bluuebunny/crossref_metadata_2025 huggingface dataset:
The Intercountry Agricultural Production Function: Another View
Authors: Mundlak Yair , Hellinghausen René
Published: July 2006

Factor productivity in agriculture is estimated from repeated observations on a sample of fifty‐eight countries under the assumption that all countries have access to the same technology. Technology is viewed as a collection of techniques; each technique is represented by a production function. The choice of the implemented techniques is determined by the state variables, which represent the physical and economic environment within which the firms operate. The statistical model is that of varying coefficients, and it is estimated by a method which utilizes principal components and multiple comparisons.
An Analysis of the Farmer‐Owned Reserve Program, 1977–82
Authors: Salathe Larry , Price J. Michael , Banker David E.
Published: July 2006

An econometric model of the U.S. agricultural sector is utilized to examine the effects of the Farmer‐Owned Reserve Program on crop and livestock production and prices, farm income, crop carry‐over levels, and government outlays. The program has had a positive impact on commodity prices and farm income but has not significantly reduced the annual variation in commodity prices. It also increased government outlays for agricultural commodity programs, but all of the increase is potentially recoverable. The continued use of the FORP to enhance commodity prices likely will lead to excessive government outlays in the long run.
Allocatable Fixed Inputs and Jointness in Agricultural Production: Implications for Economic Modeling
Authors: Shumway C. Richard , Pope Rulon D. , Nash Elizabeth K.
Published: July 2006

Allocatable fixed inputs, such as land, are a potentially important source of jointness in agriculture. As with other causes of jointness, they necessitate multiple‐product systems for modeling product supply and input demand. In other important ways, however, their analytical implications are very different from other causes of jointness. Model specification differs. Demand functions for the quantities of each input used in the production of individual commodities can be derived if a primal approach is used, but such allocation equations cannot in general be identified from a dual specification. Available allocation data are not even useful in such dual estimations.
Producer Preference for Price Stability
Authors: Hiebert L. Dean
Published: July 2006

Producer preference for product price variability vis‐à‐vis price stability at the mean is examined in a simple two‐input model where one input is chosen after price is known while the other input must be chosen before price is observed. The result shows that risk‐neutral producers may strictly prefer price stability.
Reliability of Linear Programming Software: An Experience with the IBM Mathematical Programming System Series
Authors: Tice Thomas F. , Kletke Marilyn G.
Published: July 2006

Results of this study raise serious questions concerning the reliability of a widely used commercial linear programming package. Three versions of IBM linear programming software were considered in the study: MPSX, MPS/360,and MPSX/370. Repeated solution of a large linear programming problem using MPSX yielded different objective function values. All solutions were found to be nonoptimal when compared to the dual solution. When the same problem was solved repeatedly using MPS/360or MPSX/370, the optimal solution was obtained each time. Users of the IBM MPSX linear programming package should consider alternative linear programming software.
Food Prices, Expectations, and Inflation
Authors: Van Duyne Carl
Published: July 2006

This paper explores a hypothesis about the formation of inflation expectations, popular among policy makers, which states that economic agents place a greater weight on the recent behavior of food prices when forming expectations than expenditure shares would indicate. This hypothesis is termed the biased expectations hypothesis (BEH). Using a stochastic fixprice‐flexprice model of the U.S. economy, I derive the implications of the BEH for the overall rate of inflation and demonstrate that a bias in the formation of expectations may be Muth‐rational. The empirical results suggest that there is no bias in the formation of expectations of any consequence for policy.
Analysis of a Small Open Economy: The Case of Energy Prices in Canada
Authors: Lopez Ramon E.
Published: July 2006

The analysis suggests that land rental price decrease in the long run as a consequence of higher energy prices. Energy demand from agriculture decreases if land and energy are substitute inputs. The necessary and sufficient conditions for expecting increasing average farm size, decreasing agricultural output, and number of farms also have been provided. The analysis considers a competitive equilibrium environment with specific proviso that land prices adjust in response to higher domestic energy prices. Simple expressions for calculating long‐run agricultural responses to higher domestic energy prices were derived and used in estimating such responses for Canadian agriculture.
Estimating Supply Response in the Presence of Farm Programs
Authors: Lee David R. , Helmberger Peter G.
Published: July 2006

Previous empirical research on crop supply response has given insufficient attention to the fundamentally different nature of supply response under farm programs versus competitive markets. A simple theoretical model is presented which highlights the program participation option in the farmer's acreage allocation decision. The model also provides the basis for different expected supply elasticities under “free market” and “farm program” regimes for corn and soybeans. Econometric supply estimation for Corn Belt states for 1948–80 using a temporally disaggregated approach confirms a greater supply elasticity for corn and a lower supply elasticity for soybeans under acreage‐restricting feed grain programs.
The Choices of Irrigation Technologies in California
Authors: Caswell Margriet , Zilberman David
Published: July 2006

This paper introduces an econometric technique to analyze the factors affecting the land shares of alternative irrigation technologies in agriculture. It estimates the likelihood of use of drip, sprinkler, and surface irrigation by fruit growers in the Central Valley of California. Higher water costs, the use of groundwater, the production of nuts, and location are found to increase the likelihood of using drip and sprinkler irrigation. The results are used to demonstrate the effectiveness of water price increases in inducing water conservation.
Grain Storage in Developing Areas: Location and Size of Facilities
Authors: Monterosso Cesar D. B. , Wright Charles L. , Lacerda Maria Ceclília S. , Ofugi Noboru
Published: July 2006

Storage planners in developing countries often exploit scale economies in grain facilities by building large units far from producers without accounting for the effect on transport costs. Capacitated networks with an approximate master program solve this plant size‐location problem, offering computational efficiency, ease of use, and productive interaction with planners unfamiliar with programming techniques. Tests with transport costs in three Brazilian production areas recommend decentralization of storage—more smaller units closer to farmers, a conclusion supported by sensitivity analysis and recent experience of farmers, planners, and cooperative officials.
The Effect of Acidification Damages on the Economic Value of the Adirondack Fishery to New York Anglers
Authors: Mullen John K. , Menz Fredric C.
Published: July 2006

A travel cost model is used to estimate losses in the net economic value of the Adirondack recreational fishery resulting from damages caused by acidic deposition. Annual losses to New York resident anglers are estimated to be approximately $@@‐@@1 million per year in 1976 dollars. Although there are many reasons why these damages understate the full extent of losses to both current users and others, this research represents one of the initial attempts to quantify one type of cost associated with the acidic deposition problem.
Mechanical Harvesting and the California Tomato Industry: A Simulation Analysis
Authors: Brandt Jon A. , French Ben C.
Published: July 2006

Simulation analysis based on an econometric model was used to compare processing‐tomato industry performance with and without the development of mechanical harvesting and under differing wage scales. Expanded production under mechanical harvesting increased requirements for preharvest, seasonal and off‐season cannery, and assembly labor relative to continued hand harvest. This offset much, but not all, of the reduction in seasonal harvest labor. Employment shifted more toward jobs of higher skill and pay. Product prices were lower. Economic surplus measures suggest consumers have been the primary long‐run benefactors of mechanical harvest adoption.
Brazilian Soybean Policy: The International Effects of Intervention
Authors: Williams Gary W. , Thompson Robert L.
Published: July 2006

This paper examines the effects of the complex set of Brazilian soybean sector policies on the world soybean and products market. Brazilian policy makers have intended to encourage domestic crushing of soybeans and exports of processed rather than raw soybeans. Removal of the Brazilian policy set for the period 1960–78 is simulated with an econometric model of the world soybean market. The results indicate that the intervention objectives were not achieved. Moreover, the U.S. soybean industry has benefited from the policies.
Estimating the Market for Tomatoes
Authors: Melnick Rafi , Shalit Haim
Published: July 2006

An econometric model of the market for tomatoes in Israel is developed to take into account the distortions brought about by the marketing board and intermediaries. The existence of monopoly and monopsony power is hypothesized by analyzing the middlemen's optimal behavior. Being compelled by the marketing board to purchase all produce, wholesalers exert monopsony power by reducing quantities marketed to consumers by selling surpluses to the marketing board at the minimum price. The empirical results confirm the existence of strong monopsony power together with weak monopoly power in that market.
Coupon Redemption and the Demand for Frozen Concentrated Orange Juice: A Switching Regression Analysis
Authors: Lee Jonq‐Ying , Brown Mark G.
Published: July 2006

A switching regression model was estimated and used to study the impact of Florida Department of Citrus coupon promotional programs on the demand for frozen concentrated orange juice. The empirical results show that discounts and information provided by coupons were effective in increasing the demand for FCOJ, and that the FDOC's coupon programs had positive impacts on the probability of using coupons for purchasing FCOJ. Moreover, different types of coupon promotions had different impacts, and coupon users and nonusers demonstrated different degrees of response to price changes.
Inventory Adjustment and Dynamic Winery Behavior
Authors: Wohlgenant Michael K.
Published: July 2006

This paper develops a dynamic model of processor behavior which is applied to the California wine industry. Price, production, and input demand functions are derived from an optimal control model which takes into account inventory growth from aging and the linkage between product inventories and input purchases. An important feature of the model is that expected future market conditions and beginning inventories influence current behavior through changes in the inventory shadow price. The empirical results generally conform to the theoretical specification and emphasize the role of demand expectations on winery behavior.
Distribution of Research Gains in Multistage Production Systems
Authors: Freebairn J. W. , Davis J. S. , Edwards G. W.
Published: July 2006

In a multistage production system, research that reduces production costs at one stage provides benefits to producers at all stages and to consumers. Agricultural production is assumed to involve three stages: nonfarm input, farm, and marketing. Research causes a parallel drop of the supply curve. Benefits are measured as changes in economic surplus. With a competitive model, the distribution of research benefits is the same for research directed at each production stage. Implications for the distribution of research benefits of some forms of imperfect competition are investigated.
The Demand for Calories in Developing Countries
Authors: Knudsen Odin K. , Scandizzo Pasquale L.
Published: July 2006

This paper employs characteristic demand theory to estimate demand functions for calories for a set of developing countries and to investigate the potential impact of income growth, redistribution, and price changes on alleviating underconsumption of calories. The analysis finds that, although calorie elasticities with respect to income are substantial for the poorer consumers, income growth above historical rates is required for the food needs of the entire population to be satisfied within the next fifteen years, even if calorie prices remain constant and income distribution does not become more unequal.
Evaluating Returns to Agricultural Research: A Review
Authors: Norton George W. , Davis Jeffrey S.
Published: July 2006

This paper reviews and compares the most common approaches used to evaluate public agricultural research investment. Ex post studies fall into two major groups: (a) consumer and producer surplus analyses, estimating average rates of return to research, and (b) production function analyses, estimating marginal rates of return to research. Ex ante studies fall into four groups: (a) those using scoring models to rank research activities, (b) those employing benefit‐cost analysis to establish rates of return to research, (c) those using simulation models, and (d) those using mathematical programming to select an optimal mix of research activities.
Rent Seeking in International Trade: The Great Tomato War
Authors: Bredahl Maury , Schmitz Andrew , Hillman Jimmye S.
Published: July 2006

This paper presents a model of international rent‐seeking activities by producers in both exporting and importing nations. The model is applied to the winter vegetable trade between the United States and Mexico. An analysis is made of the attempts to form export/import coalitions. Reasons for these failures are given. Due to past failures to impede trade, essentially free trade in winter vegetables between the two countries exists.
Income Effects of Donated Commodities in Rural Panama
Authors: Franklin David L. , Harrell Marielouise W. , Leonard Jerry B.
Published: July 2006

Analyses of food expenditure data from rural households in Panama showed that the marginal propensity to consume food out of additional income in the form of donated food is not different than the marginal propensity to consume food out of money income for households participating in the Veraguas supplemental feeding program. These results suggest that take‐home food programs can have significant income‐mediated impacts on the acquisition of food, and, accordingly, food supplementation programs should be designed to maximize the income value of the donated commodities in terms of prices prevailing in the local markets.
Cost‐Sharing Arrangements under Sharecropping: Moral Hazard, Incentive Flexibility, and Risk
Authors: Braverman Avishay , Stiglitz Joseph E.
Published: July 2006

This paper explains the rationale and describes the characteristics of cost sharing arrangements in rural developing economies, focusing on the risk and incentive properties of alternative cost contracts and on their flexibility—their ability to adapt to environmental changes. It is shown that where labor inputs are difficult to monitor, the rule that cost shares and output shares be equalized will not hold and is not “constrained pareto efficient,” and that cost‐sharing contracts have a decided advantage over contracts which specify the level of inputs whenever there are asymmetries of information regarding production technology between the landlord and the tenant.
Demand for Farm Output in a Complete System of Demand Functions
Authors: Wohlgenant Michael K.
Published: July 2006

Demand interrelationships for farm outputs that are theoretically consistent with consumer demand and marketing group behavior provide important linkages between retail and farm prices. A conceptual model, based on reduced‐form specifications for retail and farm prices, is formulated and applied empirically to a set of eight disaggregated food commodities. This approach circumvents the need for retail quantities, which are frequently unavailable for disaggregated food commodities. The results are consistent with theory and generally indicate significant substitution between farm and marketing inputs. Except for poultry, derived demand elasticities are at least 40% larger compared to those derived assuming fixed proportions.
Four Approaches to Commodity Market Stabilization: A Comparative Analysis
Authors: Glauber Joseph , Helmberger Peter , Miranda Mario
Published: July 2006

The effects of four alternative price stabilization programs for soybeans are compared using a rational expectations model and simulation. For a given government expenditure, subsidized private storage is the most efficient way to stabilize market price. For a given deadweight loss, a program of direct payments is the most efficient stabilizer of the effective farm price; this program does not stabilize market price. All four programs, including a buffer stock program and one involving both direct payments and buffer stocks, tend to destabilize quasi‐rent. Programs that involve an initial build‐up of stocks increase producer benefits and hurt consumers.
Evaluating the Returns to Postharvest Research in the Florida Citrus‐Processing Subsector
Authors: Stranahan H. A. , Shonkwiler J. S.
Published: July 2006

Widely used econometric techniques for evaluation of returns to research are often limited to macrolevel analysis because the data required are either unavailable or difficult to measure at the micro, or subsector, level. A translog cost function and corresponding share equations are estimated in order to measure the returns to postharvest Florida citrus‐processing research. Estimation of this system also allows computation of input substitution elasticities and evaluation of the effects of research and development on an input's share in total cost. It is shown that expenditures allocated to citrus‐processing research have a high rate of return.
Gains and Losses of Sugar Program Policy Options
Authors: Leu Gwo‐Jiun M. , Schmitz Andrew , Knutson Ronald D.
Published: July 2006

High domestic sugar prices supported by U.S. sugar policy have induced a significant substitution of corn sweeteners for sugar. Recognizing the close relationship between sugar and corn sweeteners, this study applies a general equilibrium approach to evaluate the distributional effects of three different policy options (i.e., quota, tariff, and deficiency payment) on sugar related interest groups. The results show that the current quota policy, intended ostensibly to protect domestic sugar producers, have hurt foreign exporters. It will harm domestic sugar producers if the trend continues. Additionally, the quota program is the most expensive of the options considered.
Undocumented Mexico—U.S. Migration and the Returns to Households in Rural Mexico
Authors: Taylor J. Edward
Published: July 2006

This paper presents estimates of net income gains to a sample of households in rural Mexico from sending migrants illegally to the United States, correcting for sample selectivity bias, and it examines the role of expected income gains in driving illegal Mexico—U.S. migration. There is no evidence that people who migrate illegally to the United States are above‐average contributors to household income, either as workers in Mexico or as Mexico—U.S. migrants. However, other things being equal, villagers who are in the best position to contribute to household income as workers in Mexico are positively selected not to migrate to the United States.
The Component Pricing of Milk Revisited
Authors: St‐Pierre Normand R. , Scobie Grant M.
Published: July 2006

Various studies have addressed the impact of component pricing on milk marketing. All required an estimate of the implicit prices of components under an existing scheme. In this paper, we show why results differed between studies, and we present evidence that they drew inappropriate conclusions. A reformulation based on the relationship between fat and solids‐not‐fat percentages in milk leads to the conclusion that butterfat pricing schemes for milk may have underpriced fat relative to solids‐not‐fat rather than overpriced butterfat in U.S. produced milk.
Are Harvest Forecasts News? USDA Announcements and Futures Market Reactions
Authors: Summer Daniel A. , Mueller Rolf A. E.
Published: July 2006

Futures market price data for corn and soybeans are used to examine reactions to U.S. Department of Agriculture harvest forecasts. These forecasts are widely known and reasonably accurate, so failure to find significant reaction would indicate that the USDA did not contribute additional news relative to information already possessed by traders. Various t‐tests, F‐tests, and nonparametric chi‐square tests indicate rejection of the null hypothesis of no significant difference between means of absolute values or variances of changes in closing prices on days following a USDA announcement and other days. Thus, the data indicate that significant information is contained in the forecasts.
Welfare Implications of Price Stabilization with Monopolistic Trade
Authors: Wong Chung Ming
Published: July 2006

The welfare effects of domestic and international price stabilization are examined and then compared, employing a two‐country model where one country exercises market power through continuous optimal trade restriction while the other behaves competitively. The two types of stabilization have quite different implications on the distribution of welfare between and within countries. The country exercising market power gains from domestic price stabilization regardless of the source of instability, but the government and private producers and consumers are affected differently. The country facing trade restriction can exercise some countervailing power by stabilizing international price fluctuations resulting from internal disturbances.
A Simultaneous Analysis of Food Industry Conduct
Authors: Zeller James A.
Published: July 2006

Intense advertising and new product introduction are substitute forms of entry‐deterring conduct practiced by producers of more differentiable food products. A simultaneous equation model is estimated to explain the relationship between these alternate forms of conduct and product class structure and performance. The results support the view that advertising is a barrier to entry rather than information that would facilitate entry. The extent of government‐imposed identity standards within a product class is inversely related to advertising intensity and the rate of new product introduction but may artificially fill the product space, making entry more difficult.
Intertemporal Allocation in the Corn and Soybean Markets with Rational Expectations
Authors: Giles David E. A. , Goss Barry A. , Chin Olive P. L.
Published: July 2006

This paper addresses the intertemporal allocation of supplies and the simultaneous determination of spot and futures prices in the U.S. corn and soybean markets. It presents simultaneous equations models in a comparative study of U.S. commodity markets, with separate functional relationships for long and short hedgers, long and short speculators in futures, consumers, and holders of unhedged inventories.
Is the United States Really Underinvesting in Agricultural Research?
Authors: Fox Glenn
Published: July 2006

That the level of public investment in U.S. agricultural research is too low is widely accepted. This paper argues that there are two important limitations to the evidence assembled in support of the underinvestment hypothesis: (a) many authors have compared the social rate of return to public investments with the private rate of return to private investments; (b) costs of public expenditures on agricultural research have been underestimated by a failure to account for the marginal excess burden of the tax collection system. Taking these two factors into account, evidence in support of the underinvestment hypothesis is weakened considerably.
Aggregation of Inputs Under Risk
Authors: Pope Rulon D. , Hallam Arne
Published: July 2006

The implications of primal separability on choice are examined. Separability under risk imposes strong restrictions on input demands. These restrictions can be used to test for separability of production. Alternatively, one can test directly separability of production and infer what separability implies about behavior. This latter approach is taken since an application is analyzed.
Dynamic Adjustment in the U.S. Dairy Industry
Authors: Howard Wayne H. , Shumway C. Richard
Published: July 2006

A dual model is used to examine the dynamic structure of the U.S. dairy industry. Properties implied by the theory of the competitive firm and independent adjustment of two quasi‐fixed inputs, labor and herd size, are tested and not rejected. Instantaneous adjustment, however, is soundly rejected for each quasi‐fixed input. Input adjustment to optimal levels is estimated to take about two years for labor and ten for cows. Quality adjustments of the labor and cow series do not fully embody the technological change that has occurred in this industry over the study period.
Applying Mixed Estimation in Econometric Research
Authors: Mittelhammer Ron C. , Conway Roger K.
Published: July 2006

The validity of the Theil‐Goldberger mixed estimation procedure for incorporating prior information into the estimation of econometric models has recently been questioned in the literature. In this article, a set of accepted statistical principles are used both to rationalize past and future applications of mixed estimation through the introduction of a modified mixed estimator and to provide an explicit rationale for the abandonment of the Theil‐Goldberger procedure. A previous application of mixed estimation in this Journal is reexamined to illustrate the issues involved.
The Effects of Job Site Sanitation and Living Conditions on the Health and Welfare of Agricultural Workers
Authors: Frisvold George B. , Mines Richard , Perloff Jeffrey M.
Published: July 2006

The lack of field sanitation on agricultural job sites increases the probability of agricultural workers reporting gastrointestinal disorders by 60%. Adverse living conditions significantly increase the probability of gastrointestinal, respiratory, and muscular problems. These three health problems do not appear to increase the probability that a worker's family is on welfare or to lower workers' earnings. Respiratory problems, however, substantially increase the probability that the worker receives unemployment compensation.
Attitudes and Farmer Conservation Behavior
Authors: Lynne Gary D. , Shonkwiler J. S. , Rola Leandro R.
Published: July 2006

Conservation behavior is influenced by the attitudes of farmers and by context variables, like income and farm terrain. Important attitudes were selected by using the theory that fundamental value ranks or weights affect attitudes and that only certain values are important to the conservation decision. An extension of the tobit estimation approach, handling both censored observations of the dependent variable and measurement error for the nonlimit observations, was used. Conservation behavior models can be improved with a merger of concepts and approaches from social psychology and economics.
Assessing Strategies for Control of Irrigation‐Induced Salinity in the Upper Colorado River Basin
Authors: Gardner Richard L. , Young Robert A.
Published: July 2006

Dissolved mineral salts (salinity) adversely affects numerous urban and agricultural users of Colorado River water in southwestern United States and in Mexico. More than a third of the salt load is thought to be induced by drainage from irrigated lands onto highly saline groundwater deposits in the Upper Colorado Basin in Colorado, Utah, and Wyoming. Various public policy initiatives are proposed to induce farmers to reduce discharges of this nonpoint pollutant. Taxes on water, water conservation subsidies, and land and water rights purchases are analyzed in a linear programming framework. The allocative efficiency and the distribution of control costs and damages among irrigators, water users, and taxpayers are assessed.
Pricing Efficiency in the Live Cattle Futures Market: Further Interpretation and Measurement
Authors: Garcia Philip , Leuthold Raymond M. , Fortenbery T. Randall , Sarassoro Gboroton F.
Published: July 2006

The pricing efficiency of the live cattle futures market is evaluated using out‐of‐sample forecasts from an econometric model, an ARIMA model, and composite forecasting procedures. In terms of the mean‐squared error criterion, a necessary condition for market efficiency, at least one of the models, and frequently more, forecasted more accurately than did the futures market. However, market simulation results based on the most accurate forecasts generated large risk‐return ratios. These results do not show strong evidence of inefficiency and call into question the use of only mean‐squared errors to examine a market's pricing efficiency.
Is Farming a Constant Cost Industry?
Authors: Castle Emery N.
Published: July 2006

Measurement of cost‐size relationships for farming has long been an important area of research in agricultural economics. Much of this research has had a farm management and production economics orientation, and firm‐industry interdependencies have often been ignored. Research results stemming from such an orientation should be interpreted with care when used for policy purposes. Pecuniary externalities may be of greater importance than indicated by research to this time. A suggestion is made for treating induced technical change as comparable to a pecuniary externality. Questions are raised on both theoretical and empirical grounds whether farming in the United States should be considered a constant cost industry for policy purposes.
Generic Fluid Milk Advertising, Demand Expansion, and Supply Response: The Case of New York City
Authors: Liu Donald J. , Forker Olan D.
Published: July 2006

A transfer function was used to estimate the fluid milk demand equation of New York City. The consumption effect of a generic fluid milk advertising program in the city was found to be positive and statistically significant. The resulting higher blend price of milk was found to have a negligible effect on the subsequent supply of milk. Though being successful in generating positive returns on advertising it was found that a 35% reduction in the advertising expenditures would have been optimal in the marginal sense.
Input Substitution and the Distribution of Surplus Gains from Lower U.S. Beef‐Processing Costs
Authors: Mullen John D. , Wohlgenant Michael K. , Farris Donald E.
Published: July 2006

Analysis of a switch from boxed beef to tray‐ready beef processing demonstrates that limited substitution between farm and nonfarm inputs has a significant impact on the distribution of surplus gains. A two‐input, two‐output (beef and by‐products) industry model was specified. Technical change was modeled as a shift in marketing input supply. This approach yields equivalent results to a demand increase from biased technical change. Using an estimated elasticity of substitution of 0.1 and parameter values from previous studies, the results indicate cattle producers would receive either 57% or 72% of surplus gains depending upon whether input substitution occurs.
Market Distortions and Benefits from Research
Authors: Alston Julian M. , Edwards Geoff W. , Freebairn John W.
Published: July 2006

The benefits from cost‐reducing research and their distribution under a range of price policies are compared with those that would arise in the absence of the policies. While any price policy affects the distribution of research benefits, the net national or world benefits may be reduced, lef unchanged, or increased, depending on the nature of the policy and the significance of the country in the world market for the commodity. Some implications for decisions on price policies and for distortions in incentives for the allocation of resources to research are raised.
Education, Experience, and Allocative Efficiency: A Dual Approach
Authors: Stefanou Spiro E. , Saxena Swati
Published: July 2006

A generalization of the dual, non‐frontier profit function approach to evaluating allocative efficiency is developed that allows for training (human capital) variables to influence the efficiency level directly. An application to Pennsylvania dairy indicates that education and experience are substitutes and play a significant role in the level of efficiency. While these operators are not allocating their variable inputs in an absolutely efficient manner, relative efficiency can be achieved for four of six possible input combinations for prescribed levels of education and experience. Furthermore, the estimates of the efficiency measures suggest that these operators are maximizing production rather than short‐run profits.
Land Quality and Prices
Authors: Peterson Willis
Published: July 2006

Although land values reflect land quality, the quality characteristics that determine values are only partly related to agricultural uses. The results of estimating a reduced‐form equation explaining differences in land prices among states suggest that nearly two‐thirds of this variation is attributed to nonagricultural uses. Therefore, a land quality index based on raw land prices will be biased, which in turn will result in biased coefficients in a production function or its dual. A cross‐section land quality index which excludes the influence of nonagricultural uses is constructed.
Domestic Farm Policy and the Gains from Trade
Authors: Schmitz Andrew , Sigurdson Dale , Doering Otto
Published: July 2006

This paper assesses the extent to which the gains from agricultural trade are influenced by both U.S. domestic policy and tariff and nontariff trade barriers. It shows theoretically that the volume of trade can be substantial but the gains nonexistent. Empirical results, along with rent‐seeking arguments, support the no‐gains‐from‐trade hypothesis.
The Impact of Farmland Price Changes on Farm Size and Financial Structure
Authors: DeBoer‐Lowenberg J. , Boehlje Michael
Published: July 2006

A modified Vickers model is used to show that farmland capital gains provide incentive to increase farm acreage and debt use. Farmland capital losses have the opposite effect. The model indicates that part of the current financial vulnerability of the U.S. farm sector can be traced to management decisions made in response to the farmland capital gains of the 1970s. The effects are not purely tax driven, though taxes can affect the magnitude of incentives. The Vickers model is modified to allow a finite horizon, taxes, and the recognition of unrealized capital gain or loss.
Multiproduct Cost Relationships for Retail Fertilizer Plants
Authors: Akridge Jay T. , Hertel Thomas W.
Published: July 2006

Retail fertilizer plants produce a number of products and services. To analyze the relationship between cost and output for these multiproduct firms, a short‐run, translog cost function is estimated using pooled data. Measures of economies of scope and scale are calculated. Results indicate plants can lower average cost by increasing output and by diversifying into anhydrous ammonia. Furthermore, preliminary evidence indicates that firms in the sample are overinvested in plant and equipment.
Targeted Agricultural Export Subsidies and Social Welfare
Authors: Abbott Philip C. , Paarlberg Philip L. , Sharples Jerry A.
Published: July 2006

Global export subsidies are known to be welfare reducing. This paper demonstrates that a small targeted subsidy can increase the welfare of the subsidizing country by exploiting differences in excess demand elasticities. Targeted export subsidies can also increase the subsidizing country's welfare by exploiting transportation cost differences, excess supply elasticities of competitors, or excess demand elasticities of markets supplied by competitors when markets are shared. An empirical model of the world wheat market illustrates the theoretical conclusions. An optimal targeted subsidy scheme causes a small increase in U.S. welfare but with major disruptions in world trade flows.
Pricing and Storage of Field Crops: A Quarterly Model Applied to Soybeans
Authors: Lowry Mark , Glauber Joseph , Miranda Mario , Helmberger Peter
Published: July 2006

This paper considers the role of competitive storage in markets for annually harvested field crops. A quarterly model is presented that considers the allocative role of storage both within and between crop years. Rational price expectations are endogenous variables calculated by a recursive method. Forward stochastic simulations using the model generate data that can be used to characterize the distributions of the variables. In the base case, the model is assigned parameter values from a quarterly econometric model of the U.S. soybean market. The results shed light on the distributions of the quarterly variables, including the rational price expectations, and show how these distributions are affected by changes in the carrying charge.
Sources of Cyclical Employment Instability in Rural Counties
Authors: Brown Deborah J. , Pheasant James
Published: July 2006

Cyclical employment instability at the county level is examined using monthly Indiana employment data for 1970–80 and a single‐index portfolio model. Results show rural counties are more responsive to systematic or cyclical employment instability than urban counties. At the state level, a high percentage employed in manufacturing has been associated with greater employment instability over the business cycle. This relationship does not hold at the county level where most manufacturing sectors seem to cyclically stabilize the counties in which they appear.
Institutional Change in the Common Agricultural Policy of the European Community
Authors: Runge Carlisle Ford , von Witzke Harald
Published: July 2006

The Common Agricultural Policy (CAP) of the European Community (EC) is a complex institutional structure with major effects on world agriculture. This study analyzes the CAP from a public choice perspective as a case of induced institutional innovation. The demand for change is analyzed as a function of a newly enlarged Community. Time‐consuming decisions, unequal distribution of net benefits, increasing budget expenditures, and rising pressures to “renationalize” farm subsidies drive the demand for change. Alternative institutional arrangements respond to these demands, which reflect preferences for fairness and equity as well as improved efficiency in the CAP.
The Political Economy of Western Water Finance: Cost Allocation and the Bonneville Unit of the Central Utah Project
Authors: Miller Jon R.
Published: July 2006

A common hypothesis is that federal water agencies pursue continued appropriations with little consideration of national economic efficiency. In the mid‐1980s, faced with a vote on a supplemental municipal and industrial water repayment contract on the Bonneville Unit of the Central Utah Project, the Bureau of Reclamation confirmed this hypothesis. Through modifications in cost allocation procedures, the bureau shifted costs from municipal and industrial water to hydropower and irrigation. The result of this action was retention of the irrigation purpose in the Bonneville Unit, which would have been unjustified under previous cost allocation procedures.
Extension Program Evaluation Using Normative Decision Models
Authors: Knight Thomas O. , Johnson S. R. , Finley Robert M.
Published: July 2006

Extension is under increasing pressure to conduct evaluations that provide substantive and reliable evidence of program results. However, current evaluation methods which can supply these results are too costly for general applications. This study proposes an alternative evaluation method which measures program participants' belief changes and uses normative decision models to estimate the effects of behavioral responses to those belief changes. A pilot application demonstrates that the proposed evaluation procedure is a viable alternative to current methods, with potential cost advantages that could permit more widespread application.
Tax Policies and the Financially Constrained Farm Household
Authors: Chambers Robert G. , Lopez Ramon E.
Published: July 2006

This article analyzes the implications of income, profit, and consumption taxes on the economic decisions of financially constrained farm households within a dynamic intertemporal framework. The most important results are that replacing a profits tax with a consumption tax would lead to increases in on‐farm work, farm income, and farm production in the short run. Capital accumulation would be enhanced leading to similar effects in the long run. If an income tax is replaced with a consumption tax, similar expansive effects would occur in the intermediate and long run, but in the short run there would be no effect on farm production.
European Community Enlargement: Impact on U.S. Corn and Soybean Exports
Authors: Haniotis Tassos
Published: July 2006

This paper utilizes the framework of an Armington model to analyze the impact of the European Community enlargement on U.S. corn and soybean exports. Results indicate that the enlargement has a significant and negative impact on U.S. corn exports to the new EC members. Increases in U.S. soybean exports are much smaller in volume terms. Declines in U.S. corn export prices outweigh the insignificant increases in U.S. soybean export prices and therefore accentuate U.S. losses. However, the U.S.‐EC agreement on their enlargement dispute cut net losses of U.S. corn and soybean exports to Spain and Portugal by about a third.
Farmers' Marginal Propensity to Consume: An Application to Illinois Grain Farms
Authors: Langemeier Michael R. , Patrick George F.
Published: July 2006

The marginal propensity to consume (MPC) for a sample of eighteen Illinois farms over the 1979–86 period is determined. Four consumption models were estimated using disposable household income plus depreciation as the measure of income. Estimated short‐run MPCs ranged from 0.007 to 0.020, while long‐run MPCs varied between 0.143 to 0.381. These results indicate farm family consumption responded little to changes in income and that the life cycle hypothesis model explains consumption significantly better than the other models. Robustness of the results is demonstrated using a larger sample of farms for 1986…87.
Simulation Modeling to Set Priorities for Research on Oyster Production
Authors: Bosch Darrell J. , Shabman Leonard A.
Published: July 2006

Private oyster production in Virginia has declined significantly because of factors including losses from MSX (Haplosporidium nelsoni). Increased state and federal funding is being proposed to support research to stimulate oyster productivity. A model of oyster production under uncertainty, including growth, disease, and economic components, is used to aid in setting research priorities. The model shows effects of different types of research information on returns to a representative oyster planting enterprise. Seed harvest technology and accurate knowledge of the salinity threshold at which MSX mortalities occur are found to have greatest promise for increasing profitability of oyster production.
Information Preferences of Ohio Commercial Farmers: Implications for Extension
Authors: Schnitkey Gary , Batte Marvin , Jones Eugene , Botomogno Jean
Published: July 2006

Multinomial logit models were used to examine farmers' information preferences for marketing, production, and financial decisions. Dependent variables represented the preferred information source category: Cooperative Extension Service, printed, broadcast, specialist, and other sources. Independent variables included farm and business characteristics. In general, farmers preferred information from printed sources, and the Cooperative Extension Service ranked highly as an information source. Results did not support the contention that farmers are substituting specialist services for information received from the Cooperative Extension Service.
Research Payoff from Quality Improvement: The Case of Protein in Australian Wheat
Authors: Voon Thomas J. , Edwards Geoff W.
Published: July 2006

A model is developed for evaluating the size and distribution of the economic benefits from research that improves the quality of an export commodity. Quality improvement, achieved by research or by agronomic practices, shifts the domestic and/or excess demand curves for an export commodity. Research costs are not modeled, but any shift in the supply curve (due to a change in yield, for example) accompanying the quality improvement is included. The model is used to estimate the gains from research that increases protein content in Australian wheat. It is estimated that Australia has the potential to obtain net benefits up to A$@@‐@@53 million per year from a one percentage point increase in the protein content in wheat. Over 90% of these gains accrue to wheat producers.
The Dietary Impacts of the School Breakfast Program
Authors: Devaney Barbara , Fraker Thomas
Published: July 2006

This study examines the dietary impacts of the School Breakfast Program based on twenty‐four‐hour dietary recall data collected during the 1980–81 school year. An important finding is that program availability has no significant relationship with the likelihood of eating breakfast, suggesting that a major program policy objective—to provide a breakfast to children who would not otherwise eat one—is not being achieved. Principal findings from the nutrient intake analysis are: (a) calcium intake, both at breakfast and over twenty‐four hours, is positively related to program participation; (b) participation in the program is associated with lower intakes of cholesterol, both at breakfast and over twenty‐four hours; and (c) iron intake at breakfast is negatively related to program participation.
Asset Fixity and Investment Asymmetry in Agriculture
Authors: Nelson Carl H. , Braden John B. , Roh Jae‐Sun
Published: July 2006

Fixed asset theory implies that it is more difficult to dispose of capital specific to agricultural production than to add to the stock of specialized capital. This theory is tested by determining whether transitions between states of disinvestment are as likely as transitions between states of investment. Of the twenty‐four annual capital stock series analyzed, evidence of asymmetry between investment and disinvestment is strong in eight cases, weak in four, and insignificant in twelve. There is considerable, although mixed, evidence of asymmetry for tractors (farm and nonfarm) and other specialized vehicles since World War II and for agricultural machinery.
Normal Inputs and Joint Production with Allocatable Fixed Factors
Authors: Moschini Giancarlo
Published: July 2006

When jointness is caused by allocatable fixed factors, in the normal case the marginal cost of any output increases as any other output increases, the supply of any output decreases as any other output price increases, and an input price increase may cause the supply of some outputs to increase.
Rent Seeking: The Potash Dispute between Canada and the United States
Authors: Picketts Valerie J. , Schmitz Andrew , Schmitz Troy G.
Published: July 2006

Despite the Canada‐United States Free Trade Agreement, border disputes involving agricultural trade are common. A theoretical basis for the 1987 U.S. countervailing duty case against Canadian exports of potash is developed using excess capacity arguments. Empirically, within a rent‐seeking context, the U.S. potash producers gained far less from their legal action against Canada than did U.S. farmers who are significant users of Canadian potash.