bluuebunny/crossref_metadata_2025 huggingface dataset:
Markup Pricing in a Dynamic Model of the Food Industry
Authors: Heien Dale M.
Published: July 2006

This paper presents a dynamic model of farm and retail prices and quantities. Central to the model is the notion that increases in wholesale prices are transmitted to the retail level via markup‐type pricing behavior. This behavior is shown to be consistent with firm optimization under the assumption of constant returns to scale and Leontief production technology at the retail level. The markup hypothesis is tested using the Granger‐Sims causality tests. Markup‐type price relationships are then estimated for twenty‐two food commodities.
Agricultural Development and Land Tenancy in a Peasant Economy: A Theoretical and Empirical Analysis
Authors: Bardhan Pranab K.
Published: July 2006

In this paper we have a two‐season model of agricultural production in a peasant economy, with labor unemployment in the lean season, land rationing at a conventionally fixed crop share by a monopolistic landlord who is also the financier of consumption credit for the sharecropper families. We then work out hypotheses about the relation of the equilibrium percentage of area under tenancy with land quality factors, labor‐intensity of crops, extent of unemployment, interest rates, weather uncertainty, etc. Most of the hypotheses are confirmed by interstate cross‐section evidence from India in early 1950s.
The Effects of Property Taxes and Local Public Services upon Residential Property Values in Small Wisconsin Cities
Authors: McMillan Melville , Carlson Richard
Published: July 2006

Contrary to the results of similar studies in metropolitan areas, this investigation found no evidence that local property taxes and public expenditures were capitalized into the value of owner‐occupied homes in small cities despite their considerable dependence upon the property tax. This does not imply that residents of small cities are insensitive to fiscal differences but rather is evidence of the more elastic supply of land for housing in nonmetropolitan communities.
A Critique of Exchange Rate Treatment in Agricultural Trade Models
Authors: Chambers Robert G. , Just Richard E.
Published: July 2006

The recent theoretical and empirical literature on the role of exchange rates in agricultural prices and trade is reviewed. Specifically, alternative specifications of the exchange rate in excess demand functions are considered. Results show that the specification most common in recent theoretical and empirical work is unnecessarily restrictive and may bias the resulting analysis. Several less restrictive specifications for empirical research are suggested.
Academic Freedom and Peer Reviews of Research Proposals and Papers
Authors: Berry R. L.
Published: July 2006

Academic freedom—the freedom of professional persons to present unpopular views—can exist only when there is freedom from severe sanctions such as censorship of research proposals and papers. Peer reviews are invaluable to researchers struggling to improve their work. They are also invaluable to administrators who must allocate limited funds and journal pages among competing researchers. However, evidence indicates that some administrators use peer criticisms to justify the suppression in whole or part of unpopular proposals and papers. Such prior restraint is censorship unless the administrators can prove that it is justified because of gross incompetence or financial exigency.
Estimation and Optimal Control of an Uncertain Production Process
Authors: Taylor C. Robert , Chavas Jean‐Paul
Published: July 2006

Three alternative decision rules for estimation and control of an uncertain production process are examined. One is a certainty equivalence strategy whereby an optimal rate based on current estimates of production parameters is used throughout the planning horizon. A second is updated certainty equivalence, a passively adaptive strategy. Third is an actively adaptive control formulation. Monte‐Carlo simulation results show that the passively adaptive strategy outperforms the others. For the cases simulated, the actively adaptive approximation to the information state for a dual control problem is not good enough to establish superiority of this sophisticated strategy for all problems.
A New Analytical Framework for the Fertilization Problem
Authors: Lanzer Edgar A. , Paris Quirino
Published: July 2006

A novel control model for technical and economic analysis of fertilizer recommendations is based on Liebig's Law of the Minimum, Mitscherlich's relative yield theory, and the notions of yield plateau and soil fertility carry‐over. The empirical model consists of a multistage separable programming specification which maximizes the discounted stream of net revenues subject to crop response and fertility carry‐over functions. The model is applied to the wheat‐soybean cropping system in Southern Brazil. It is found that, while the optimal fertility target levels are within a small range of those determined by Brazilian agronomists, their maintenance recommendations could be substantially improved.
A “Putty‐Clay” Approach to Aggregation of Production/Pollution Possibilities: An Application in Dairy Waste Control
Authors: Moffitt L. Joe , Zilberman David , Just Richard E.
Published: July 2006

Utilizing the “putty‐clay” production framework, a methodology for empirical assessment of the relationship between aggregate economic variables and environmental policy instruments is developed. Practicality is demonstrated by an application of the approach to the problem of dairy pollution in the Santa Ana River Basin of California. Results indicate pollution taxes to be substantially more efficient than emission standards in achieving a predetermined environmental quality goal. However, redistribution of tax revenues back to the regulated industry may be required to promote political feasibility.
Retail and Wholesale Demand and Marketing Order Policy for Fresh Navel Oranges
Authors: Nelson Glenn , Robinson Tom H.
Published: July 2006

The federal marketing order for fresh navel oranges appears to have been administered in early 1974 in a manner which restricted supplies to consumers, raised retail prices, and lowered total receipts of growers and packers. An examination of historical data and econometrically estimated parameters in wholesale and retail demand equations supports these conclusions. These concerns were central to a heated debate between the Cost of Living Council and the Navel Orange Administrative Committee.
Supply, Demand, and Technology in a Multiproduct Industry: Texas Field Crops
Authors: Shumway C. Richard
Published: July 2006

Technology, supply, and demand relationships among six Texas field crops and three variable inputs are investigated using a dual approach. Evidence of nonjoint production is found for wheat but not for other crops. Cotton, sorghum, and corn are homothetically separable. No larger groups of outputs nor any input groups satisfy the sufficient dual conditions for consistent aggregation and two‐stage choice. Production is homothetic in outputs, fertilizer, and hired labor. Product supply and input demand equations are estimated. Estimates are inconsistent with expectations of the competitive model. The normalized profit function Hessian is not positive definite, and parameter symmetry is rejected.
A Multi‐Year, Stochastic, Farm Simulation Model for Northern Nigeria: An Experimental Design Approach
Authors: Crawford Eric W. , Milligan Robert A.
Published: July 2006

The paper illustrates the use of experimental design in simulation modelling. Income growth prospects for small farms in northern Nigeria are examined under deterministic and stochastic conditions. A partial factorial design is employed to assess the impact on growth of resource endowment, stochastic yields and returns, consumption behavior, and enterprise opportunities. Analysis of variance on the deterministic results indicates that the key determinants of financial performance are stochastic events and family size and resource endowment. Capital accumulation under stochastic returns is slower than under fixed average returns. The value of a multi‐year model is discussed.
A Translog Cost Function Analysis of U.S. Agriculture, 1939–77
Authors: Ray Subhash C.
Published: July 2006

The translog cost function provides a convenient framework for analyzing U.S. agricultural production in a multioutput context. Treating crops and livestock as two distinct outputs, this study utilizes standard results of neoclassical duality theory to obtain measures of pairwise elasticities of substitution between inputs, price elasticities of factor demands, and the rate of Hicks‐neutral technical change. Results obtained from joint GLS estimation of parameters of cost and share equations indicate a declining trend in the degree of substitutability between capital and labor. Price elasticity of demand for all inputs increased over time. The measured rate of technical change was 1.8%per year.
The Political Economy of Agricultural Research and Extension: Grants, Votes, and Reapportionment
Authors: Rose‐Ackerman Susan , Evenson Robert
Published: July 2006

This paper seeks to identify the economic and political factors that produce state financial support for agricultural research and extension. State demand for research and extension services is found to be influenced not only by the level of farm income and population but also by measures of intergovernmental influence and the political effectiveness of farmers. Federal grants have “price” effects which stimulate state spending; the reapportionment of state legislatures mandated by the U.S. Supreme Court had a negative effect, while the ability of farmers to elect other farmers to the legislature increases state support for research and extension.
Risk Management by Colorado Dryland Wheat Farmers and the Elimination of the Disaster Assistance Program
Authors: King Robert P. , Oamek George E.
Published: July 2006

The impacts of eliminating the Disaster Assistance Program and modifying the provisions of federal all‐risk crop insurance are evaluated for a sample of eastern Colorado dryland wheat farmers. A stochastic simulation model and stochastic dominance techniques are used to identify changes in risk management strategies and to obtain approximate measures of welfare changes. The results indicate that all ten sample farmers were made worse off by this policy change, despite substantial subsidies in crop insurance premiums. Welfare losses were sizable, relative to expected net returns, and acreage covered by federal crop insurance did not increase appreciably.
Range Management under Uncertainty
Authors: Karp Larry , Pope Arden
Published: July 2006

The problem of rangeland management is modeled as a stochastic control problem. The manager periodically chooses stocking rates and decides whether to use a treatment which improves the rangeland. His decisions have an uncertain impact on the rangeland. The theory of finite Markov chains is used to analyze the solution to the control problem. The stochastic specification of the model is varied to test the sensitivity of the optimal policies. These are quite robust except at certain levels of the range condition. Cases of a risk‐neutral and risk‐averse manager are studied.
Erratum
Authors: Nelson Paul E.
Published: July 2006

In the February 1984 Journal issue, the last paragraph of Bernard Erven's review of Peter H. Calkins and D. D. Pietre's text, Farm Business Management; Successful Decisions in a Changing Environment, indicates that there is no teacher's manual to accompany it. The good news is that there is—the publisher guarantees it! Erven is absolved of responsibility; he was unaware that such a manual was available. Apologies are extended to the authors and the publisher.

Paul E. Nelson, Jr.

Book Review Editor
Ranking Doctoral Programs by Journal Contributions of Recent Graduates
Authors: Tauer Loren W. , Tauer Janelle R.
Published: July 2006

The productivity of graduate agricultural economics programs in the United States is measured by the number of pages and articles that recent graduates have published in the American Journal of Agricultural Economics during the last ten years. In both rankings the University of California, Berkeley, leads, followed by the University of California, Davis, Wisconsin, Minnesota, and Michigan State or Purdue. When pages are divided by the number of graduates, the University of Chicago ranks first, followed by Massachusetts Institute of Technology, Berkeley, Davis, and Rhode Island.
Goals and Consequences of Rice Policy in Japan, 1965–80
Authors: Otsuka Keijiro , Hayami Yujiro
Published: July 2006

The change in welfare of producers and consumers, government cost, and the deadweight loss arising from the various forms of government interventions into the rice market in order to protect domestic producers in Japan are estimated in a partial equilibrium framework. Results of the quantitative analysis indicate that the motivation of the government was to minimize budget costs in achieving the target level of producer price support, while consumer welfare had an insignificant weight in the government's objective function. It is aiso found that acreage control is a “second best” policy to reduce social inefficiency produced from other forms of market distortions.
Choice of Varieties by Sri Lanka Rice Farmers: Comparing Alternative Decision Models
Authors: Herath H. M. G. , Hardaker J. Brian , Anderson Jock R.
Published: July 2006

Sri Lanka rice farmers are faced with a choice between traditional and high‐yielding rice varieties. Three risky‐choice models are compared to explain producer behavior. Forty farmers with typically small rice areas were studied. Choice criteria compared were multiple (two)‐attribute utility maximization, single (profit)‐attribute utility maximization, and expected profit maximization. Expected utility maximization performed better than expected profit maximization: single‐attribute utility maximization outperformed the more complex multiattribute utility model. The importance of careful elicitation of subjective probability distributions is emphasized. Rice farmers appear to allocate their land between available technologies in an economically rational way.
Simulating the Impacts of Credit Policy and Fertilizer Subsidy on Central Luzon Rice Farms, the Philippines
Authors: Rosegrant Mark W. , Herdt Robert W.
Published: July 2006

The effects of credit policy and fertilizer subsidy on farmers' input choices, production, and income are examined with a multiseason decision‐making model. Stochastic production technology, risk‐neutral and risk‐averse decision rules, short‐term savings/consumption behavior, and a dual financial market are considered. Results indicate the risk‐neutral rule is more consistent with actual choices than risk‐averse rules. Estimated yields increased 21% to 30% from joint credit and fertilizer subsidies. Benefits are greater on irrigated than on rainfed farms. A substantial default rate in the institutional market reduces credit program benefits.
Computation Techniques for Intertemporal Allocation of Natural Resources
Authors: Chapman Duane
Published: July 2006

Application of optimal control theory to applied problems is limited by the difficulty of numerical solutions. Typically, terminal values for the production period, price, or production level have been assumed rather than optimized. The use of an objective functional with explicit discounting gives direct solution values for n, y(t), p(t), and rent (or consumer surplus) for continuous or discrete problems. The method is usable for numerical solutions to problems with linear demand, cost trend, or expropriation risk. It is illustrated with Fisher's widely used discrete problem and with application to parameters representing remaining world oil resources for competitive and monopolistic assumptions.
Demand Analysis of Fresh and Frozen Finfish and Shellfish in the United States
Authors: Cheng Hsiang‐tai , Capps Oral
Published: July 2006

Household expenditures for at‐home consumption on three species of shellfish and five species of finfish were analyzed. Factors explaining the variation of expenditures on seafood commodities were own price, household income, coupon value, household size, geographic region, urbanization, race, and seasonality. Own‐price elasticities ranged from −0.45 (flounder/sole) to −1.13 (oysters). Expenditures on fishery products were more sensitive to changes in household size than to changes in household income. Cross‐price effects of red meat and poultry were not statistically significant. For comparison purposes, estimates of own‐price, income, and household size elasticities from the literature were made with this set of elasticities.
Rural Property Tax Delinquency and Recession in Agriculture
Authors: Conrad James , DeBoer Larry
Published: July 2006

Agricultural recession causes the property tax delinquency rate to increase in rural counties. The annual volume of unpaid property taxes as a percent of the tax levy is regressed on the farm debt‐asset ratio, farm and nonfarm income, and the ratio of the interest rate to the delinquency penalty rate. Data from thirteen agriculturally‐dependent Indiana counties are used. Increases in the debt‐asset ratio and decreases in farm and nonfarm income are found to increase delinquency. Delinquency is also used as a source of capital when interest rates exceed the penalty rate.
High‐Technology Manufacturing in the Nonmetropolitan West: Gold or Just Glitter
Authors: Barkley David L. , Dahlgran Roger A. , Smith Stephen M.
Published: July 2006

Tobit analysis was utilized to determine if employment, occupational, and market‐linkage characteristics of nonmetropolitan high‐ and low‐technology manufacturers differed after controlling for select firm and community characteristics. Data on manufacturers' characteristics were collected through an extensive survey of nonmetropolitan firms in the eleven contiguous western states. The results indicate that the employment size of high‐ and low‐technology manufacturers was similar. Nonmetropolitan high‐technology manufacturers were more rapidly growing, export oriented, and skilled‐labor intensive than low‐technology firms. The low‐technology manufacturers maintained stronger backward linkages with the local economy.
Modeling the Pattern of Structural Change in U.S. Meat Demand
Authors: Moschini Giancarlo , Meilke Karl D.
Published: July 2006

The hypothesis of structural change in U.S. meat demand is tested in a four‐meat almost ideal demand system with parameters following a gradual switching regression model. The results support the notion that structural change partly explains the observed U.S. meat consumption patterns. Structural change is biased against beef, neutral for pork, in favor of chicken and fish, and it does not affect estimated elasticities. The estimated path of structural change implies a rapid transition to a new regime in the mid‐1970s, although a smooth path cannot be ruled out.
The Importance of International Students in the Academic Market for Agricultural Economists
Authors: Gempesaw C. M. , Elterich G. J.
Published: July 2006

About 10% of the academic job openings in agricultural economics will probably be filled by international students. During the early 1960s, only one‐fifth of Ph.D. degrees in agricultural economics were awarded to foreign students. Currently, close to half of all doctoral degrees in agricultural economics are earned by foreign students. A survey of U.S. agricultural economics departments was undertaken to analyze the potential impact of international students on the supply of academic agricultural economists.
The Effects of Macroeconomic Announcements on Commodity Prices
Authors: Barnhart Scott W.
Published: July 2006

This article analyzes the immediate reaction of a representative sample of commodity prices and two T‐bill yields to the unanticipated components of thirteen macroeconomic announcements. Surprises in the monetary variables cause the majority of the significant commodity price responses; while these plus other cyclical surprises, such as the unemployment rate, cause significant lumber and T‐bill reactions. The results provide strong support for the policy anticipations hypothesis and against the inflationary expectations hypothesis, i.e., that monetary surprises cause changes in real interest rates rather than in nominal rates only as the inflationary expectations hypothesis contends.
Testing Market Integration
Authors: Ravallion Martin
Published: July 2006

A model of spatial price differentials for a tradable good is proposed which avoids the inferential dangers of received methods using static price correlations. The proposed method also extracts more information on the causes of price differentials from the same data. The method is illustrated using monthly rice price data for postindependence Bangladesh, including the very substantial regional price shocks during the 1974 famine. Impediments to market integration are indicated.
Econometric Estimation of Producers' Risk Attitudes
Authors: Antle John M.
Published: July 2006

General methods are proposed for the identification and econometric estimation of the parameters of the distribution of risk attitudes in a producer population. The proposed methods also provide the basis for the development of statistical tests of model specification and of behavioral hypotheses. Econometric risk attitude estimation is shown to be possible under less restrictive conditions than previously believed. A moment‐based version of the general model is applied to Indian data, and the econometrically estimated risk attitudes are presented and compared to experimental results for a similar group of producers.
An Examination of Farm Sector Real Asset Dynamics: 1910–85
Authors: Featherstone Allen M. , Baker Timothy G.
Published: July 2006

The dynamic response of real farm asset values to changes in net returns and interest rates is studied using vector autoregression. Results show that a shock in real asset values, real returns to assets, or real interest rates leads to a process in which real asset values overreact. In the initial period, a reaction to a shock immediately occurs followed by a continued build‐up in the asset value for up to six years until finally the effect of the one‐time, transitory shock begins to die out. The results suggest a market with a propensity for bubbles.
Does Agricultural Extension Pay? The Training and Visit System in Northwest India
Authors: Feder Gershon , Slade Roger H. , Lau Lawrence J.
Published: July 2006

The paper presents the results from a study of the effect of the Training and Visit (T…V) System of agricultural extension on farm productivity. Two adjacent areas in northwest India, one with T…V extension and one with an older system, are compared, utilizing farm‐level data. Econometric analysis demonstrates that the T…V area had a wheat yield advantage of 9.33% after four years of T…V extension. The baseline yield differential was calculated as 3.01%. The gain attributable to T…V is shown to imply a return of at least 15% to the incremental investment in extension with high probability.
Cash Rents and Land Values in U.S. Agriculture
Authors: Robison Lindon J. , Lins David A. , VenKataraman Ravi
Published: July 2006

A firm‐level land valuation model is deduced which depends on the expected growth rate in net cash returns to land, inflation expectations, and property, income, and capital gains taxes. It is then aggregated to obtain an aggregate two‐sector land valuation model. That model is then estimated for twenty‐four individual states for the period 1960–81. In addition, a pooled cross‐sectional regression model is estimated combining the twenty‐four‐state data. The model results demonstrate that significant state differences exist in the land market and that in many states, agricultural land values are influenced by nonagricultural demand for land.
Efficiency of Alternative Policies for the EC's Common Agricultural Policy
Authors: de Gorter Harry , Meilke Karl D.
Published: July 2006

The Common Agricultural Policy (CAP) of the European Community (EC) is facing a crisis from budgetary and political pressures. This study analyzes the relative efficiency of four policy options discussed at the recent emergency summit in Brussels including a price reduction, coresponsibility levies, production controls, and a two‐price plan. These are assessed in terms of their efficiency in achieving producer welfare. A two‐price plan is superior to a production quota only at lower producer income goals. A price reduction policy is more efficacious than a coresponsibility levy, but both are shown to be inferior to either quotas or a two‐price plan.
Marketing Order Impacts on Farm‐Retail Price Spreads: The Suspension of Prorates on California‐Arizona Navel Oranges
Authors: Thompson Gary D. , Lyon Charles C.
Published: July 2006

The 1985 suspension of the prorate on California‐Arizona navel oranges decreased FOB retail price spreads in Atlanta and San Francisco by about 1.3 cents per pound. Four reduced‐form models of price spreads were estimated as seemingly unrelated regressions for price spreads in Atlanta, Dallas, and San Francisco. Nested and non‐nested hypothesis testing procedures indicated a markup model as the most plausible one for explaining short‐run changes in price spreads.
Supply and Demand Functions for Multiproduct U.S. Cash Grain Farms: Biases Caused by Research and Other Policies
Authors: Huffman Wallace E. , Evenson Robert E.
Published: July 2006

This study presents new estimates of supply and demand elasticities for U.S. multiproduct cash grain farms and estimates of input and output bias effects caused by public and private crop research, extension, and farmers' schooling. The study also shows that the social rate of return to public crop research is large—about 62 percent.
Government Programs and Adoption of Conservation Tillage Practices on Nonirrigated Wheat Farms
Authors: Helms Gary L. , Bailey DeeVon , Glover Terrence F.
Published: July 2006

A whole‐farm simulation analysis is used to investigate producer preferences for adoption of separate tillage practices (minimum‐till, combination‐till, or no‐till) under provisions of both the 1981 and 1985 farm bills. An analysis of preference for participation or nonparticipation in government programs under both farm bills is also considered. For risk‐averse producers, a combination‐tillage practice with program participation is found to dominate (as measured by stochastic dominance) the other strategies considered under both the 1981 and 1985 provisions.
The Necessity for Substitute Prices Recreation Demand Analyses
Authors: Rosenthal Donald H.
Published: July 2006

Omitting substitute prices from a travel cost model is shown to cause a significant bias in consumer surplus estimates. Three sets of travel cost models are developed from a common data base representing 60,000 day‐users of U.S. Army Corps of Engineer reservoirs in Kansas and Missouri. The firct set of models omitted substitute prices; the latter two sets included them. An analysis of variance test showed that consumer surplus estimates from the first set of models were significantly higher than the other two (F = 26.2 with 2, 20 degrees of freedom). The theoretical and practical implications of these findings are discussed.
Land Reform Policies in Iran
Authors: Majd Mohammad G.
Published: July 2006

Land reform (1962–71), contrary to a widespread view, gave land on highly favorable terms to all of Iran's 1.8 million tenant cultivators and benefited 74% of all farmers and 67% of rural households. It thus radically changed landownership and resulted in a far‐reaching socioeconomic tranformation. It did not, however, result in political stability. This article identifies some of the sources of error in the literature on land reform in Iran and shows that official land reform data are correct and consistent with numerous census results.
Interpreting Dual Variables for Optimization with Nonmonetary Objectives
Authors: Preckel Paul V. , Featherstone Allen M. , Baker Timothy G.
Published: July 2006

An approach to the interpretation of dual variables for mathematical programs with nonmonetary objectives is described. The approach is general, and in particular may be applied to problems of goal programming, expected utility maximization, intertemporal utility maximization and risk minimization subject to minimum income constraints. The technique is designed to transform shadow prices, expressed in marginal increases in the objective per unit of resource, into easily interpreted units, such as dollars per unit of resource.
Fertilization under Uncertainty: An Analysis Based on Producer Yield Expectations
Authors: SriRamaratnam S. , Bessler David A. , Rister M. Edward , Matocha John E. , Novak James
Published: July 2006

Optimal nitrogen fertilizer levels are computed for a sample of Texas Coastal Bend grain sorghum producers based on their assessed subjective conditional yield and price probabilities, utility measures, and cost information. Producers' mean yield expectations were substantially greater than experimental yield response and their perceptions of the effects of nitrogen on yield variability were contrary to usual characterization of nitrogen as a risk‐increasing input. Optimal fertilizer levels based on expected utility maximization represent actual fertilizer use somewhat better than those based on expected profit maximization. However, both calculated levels were high relative to actual fertilizer use.
Bootstrapping in Applied Welfare Analysis
Authors: Kling Catherine L. , Sexton Richard J.
Published: July 2006

Bootstrapping procedures are used to estimate the statistical properties of common empirical welfare measures. Results from a Monte Carlo experiment indicate that welfare estimates such as Marshallian consumer surplus often exhibit significant bias. Standard errors of welfare estimates are found to often exceed the magnitude of the point estimate for typical cross‐section data sets and are generally larger than the difference between comparable Hicksian and Marshallian measures. Precision of welfare estimates can be markedly enhanced through generating larger data sets, obtaining better model fits, and through imposition of innocuous inequality restrictions on the demand function parameters.
Theoretical and Empirical Advantages of Truncated Count Data Estimators for Analysis of Deer Hunting in California
Authors: Creel Michael D. , Loomis John B.
Published: July 2006

Truncated Poisson and truncated negative binomial count data models, as well as standard count data models, OLS, nonlinear normal, and truncated nonlinear normal MLE were used to estimate demand for deer hunting in California. The truncated count data estimators and their properties are reviewed. A large sample (N = 2223) allowed random segmenting of the data into specification, estimation, and out‐of‐sample prediction portions. Statistics of interest are therefore unbiased by the specification search, and the prediction results allow comparison of the statistical models' robustness. The new estimators are found to be more appropriate for estimating and predicting demand and social benefits than the alternative estimators based on a variety of criteria.
Quasi‐Experimental Price Elasticity of Liquor Demand in the United States: 1960–83
Authors: Baltagi Badi H. , Goel Rajeev K.
Published: July 2006

This paper uses sixty‐five recent tax changes on liquor in private licensed states over the period 1960–83 to update Simon's quasi‐experimental price elasticity of liquor. Three alternative measures for liquor price are used, and the sensitivity of this price elasticity to border effect purchases as well as market changes over time are examined. Our results support a liquor price elasticity estimate of −.7. However, the confidence interval on this estimate is wide. Border effect purchases as well as changes in the liquor market over time are statistically insignificant.
The On‐Farm Costs of Reducing Groundwater Pollution
Authors: Johnson Scott L. , Adams Richard M. , Perry Gregory M.
Published: July 2006

Agricultural chemicals ate a source of groundwater pollution in some areas. Regulatory options to reduce such nonpoint pollution imply costs to producers. By integrating plant simulation, hydrologic, and economic models of farm‐level processes, this study evaluates on‐farna costs of strategies to reduce nitrate groundwater pollution. The empirical focus is on intensively managed, irrigated farms in the Columbia Basin of Oregon. Results suggest that changes in timing and application rates of nitrogen and water reduce nitrate pollution with little loss in profits. Once such practices are adopted, further reductions in nitrates can be achieved only at increasing costs to producers.
Allocable Fixed Inputs as a Cause of Joint Production: A Cost Function Approach
Authors: Leathers Howard D.
Published: July 2006

The multiproduct cost concepts of Baumol, Panzar, and Willig are used to explore the contention of Shumway, Pope, and Nash that allocable fixed inputs cause joint production. Allocable fixed inputs may create an interdependence in the short‐run cost function when none exists in the long run; however, this will not necessarily lead to joint production. For joint production to occur in the short run, either the short‐run cost function must exhibit economies of scope, or stand‐alone production of one of the commodities must exhibit diseconomies of size. The issue of whether allocable fixed inputs cause joint production is an empirical question.
Unstable Models from Incorrect Forms
Authors: Alston Julian M. , Chalfant James A.
Published: July 2006

Parametric tests for structural change are conditional on the joint hypothesis of functional form and other aspects of the model specification. This problem is often disregarded. Monte Carlo evidence using three data sets indicates that apparently innocuous specification errors can lead to substantial increases in the probability of finding structural change when it is not present in the data‐generating mechanism. Significant Chow tests and autocorrelation are much more likely when the wrong functional form is used. Maximum Chow tests falsely reject stable preferences much more often than their nominal size suggests, even when the correct model is estimated.
Testing for Disequilibrium in the Hired Farm Labor Market
Authors: Duffield James A. , Coltrane Robert
Published: July 2006

Producers of labor‐intensive crops fear labor shortages if sanctions under the Immigration Reform and Control Act (IRCA) of 1986 are strictly enforced. They argue that special government programs are necessary to insure an adequate labor supply. On the other hand, farm labor advocates argue that such policies create an oversupply of workers and depress wages. A model of the farm labor market was tested for disequilibrium using cusum and cusum squares criteria. Results give no evidence that the hired farm labor market is chronically out of balance or unable to make equilibrium adjustments.
A Selectivity Model of Household Food Marketing Behavior in Sub‐Saharan Africa
Authors: Goetz Stephan J.
Published: July 2006

The agricultural household's discrete decision of whether to participate in coarse grain markets is separated here from the continuous decision of how much to sell or buy, conditional on participation. Failure to participate in markets results from high fixed transactions costs. A selectivity model endogenously switches households into alternative market participation states, correcting for bias caused by the exclusion of unobservable variables affecting both discrete and continuous decisions. Improved market information increases the probability of participation by sellers, while access to cereals‐processing technology increases quantities transacted by both sellers and buyers, conditional on participation.
Toward a More Comprehensive Theory of Food Labels
Authors: Caswell Julie A. , Padberg Daniel I.
Published: July 2006

Food labels play important third‐party roles in the food marketing system through their impact on product design, advertising, consumer confidence in food quality, and consumer education on diet and health. However, current analysis focuses overwhelmingly on the label's direct use as a point‐of‐purchase shopping aid, even though such use is limited by consumers' information processing abilities and time. In rewriting label regulations, policy makers should consider the benefits and costs of the broad array of roles labels serve, with evaluation of alternative regimes based on their impacts on consumer behavior and seller strategy.
Objectives and Constraints of Government Policy: The Countercyclicity of Transfers to Agriculture
Authors: Bullock David S.
Published: July 2006

Estimates of government transfers to typical U.S. corn, wheat, and cotton farms are regressed on estimates of market‐derived farm income to show that U.S. farmers receive greater government transfers when they face relatively unfavorable market conditions. This transfer countercyclicity is shown to be unrelated to potential deadweight losses constraining government transfers. It is argued that prevailing political economy models have difficulty explaining transfer countercyclicity because they focus on political agents' constraints to the neglect of political agents' objectives.
Demands for Local Public Sector Outputs in Rural and Urban Municipalities
Authors: McMillan Melville L. , Amoako‐Tuffour Joe
Published: July 2006

Little is known about local public services demands in rural municipalities and how they differ from demands in urban municipalities. Local public sector output demands in rural and urban municipalities in Victoria, Australia, are studied here using a system of equations approach based on the translog model. Expenditure, price, and substitution elasticities are reported. Demands differ between rural and urban municipalities and even among the (especially urban) subclasses.
Economic Impacts, Value Added, and Benefits in Regional Project Analysis
Authors: Hamilton Joel R. , Robison M. Henry , Whittlesey Norman K. , Ellis John
Published: July 2006

This paper addresses five issues encountered when estimating secondary benefits in regional project analysis: (a) the correction for opportunity cost of factors used, (b) the treatment of mobile factors, (c) the effect of economies of size, (d) the role of forward linkages, and (e) the role of spatial structure of economic regions. The first four are reasons that only a small part, if any, of regional impacts can be treated as regional net benefits. The fifth is a reason that, when secondary benefits or damages do exist, their correct estimation can depend on the spatial structure of the affected areas.
Tax Reform and Land‐Using Sectors in the U.S. Economy: A General Equilibrium Analysis
Authors: Boyd Roy , Newman David H.
Published: July 2006

A computable general equilibrium model of the U.S. economy is used to assess the effects of the Tax Reform Act of 1986 on land‐using sectors (forestry and three classes of agriculture). The model's components include twelve production sectors, six consumer groups, a balanced‐budget government sector, and a zero surplus foreign sector. In relative terms, Tax Reform reduces total value added output in land‐using sectors to a greater extent than other sectors in the economy. Experiments are also performed comparing partial and general equilibrium specifications of the economy and the impact of choice of input substitution elasticities.
An Empirical Analysis of Economic Performance under the Marketing Order for Raisins
Authors: French Ben C. , Nuckton Carole Frank
Published: July 2006

This study utilizes a dynamic econometric model of the California raisin industry to compare predictions of prices, production, profits, and related measures under the volume control program with predictions under several no‐control scenarios. The outcomes are evaluated in relation to performance criteria proposed by a USDA study team. The twenty‐two‐year comparisons suggest that the public interest may have been well served by the raisin volume control program, or at worst there was no significant welfare loss.
Application of Computer Graphics to Undergraduate Instruction in Agricultural Economics
Authors: Debertin David L. , Jones Larry D.
Published: July 2006

This article outlines are experience in building a freshman‐level course in agricultural economics employing computer graphics imaging. Lecture material is displayed with a computer connected to a large‐screen projector producing high‐resolution graphics. The complete course consists of approximately 1,200 computer‐generated text, chart, or graphics images. An evaluation of the new method was conducted. Results indicate that most students prefer lectures that employ computer graphics to those that use a chalkboard or an overhead projector. Evidence supports the hypothesis that students perform better on exams when the innovations described in this paper are adopted.
The Competitive Structure of U.S. Agricultural Exports
Authors: Pick Daniel H. , Park Timothy A.
Published: July 2006

The competitive structure of U.S. agricultural exports is examined using a model of exporter behavior based on pricing decisions across destination markets. Market power is revealed in the adjustment patterns of export prices in response to exchange rate movements. The results reject the hypothesis that the export pricing decisions by U.S. firms are consistent with price discrimination across destination markets for cotton, corn, and soybeans. The strongest evidence against the competitive market structure is obtained for international trade in wheat, where results indicate that the two largest importers (Soviet Union and PRC) may exert market power to obtain lower prices.
Hedonic Estimation of Quality Factors Affecting the Farm‐Retail Margin
Authors: Parker Douglas D. , Zilberman David
Published: July 2006

A model of the farm‐retail marketing margin is tested using producer and retail prices of a perishable product in which time during season and quality characteristics are variable. Empirical analysis verifies that the marketing margin of California fresh peaches decreases during the season and increases with improved quality. Results identify potential producer gains from improving product quality early in the season, and from price signals compensating producers for quality characteristics other than weight.
The Impact of Information on Environmental Commodity Valuation Decisions
Authors: Bergstrom John C. , Stoll John R. , Randall Alan
Published: July 2006

A conceptual model is developed which provides insight into how information affects willingness to pay for environmental commodities. A refutable hypothesis of the effects of a specific information type on the magnitude of willingness to pay for an environmental commodity is developed. This hypothesis is tested using a contingent valuation method experiment. Results indicate that information affects willingness to pay in a theoretically plausible manner. The results support the contention that information is important for accurate environmental commodity consumer valuations.
Using the Wrong Discount Rate to Allocate an Exhaustible Resource
Authors: Rowse John
Published: July 2006

What are the social welfare implications of using the wrong discount rate to allocate an exhaustible resource? Utilizing a simple numerical model, it is found that, over the (real) discount rate range of 6% to 9%, the welfare losses of employing a rate no more than 3% different from the social rate are small and decline as the social rate rises, even for stringent supply circumstances. However, substantial transfers of surplus between producers and consumers occur as the improper rate deviates from the social rate. Other issues such as income distribution immediately loom larger when a discount rate is chosen.
Production Risk and Optimal Input Decisions
Authors: Ramaswami Bharat
Published: July 2006

The paper examines the impact of production risk on a producer's optimal input decisions. Whether producers use more or fewer inputs in a yield‐risky environment depends on the sign of the marginal risk premium, which is determined by risk preferences and technology. I present the weakest condition on technology that is sufficient to sign the marginal risk premium for all risk‐averse preferences. If this condition fails to hold, the marginal risk premium is not of the same sign for all risk averters. Results are used to explore the properties of an estimated technology.
Production Subsidy and Countervailing Duties in Vertically Related Markets: The Hog‐Pork Case Between Canada and the United States
Authors: Moschini Giancarlo , Meilke Karl D.
Published: July 2006

This paper analyzes U.S. countervailing import duties aimed at offsetting the effects of a Canadian hog production subsidy. Approximate countervailing duty formulae for two alternative objectives are derived, the permissible range of these duties is illustrated, and empirical evidence is provided. To restore equilibrium at the presubsidy level in the U.S. hog market, a countervailing duty on hog imports suffices; this duty should be less than the unit hog production subsidy. To restore equilibrium in both the U.S. hog and pork markets, countervailing duties on both hog and pork imports are required. Such duties should be less than the unit subsidy, and the duty on pork should be less than the duty on hogs.
Modeling Multiple Adoption Decisions in a Joint Framework
Authors: Dorfman Jeffrey H.
Published: July 2006

A multinomial probit (MNP) model is applied to the modeling of adoption decisions by farmers facing multiple technologies which can be adopted in various combinations. This model allows for full investigation of the interactions between decisions to adopt or not adopt several technologies. Estimation is carried out in a Bayesian framework employing Gibbs sampling to circumvent past difficulties encountered in maximum likelihood estimation of the MNP model. The model is estimated for a sample of U.S. apple growers with four possible sustainable production technology bundles. The results show that adoption decisions are most significantly influenced by off‐farm labor supply.
Effect of Carbon Taxes and Subsidies on Optimal Forest Rotation Age and Supply of Carbon Services
Authors: van Kooten G. Cornelis , Binkley Clark S. , Delcourt Gregg
Published: July 2006

Carbon taxes and subsidies will affect the optimal forest rotation and, consequently, the carbon stored in forests. Unlike the Hartman rotation, where externality benefits are a function of the volume of timber growing on a site at any time, carbon benefits are a function of the change in biomass. Theoretical and empirical results (for coastal British Columbia and northern Alberta) indicate that, under some tax regimes, it may be socially optimal never to harvest the trees. In general, inclusion of the external benefits from carbon uptake results in rotation ages only a bit longer than the financial (Faustmann) rotation age.
Attribute and Safety Perceptions in a Double‐Hurdle Model of Shellfish Consumption
Authors: Lin C.‐T Jordan , Milon J. Walter
Published: July 2006

Individuals' perceptions of food product attributes such as safety may influence decisions about whether to consume and how much to consume. Survey data from southeastern U.S. adults were used in a double‐hurdle model to evaluate effects of health risk and other attribute perceptions on shellfish demand. Results indicate that attribute perceptions were important in both participation and consumption decisions. However, responses to new health risk information were not the same for each decision. Findings suggest that efforts to reduce shellfish health risks with an improved U.S. inspection program may have little influence on existing shellfish demand.