsidies have been used to stimulate commodity stockholding, with the intention of stabilizing prices. However, reductions in price variability can be achieved at less government cost using a direct storage subsidy, and it is possible that an interest‐rate subsidy will increase price variability even though the interest subsidy increases mean stocks held. These results are demonstrated using a stochastic dynamic programming model of optimal private storage, with parameter values relevant to agricultural commodity markets, and with particular reference to the U.S. soybean market.
Analysis of Food‐Away‐from‐Home Expenditure Patterns for U.S. Households, 1982–89
Authors: Byrne Patrick J. , Capps Oral , Saha Atanu
Published: July 2006

The two‐step decision process for food‐away‐from‐home (FAFH) consumption is empirically estimated using a generalization of the Heien and Wessells approach. Household information gathered by the National Panel Diary Group is used for the analysis. Marginal effects are corrected by untangling the respective variable impacts on the inverse Mills ratio. Expenditure and participation probability elasticities are similar to previous studies. Income elasticities are about 0.20, suggesting that the FAFH commodity is a necessary good for U.S. society. Northeastern households are less likely to consume FAFH than other households, but their expenditures are higher on average.
Off‐Farm Work Decisions of Farm Couples: Estimating Structural Simultaneous Equations with Ordered Categorical Dependent Variables
Authors: Kimhi Ayal , Lee Myoung‐jae
Published: July 2006

We estimate a full system of structural farm and off‐farm labor supply equations of farm couples as a set of simultaneous equations with categorical dependent variables. In a first step, the reduced form is estimated by ordered probit with unknown thresholds. Then, the identified structural coefficients are recovered from the reduced‐form coefficients through minimum distance estimation. Using census data from Israel, we find that for men, a one‐hour increase in farm labor supply causes a one‐hour decrease in off‐farm labor supply, but not for women. This could not have been found without estimating structural coefficients.
A Cost Analysis of Alternatives for Methyl Bromide for Postharvest and Quarantine Treatment of Apples and Cherries
Authors: Nelson Holly C.
Published: July 2006

Methyl bromide is currently the only accepted quarantine treatment for temperate fruit worldwide. Recent environmental issues and laws have created the need for an alternative to methyl bromide for postharvest and quarantine treatment of fruits and vegetables due to methyl bromide being classified as a Class I ozone‐depleting substance and subject to being withdrawn from production, importation, and use in the United States by the year 2001. The objective of this project was to analyze alternatives with capabilities equal to those achieved by methyl bromide for postharvest and quarantine treatment of apples and cherries. Published literature and personal interviews were used to develop partial budgets for the following scenarios: (1) benchmark—methyl bromide, (2) irradiation, (3) controlled atmosphere storage, and (4) cold treatments. Total operating and depreciation costs for apples for scenario 1 were $‐431,759.23 compared to $‐862,505.48 for scenario 2, and $‐607,744.02 for scenario 3. For the treatment of cherries, scenario 1 totaled $‐37,564.00 compared to scenario 2's $‐144,000.00. Scenario 3 is not applicable for cherries. With the loss of methyl bromide, cherries have a potential of $‐6,700,000 in lost revenues.
Quantifying Economic Benefits of Sow‐Herd Management Information Systems Using Panel Data
Authors: Verstegen Jos A.A.M. , Huirne Ruud B.M. , Dijkhuizen Aalt A. , King Robert P.
Published: July 2006

Economic benefits of management information systems (MIS) in sow farming were quantified by combining data from two survey studies. Panel analysis was conducted through estimation of a mixed‐effects model by ordinary least‐squares. Effects were analyzed both within farms and over farms at the same time, controlling for self‐selection bias and changes over time. Adjusted for other effects in the model, production on farms adopting MIS increased by 0.56 piglets per sow per year, indicating a return on investment of between 220% and 348%. Additional tests and checks indicate that this outcome is robust.
Do New York Dairy Farmers Maximize Profits or Minimize Costs?
Authors: Tauer Loren W.
Published: July 2006

The Weak Axiom of Profit Maximization and Weak Axiom of Cost Minimization were used to determine whether each of forty‐nine New York dairy farms displayed behavior consistent with profit maximization or cost minimization. These were tested for each farm across eleven years of data, correcting for technological change using previously estimated nonparametric Malmquist productivity indices. The results indicate that some were moderately successful in maximizing profits, but more came closer to minimizing costs. Over half of the observations were within 10% of minimum costs.
Quick and Easy Optimal Approach Paths for Nonlinear Natural Resource Models
Authors: Kolberg William C.
Published: July 2006

An analytical optimal time‐path solution method for nonlinear natural resource models based on backward induction is discussed. A method for estimating a time‐independent current period decision rule from the discrete‐point time‐path solution set generated with backward induction is then reviewed. A model of the northern anchovy fishery of California is used to compare the performance of this approach against previously reported results based on linear quadratic analytical dynamic programming and approximately optimal analytical current period decision rule solution methods. The approach provides an analytical shortcut alternative to numerical dynamic programming, without sacrificing precision.
Consistent Estimation of Armington Demand Models
Authors: Davis George C. , Kruse Nancy C.
Published: July 2006

Traditional methods of empirically implementing the popular Armington trade model are shown to result in theoretically and statistically inconsistent parameter estimates. A method for removing these inconsistencies within the framework of the Armington model is provided, along with a comparison of results of our new consistent procedure with those of the previous procedure.
In Search of Rational Government: What Political Preference Function Studies Measure and Assume
Authors: Bullock David S.
Published: July 2006

Political preference function (PPF) studies assume that policy‐making can be described by a mathematical problem in which a rational government maximizes a function of interest groups' welfares. The purpose of my paper is to explain in‐depth ramifications of PPF study assumptions and methodology. PPF studies that attempt to measure interest group political power do so by measuring marginal rates of transformation along a Pareto frontier. One can estimate political power with a PPF only if observed policies are Pareto‐efficient, which may depend on the assumed number of interest groups and policy instruments. Marginal rates of transformation need not reveal anything meaningful about interest group political power, and may incorrectly measure the direction of transfers.
Demand Response to Advertising in the Australian Meat Industry
Authors: Piggott Nicholas E. , Chalfant James A. , Alston Julian M. , Griffith Garry R.
Published: July 2006

The implications of model specification choices for the measurement of demand response to advertising are examined using Australian data. Single‐equation models versus complete systems and alternative corrections for autocorrelation are evaluated. Competing advertising efforts by two producer bodies are included. Across all specifications, the evidence on advertising effects is fairly consistent. In the preferred model, the only statistically significant effects of advertising are for Australian Meat and Livestock Corporation advertising (of beef and lamb) on the demand for beef (positive) and on the demand for chicken (negative). Australian Pork Corporation advertising does not have any statistically significant effects.
Taste Changes in the Demand for Food by Demographic Groups in the United States: A Nonparametric Empirical Analysis
Authors: Cortez Rafael , Senauer Ben
Published: July 2006

This study uses nonparametric techniques to analyze the stability of demand for nineteen major food categories among various demographic groups in the United States. Households are divided into population groups by income, the head's age, and the spouse's education level. The data used are from the 1980–90 “Diary” portion of the Bureau of Labor Statistics's annual Consumer Expenditure Survey. The programming model developed by Sakong and Hayes, with the modifications suggested by Chalfant and Zhang, is used to test for and measure taste changes. Substantial differences in preference trends between population groups are found for many of the food commodities.
Optimum Management of a Hierarchically Exploited Open Access Resource: A Multilevel Optimization Approach
Authors: Önal Hayri
Published: July 2006

A multilevel optimization approach is presented for determining the optimum management of the Texas brown shrimp fishery. Independent fisher groups harvest this open access resource in a hierarchical order without cooperation among themselves or with the management authority. The special structure of the problem is exploited to derive the fishers' optimum responses to any arbitrary specification of the policy variables (season and area closures). Empirical results indicate that significant losses of income and harvest value would occur if the fishery were unmanaged. The results also indicate that optimum closure policies vary significantly depending on the policy objective specification.
A Critical Assessment of Supply‐Demand Models of Agricultural Trade
Authors: Peterson Everett B. , Hertel Thomas W. , Stout James V.
Published: July 2006

We offer a critical assessment of static, deterministic, reduced form, supply‐demand (SD) models of agricultural trade. A commonly used and well‐documented model has significant limitations: no explicit treatment of factor mobility between farm and nonfarm sectors, nonzero profits in some sectors, no substitutability among feedstuffs in livestock sectors, violation of the law of one price, small marketing margins for some commodities, and incomplete coverage of the agricultural sector. Such limitations have significant impacts on the magnitude and direction of projected world price and welfare changes. We believe agricultural policy analysis should first focus on the remediation of these limitations before proceeding to more complex issues like dynamics and uncertainty.
Price Protection and Productivity Growth
Authors: Kalaitzandonakes Nicholas G.
Published: July 2006

This study provides empirical evidence on the relationship between price protection and productivity growth. From theoretical considerations, it is concluded that the impact of price protection on productivity growth is ambiguous. Although protectionism may in some instances stimulate investment and adoption of new technologies, efficiency may decrease, particularly when farm prices and income are high. Empirical evidence from the New Zealand beef/sheep industry indicates that high protection during the 1975–85 period produced negative productivity growth. Following market liberalization in 1985, productivity growth increased substantially.
Pesticide Residue Risk and Food Safety Valuation: A Random Utility Approach
Authors: Eom Young Sook
Published: July 2006

A new approach is developed for integrating consumers' risk perceptions with stated purchase behavior when consumption decisions must be made with incomplete information. The application involves health risks from exposure to pesticide residues on fresh produce. Unlike traditional food demand analysis, the present approach treats produce choices as discrete outcomes, resulting in a random utility model. Empirical results from a pilot survey suggest a clear linkage between perceptions and behavior in response to new risk information. Consumers' stated preferences for safer produce were primarily influenced by price differences and perceived risks, not by the technical risk information provided alone. However, the linkage between behavior and valuation was less clear cut. The risk/price tradeoffs entailed by contingent discrete choices indicate high price premia for small risk reductions and little variation in price premium across alternative risk reductions.
Modeling Regional Agricultural Production and Salinity Control Alternatives for Water Quality Policy Analysis
Authors: Lee Donna J. , Howitt Richard E.
Published: July 2006

Water development and allocation to competing uses without well‐defined water quality rights contribute to water use externalities. Federal legislation to address the salinity externalities in the Colorado River Basin comprises a set of arbitrary quality standards and millions of dollars in federal projects. This study specifies economic criteria to empirically determine first‐ and second‐best quality standards and to indicate opportunities for efficiency gains in existing policy. A basin‐wide, nonlinear programming model optimizes river water quality, resource allocation, production levels, and total expenditures for control. Revealed are the economic tradeoffs between water uses, regions, and control strategies.
Food Price Variability and Economic Reform: An ARCH Approach for Ghana
Authors: Shively Gerald E.
Published: July 2006

Changes in maize price levels and variability in Ghana are investigated. A model of wholesale price determination is reviewed in which grain stocks are held for speculative storage as well as export to neighboring countries in the Sahel. To test the model, an Autoregressive Conditionally Heteroskedastic (ARCH) regression is applied to monthly maize data for two markets over the period 1978–93. The regression is used to measure changes in maize price volatility in Ghana, and to infer the importance of past prices, domestic and regional production, and commodity storage and trade in explaining these changes.
Asymmetry and Nonstationarity in the Farm Size Distribution of Wisconsin Milk Producers: An Aggregate Analysis
Authors: Zepeda Lydia
Published: July 2006

A Markov model is developed to test the nonstationarity and asymmetry of factors affecting the evolution of Wisconsin dairy farms using aggregate data. The model is used to examine how prices, interest rates, debt, drought, and the dairy termination program affected farm growth and the entry and exit of Wisconsin dairy farms by size categories during 1972–92.
The Behavior of Forward‐Looking Firms in the Very Short Run
Authors: Lence Sergio H. , Hayes Dermot J. , Meyers William H.
Published: July 2006

The study develops a theory of very‐short‐run forward‐looking behavior allowing for forward trading and storage of final good and material input. Production and storage are separable from hedging decisions and depend only upon current forward and cash prices. Comparative statics are derived regarding production, purchases, and sales. The hypotheses advanced are tested with monthly data pertaining to the U.S. soybean‐processing industry. Results suggest that in short‐run equilibrium futures prices of the soybean complex have had little influence on crushings or production, but they have been important determinants of inventory levels.
Investment Demand When Economic Depreciation is Stochastic
Authors: Fousekis Panos , Shortle James S.
Published: July 2006

The neoclassical model of investment by a risk‐neutral firm is generalized to include uncertainty about the rate of depreciation by replacing the deterministic capital accumulation identity with a stochastic variant. Ito's stochastic dynamic optimization is used to derive conditions for optimal investment. A nondegenerate steady‐state distribution of the capital stock is shown to exist and is derived for the empirically important case of a normalized quadratic profit function and static price expectations. It is demonstrated for this case that uncertainty about the rate of depreciation decreases the expected steady‐state capital stock and investment.
Regulating Nonpoint Source Pollution Under Heterogeneous Conditions
Authors: Helfand Gloria E. , House Brett W.
Published: July 2006

Because of difficulties in measuring effluent from nonpoint pollution, proposals for regulating agricultural runoff often suggest instruments applied to inputs or management practices. When pollution functions vary across sources, uniform input instruments cannot achieve a least‐cost pollution reduction, but efficient instruments may be difficult to administer. In this paper we analyze lettuce production on two soils in California's Salinas Valley to consider empirical costs associated with uniform input taxes and regulations. The results suggest that uniform instruments may not be costly relative to an efficient baseline. Though taxes are more efficient, farmers have higher profits with regulations.
The Former Soviet Union and the World Wheat Economy
Authors: Jones James R. , Li Shuang L. , Devadoss Stephen , Fedane Charlotte (Jensen)
Published: July 2006

The impacts of the former Soviet Union leaving the world wheat market as a consistent net importer are investigated using a modified spatial trade equilibrium model. The simulation results suggest that the former Soviet Union, following Bigman's stochastic trade hypothesis, can have a stabilizing role in the future world wheat economy.
Adoption of a Politicized Technology: bST and Wisconsin Dairy Farmers
Authors: Barham Bradford L.
Published: July 2006

Technologies that are the focus of extensive public debate prior to commercialization may have diffusion paths which are distinct from the classic sigmoid shape often used by economists. Descriptive and econometric analysis of ex ante and ex post data on bovine somatotropin use by Wisconsin dairy farmers reveal that this controversial technology has a relatively low adoption rate and little prospect for adoption growth in the near future. Further research on potential adoption outcomes for technologies that are politicized prior to commercialization could improve economists' predictive capacities.