bluuebunny/crossref_metadata_2025 huggingface dataset:
Economic Welfare Evaluations for Producers under Uncertainty
Authors: Pope Rulon , Chavas Jean‐Paul , Just Richard E.
Published: July 2006

The validity of producer and consumer surplus measures of firm welfare under risk is examined. Under constant absolute risk aversion and output price uncertainty only, these measures are an exact measure of firm welfare as defined by compensating variation, equivalent variation or the change in the certainty equivalent. Under decreasing absolute risk aversion, qualitative comparisons of various measures are discussed. For example, producer's surplus as measured by the area above the uncompensated risk averse supply curve overstates the compensating variation of a change in expected price of output. Procedures for calculating firm welfare under production uncertainty and a variety of economic environments are proposed. Generally, these procedures are applicable only when absolute risk aversion is constant.
Dynamic Games and International Trade: An Application to the World Corn Market
Authors: Karp Larry S. , McCalla Alex F.
Published: July 2006

Dynamic games are a conceptually useful way of analyzing imperfect markets where both buyers and sellers have potential market power. Previous analysis of imperfect markets was static and limited to either exporters or importers. A dynamic game allows the inclusion of both importers and exporters in a multiperiod framework allowing the derivation of reaction functions. A Nash noncooperative difference game is applied to the international corn market to explore the plausibility of numerical results. The results are reasonable and show that the game approach based on a more comprehensive econometric model has a promising future in policy analysis.
Benefits from Groundwater Management: Magnitude, Sensitivity, and Distribution
Authors: Feinerman Eli , Knapp Keith C.
Published: July 2006

Empirical estimates of benefits from groundwater management are reported for an area in California with heavy reliance on groundwater supplies. Benefits are quite sensitive to the water demand schedule and interest rate but less sensitive to other parameters. However, in all cases considered the increases in welfare from groundwater management are less than ten percent. Tax revenues received under a system of pump taxes are four to five times as large as the benefits from management. Thus, groundwater users gain under a system of quotas but may suffer substantial welfare losses under pump taxes.
Insecticide Use and Crop Rotation under Risk: Rootworm Control in Corn
Authors: Lazarus William F. , Swanson Earl R.
Published: July 2006

The economic threshold concept is extended to a combination of two pest controls, insecticide and crop rotation, in a corn‐soybean farm model. Effect of risk attitudes on the optimal combination of controls is explored, using a stochastic simulation with random crop prices, yields, and rootworn damage. Crop insurance may cause a risk‐averse farmer to adopt a riskier cropping program. Reduced risk aversion causes the farmer to specialize in the more profitable corn crop. The insecticide and rotation thresholds both increase with reduced risk aversion. Depending on pest densities on individual fields, insecticide use may increase or decrease.
Estimation of Multicrop Production Functions
Authors: Just Richard E. , Zilberman David , Hochman Eithan
Published: July 2006

This paper considers whether separability or nonjointness is the better approach for attaining tractability for multicrop production function estimation. Characteristics of agricultural production associated with allocated inputs, physical constraints, and output determination imply sufficient nonjointness for estimation, whereas separability is less plausible. The paper also addresses estimation of production functions with allocated inputs where allocations are not observed and demonstrates a proposed approach by way of example.
The Irrigation Demand for Electricity
Authors: Maddigan Ruth J. , Rizy Colleen Gallagher , Chern Wen S.
Published: July 2006

This paper examines the regional differences in the irrigation demand for electricity. The analysis is based upon the Rural Electric Cooperatives' statistics on the sale of power for irrigation. A simultaneous‐equation system is developed to focus on both the short‐run utilization of electricity in irrigation and the long‐run determination of the number of irrigators using electricity. The structural equations are estimated using pooled, state‐level data for the period 1969–79. In light of the model's results, the impacts of changes in relative energy prices on irrigation are examined.
Evidence on Farm Use Value Assessment, Tax Shifts, and State School Aid
Authors: Chicoine David L. , Hendricks A. Donald
Published: July 2006

The almost universal adoption of farm use value assessments is a fundamental change in the U.S. property tax system. Evidence from the Illinois use value assessment program suggests assessment law changes codified de facto farm property tax preferences and substantially increased property tax liabilities on nonfarm real estate. An evaluation of the effects of use value assessments on state school aid under a district power equalizing formula demonstrates how costs of farm property tax preferences are exported, in part, to state taxpayers.
Improving the Efficiency of Stochastic Dominance Techniques Using Convex Set Stochastic Dominance
Authors: Cochran Mark J. , Robison Lindon J. , Lodwick Weldon
Published: July 2006

The advantages of convex set stochastic dominance (CSD) are discussed in terms of extending other stochastic dominance criteria in a way which will decrease Type II errors (large efficient sets) without increasing the Type I errors (inaccurate rankings). An empirical example ranking pest management strategies demonstrates the potential of CSD by reducing the efficiency set by almost 60% without imposing additional constraints on the preference set. It is suggested that CSD may permit more imprecise representations of risk preferences, avoiding utility measurement problems, and still identify efficient sets of acceptable sizes.
Sources of Increased Instability in Indian and U.S. Cereal Production
Authors: Hazell Peter B. R.
Published: July 2006

Recent growth in Indian and U.S. cereal production has been accompanied by a more than proportional increase in the standard deviation of production. This study applies variance decomposition procedures to state data on crop production to analyze the sources of this increased instability. It is found that production has become significantly more covariate between states and crops, largely because of increased yield variability and a loss in offsetting patterns of variation between crop yields in different states. These changes may be associated with more variable prices, with higher‐yielding technologies, and with a narrowing of the genetic base.
The Estimation of Product Supply and Input Demand by the Differential Approach
Authors: Rossi Nicola
Published: July 2006

This paper makes use of the differential approach to the theory of the multiproduct firm in order to empirically analyze input demand and product supply in Italian agriculture. Estimation of the parameters of the model with annual (1961–80) data for a sector model of fourteen products and three factors of production suggests possibilities for farmers to change their output mix in response to changes in the expected prices of products. On the input demand side, the derived demand functions seem to satisfy the integrability conditions but turn out to be quite inelastic.
Bargaining, Strategic Reserves, and International Trade in Exhaustible Resources
Authors: Crawford Vincent P. , Sobel Joel , Takahashi Ichiro
Published: July 2006

This paper proposes a framework for the analysis of optimal strategic reserve policy when ability to withstand embargoes influences terms of trade in an exhaustible resource like oil. The mode embodies two stylized facts: competitive forces are not always strong enough to eliminate other influences on the negotiated price of oil, and long‐term contracts for oil delivery cannot be enforced across national boundaries. Some modeling issues that arise in this context are discussed, and a model of optimal strategic reserve policies is proposed and solved in a leading special case.
On Discarding Low Quality Produce
Authors: Nguyen Dung , Vo Trang T.
Published: July 2006

This paper considers a model of optimal culling in which demand is generally nonlinear. We show that the shape of the break‐even quality price change curve depends on both the concavity‐convexity of the demand function and the price elasticity. We specify that the actual quality price change is an increasing function of the minimum quality but at a decreasing rate. Conditions ate then obtained to ensure that a minimum quality level chosen from a permissible set would yield maximum total profits for the industry.
Asymmetry in Retail, Wholesale, and Shipping Point Pricing for Fresh Vegetables
Authors: Ward Ronald W.
Published: July 2006

The linkage among retail, wholesale, and shipping point prices for a select group of fresh vegetables is measured using Wolffram's asymmetry model. Procedures for dealing with discontinuous time series are shown, and Granger's causality test is used to show the direction of the price linkage. Wholesale prices are shown to lead both retail and shipping point prices. Asymmetry in the retail‐wholesale response indicates that wholesale price decreases are reflected at the retail more so than are wholesale price increases. Wholesale price decreases are more fully passed through to the shipping point relative to wholesale increases.
Price Trends at Livestock Auctions
Authors: Buccola Steven T.
Published: July 2006

Auction bidders may pursue a large number of reasonable bidding strategies, including those that are risk‐neutral and risk‐averse. Risk‐averse bidders are especially tempted by the auction process to discriminate against themselves, that is, to offer prices close to their reservation prices or target prices. Self‐discrimination, in turn, usually implies that quality‐corrected prices of individual lots trend downward as the sale proceeds. The empirical evidence for downtrending prices at selected yearling steer sales is examined. Implications are then drawn for auction pricing efficiency and equity.
Adoption of Interrelated Agricultural Innovations: Complementarity and the Impacts of Risk, Scale, and Credit
Authors: Feder Gershon
Published: July 2006

The paper presents a model of farm decisions which arise when a farm is faced with two interrelated innovations. The innovations are distinguished by their returns to scale, and may be adopted individually. It is shown that under conditions of uncertainty or a binding credit constraint, the intuitive concept of innovations' complementarity may be misleading, and a more relevant definition of complementarity is derived. The latter helps to explain why policies which enhance adoption of one innovation may discourage adoption of the other, even when the two innovations seem to complement each other.
Net Investment in Farm Tractors: An Econometric Analysis
Authors: Penson John B. , Romain Robert F. J. , Hughes Dean W.
Published: July 2006

A wide range of assumptions about the capital deterioration and marginal factor cost of tractors has been made in previous studies. This study develops a measure of the implicit rental price of tractors which accounts for the capital structure used by farmers, the capacity depreciation of tractors, and income tax considerations. Estimates of net investment models for alternative capacity depreciation patterns are compared to those suggested by engineering considerations. The results show that the frequently used geometric decay pattern does the poorest job of explaining annual real net investment in farm tractors.
Determinants of Hunter Participation: Duck Hunting in the Mississippi Flyway
Authors: Miller Jon R. , Hay Michael J.
Published: July 2006

In this paper the authors study the relationship between habitat availability, hunter success, and the rate and intensity of participation in duck hunting in the Mississippi Flyway. Using socioeconomic data from the 1975 National Survey of Hunting, Fishing and Wildlife Associated Recreation, and waterfowl habitat data from the 1970 Flyway Habitat Management Unit Project, they estimate probability and intensity of participation equations for duck hunting. The analysis differs from previous population‐specific recreation studies in (a) the narrowly defined activity, (b) more precise definition of supply variables, (c) use of variables representing distance to hunting sites, and (d) the use of logit analysis to estimate participation probability equations.
Dominant Forms of Corporate Control in the U.S. Agribusiness Sector
Authors: Caswell Julie A.
Published: July 2006

Two forms of control over corporate decision making are analyzed: direct control through stockholding and network control through interlocking boards of directors. A majority of the 222 large agribusiness firms studied had strong direct control by owners or cooperatives, while the largest firms lacked such control. Tests relating direct control type to level of network control exposure show that strong direct control is associated with weak network control and vice versa, with firm size being the major factor in explaining both types of control. For the largest firms, network‐based rather than direct control appears to limit management discretion.
Energy Conservation and Rebates in Commercial Food Enterprises
Authors: Train Kenneth E. , Strebel Judi E.
Published: July 2006

State programs offer rebates to food enterprises for the installation of energy‐saving devices. This paper estimates the impact of rebates on the probability of installing a device and the resultant energy saving. Under reasonable ranges for energy costs and rates of return on devices, the benefits of a rebate program, calculated as the value of the energy savings that are attributable to the program, exceed the costs of the program and devices.
Optimal Control of Irrigation Scheduling Using a Random Time Frame
Authors: McGuckin J. Thomas , Mapel Craig , Lansford Robert , Sammis Ted
Published: July 2006

A dynamic programming model of irrigation scheduling is developed which accounts for stochastic weather conditions, results in simple irrigation decision rules, and can be operated on current microcomputers. The model employs heat unit intervals instead of chronological time to define the dynamic equations of the crop‐soil system. Procedures are outlined for estimating the transition probabilities of climate within the heat unit intervals. When compared to maximum yield irrigation scheduling, the model increases net returns of corn, sorghum, and cotton by $@@‐@@10.00 to $@@‐@@30.00 per acre.
The Econometrics of Damage Control: Why Specification Matters
Authors: Lichtenberg Erik , Zilberman David
Published: July 2006

The contribution of damage control agents to production differs fundamentally from that of standard inputs (lands, labor, capital). This paper develops an econometric model based on the key characteristics of damage control agents and examines its properties. It demonstrates that standard production function specifications overestimate damage control agent productivity and have erroneous implications for the evolution of damage control agent productivity and use in response to changing environments (e.g., the spread of pest resistance). It also proposes several alternative specifications and discusses methods for estimating them.
A Comparison of Direct and Indirect Methods for Estimating Environmental Benefits
Authors: Smith V. Kerry , Desvousges William H. , Fisher Ann
Published: July 2006

Two classes of methods are currently available to estimate consumers' valuations of improvements in environmental resources—direct and indirect. This paper reports the results of a detailed comparison of the estimated recreational benefits associated with water quality improvements using one member of each class. The findings indicate that while the estimates are quite comparable, analyst judgment played a very important role in the development of both methods.
The Travel Cost Model for Lake Recreation: A Comparison of Two Methods for Incorporating Site Quality and Substitution Effects
Authors: Caulkins Peter P. , Bishop Richard C. , Bouwes Nicolaas W.
Published: July 2006

This paper empirically illustrates how different assumptions regarding recreationists' decision‐making behavior affect the predicted changes in recreational activity given a water quality improvement. A multinomial logit model, which reallocates visits away from other sites to the improved site, predicts a smaller outward shift of the recreationist's demand curve than the more traditional travel cost model, which does not assume any reallocation of visits among sites.
Integrated Pest Management Strategies for Approximately Optimal Control of Corn Rootworm and Soybean Cyst Nematode
Authors: Zacharias Thomas P. , Grube Arthur H.
Published: July 2006

A dynamic programming model is used to determine approximately optimal management strategies for control of corn rootworm and soybean cyst nematode in Illinois. Decision alternatives for rootworm control include nontreatment, application of a soil insecticide, and rotation to soybeans. Alternatives for cyst nematode control are nontreatment, soil nematicide, resistant cultivars, and rotation to corn. State variables in the dynamic programming model are infestation levels of both pests, previous land use decisions, and expected product prices.
Input and Marketing Economies: Impact on Structural Change in Cotton Farming on the Texas High Plains
Authors: Smith Edward G. , Knutson Ronald D. , Richardson James W.
Published: July 2006

This study isolates the degree of pecuniary economies existing for input purchases and marketing on cotton farms in the Texas Southern High Plains. The results indicate that substantial cost and marketing economies are being realized by the largest farms in the region.
Profit Efficiency Among Basmati Rice Producers in Pakistan Punjab
Authors: Ali Mubarik , Flinn John C.
Published: July 2006

Farm‐specific profit inefficiency among Basmati rice producers was estimated from a variable‐coefficient profit frontier. The mean level of inefficiency at farm resources and price levels was 28%, with a wide range (5%–87%). Average loss of profit was Rs 1,222 per hectare. Socioeconomic factors related to profit loss were the farm household's education, nonagricultural employment, and a credit constraint. Institutional determinants of profit loss were a water constraint and the late application of fertilizer. Punjab‐wide benefits of increasing farmer's profit efficiency are large; a 25% reduction in profit loss among Basmati rice producers may generate over Rs 240 million in extra profits each rice season.
The Determinants of Full‐Empty Truck Movements
Authors: Beilock Richard , Kilmer Richard L.
Published: July 2006

A model is developed to explain full‐empty movement decisions for motor carriers. The model is estimated for movements to Florida of carriers serving the Florida produce/ornamentals industry. The results indicate that carriers act rationally, basing their decisions on a wide range of factors. The findings also suggest that regulatory restrictions continue to result in unnecessary empty movements.
Cooperation and Part‐Time Farming in the Israeli Moshav
Authors: Guttman Joel M. , Haruvi Nava
Published: July 2006

A simultaneous equations model of the Israeli moshav, in which the levels of cooperative marketing, part‐time and full‐time farming, output and capital stock are endogenous, is developed and empirically estimated. In the process, hypotheses relating to the problem of voluntary collective action are tested.
Forecasting Vector Autoregressions with Bayesian Priors
Authors: Bessler David A. , Kling John L.
Published: July 2006

The paper explores the justification for, and application of, Bayesian priors in forecasting a vector autoregression. A nonsymmetric, random‐walk prior outperforms three alternative time‐series representations in forecasting five series of the U.S. hog market.
Long‐Run Profit Functions for Multiproduct Firms
Authors: Squires Dale
Published: July 2006

A long‐run specification of the multiproduct profit function is developed from the restricted profit function. The multiproduct restricted profit function and the envelope condition are used to estimate the optimal, long‐run levels of the quasi‐fixed factor. Formulas for long‐run Marshallian elasticities of substitution and transformation, economies of scope, product‐specific and overall economies of scale, and economic measures of capacity utilization are developed for the translog functional form. The methodology is illustrated by a case study of the New England otter trawl industry.
A Hedonic Study of the Effects of Erosion Control and Drainage on Farmland Values
Authors: Palmquist Raymond B. , Danielson Leon E.
Published: July 2006

Valuing farmland improvements is important for individual farmers and policy makers. This paper demonstrates the use of a hedonic land value study to determine the value of erosion control and drainage using data from North Carolina. Land values are significantly affected by both potential erosivity and drainage requirements. This study's estimates are compared with estimates derived from a variety of other types of studies.
Interruptible Water Markets in the Pacific Northwest
Authors: Hamilton Joel R. , Whittlesey Norman K. , Halverson Philip
Published: July 2006

This paper analyzes the potential for using a market to shift water from irrigation to hydropower use in periods of low river flow in the Snake River basin of Idaho. The water could be used for irrigation in most years but in dry years would be very valuable for firming up electric power supplies. A model of crop growth and water use was utilized to estimate farmer responses and resulting farm income losses due to market‐restricted irrigation water supplies. Results indicate that estimated hydropower benefits are ten times greater than estimated lost farm income, so the proposed water market should be economically feasible.
Test‐Retest Reliability of the Contingent Valuation Method: A Comparison of General Population and Visitor Responses
Authors: Loomis John B.
Published: July 2006

The reliability of the contingent valuation method is evaluated by resurveying the same general households and visitors nine months after their original survey. Test‐retest correlations on willingness to pay are statistically significant and ranged from. 422 for the general population sample to. 782 for the visitor sample. Using a paired T‐test, there was no statistical difference between an individual's first and second reported willingness to pay. Chow tests comparing the original and resurvey willingness‐to‐pay functions showed no statistical difference at the .01 level. Reported willingness to pay is reasonably stable over the time period surveyed.
The Effect of Food Stamps on Food Expenditures: An Assessment of Findings From the Nationwide Food Consumption Survey
Authors: Devaney Barbara , Fraker Thomas
Published: July 2006

Estimates of the marginal propensity to consume food out of food stamp benefits based upon the low‐income supplement to the U.S. Department of Agriculture's “Nationwide Food Consumption Survey” are very sensitive to whether weighted or unweighted data are used in the analysis. Based on data from the 1977–78 survey, we estimated identical models of household food expenditures using unweighted and weighted data. Weighted estimates of the marginal propensity to consume food out of food stamps are approximately double the unweighted estimates, even when sample stratifiers are included in the model. A small number of cases with large sampling weights are responsible for almost all of the difference between the weighted and unweighted estimates.
The Political Economy of Extension Program Design: Institutional Maintenance Issues in the Organization and Delivery of Extension Programs
Authors: McDowell George R.
Published: July 2006

Besides its educational function, extension is expected to generate political support for the land grant universities. The necessary conditions for extension programs to elicit political support are for them to (a) be a positive net benefit, (b) be clearly attributable to extension, (c) be feasible of political solicitation, and (d) have benefits of sufficient magnitude to motivate political action. The characteristics of programs that affect these conditions are the attributes of (a) incompatible use, (b) exclusion costs, and (c) joint impact. The instrument of program design that influences these attributes is the degree to which information is particularized to a specific audience.
The Estimation of Indifference Maps by Expected Utility Analysis
Authors: Bennett Jeff , Smith Ben
Published: July 2006

The indifference curve estimation procedure proposed and used by Sinden to value nonmarketed goods implicitly adopts the assumption that a two‐good utility function can be obtained by the simple addition of two single‐good utility functions. The results of two experiments indicate that using the strict additivity assumption is likely to bias the indifference maps so derived. While an alternative nonadditive technique is proposed, it is found that, as with Sinden's technique, it is subject to such a large degree of respondent inconsistency that doubt is cast on the usefulness of the results obtained and on the practicality of this general approach.
Welfare Measurements Using Contingent Valuation: A Comparison of Techniques
Authors: Boyle Kevin J. , Bishop Richard C.
Published: July 2006

Three commonly used techniques of asking contingent valuation questions are compared: iterative bidding, payment cards, and dichotomous choice. The results reveal that no single contingent valuation technique is neutral in the elicitation of hicksian surplus and each technique has its strengths and weaknesses. The iterative bidding estimates contain a starting point bias, while the payment card and dichotomous choice estimates were influenced by the interviewers soliciting the contingent values. Finally, the analysis of dichotomous choice responses involves unresolved issues that warrant further investigation. On the other hand, dichotomous choice is the easiest technique to administer in a survey setting.
Long‐Run Comparative Statics Under Output and Land Price Uncertainty
Authors: Paris Quirino
Published: July 2006

Several authors have noticed that, in the uncertain short run, the supply function may slope downward and the input demand functions may slope upward. These possibilities prevent the setup of unambiguous tests of rational behavior. In this article, testable hypotheses for the competitive firm operating in a price‐uncertain environment are derived assuming a long‐run horizon. Some of these hypotheses take the form of Slutsky‐type relations involving the relative input demand functions (the ratios of input to output quantities). Homogeneity restrictions involving input and output mean prices, in general, are absent under uncertainty. Conditions for restoring this homogeneity are also discussed. The main result is the rediscovery of the importance of relative quantities for the analysis of a long‐run equilibrium.
Negotiating Reductions in Agricultural Support: Implications of Technology and Factor Mobility
Authors: Hertel Thomas W.
Published: July 2006

This paper highlights the joint significance of agricultural technology and factor mobility in determining the impact of changing support policies. The impact of across‐the‐board reductions in farm support on output, exports, employment, and land values will vary systematically across countries, depending on their relative reliance on export, output, and input subsidies. Furthermore, considerable maneuvering room exists, even after an aggregate reduction in support is agreed upon. For example, the aggregate U.S. producer subsidy equivalent could be reduced, while leaving unchanged the demand for farm labor, by shifting the mix of remaining subsidies toward inputs which are complementary with labor.
The J‐Curve Effect and the U.S. Agricultural Trade Balance
Authors: Carter Colin A. , Pick Daniel H.
Published: July 2006

According to the J‐curve theory, following a currency depreciation, there will be an initial deterioration of the trade balance before an improvement is realized. This paper finds empirical evidence indicating the first segment of the J‐curve does exist for the U.S. agricultural trade balance. A 10% depreciation of the U.S. dollar is estimated to lead a deterioration of the agricultural trade balance that will last for about nine months.
Multiproduct Supply and Input Demand in U.S. Agriculture
Authors: Shumway C. Richard , Saez Roberto R. , Gottret Pablo E.
Published: July 2006

Two sets of U.S. agricultural output supply and input demand relationships, including cross‐price effects, are reported for five commodity groups and four variable input groups for the 1951–82 period. They are obtained by direct econometric estimation on U.S. data and by geographic aggregation from published econometric estimates for each of ten regions comprising the contiguous forty–eight states. The supply and demand formulations are specified on the assumptions of competitive behavior and an underlying normalized quadratic profit function. The effects of upward‐sloping input supply curves are examined at the national level.
The Biological Control of Cassava Mealybug in Africa
Authors: Norgaard Richard B.
Published: July 2006

Cassava, brought from South America 300 years ago free of its pests, became a major subsistence crop in Africa. A mealybug was mistakenly introduced in the early 1970s. By the 1980s the mealybug was a major pest. The International Institute of Tropical Agriculture found a parasitic wasp in South America and reared and released it in Africa. Conservatively estimated, the benefit‐cost ratio for this program is 149 to 1. This success indicates that biological control can play an important role in pest management.
Distributional Welfare Implications of an Irrigation Water Subsidy
Authors: Foster William E. , Calvin Linda S. , Johns Grace M. , Rottschaefer Patricia
Published: July 2006

The distributional welfare implications of a subsidy for irrigation water for California rice producers are analyzed. A more general equilibrium approach than that used in previous studies is taken in order to determine the effects of subsidy on consumers, subsidized producers, and unsubsidized producers. The two important policy conclusions of the results are that unsubsidized producers bear part of the cost of a subsidy through lower prices, and that consumers (taxpayers) may gain by sponsoring increased production through a selective subsidy.
The Effects of Well Depth and Land Quality on the Choice of Irrigation Technology
Authors: Caswell Margriet F. , Zilberman David
Published: July 2006

This paper introduces a framework to study the effects of farm characteristics (land quality and well depth) and irrigation technology characteristics (application effectiveness and pressurization requirement) on a farmer's choice of irrigation system. Conditions indicating how the adoption of drip or sprinkler irrigation affects water and energy demands are presented as well as conditions under which these technologies are likely to be adopted. Two functional forms for the production function (quadratic and Cobb‐Douglas) are presented with realistic values of key parameters. The empirical analysis demonstrates the importance of using forms which are consistent with the classical three stages of production.
The Benefits of Pollution Control: The Case of Ozone and U.S. Agriculture
Authors: Adams R. M. , Hamilton S. A. , McCarl B. A.
Published: July 2006

The adverse effects of ozone and other air pollutants on crop yields are well documented. This paper reports on an assessment of the benefits to agriculture arising from reductions in ambient ozone pollution. Estimates are derived using recent plant science data as input for a spatial equilibrium model of U.S. agriculture. Sensitivity of benefit estimates to biological and economic sources of uncertainty is also investigated. Results suggest that the benefits of a 25 percent reduction in ambient ozone are substantial, amounting to $@@‐@@1.7 billion. The robustness of these estimates varies across alternative assumptions concerning response data and export markets.
Prices and Quality Effects in Cross‐Sectional Demand Analysis
Authors: Cox Thomas L. , Wohlgenant Michael K.
Published: July 2006

A conceptual clarification of the sources and meaning of cross‐sectional price variability is used to motivate a theoretical and econometric framework for the estimation of cross‐sectional demand functions. Quality effects are distinguished from supply‐related price variability to identify cross‐sectional demand for disaggregated food commodities. An empirical application using data from the 1977–78 Nationwide Food Consumption Survey indicates that parameter differences resulting from a failure to adjust cross‐sectional prices for quality effects are likely to be small for relatively homogenous, disaggregated food commodities.
Household Consumption of Food‐Away‐From‐Home: Total Expenditure and by Type of Food Facility
Authors: McCracken Vicki A. , Brandt Jon A.
Published: July 2006

Consistent with prior expectations based on household production theory, household income, time value, size and composition, and the environment in which production and consumption occurred were all important determinants of total household expenditures on food‐away‐from‐home. However, the importance of these factors varied by type of food facility: conventional restaurants, fast‐food facilities, and other commercial establishments. Decomposition of the tobit elasticities indicated the differential importance of market participation effects of household size, income, and time value by level of the variable and by type of food facility.
Preferences of Citizens for Agricultural Policies: Evidence from a National Survey
Authors: Variyam Jayachandran N. , Jordan Jeffrey L. , Epperson James E.
Published: July 2006

The increasing costs of agricultural programs is raising concern about the future direction of agricultural policies. Data from a nationwide survey on public attitudes toward agriculture are used to examine the structure of citizens' preferences for government involvement in agriculture and especially for policies to protect family farms. Estimates of the influence of economic and sociodemographic variables on policy preferences are computed using a multiple‐indicator model. Signs and magnitudes of estimated coefficients lend support to the self‐interest theory of voter behavior. Results question economic arguments suggesting altruistic motives as a cause of redistributionary agricultural policies.
Optimal Scheduling in Shrimp Mariculture: A Stochastic Growing Inventory Problem
Authors: Hochman Eithan , Leung PingSun , Rowland Lawrence W. , Wyban James A.
Published: July 2006

Appropriate management tools are required for the successful introduction of advanced intensive technology in shrimp mariculture. This paper presents a stochastic dynamic decision model for evaluating the potential of the round pond technology practiced at the Oceanic Institute in Hawaii. The model provides the optimal stocking and harvesting schedules for a shrimp pond using a set of intra‐ and interseasonal decision rules. These rules are expressed as cutoff revenues when both prices and weights are considered random and as cutoff prices and cutoff weights when only prices or weights are considered random. The pond is not harvested if the current realized revenue is less than the cutoff revenue. The model simulates optimal scheduling using a set of 1986 shrimp prices for the case of random prices. Net profits are approximately doubled using the optimal schedules compared to conventional fixed scheduling schemes. The model also evaluates the economics of controlled environment.
Alternative Estimates of Fed Beef Supply Response to Risk
Authors: Antonovitz Frances , Green Richard
Published: July 2006

Supply response models for fed beef incorporating risk by including both the mean and variance of output price are developed, estimated, and compared. Six different estimates of the mean and variance are obtained from futures prices; ARIMA processes; and naive, adaptive, and rational expectations models. Empirical estimates are compared using nonnested testing procedures and indicate that the choice of the expectations model significantly influences elasticity estimates and whether supply response is positive or negative. Empirical evidence does not support any one model in particular, suggesting that expectations are heterogenous rather than homogenous.
Federalism, Opportunism, and Multilateral Trade Negotiations in Agriculture
Authors: Ruppel Fred J. , Boadu Fred O. , Peterson E. Wesley F.
Published: July 2006

When federalist nations are signatories to international economic agreements, potential problems arise because of the inherent conflicts between federal law and legitimate state interests. This paper presents a conceptual framework for analyzing problems surrounding negotiation, ratification, and implementation of international agreements when federations are signatories. The economic model isolates three factors (the variance of state net benefits under an agreement, individual states' opportunity costs associated with the agreement, and state‐supported opportunism) as cost‐increasing impediments to the successful institution of international economic agreements and highlights opportunism containment as fundamental to credible commitments in international agreements.
A Generalized Measure of Farm‐Specific Technical Efficiency
Authors: Dawson Philip J. , Lingard John , Woodford Christopher H.
Published: July 2006

Single measures of farm‐specific technical efficiency over time are calculated for rice farms in Central Luzon, the Philippines, from the residuals of a stochastic frontier production function. Panel data from the International Rice Research Institute's periodic “Loop Survey” are used. Results show a narrow range of efficiency between 84% and 95% across the twenty‐two farms, so that there is limited scope for increasing output by resource reallocation. A comparison is made with measures of technical efficiency using traditional covariance analysis.
A Bioeconomic Analysis of the Texas Shrimp Fishery and Its Optimal Management
Authors: Önal Hayri , McCarl Bruce A. , Griffin Wade L. , Matlock Gary , Clark Jerry
Published: July 2006

Overfishing in the Texas shrimp fishing industry by time period and fishing area is investigated. An optimal harvesting pattern is determined using a multiperiod mathematical programming model where prices, fishing effort, catch, and resource dynamics are treated endogenously. These results are then compared with actual effort. The comparison indicates substantial excess effort in spring and early summer, especially in the bays and shallow offshore areas. The peak fishing season also occurs later in the fall in optimal harvest pattern than in practice. The results indicate both producers and consumers gain from reduced fishing effort because of improved size composition of the harvest.
Advertising, Information, and Product Quality: The Case of Butter
Authors: Chang Hui‐Shung , Kinnucan Henry W.
Published: July 2006

This study examines the roles of cholesterol information and advertising in explaining consumption trends for fats and oils, focusing on butter. Results suggest increased consumer awareness of the health effects of blood cholesterol has contributed to the secular decline in butter consumption in Canada. Although consumers' responses to negative information appear to outweigh their responses to positive information, the industry advertising campaign launched in 1978 by the Dairy Bureau of Canada has had a positive effect on butter demand.
Statistical Efficiency of Double‐Bounded Dichotomous Choice Contingent Valuation
Authors: Hanemann Michael , Loomis John , Kanninen Barbara
Published: July 2006

The statistical efficiency of conventional dichotomous choice contingent valuation surveys can be improved by asking each respondent a second dichotomous choice question which depends on the response to the first question—if the first response is “yes,” the second bid is some amount greater than the first bid; while, if the first response is “no,” the second bid is some amount smaller. This “double‐bounded” approach is shown to be asymptotically more efficient than the conventional, “singlebounded” approach. Using data from a survey of Californians regarding their willingness to pay for wetlands in the San Joaquin Valley, we show that, in a finite sample, the gain in efficiency can be very substantial.
Supply, Demand, and Effects of Alternative Policies on the U.S. Oats Industry
Authors: Brandt Jon A. , Kruse John R. , Todd Jackie
Published: July 2006

Oats are used as both a cover and a production crop. In the Corn Belt and Northern Plains, large year‐to‐year changes in the oats harvested‐to‐planted acreage ratio suggest specifying harvested rather than planted acreage equations. Oats demands for feed, food, seed, and stock use are simultaneously estimated in this study, and impacts of alternative policies on oats production, prices, and returns are simulated. Changes in corn and dairy policies associated with the 1985 farm bill are shown to have significant consequences for the U.S. oats industry.
A Stochastic Asset Replacement Model for Rejuvenated Assets
Authors: Smith G. Scott , Wetzstein Michael E.
Published: July 2006

Stochastic returns generated by a productive asset are investigated for the replacement problem with rejuvenation. Optimal replacement and rejuvenation conditions, given collinearities among multiple outputs, are considered for alternative levels of producer risk preference. This methodology is applied to a laying hen replacement problem. Results indicate that risk‐averse producers should consider less rejuvenation and shorter rejuvenation production periods. Also, replacement decisions should occur later in the year for peak production to coincide with high output prices.
Evaluating the Integration of Contiguous Discontinuous Markets
Authors: Dahlgran Roger A. , Blank Steven C.
Published: July 2006

This paper applies the concepts of structural models of markets, market integration, and market discontinuity to show that discontinuous markets alter the integration characteristics of continuous markets. When analyzing systems of contiguous markets, some of which are discontinuous, it appears that the continuous markets are less well integrated when the discontinuous markets are operating than when they are not operating.
Flexible Demand Systems with Serially Correlated Errors: Fat and Oil Consumption in the United States
Authors: Yen Steven T. , Chern Wen S.
Published: July 2006

A flexible demand system proposed by Lewbel is used to estimate U.S. fat and oil demand from 1950 to 1986. Results suggest that the Lewbel model outperforms the Translog and AIDS and that correction for serial correlation is important. Findings also suggest that price and income effects, together with increasing public health concerns, primarily determine U.S. fat and oil demand.
Computer Use by Ohio Commercial Farmers
Authors: Batte Marvin T. , Jones Eugene , Schnitkey Gary D.
Published: July 2006

Although computer technologies have evolved rapidly, farmers have been slow to adopt these technologies. This research identifies factors influencing farmers' adoption of computers and the number and type of applications for which the computer is used. Ohio commercial farmers were randomly sampled and analyzed using multinomial logit techniques. Results suggest that older farmers are less likely to adopt computers, less likely to find them useful, and make fewer applications of the computer in their business. Education level is positively associated with computer adoption and with increased numbers of applications made of the computer.
Dynamic Marketing and Retention Decisions for Cow‐Calf Producers
Authors: Schroeder Ted C. , Featherstone Allen M.
Published: July 2006

Optimal calf retention and marketing activities for cow‐calf producers are examined using a expected utility‐maximizing discrete stochastic programming model. Steer, heifer, and corn prices are modeled as stochastic variables. The mathematical model is used to consider retention at weaning and yearling stages and marketing alternatives of cash, hedging, and options. Results show how calf retention decisions depend upon current profit, expected future profit distributions, pricing alternatives available, and the cow‐calf producer's aversion to risk.
Optimal Control of Generic Fluid Milk Advertising Expenditures
Authors: Liu Donald J. , Forker Olan D.
Published: July 2006

Optimal expenditures of the New York State milk promotion program are determined for three markets. Spending level in New York City and Albany should be reduced by about 10%, while that for Syracuse should be increased three times. Further, there exists an optimal seasonal advertising pattern which reflects the seasonal pattern of the Class 1 differential. In addition, the optimal spending level and seasonal pattern of the state promotion program depends on those of the national program. Thus, coordination between the two promotional units is essential to achieve optimality.
Generalized Optimal Hedge Ratio Estimation
Authors: Myers Robert J. , Thompson Stanley R.
Published: July 2006

A generalized approach to estimating optimal hedge ratios on futures markets is developed. The generalized approach is not difficult to apply and provides a framework for evaluating the appropriateness of conventional simple regression approaches to optimal hedge ratio estimation. In an application to storage hedging of corn, soybeans, and wheat, it is found that simple regression using price levels or returns leads to errors in optimal hedge ratio estimation but that simple regression using price changes provides reasonably accurate estimates.
Off‐Farm Labor Market Entry and Exit
Authors: Gould Brian W. , Saupe William E.
Published: July 2006

Through the use of a longitudinal data set, we determine those factors that are important to off‐farm labor market entry and compare them with factors affecting off‐farm labor market exiting. The model of labor market entry and exit takes into account the effects of changes in key economic variables over a four‐year period. The data are for married farm women in Wisconsin who must make labor allocation decisions among home production, farm production, and off‐farm employment. These decisions have important implications for the well‐being of the families involved (who have been increasing in number) and for their communities.
Valuing the Multidimensional Impacts of Environmental Policy: Theory and Methods
Authors: Hoehn John P.
Published: July 2006

A theoretically consistent framework is developed for valuing the multidimensional impacts of environmental policy. Conventional benefit estimates are shown to be biased because of the presence of substitution and complementarity effects in valuing policy impacts. Procedures are developed for implementing a valid framework. Consistent with theory, empirical results indicate significant substitution effects in valuing environmental conditions across different geographic regions.
Distributional Effects of Household Linkages
Authors: Bernat G. Andrew , Johnson Thomas G.
Published: July 2006

The study uses input‐output models with disaggregated household sectors to demonstrate that important interhousehold linkages are ignored in standard input‐output models of both rural and urban regions. The results indicate that higher‐income households are not strongly linked to low‐income households and that, given equal changes in exogenous income, low‐income households will have much higher impacts on the local economy than high‐income households. In addition, significant differences in household linkages were found between rural and urban regions.