bluuebunny/crossref_metadata_2025 huggingface dataset:
Imperfectly Competitive Equilibria in International Commodity Markets
Authors: Kolstad Charles D. , Burris Anthony E.
Published: July 2006

The simple model of perfect competition in spatial markets has been widely applied in analyzing international agricultural trade. Yet, many markets do not appear to be perfectly competitive. In this paper we offer a new and efficient method for computing spatial equilibrium in oligopolistic or oligopsonistic markets. We apply the technique to an analysis of several hypotheses of market conduct in the international wheat market that have been put forward by other authors. We conclude that a Cournot‐Nash duopsony model does not perform well in explaining trade.
A Nonlinear Programming Analysis of Production Response to Multiple Component Milk Pricing
Authors: Kirkland Jack J. , Mittelhammer Ron C.
Published: July 2006

The problem of feeding Holstein cows so as to maximize revenue over feed costs was analyzed under various scenarios concerning milk component prices. Results suggested that production response of milk components to component price incentives was inflexible. When compared to baseline solutions generated under a standard federal order pricing system, fat production was within 3.5%, and solids nonfat and fluid carrier within 1.0% of baseline levels for a 100‐cow herd. Component pricing scenarios having blend prices equal to the blend price in the baseline scenario were associated with reductions in revenue over feed costs of less than 4%.
Aggregate Milk Supply Response and Investment Behavior on U.S. Dairy Farms
Authors: Chavas Jean‐Paul , Klemme Richard M.
Published: July 2006

This paper presents a dynamic model of herd composition and supply response in the U.S. dairy sector. By incorporating biological information, the influences of the economic environment on culling rates and the dynamics of the dairy cow population are analyzed. Short‐run and long‐run supply elasticities provide considerable insights on milk supply adjustments over time.
Competition from Fish Farming in Influencing Rent Dissipation: The Crawfish Fishery
Authors: Bell Frederick W.
Published: July 2006

As fish farming has emerged to compete with a preexisting common property fishery sector, rent dissipation and consequently welfare losses may be reduced. Fish farming increases the increment to supply resulting in lower prices, which reduces the quantity supplied by the commons. Welfare gains accrue only when marginal cost is rising faster than average cost, which is the usual case in the wild fisheries. Using data from the Louisiana pond and wild crawfishing industries, it was shown that for the year 1978, fish farming of crawfish reduced potential welfare losses by 76 percent.
Risk Analysis with Single‐Index Portfolio Models: An Application to Farm Planning
Authors: Collins Robert A. , Barry Peter J.
Published: July 2006

Sharpe's 1963 single‐index portfolio model, the separation theorem, and a solution method suggested by Elton, Gruber, and Padberg are adapted in this paper to the farm diversification problem. The objectives are to develop risk measures, based on single‐index parameters and computationally simple methods for farm risk planning, that are suitable for microcomputers and modern hand‐held calculators. The intent is to produce a normative model with possible extension applications.
Dynamic Animal Economics
Authors: Rosen Sherwin
Published: July 2006

Market equilibrium dynamics of herd inventory management are derived for homogenous female populations. Short‐run supply is backward bending in response to permanent changes in demand and is rising in response to transitory changes in demand. Increasing inventories are associated with high and falling prices and decreasing inventories with low and rising prices, but there is no market instability in this. These unusual intertemporal substitution effects follow from both rational expectations and appropriately formulated cobweb models and go part of the way toward explaining hog and cattle inventory cycles.
The Seasonality of Risk and Return on Agricultural Futures Positions
Authors: Murphy J. Austin
Published: July 2006

This study uses spectral analysis to investigate the risk and return seasonality of agricultural futures contracts. The results indicate that neither the expected return nor the contribution of agricultural futures to the risk of diversified investment portfolios vary seasonally. Because numerous authors have hypothesized that seasonality might exist, the findings of this article have important implications for speculators, hedgers, and researchers.
Risk Modeling via Direct Utility Maximization Using Numerical Quadrature
Authors: Kaylen Michael S. , Preckel Paul V. , Loehman Edna T.
Published: July 2006

An approach to risk modeling is developed which uses nonlinear programming and numerical integration to directly solve the expected utility maximization problem. The approach contrasts with earlier efforts in that, rather than using an empirical density function, a joint probability density function is explicitly specified. Comparisons are done showing that this approach yields more accurate solutions than the empirical density approach even when many points are sampled from the theoretical distribution.
Causal Relationships between Public Sector Agricultural Research Expenditures and Output
Authors: Pardey Philip G. , Craig Barbara
Published: July 2006

Allocative decisions concerning public sector agricultural research appear to be driven by both supply and politically mediated demand forces. In‐sample Granger tests, along with post‐sample predictive tests, suggest that simultaneity issues should not be ignored when modeling the research expenditure‐output relationship. The results also provide strong evidence that the impact of research expenditures on agricultural output may persist for as long as thirty years. These lags are substantially longer than those commonly used for agricultural research to date. The lagged effect of output on research appears to be shorter, though still between ten and twelve years.
Conditional Qualitative Forecasting
Authors: Feather Peter M. , Kaylen Michael S.
Published: July 2006

A bayesian method for conditioning the forecast of a qualitative variable on a vector of other qualitative variables is presented. An application is made to forecast the direction of quarterly hog price movements using the direction forecasts from an econometric model, an ARIMA model, and an expert as the conditioning vector. Over the out‐of‐sample 1976–86 period, only the expert outperformed the conditional qualitative forecast. The accuracy of the conditional forecast improved as the bayesian parameters were updated.
Statistical Significance of Indicators of Efficiency and Incentives: Examples from West African Agriculture
Authors: McIntire John , Delgado Christopher L.
Published: July 2006

Indicators of efficiency and incentives derived from trade theory, such as the domestic resource cost coefficient (DRC) and effective protection (EP), are generally presented as simple means. Analysis of their distributions, using farm data on millet and sorghum production from West Africa, shows them to be highly variable and, in some cases, to be significantly skewed. The analysis also shows the indicators to be highly elastic to changes in such parameters as input and output prices. If this variability is not considered when making inferences from such data, policy recommendations can be seriously misleading because they are based on different farming populations.
Competitive Storage, Rational Expectations, and Short‐Run Food Price Determination
Authors: Wohlgenant Michael K.
Published: July 2006

This paper demonstrates that lags between retail and wholesale food prices can be explained by inventory behavior of retailers. Theoretical considerations indicate that the markup model should be modified to include a Jorgenson‐type user cost variable, which depends on expected future wholesale price. The rational expectations hypothesis is used to derive price expectations. The retail price specification, therefore, depends on the stochastic process generating expected wholesale price. The econometric methodology, employing both causality testing and nonlinear estimation, is illustrated by estimating monthly price relationships for beef. The results are consistent with the theory and indicate rejection of the markup model.
Stochastic Efficiency versus Mean‐Variance Criteria as Predictors of Adoption of Reduced Tillage
Authors: Lee John , Brown Deborah J. , Lovejoy Stephen
Published: July 2006

Costs and benefits of conservation programs depend on the fraction of participants adopting a practice. Under risk, it is not clear whether predictions of adoption should be based on adoption's effect on the farmers' entire income distribution or only on its mean and variance. It is also unclear whether one must elicit the farmer's subjective beliefs about the effect on his income distribution or whether some “objective” distribution can be used. This paper describes how well mean‐variance and stochastic efficiency criteria predicted adoption of a reduced tillage practice in a watershed in central Indiana when applied to “objective” and “subjective” income distributions.
Household Demand for Convenience and Nonconvenience Foods
Authors: Capps Oral , Tedford John R. , Havlicek Joseph
Published: July 2006

A variation of the Almost Ideal Demand System was employed to determine the impacts of total food expenditure, income, food prices, household size, and demographic variables on household demand for convenience and nonconveninece foods in the United States. The budget shares are generally more responsive to prices than to real total expenditure. Additionally, the quantities demanded of convenience and nonconvenience foods are generally more sensitive to changes in income and own‐prices than to changes in cross‐prices. With regard to demographic variates, primary users of convenience foods are white households with employed household managers less than 35 years of age.
Modeling Supply Response in a Multiproduct Framework
Authors: Ball V. Eldon
Published: July 2006

The paper models multiproduct supply response in agriculture and tests key assumptions traditionally maintained in supply response studies. The technology is approximated by a restricted profit function. The properties of the restricted profit function are imposed during estimation. The hypothesis that maintains the existence of output price and quantity indexes that satisfy the adding‐up property is rejected. The existence of individual production functions for each output is also rejected. Unless joint production is permitted, the estimates of responsiveness of a particular commodity to changes in own price or prices of competing outputs are likely to be considerably understated.
An Organonic and Modern Problems Approach for Teaching Agricultural Economics Principles
Authors: Wetzstein Michael E.
Published: July 2006

Instructors in principles courses should consider placing greater emphasis on modern problems and organonic teaching techniques to increase students' proficiency in agricultural economics. These techniques will stimulate student imaginations, modify learning styles toward collaborative and independent learners, and stimulate interest in the subject matter. Unfortunately, recent developments in teaching principles are aphoristic techniques, including programmed learning, television, and computer‐aided instruction. These aphoristic techniques stifle students' imaginations, contribute to a dependent learning style, and fail to stimulate interest in the subject matter. The degree of instructors' adoption of modern problems and organonic techniques depend on their teaching abilities, class size, types of students, and how their courses blend into the curriculum.
Pest Externalities from Agricultural Inputs
Authors: Harper Carolyn R. , Zilberman David
Published: July 2006

Agricultural inputs such as water, pesticide, and even time may have the unintended effect of stimulating some pest populations, leading to crop losses. A conceptual model is developed to contrast optimal use of pesticide and nonpesticide inputs with myopic use patterns which ignore pest externalities. Under most conditions, optimal management is found to entail reduced input levels. These issues are illustrated for Imperial Valley cotton using biological simulation. Correct calculation of the relative profitability of conventional and integrated pest management techniques, such as a shortened growing season, are found to depend crucially on whether pest externalities are taken into account.
The Demand for Dairy Products: Structure, Prediction, and Decomposition
Authors: Heien Dale M. , Wessells Cathy Roheim
Published: July 2006

This article presents an analysis of the demand for dairy products. First, the structure of dairy product demand is estimated using the Household Food Consumption Survey data. Under the assumption of a two‐stage budgeting procedure, a complete demand system for food incorporating demographic effects is estimated. Next, using the demand relations estimated from cross‐section data, prediction interval tests utilizing time‐series data are performed for milk and butter. Last, factors affecting consumption are classified into economic and demographic effects and a decomposition of the causes of changes in demand over time is performed.
Intermediation Costs in an Agricultural Development Bank: A Cost‐Function Approach to Measuring Scale Economies
Authors: Cuevas Carlos E.
Published: July 2006

The cost‐output relationships and production technology in the Agricultural Development Bank of Honduras are analyzed using a translog model. Scale economies for the average branch are not significantly different from one. They are a function of output levels reflecting U‐shaped cost surfaces. Product‐specific economies of scale are substantially different. Returns to scale of lending activities approach unity, whereas there are important unexploited economies to the expansion of deposit mobilization. Cost complementarities between lending and deposit mobilization indicate advantages of joint provision of financial services over the traditional specialization in lending of agricultural development banks in developing countries.
A Nonparametric Investigation of Agricultural Production Behavior for U.S. Subregions
Authors: Fawson Chris , Shumway C. Richard
Published: July 2006

This research provides an empirical application of nonparametric techniques to determine whether agricultural production behavior in the United States and ten farm production regions over the period 1939 to 1982 has been inconsistent with the joint hypothesis of profit maximization, convex technology, and monotonic nonregressive technical change.
Use of Dichotomous Choice Nonmarket Methods to Value the Whooping Crane Resource
Authors: Bowker J. M. , Stoll John R.
Published: July 2006

A dichotomous choice form of contingent valuation is applied to quantify individuals' economic surplus associated with preservation of the whooping crane resource. Specific issues and limitations of the empirical approach are discussed. The results of this case study reveal that models with similar statistical fits can lead to very disparate measures of economic value, regardless of whether the mean or median is chosen to estimate average willingness to pay. Such results suggest caution is necessary when applying dichotomous choice models in contingent valuation.
Implications of Private Salmon Aquaculture on Prices, Production, and Management of Salmon Resources
Authors: Anderson James L. , Wilen James E.
Published: July 2006

The emergence of large‐scale salmon ranching in the Pacific Northwest has led to significant controversy over the potential impact of salmon ranching on market structure, salmon prices, ocean and aquacultural production, and salmon fishing regulation. This paper models the behavior of a dominant salmon rancher facing a competitive open‐access fishery using a dynamic nonlinear programming model. Primary attention is given to production and regulation‐influencing strategies of an optimally managed salmon ranch under selected institutional and biological constraints. The effect of such behavior is evaluated with regard to salmon prices, natural salmon stocks, ocean fishing effort, and ocean fishery productivity.
An Adjustment‐Cost Rationalization of Asset Fixity Theory
Authors: Hsu Shih‐Hsun , Chang Ching‐Cheng
Published: July 2006

This article integrates a classic concept in production economics (G. L. Johnson's asset fixity theory) with the dynamic adjustment cost model. Until now the literature has considered these two to be incompatible. By relaxing the smoothness assumption of the adjustment cost function at the origin, the theory of costs of adjustment can provide a rigorous endogenization of asset fixity. G. L. Johnson and Edwards' results are then obtained when the linearity assumption of the adjustment cost function is imposed. The work reported here also indicates that both smoothness at the origin and symmetry of adjustment cost function should be subject to empirical tests.
Whither Armington Trade Models?
Authors: Alston Julian M. , Carter Colin A. , Green Richard , Pick Daniel
Published: July 2006

The Armington trade model distinguishes commodities by country of origin, and import demand is determined in a separable two‐step procedure. This framework has been applied to numerous international agricultural markets with the objective of modeling import demand. In addition, computable general equilibrium (CGE) models commonly employ the Armington formulation in the trade linkage equations.

The purpose of this paper is to test the Armington assumptions of homotheticity and separability with data from the international cotton and wheat markets. Both parametric and nonparametric tests were performed, and the empirical results reject the Armington assumptions. This has important implications for international trade modeling and CGE modeling.
An Analytical Model of Farmers' Demand for Replacement Seed
Authors: Heisey Paul W. , Brennan John P.
Published: July 2006

Seed replacement choices differ from decisions about other inputs, such as fertilizer, because the farmer can reproduce seed. Assumptions about rates of improvement in yield potential and depreciation of retained seed are combined with behavioral assumptions and price and technical information to develop a model predicting the number of years before a farmer will buy new seed. Parameter estimates for wheat in Pakistan are fed into the model and results compared with observed replacement times. Time horizon strongly conditions effects of model parameters. To speed varietal change, better information for farmers is likely to be preferred to seed subsidies.
Productivity Growth in U.S. Agriculture under Dynamic Adjustment
Authors: Luh Yir‐Hueih , Stefanou Spiro E.
Published: July 2006

A dynamic measure of productivity growth adjusted for deviations from the long‐run equilibrium is established within an adjustment‐cost framework. An empirical application to U.S. agriculture is presented which permits identifying the dynamic linkages between technical change and productivity growth in U.S. agriculture. Total factor productivity as dynamically measured grew at 1.50% per annum. The combined effect of scale, quality‐adjusted input growth, and long‐run disequilibrium input use contributes only 3.44% of the growth, while technical change dominates the growth of total factor productivity.
Estimating Interrelated Demands for Meats Using New Measures for Ground and Table Cut Beef
Authors: Brester Gary. W. , Wohlgenant Michael K.
Published: July 2006

Two systems of demand equations for meats ate estimated using traditional and new measures of ground and table cut beef. The choice of disaggregation has a significant impact on estimated demand elasticities for hamburger and table cuts. A multivariate version of the PE‐test is used as a nonnested test of the alternative specifications. The PE‐test is an appropriate nonnested specification test when the models in question have different (but related) dependent variables. The PE‐test rejects the nonfed beef model specification but does not reject the ground beef model, which uses the new measures of ground and table cut beef.
Explaining Price Policy Bias in Agriculture: The Calculus of Support‐Maximizing Politicians
Authors: de Gorter Harry , Tsur Yacov
Published: July 2006

A model is developed to explain observed patterns of policy intervention in agriculture. We analyze the interaction between political support‐seeking politicians and support‐supplying citizens. Society consists of a rural and urban group. We determine the effects on transfers of relative group size, disparities in income endowments between groups, and the deadweight loss of redistribution. The framework advanced is an alternative to that of the interest group model and is used to explain, for example, why the export sectors in developing countries are taxed more and why the United Kingdom is less adamant for higher price supports than Germany.
Public Policy and Constitutional Prescription
Authors: Rausser Gordon C. , Zusman Pinhas
Published: July 2006

In public policy analysis, much confusion exists about the roles of explanation and prescription. To offer a new perspective, a paradigm is developed that gives both theoretical and empirical meaning to the constitutional determination of political preference functions or public sector governance structures. Current policies are viewed as a rational outcome of a political‐economic process. Three relevant spaces are specified: result, policy instrument, and constitutional. For the policy instrument space, the paradigm provides a framework for generating testable propositions on government behavior, while, for the constitutional space, the framework is prescriptive. The collective‐choice rules of the constitutional space structure the tradeoff between public and special interests.
A State‐Space Approach to Perennial Crop Supply Analysis
Authors: Kalaitzandonakes Nicholas G. , Shonkwiler J. S.
Published: July 2006

In perennial crop supply analysis, separate estimation of the qualitatively different new planting and replanting decisions is desirable. Commonly, data paucity restricts estimation to a single reduced form equation. This study develops a dynamic unobserved components method where separate estimation of the structural equations is possible in the absence of detailed data on new plantings and replantings. The proposed method is empirically implemented in a case study of the Florida grapefruit industry. In terms of both statistical and forecasting performance, the proposed structural approach is found superior to a single equation reduced form specification.
Landowner Incorporation of Onsite Soil Erosion Costs: An Application to the Conservation Reserve Program
Authors: Miranda Marie Lynn
Published: July 2006

Using data from the first signup of the Conservation Reserve Program, this paper examines whether or not landowners consider soil erosion productivity effects as they formulate their land management strategies. The empirical results indicate that regional differences exist in how well landowners incorporate the intertemporal consequences of land management decisions. With the exception of the Farm Belt, farmers either do not understand or are failing to act on the onsite productivity effects caused by soil erosion.
Nonparametric Test of the Expected Utility Hypothesis
Authors: Bar‐Shira Ziv
Published: July 2006

A nonparametric test of the expected utility hypothesis is developed in this paper. The expected utility hypothesis is shown to hold if there exists a feasible solution to a particular system of linear inequalities. Furthermore, when a feasible solution exists, boundaries on the coefficient of absolute risk aversion can be calculated explicitly. The test is applied to data on land allocations modeled as choices over lottery sets. Results, contrary to those obtained in many laboratory experiments, show that in most cases the expected utility hypothesis cannot be rejected.
A Farm‐Level Financial Analysis of Farmers' Use of Futures and Options under Alternative Farm Programs
Authors: Turvey Calum G. , Baker Timothy G.
Published: July 2006

In this paper, we investigate the relationships of farm programs and farm finance on farmers' decisions to hedge with futures or options. Results from a two‐period discrete sequential stochastic programming model of the farm firm indicates two important points. First, farmers' use of futures and options decreases in the presence of loan rates and target prices, and second, farms with high debt hedge more than farms with low debt. The results imply that evaluating farmers' use of futures and options based solely on market risks may exclude important information, namely participation in farm programs and the farm's capital structure.
An Analysis of Farmers' Agricultural Policy Preferences
Authors: Orazem Peter F. , Otto Daniel M. , Edelman Mark A.
Published: July 2006

This paper analyzes farmers' attitudes toward competing agricultural policies. The empirical work utilizes data on Iowa farmers' opinions of four policies: continuing the current program, targeting benefits to fiscally stressed farmers, mandatory controls, and decoupling. The results show that a farmer's financial situation, size and type of operation, education, and farm experience significantly influence his opinions. Attitudes toward mandatory controls and targeting are most sensitive, and attitudes toward continuation of the current program are least sensitive to changes in economic characteristics. Strong identifiable camps of both support and opposition are found for each policy except the current program.
Railroad Rate Deregulation and Uncertainly of Farm‐Level Prices for Corn
Authors: Sarwar Ghulam , Anderson Dale G.
Published: July 2006

Uncertainty of country elevator prices for corn, in terms of error‐variance and mean‐squared forecast errors, failed to increase in response to the deregulation in 1980 of railroad rates. Regression analysis was used to separate the uncertainty impacts of deregulation from those of other unanticipated changes in supply and demand. Factors influencing uncertainty included unexpected changes in storage costs, export demand, corn futures, and rail car utilization. Some of the factors creating price uncertainty prior to deregulation were replaced by new uncertainty factors occurring as a result of deregulation.
Cost Efficiency in U.S. Corn Production
Authors: Cooke Stephen C. , Sundquist W. Burt
Published: July 2006

Diewert's quadratic lemma is used to derive indexes of intertemporal and interregional cost efficiency and of economies of scale for a sample of U.S. corn regions. Using U.S. Department of Agriculture farm enterprise survey data, the results indicate that intertemporal cost efficiency in U.S. corn production increased 1.3% per year, on average, between 1974 and 1983. Regions in Illinois and Iowa have a competitive advantage in corn production over those in Indiana and Nebraska. Between 1974 and 1983, very large corn enterprises (500–1,000 acres) were 4%–8% more cost efficient than large enterprises (300–460 acres) and 8%–15% more efficient than medium size corn enterprises (175–290 acres).
Modeling Government Program Participation Decisions at the Farm Level
Authors: Perry Gregory M. , McCarl Bruce A. , Rister M. Edward , Richardson James W.
Published: July 2006

Changes in the U.S. farm economy during the 1980s have caused many farmers to give careful consideration to participation in the government farm program. Analytical techniques to identify optimal participation and resulting crop mix strategies at a whole‐farm level can aid farmers faced with these decisions. This paper presents a mathematical programming approach adaptable to farm‐level decision analysis. An empirical example involving a Texas farm suggests that resource levels, base acreage endowments, limited cross compliance, and returns outside the program can influence participation decisions.
Tax Versus Quota Regulation: A Stochastic Model of the Fishery
Authors: Androkovich Robert A. , Stollery Kenneth R.
Published: July 2006

In a deterministic setting, it has been demonstrated that taxes and quotas can be equivalent regulatory instruments and that both can in principle induce an optimal allocation of resources in markets where externalities are problematic. In this paper we consider growth, harvest, and demand uncertainty within the context of Canada's Pacific halibut fishery and find that, while taxes remain the preferred instrument, the welfare losses arising from the use of individual boat quotas are minor.
Dairy Farm Efficiency Measurement Using Stochastic Frontiers and Neoclassical Duality
Authors: Bravo‐Ureta Boris E. , Rieger Laszlo
Published: July 2006

This paper presents a stochastic efficiency decomposition model based on Kopp and Diewert's deterministic methodology. The stochastic model is used to analyze technical, economic, and allocative efficiency for a sample of New England dairy farms. The results suggest that mean economic efficiency for the farmers in the sample is about 70% and that, on average, there is little difference between technical (83.0%) and allocative (84.6%) efficiency. Analyses of the relationship between efficiency and four socioeconomic variables—farm size, education, extension, and experience—reveal that, despite some statistically significant associations, efficiency levels are not markedly affected by these variables.
Cointegration Tests and Spatial Price Linkages in Regional Cattle Markets
Authors: Goodwin Barry K. , Schroeder Ted C.
Published: July 2006

This analysis empirically evaluates spatial linkages in regional cattle markets using cointegration tests of regional price series. Several markets were not cointegrated over the 1980 through 1987 period. However, significant increases in cointegration of several regional livestock markets are observed through the 1980s. The increased cointegration parallels significant structural changes in the livestock industry. A formal analysis of market characteristics reveals that distances between markets, industry concentration ratios, market volumes, and market types have significant influences on cointegration relationships between markets.
Marketed Surplus under Risk: Do Peasants Agree with Sandmo?
Authors: Finkelshtain Israel , Chalfant James A.
Published: July 2006

Using a newly defined notion of aversion to income risk, the behavior of the marketed‐surplus producer under price risk is characterized. Unlike the familiar case first examined by Sandmo, output depends on both ordinal preferences for goods and on risk attitudes. Conditions are found that yield an output level under risk that is smaller than under certainty. If these conditions do not hold, both risk and risk aversion may have a positive effect on output. Implications for econometric studies of risk attitudes are considered and illustrated with an example. Finally, we examine the effect of uncertainty on the peasant's long‐run equilibrium.
Factor Demands in the U.S. Food‐Manufacturing Industry
Authors: Huang Kuo S.
Published: July 2006

This paper analyzes the demand for labor, capital, and energy in the U.S. food‐manufacturing industry using Allen and Morishima elasticities of substitution. The demand for capital is more elastic than for labor and energy, and these production factors are substitutable, especially between capital and labor.
Testing for Consistent Aggregation
Authors: Chambers Robert G. , Pope Rulon D.
Published: July 2006

This paper designs workable empirical procedures for testing or imposing supply (demand)‐price aggregators. Only single‐equation methods are considered to shift the focus from any particular optimizing paradigm toward the necessities for correctly tabulating firm‐level supplies (demands) and aggregate supply (demand). Both macro‐and micro‐level tests for consistent aggregation are developed. And constructive rules for aggregation based upon empirically observed micro behavior are provided in tabular form. Empirical tests reveal no support for the aggregate price most commonly reported by USDA. The constructive rules are then used to develop a new wheat‐price index consistent with supply aggregation.
Testing for Input Substitution in a Regulated Fishery
Authors: Dupont Diane P.
Published: July 2006

Input restrictions are commonly used to prevent rent dissipation in fisheries. This paper examines whether these schemes are successful by calculating the degree of input substitution between restricted and unrestricted inputs. Conventional elasticities of substitution cannot be used when the firm faces controls on the use of some inputs. In this case, the appropriate measure of substitution, the elasticity of intensity, must be used. Data from the British Columbia salmon fishery provide evidence of input substitution possibilities for two vessel types. These results call into question the usefulness of input control schemes.
A Simple Procedure to Evaluate Ex Ante Producer Welfare under Price Uncertainty
Authors: Tsur Yacov
Published: July 2006

A simple procedure is proposed for evaluating producer welfare under price uncertainty. The method is derived under the assumption of constant absolute risk aversion in which risk preferences depend on the stock of wealth but not on the flow of income. Numerical examples corroborate the procedure's properties.
Understanding Farmland Price Changes
Authors: Just Richard E. , Miranowski John A.
Published: July 2006

This paper develops a structural model of land prices which includes the multidimensional effects of inflation on capital‐erosion, savings‐return erosion, and real debt reduction as well as the effect of changes in the opportunity cost of capital. The results show that inflation and changes in the real returns on capital are major explanatory factors in farmland price swings in addition to returns to farming. Additionally, the effects of credit market constraints and expectations schemes are considered explicitly in the analytical model.
The Implicit Value of Corn Base Acreage
Authors: Herriges Joseph A. , Shogren Jason F. , Barickman Nancy E.
Published: July 2006

The impact of recent changes to the U.S. commodity program and efficacy of environmental regulations designed to discourage continuous corn rotations will depend upon the value farmers place on corn base acreage. This paper estimates this value by assuming that the benefits of access to the program are capitalized into farmland rents. Using Iowa rental survey data and a hedonic pricing approach, the rent gradient for base acreage is found to be on the order of $@@‐@@12 per acre. The discounted stream of returns to base acreage suggests an asset value for corn base of approximately $@@‐@@200 per acre.
Redistributing Income Back to European Community Consumers and Taxpayers through the Common Agricultural Policy
Authors: Bullock David S.
Published: July 2006

A multiple‐policy‐instrument generalization of Gardner's surplus transformation curve analysis is applied to an empirical model of the EC wheat sector to compare welfare effects of policy change proposals. A production quota/support price combination is estimated as the most efficient means of making relatively small transfers from EC agriculture to consumers/taxpayers. A coresponsibility levy/support price combination is estimated as the most efficient means of making larger transfers. The importance of accounting for income transfer size, distortions in related markets, and the structure of markets when comparing welfare effects of policy change proposals is demonstrated.
Preserving Waterfowl Habitat on the Canadian Prairies: Economic Incentives versus Moral Suasion
Authors: van Kooten G. C. , Schmitz Andrew
Published: July 2006

This paper examines a pilot project of NAWMP that encourages farmers to promote or maintain waterfowl habitat by relying not only on economic incentives but on awareness, education, and moral suasion. The pilot project relies on farmers' attitudes to keep payments low because project payments substitute for grain program subsidies, thus constituting a transfer from Canadian taxpayers to U.S. contributors to NAWMP. A survey instrument and regression analysis are used to examine attitudes, economic incentives, and willingness to pay and willingness to accept compensation for modifying land use in order to conserve waterfowl habitat. The results indicate that current economic incentives offered to agricultural producers are inadequate because they ignore nonmarket costs, and that a positive attitude toward habitat preservation cannot be used as a substitute for monetary incentives.
Cash Crop Production, Food Price Volatility, and Rural Market Integration in the Third World
Authors: Fafchamps Marcel
Published: July 2006

Large farmers in the Third World often devote to cash crops a larger share of their land than do small farmers. This paper suggests a possible explanation: even in the presence of food markets, Third World farmers' food security is best assured by food self‐sufficiency. A model of crop portfolio choice under multivariate risk is used to show that reasonable assumptions regarding risk and preferences reproduce the observed pattern. Simulations further indicate that food market integration reduces the need for food self‐sufficiency. Policy implications are drawn regarding domestic trade liberalization and agricultural technology.
Material Productivity in Food Manufacturing
Authors: Adelaja Adesoji O.
Published: July 2006

Material prices have risen in food manufacturing, resulting in material productivity growth. This study estimates material productivity indexes for New Jersey's food‐manufacturing sector. A 21% material productivity growth is indicated for the 1964–84 period. The mechanism of material productivity growth is also investigated. Results suggest that greater material efficiency is encouraged by rising material prices, wage rates, and regulation, and by declining food prices. Short‐run impacts on material productivity are caused by input substitution; beyond‐the‐short‐run impacts are caused by material‐saving technological change. In some food‐manufacturing subsectors, higher material prices may bring lower revenues to material suppliers.
Testing Restrictions on a Model of Japanese Meat Demand
Authors: Hayes Dermot J. , Wahl Thomas I. , Williams Gary W.
Published: July 2006

Tests for quasi‐separability, net substitutability, and perfect substitutability are developed and implemented on an almost ideal demand system model of the Japanese meat sector. The data set satisfies both symmetry and homogeneity. There is evidence of net complimentarity between chicken and dairy beef and chicken and pork. The tests indicate that Japanese Wagyu beef is considered a separate commodity to both imported beef and dairy beef. The results also indicate that fish can be treated as separable in the Japanese meat demand system.
Improving on Shadow Price Information for Identifying Critical Farm Machinery
Authors: McCarl Bruce A. , Kline D. Earl , Bender Donald A.
Published: July 2006

A method is presented for identifying critical farm machinery in a linear programming context. The method uses a technical coefficient sensitivity analysis formula that overcomes problems associated with direct use of shadow prices for critical machinery identification. Case studies show the formula identifies the benefits of altering machinery generally with less than 10% error.
Grain Price Expectations of Illinois Farmers and Grain Merchandisers
Authors: Eales James S. , Engel Brian K. , Hauser Robert J. , Thompson Sarahelen R.
Published: July 2006

The study's purpose is to measure the extent to which futures and option prices reflect the subjective price distribution of a subset of market participants, farmers, and grain merchandisers in Illinois. Findings suggest that in most instances the futures price is an appropriate proxy for expected price. However, volatilities implied by option premia usually overestimate the subjective variances of producers and merchandisers. These differences between individual and market expectations of variance are consistent with findings of overconfidence in the psychology literature and should be considered by analysts when making observations about hedging decisions and risk aversion.
Testing for Structural Change: The Demand for Meat
Authors: Choi Seungmook , Sosin Kim
Published: July 2006

Recent research on meat demand demonstrates the importance in empirical demand analyses of identifying and measuring structural changes. This paper develops and applies a method of analyzing structural changes in preferences using parameters from empirical demand equations derived from an underlying utility function. Structural changes alter the marginal rate of substitution between goods at fixed points of prices and quantities. The evolution of preference changes is measured by time‐varying multiplicative terms in a translog utility function. The application to meat concludes that structural change occurred in the 1970s and provides measures of the time pattern of demand shifts.
Characteristic Supplies and Demands in a Hedonic Framework: U.S. Market for Cotton Fiber Attributes
Authors: Kenneth R. Bowman , Ethridge Don E.
Published: July 2006

Hedonic price analysis has frequently been used to determine agricultural commodity characteristics' values. While hedonic price theory consists of a two‐stage process, second‐stage commodity characteristics' equations have not been successfully estimated until now. The estimated system consisted of 11 first‐stage equations to determine cotton characteristics' values. The second stage consisted of 24 characteristic demand and 20 characteristic supply equations to model the underlying characteristic market structure. Cotton characteristic values were shown to vary across regions and over time as characteristic supplies and demands varied.
Public Grazing in the West and “Rangeland Reform '94”
Authors: LaFrance Jeffrey T. , Watts Myles J.
Published: July 2006

Private grazing fees differ substantially and systematically across states in the West. In contrast, federal policy establishes the same grazing fee on federal lands, regardless of location. We analyze locational differences in private grazing fees with an econometric model. Differences in private grazing fees across states can be explained largely by economic forces consistent with a competitive spatial market. A uniform increase in the federal grazing fee will lead to a large variation in economic effects between states and across individual public lands ranchers. We propose the permanent transfer of public grazing rights to the private sector.
Aggregation, Flexible Forms, and Estimation of Food Consumption Parameters
Authors: Ramezani Cyrus A. , Rose Donald , Murphy Suzanne
Published: July 2006

Grouping schemes, commodity aggregation, and the choice of functional specification significantly influence the results of empirical demand studies. This article assesses the importance of these factors for estimating aggregate food consumption parameters. A flexible food demand model that nests alternative specifications is estimated using U.S. data. Foods are aggregated based on a new grouping scheme adopted from the “Dietary Guidelines for Americans.” Nutrient intake elasticities with respect to food prices and expenditure are calculated. The influence of socioeconomic variables on consumption and nutrient intake is analyzed. Price, income, and demographic effects are found to be highly significant. Our findings are invariant to the choice of functional form.
Trade and Tax Policy Reform and the Environment: The Economics of Soil Erosion in Developing Countries
Authors: Coxhead Ian , Jayasuriya Sisira
Published: July 2006

The widespread view that trade reform is bad for the environment has rarely been subjected to close scrutiny. In a developing country model we trace general equilibrium impacts of tax and tariff policy changes on upland resource allocation and, by implication, on the rate of erosion. Our analysis highlights the role of domestic market linkages as conduits between lowland and upland economies. When economywide effects are taken into account, indirect policies such as tariff reforms may in some cases provide better means for reducing upland erosion than would direct environmental policies.
Evaluation of Factors Influencing Student Class Attendance and Performance
Authors: Devadoss Stephen , Foltz John
Published: July 2006

This study quantifies the effects of student behavior, teacher attributes, and course characteristics on class attendance and performance. Several notable factors that influence attendance and grades are motivation, prior grade point average (GPA), self‐financing by students, hours worked on jobs, quality of teaching, and nature of class lectures. This study provides strong empirical evidence of the positive influence of class attendance on student performance.
A Two‐Stage Rural Household Demand Analysis: Microdata Evidence from Jiangsu Province, China
Authors: Gao X.M. , Wailes Eric J. , Cramer Gail L.
Published: July 2006

In this paper we evaluate economic and demographic effects on China's rural household demand for nine food commodities: vegetables, pork, beef and lamb, poultry, eggs, fish, sugar, fruit, and grain; and five nonfood commodity groups: clothing, fuel, stimulants, housing, and durables. A two‐stage budgeting allocation procedure is used to obtain an empirically tractable amalgamative demand system for food commodities which combine an upper‐level AIDS model and a lower‐level GLES as a modeling framework. The results indicate that the slow growth of food consumption in China during the latter half of the 1980s is a result of income stagnation rather than consumption saturation. Growth in the demand for better food and shelter by Chinese rural households will continue to be a major concern.
Closely Related Good Prices in the Travel Cost Model
Authors: McKean John R. , Walsh Richard G. , Johnson Donn M.
Published: July 2006

This travel cost demand study included prices for closely related goods such as money and time costs of on‐site time, on‐site purchases, and other trip activities. A disequilibrium labor market model was estimated. The sample was mainly composed of persons who did not substitute earned income for leisure time. The few persons who had the capability to substitute time for money were excluded from the sample. Consumer surplus was estimated to be $@@‐@@69 per trip using the expanded model. A model using only the conventional travel cost variables resulted in estimated surplus per trip of $@@‐@@45.
Declining U.S. Tobacco Exports to Australia: A Derived Demand Approach to Competitiveness
Authors: Beghin John , Hu Fan
Published: July 2006

The loss of competitiveness of U.S. tobacco leaf exports to Australia is empirically investigated, using industry‐level time‐series market data. Tobacco‐relative prices, market structure, scale, Australian market distortions, and changing characteristics of cigarettes are accounted for in the investigation. A decomposition analysis reveals that a switch to lighter cigarettes and changes in the Australian domestic tobacco content policy are the major contributors to the decline of U.S. tobacco exports. Tobacco price differences between the U.S. and its competitors, alone, cannot explain the loss of competitiveness of U.S. tobacco in Australian cigarette manufacturing.
Technology Adoption in the Presence of an Exhaustible Resource: The Case of Groundwater Extraction
Authors: Shah Farhed A. , Zilberman David , Chakravorty Ujjayant
Published: July 2006

In this paper we integrate technology diffusion within Hotelling's exhaustible resource model. The modern technology is a conservation technology such as drip irrigation used with groundwater. Resource quality heterogeneity and rising water prices are responsible for the gradual adoption of the modern technology, and under reasonable conditions the diffusion curve is an S‐shaped function of time. Without intervention, the diffusion process will be slower than is socially optimal, and optimal resource use tax will accelerate the diffusion of the conservation technology and slow down excessive resource depletion caused by market failure due to open access conditions.