bluuebunny/crossref_metadata_2025 huggingface dataset:
Extension Decision Aids for the Dairy Termination Program: A Comparative Analysis
Authors: Knight Thomas O. , Kubiak Kathryn A.
Published: July 2006

Extension economists in many states develop decision aids to assist agricultural producers in evaluating farm program participation. It is important that these analytical procedures yield reliable results. Consistency among procedures is also important when they are used in formulating competitive bids for programs like the Dairy Termination Program. Seven Dairy Termination Program break‐even bid procedures are examined. The results show that the analytical approaches are conceptually quite different and that numerical results derived for an example farm are inconsistent.
Nearly Optimal Linear Programming Solutions: Some Conceptual Issues and a Farm Management Application
Authors: Burton Robert O. , Gidley James S. , Baker Barton S. , Reda‐Wilson Kimberly J.
Published: July 2006

Nearly optimal solutions in linear programming provide useful information to decision makers. Modeling to generate alternatives may be used to generate a set of nearly optimal solutions from which a decision maker may select the desired solution by considering criteria not quantified in the model. The mathematical problem is to find vertices of a convex polytope. A pivoting method of vertex enumeration is used to generate all extreme‐point nearly optimal solutions of an example problem involving selection of a marketing strategy for beef calves. Compared to the optimal solution, nearly optimal solutions have more diversity or use less cash or hired labor.
Substitutability for Farm Commodities: The Demand for U.S. Tobacco in Cigarette Manufacturing
Authors: Sumner Daniel A. , Alston Julian M.
Published: July 2006

A generalized leontief cost function and system of factor demand functions for the domestic cigarette industry is estimated. We strongly rejected fixed proportions. Both imported tobacco and other inputs are substitutes for U.S. tobacco. The estimated (output constant) price elasticities are combined with the output effect (calculated from cost shares and time‐series estimates of the cigarette demand elasticity) and an export demand elasticity (from previous studies) to consider the effects of reducing the U.S. price support. Competition from foreign tobacco implies that a U.S. price decline would increase significantly the quantity of U.S. tobacco demanded.
An Analogy between Risk Aversion and Homothetic Production under Certainty
Authors: Pope Rulon D.
Published: July 2006

A key component in arguments about aggregation is the curvature of micro‐decision functions. For example, a mean‐preserving spread in the distribution of some parameter across economic agents will decrease aggregate response when each identical microfunction is concave in the parameter. Using this motivation, with the parameter being output price, curvature of derived demands and supplies is examined. Calculations analogous to the Arrow‐Pratt absolute risk aversion measure and its slope are crucial in determining these results in many cases. This allows one to use known results in risk theory to simply characterize curvature.
A Policy Analysis of China's Wheat Economy
Authors: Halbrendt Catherine , Gempesaw Conrado
Published: July 2006

This paper examines the impacts of China's historical and anticipated future reforms on its domestic wheat economy and how it affects the import demand for wheat using a stochastic coefficient regression method. The results strongly support the hypothesis that producers and consumers in the post‐reform era were responsive to a less controlled economy. Furthermore, the higher import forecasts indicate that China will interact more with the world wheat market.
Argentine Agricultural Policy in a Multiple‐Input, Multiple‐Output Framework
Authors: Fulginiti Lilyan E. , Perrin Richard K.
Published: July 2006

This study shows that government interventions in Argentine agriculture substantially reduced the growth rate of output 1940–80. A multiple product, multiple input, aggregate translog profit function is estimated. Supply elasticity estimates range from zero for linseed to 1.6 for sorghum. Estimates of intervention wedges together with the estimated structure imply that export taxes, import restrictions, and domestic taxes each in isolation could have reduced aggregate output by as much as 25%–30%. These and other interventions increased beef as a share of outputs and increased the cost shares of purchased inputs and labor at the expense of capital inputs.
A Prospective Assessment of the Impacts of Bovine Somatotropin: A Case Study of Wisconsin
Authors: Marion Bruce W. , Wills Robert L.
Published: July 2006

The predicted effects of bST on aggregate supply, milk price, and farm structure is extremely sensitive to several key assumptions: the impact of bST on production per cow, cost of bST to farmers, returns required by farmers to adopt bST, price of milk when bST is introduced, speed and extent of adoption. A case study of Wisconsin dairy farms indicates that the overall economic impact of bST will be much less than most other studies have predicted. The projected effects, however, are similar to Cochrane's treadmill theory, albeit less severe than predicted by earlier estimates.
The Decision to Double Crop: An Application of Expected Utility Theory Using Stein's Theorem
Authors: Marra Michele C. , Carlson Gerald A.
Published: July 2006

A nonlinear, single‐equation acreage allocation model derived from expected utility theory using Stein's theorem for covariance decomposition is developed. This decomposition allows the covariance of utility parameters and revenues to be expressed in terms of measurable variables. The model is applied to state‐level data to estimate the relative importance of various economic factors in determining the pattern of double cropping wheat and soybeans in the southeastern United States. The hypothesis that the riskiness of returns is important in the aggregate is rejected for some of the states, although the constrained expected utility model without the effect of risk performs better than a standard wheat acreage response model.
The Strategic Role of Supermarket Buyer Intermediaries in New Product Selection: Implications for Systemwide Efficiency
Authors: McLaughlin Edward W. , Rao Vithala R.
Published: July 2006

Based on logistic regression models that describe the accept/reject decisions of supermarket buyers for new products and market performance of accepted products, the implications for systemwide efficiency of decision making by channel intermediaries are analyzed. The statistical models perform very well. The results point to areas where systemwide performance may be enhanced regarding the allocation of new product development resources. For example, the system may be potentially more efficient if manufacturers reallocate the promotional allowances directed to the retail trade. Better prediction by retail buyers of ultimate product preference by their consumers is likely to increase both firm and system efficiency.
Elasticities in AIDS Models
Authors: Green Richard , Alston Julian M.
Published: July 2006

In the literature, a variety of approaches have been used to calculate demand elasticities in almost ideal demand system (AIDS) models of demand. It is common to estimate the linear approximate almost ideal demand system (LA/AIDS) instead of the AIDS. When the LA/AIDS is estimated, all of the previously reported approaches to compute elasticities are theoretically incorrect. This paper presents correct formulas for LA/AIDS elasticities and illustrates the potential errors from using incorrect computing formulas.
A Simple Multiperiod Minimum Risk Hedge Model
Authors: Mathews Kenneth H. , Holthausen Duncan M.
Published: July 2006

A multiperiod hedging model is developed that is simpler than other multiperiod models in the literature. The model permits periodic adjustment of the hedge while minimizing the producer's profit variance. Minimum risk hedge ratios are calculated for steers, cows, hogs, com, and soybeans using the full model with hedge adjustments every two months. These ratios are compared to those using the model without periodic hedge adjustments and to a simple single‐period model. The results suggest that simple models may work well for simple hedges, while the full model is best for more complex hedging situations such as cross hedges.
Producer Welfare Consequences of Regulating Chemical Residues on Agricultural Crops: Maleic Hydrazide and Tobacco
Authors: Foster William E. , Babcock Bruce A.
Published: July 2006

A procedure is presented to calculate welfare consequences of chemical regulation from demand curves when input applications are unobserved, and is applied to maleic hydrazide and tobacco. The relationship between chemical residues and weather variables and prices is estimated, and from this we derive demand curves using an application‐residue relationship estimated using research station data. Chemical price levels required to attain given regulatory goals are estimated. Yearly producer losses from a chemical ban range from $@@‐@@6 million to $@@‐@@14 million, two to five times greater than from a tax achieving a 95% assurance rate of residues falling below a proposed standard.
Estimating Duality Models with Biased Technical Change: A Time Series Approach
Authors: Clark J. Stephen , Youngblood Curtis E.
Published: July 2006

Technical change is an omitted variable in econometric models which estimate technical change biases with no direct measure of this variable. Modeling technical change as a deterministic time trend is a restrictive representation that may be inconsistent with the type of nonstationarity of the other model variables. We used a time‐series approach to estimate a cost function for central Canada and found that factor shares, prices, and output are cointegrated, implying that technical change is neutral. In contrast, estimating the system with a time trend as a technical change measure leads one to conclude inappropriately that technical change biases exist.
Computerized Analysis of Individual Sow‐Herd Performance
Authors: Huirne Ruud B. M. , Dijkhuizen Aalt A. , Renkema Jan A. , van Beek Paul
Published: July 2006

A computer model, CHESS, was developed to allow systematic and objective analysis of individual swine breeding farms. The model works by identifying deviations from standards, weighting the deviations, analyzing the weighted deviations, and finally evaluating individual farm performance based on the results. CHESS consists of one decision support system and three expert systems. A field test to validate the CHESS model resulted in a test disagreement between CHESS and human experts of about 4% only.
Efficient Handling of Probability Information for Decision Analysis under Risk
Authors: Preckel Paul V. , DeVuyst Eric
Published: July 2006

An approach is presented for “condensing” probability distributions so that as much distributional information as possible is preserved. We demonstrate that our approach may be substantially more efficient than alternative methods and, as a result, may permit more realistic modeling of risky decisions.
Teaching Innovations in Agricultural Economics: An Economic Approach
Authors: Dahlgran Roger A.
Published: July 2006

An economic learning model, with time inputs of instructional preparation, classroom contact, and student preparation under both innovative and traditional teaching methods, is developed and used to evaluate teaching innovations in agricultural economics. The model's implications for evaluating teaching innovations are developed and tested. The conclusions are as follows: a comparison of test scores for experimental and control groups to evaluate teaching innovations ignores the efficiency impacts of “labor‐saving#x201D; innovations; students can provide useful data for evaluating teaching innovations; and economic cost‐benefit concepts should guide conclusions about the effectiveness of innovations.
The Distribution of Food Consumption over a Year: A Longitudinal Analysis
Authors: Guilkey David K. , Haines Pamela S. , Popkin Barry M.
Published: July 2006

Longitudinal methods are used to examine food consumption decisions by American women aged 19–50. The data set used is the 1985 Continuing Survey of Food Intake by Individuals collected by the U.S. Department of Agriculture, which is a six‐wave longitudinal data set gathered over the course of a year. The multivariate results give insights into how individuals make food group consumption decisions. In addition, the use of longitudinal data allows calculation of variance ratios that have proven to be useful in dietary research. Simulations are run to highlight the effects of important explanatory variables.
Characteristics of Grain Elevators that Contract with Railroads
Authors: Hanson Steven D. , Baumhover Stephen B. , Baumel C. Phillip
Published: July 2006

The Staggers Rail Act of 1980 allowed contracts between railroads and shippers which have resulted in increased grain prices to some farmers while, at the same time, increasing competitive pressure on some local grain elevators. This study employs a logistic model designed for complex survey designs to identify characteristics of elevators that had railroad contracts during 1983–85. The total volume shipped from an elevator, number of railroads serving an elevator location, and affiliation with elevator firms serviced by more than one railroad company are found to contribute significantly to the probability of a grain elevator receiving a railroad contract.
Managing Change in Extension
Authors: Holt John
Published: July 2006

Managing change in extension is capitalizing on today's strengths while building tomorrow's niches. A shrinking support base, increasing competition, and rapid changes in what people need and want in off‐campus education are strong forces for change in extension programs. But inertia inherited from past success, the difficulties of changing mental habits, conflicting clientele signals, and rewards schema that give no clear signals all complicate change management. Symbiosis is needed between faculty and all levels of administration in order to find the support, and the will, to manage change constructively.
Estimation Risk in Farm Planning Under Uncertainty
Authors: Collender Robert N.
Published: July 2006

This paper examines the impact of estimation risk on a decision maker's ability to distinguish between the mean‐variance characteristics of different farm plans. The importance of making such distinctions should be clear; risk‐averse decision makers will want to bear risk only if they can be reasonably confident of commensurate increases in expected return. When parameters are unknown, statistically testing for differences in their estimated values is appropriate. An illustration of such tests using data from Hazell suggests considerable resources must be devoted toward data generation if normative statements under uncertainty are to be reliable.
Scientific Principle and Practice in Agricultural Economics: An Historical Review
Authors: Breimyer Harold F.
Published: July 2006

Ever since their field of learning took its own identity, agricultural economists have seen themselves as dedicated to the scientific principle. In early years that commitment was trusted as a guard against human fallibility, and the more so as the first investigations relied heavily on statistical data and analyses—supposedly bias‐free. Thus originated a lasting emphasis on the quantitative. A need for underlying economic principles, recognized at once, was developed in depth beginning in the 1950s. Research taxonomies, outlined in the 1920s, devolved later into an array of research methods. Scientific practice is viewed also as how scientists “behave,” and writings about agricultural economists' record are couched in terms of values, objectivity, ethics. Despite just claims to systematic rigor, science responds also to unsystematic elements, among them imagination and hunch. Most engaging in literature are never‐ending exchanges about the merits of mathematics and model building.
Impact Targets versus Discharge Standards in Agricultural Pollution Management
Authors: Braden John B. , Larson Robert S. , Herricks Edwin E.
Published: July 2006

When attempting to protect fish in streams, sediment or erosion targets are inefficient. Use of a habitat suitability target reveals lower cost abatement measures because it accounts for pesticides as well as soil particles. In Lake Michigan case studies, the lower cost measures involve more crop diversity, less use of no‐till, and changes on more acres than the solutions based on sediment discharges or erosion rates.
Consumer's Surplus Revisited
Authors: Shonkwiler J. S.
Published: July 2006

A technique for approximating welfare measures using knowledge of the Marshallian demand relation is developed and compared numerically to the true measures and other approximations. The technique does not rely on the solution of differential equations and is easily illustrated graphically. The technique should be useful as a pedagogic device and applicable in empirical work when derivation of the indirect utility function is burdensome.
Prospect Theory and Risk Preferences of Oregon Seed Producers
Authors: Collins Alan , Musser Wesley N. , Mason Robert
Published: July 2006

Prospect theory relates risk preference classifications to gains and losses from a reference income level. This study applies prospect theory to reinterpret historical studies of risk preferences of Oregon grass seed growers. A significant relationship between changes in classifications of preferences and changes in income was found. Results indicated that those who lost income were concentrated in the category of changing to risk preferrers. Income changes calculated from crop combinations were also found to be correlated in a theoretically correct pattern with positive measures of risk from crop enterprises. The research therefore is consistent with further applications of prospect theory to farm management.
Robustness of the Mean‐Variance Model with Truncated Probability Distributions
Authors: Hanson Steven D. , Ladd George W. , Curtiss Charles F.
Published: July 2006

The known sufficient conditions for the mean‐variance framework to produce expected utility results are violated in the presence of truncated probability distributions. A theoretical simulation is conducted to examine the ability of the linear mean‐variance model to approximate expected utility results when the income distribution is truncated by the use of commodity option contracts. The mean‐variance model is shown to produce solutions that are close approximations to the expected utility model results under the assumptions of constant absolute risk aversion and normally distributed prices. However, some inconsistency was found between the comparative static results of the two models.
Evaluating Robust Regression Techniques for Detrending Crop Yield Data with Nonnormal Errors
Authors: Swinton Scott M. , King Robert P.
Published: July 2006

Although ordinary least squares is not efficient when errors are not distributed normally, it generates better crop yield trend coefficient estimates than six alternative robust regression methods. This is because of the econometric properties of an uninterrupted series independent variable as well as the level of skewness typical of corn yields. The evaluation covers actual farm‐level corn yield series as well as a set of “contaminated” data series and one thousand sets of Monte Carlo yield series. Where an influential end‐of‐series outlier is suspected, the DFBETAS regression diagnostic statistic is recommended.
Construction of True Cost of Food Indexes from Estimated Engel Curves
Authors: Blisard William Noel , Blaylock James R.
Published: July 2006

This paper applies a technique to derive true cost‐of‐living indexes from the estimation of a simple system of piglog Engel curves. This technique allows a maximum amount of commodity disaggregation, and the indexes show the impact of inflation on households with different expenditure levels and demographic characteristics. Results indicate that the consumer price index (CPI) underestimated the cost of food over the 1980–85 period. The CPI more accurately reflects the cost of food for nonwhite households with low or average food expenditures.
Supply Response Under Proportional Profits Taxation
Authors: Quiggin John
Published: July 2006

A striking result in the theory of the competitive firm under certainty is the proposition that a proportional profits tax (with full offsets for losses) will have no impact on optimal output. This result does not apply under uncertainty. It is shown that, under constant or increasing returns to scale, a proportional profits tax will yield an unambiguous expansion in output. The same result is shown to hold for the more general rank‐dependent expected utility (RDEU) model.
Put‐Call Parity and Arbitrage Bounds for Options on Grain Futures
Authors: Wilson William W. , Fung Hung‐Gay
Published: July 2006

Many arbitrage opportunities have become available for market participants since the inception of trading in options. Central to many of these is the put‐call parity relationship. If this condition is violated, arbitrage profits could be earned. This paper examines arbitrage possibilities between put and call options on grain futures using two different tests. One is a test of market efficiency over the duration of trading, and the other evaluates arbitrage bounds on individual trading days. In general, the results suggest that the options markets on grain futures are not completely efficient. However, violations varied substantially across contracts and through time.
Measuring the Economic Efficiency of Producing Rural Road Services
Authors: Deller Steven C. , Nelson Carl H.
Published: July 2006

The research reported here examines the ability of a sample of Midwest township officials to produce low‐volume rural road services in an economically efficient manner. Farrell‐type measures of input use and scale efficiency are reported. Results suggest that over 50% of costs may be unnecessarily incurred because of input use inefficiency. Correlation between output measures and the efficiency measures suggests that larger jurisdictions are more efficient than smaller jurisdictions. In addition, 84.5% of the townships exhibit technology characterized by increasing returns to scale. These results suggest that jurisdictional consolidation of production‐related responsibilities may yield substantial cost savings.
Crop Insurance and Disaster Assistance Designs for Wheat and Grain Sorghum
Authors: Williams Jeffery R. , Carriker Gordon L. , Barnaby G. Art , Harper Jayson K.
Published: July 2006

This study compares the effectiveness of two crop insurance and two disaster assistance program designs used in conjunction with a government commodity program and a linked crop insurance/government commodity program design. Stochastic dominance analysis of farm‐level net return distributions is used to select the preferred design(s). The results indicate that the disaster assistance programs are preferred over the alternatives. The results also suggest that individual crop insurance is preferred to area crop insurance. A subsidy is required for risk‐averse managers to prefer area crop insurance to individual crop insurance.
Individual Travel Cost Method: Estimation and Benefit Assessment with a Discrete and Possibly Grouped Dependent Variable
Authors: Dobbs Ian M.
Published: July 2006

The trip/visit variable in the individual travel cost method is often regarded as discrete. Furthermore, it is often reported in surveys as a grouped variable (the number of visits reported falling into one of several classes). This paper develops a travel cost model which takes account of discreteness and grouping in both demand and benefit estimation. A case study and associated simulations are then reported which indicate the potential extent of bias that may arise from ignoring discreteness/grouping in demand and benefit estimation. The information loss involved in varying the size of visit classes is also examined.
The Incidence of Benefits from U.S. Soybean Productivity Gains in a Context of World Trade
Authors: Cooke Stephen C. , Sundquist W. Burt
Published: July 2006

A new procedure for measuring the “K‐shift” in the supply function from new technology is introduced. This procedure is used to show that U.S. soybean total factor productivity increased by 1.6% per year between 1974 and 1983. Brazilian and Argentine soybean productivity increased 2.4% per year during this period. Total economic surplus in the U.S and the rest of the world increased between $@@‐@@1.7 and $@@‐@@3.2 billion. Of this total, U.S. resource owners received between $@@‐@@1.3 and $@@‐@@1.5 billion and U.S. consumers received between a $@@‐@@0.1 and $@@‐@@0.2 billion increase in income from increased soybean productivity.
Acreage Decisions Under Risk: The Case of Corn and Soybeans
Authors: Chavas Jean‐Paul , Holt Matthew T.
Published: July 2006

An acreage supply response model is developed under expected utility maximization. The resulting framework is used to specify and estimate a system of risk‐responsive acreage equations for corn and soybeans in the United States. Particular attention is given to the truncation effects of government price supports on the distribution of corn and soybean prices. Also, a wealth variable is included in the acreage equations. The empirical results indicate that risk and wealth variables play an important role in corn‐soybean acreage decisions. The analysis also shows that cross‐commodity risk reduction is important in acreage allocation decisions.
A Revised Test of the Law of One Price Using Rational Price Expectations
Authors: Goodwin Barry K. , Grennes Thomas J. , Wohlgenant Michael K.
Published: July 2006

The law of one price (LOP) is an important ingredient in theories of international trade. Typical analyses of the LOP assume that parity should hold contemporaneously. This assumption overlooks temporal elements of trade. Recognizing this fact, we expect parity to hold for expected prices. Two empirical procedures are utilized to consider the LOP in international markets for U.S. agricultural commodities. The first utilizes econometric procedures to test an expectations augmented version of the LOP. A second approach uses nonparametric procedures to provide an alternative consideration of expectations. In each case, results provide support for a rational expectations view of the LOP.
The Reaction of Live Hog Futures Prices to USDA Hogs and Pigs Reports
Authors: Colling Phil L. , Irwin Scott H.
Published: July 2006

Strong concerns about how efficiently live hog futures prices react to U.S. Department of Agriculture Hogs and Pigs Reports have been raised by livestock producer groups. Using market survey data, direct tests of the efficient markets hypothesis are performed for the live hog futures market. Two‐limit tobit models account for institutional price limits. Results support the efficient market hypothesis in that live hog futures prices (a) do not react to anticipated changes in reported information, (b) do react significantly and in the expected direction to unanticipated changes in reported information, and (c) generally adjust to unanticipated information on the day following release of the reports.
A Simulation Model of the U.S. Export Enhancement Program for Wheat
Authors: Seitzinger Ann Hillberg , Paarlberg Philip L.
Published: July 2006

Nash bargaining game models representing negotiations of Export Enhancement Program (EEP) sales are combined with a quarterly spatial price equilibrium model representing non‐EEP world wheat trade to simulate the EEP's impact in late 1985 and early 1986. The benefits of the EEP in terms of increased U.S. export revenues adjusted for subsidy costs are estimated to be less than one percent of total U.S. revenues. For the first quarter of 1986, model simulations also show a lowering of the CCC loan rate to have a much greater potential for increasing U.S. wheat exports than the EEP as operated.
Estimation of Australian Wool and Lamb Production Technologies under Uncertainty: An Error‐Components Approach
Authors: O'Donnell C.J. , Woodland A. D.
Published: July 2006

A model of producer behavior, which explicitly accounts for both output price and production uncertainty, is formulated and estimated. If the production technology is multiplicatively separable in its deterministic and stochastic components, then the expected utility maximization problem implies cost minimization for planned or expected output. Consequently, our empirical model of three lamb‐ and wool‐producing sectors in Australia involves the estimation of a system of input cost share and cost equations whose disturbances have an error‐components structure. The empirical results are evaluated in terms of input demand elasticities, and estimates of the stochastic components of production are presented.
Quality‐Adjusted Price and Quantity Indices for Pesticides
Authors: Fernandez‐Cornejo Jorge , Jans Sharon
Published: July 2006

Quality‐adjusted price indices are calculated for pesticides used on major crops in U.S. agriculture for 1967–92 using hedonic methods. Pesticide potency, hazardous characteristics, and persistence in the environment are used as quality characteristics. Separate hedonic functions are estimated for pesticides by end‐use (crop) and major pesticide class. Price indices are aggregated using chained Tornqvist indices. Adjusted quantity indices are computed using pesticide expenditures. The adjusted price index rose steadily, reaching in 1992 around 2.5 times the level of 1968. Pesticide use at constant quality peaked in 1981 at a level substantially higher than the peak reached by the unadjusted index.
The Effects of Decision Making on Futures Price Volatility
Authors: Hennessy David A. , Wahl Thomas I.
Published: July 2006

Existing literature on commodity futures price volatility emphasizes time to expiration and the resolution of uncertainty. In this paper we stress the supply and demand inflexibilities arising from decision making. A decision made on the supply (demand) side makes future supply (demand) responses less elastic. Therefore, a shock arising after a decision is made is more effective in changing the futures price than a shock before the decision is made. The results support the time‐to‐maturity hypothesis, but do not conflict with the state variable hypotheses of futures price volatility. Evidence supporting the impacts of inflexibilities are presented for corn, soybean, and wheat contracts.
The Hot Air in R2 and Consistent Measures of Explained Variation
Authors: McGuirk Anya M. , Driscoll Paul
Published: July 2006

The size of R2 and R̅2 are poor specification indicators since correctly specified models can have “low” R2 values and misspecified models often have “high” R2 values. Further, R2 and R̅2, as typically calculated, are found to be inconsistent measures of goodness of fit whenever the mean of the dependent variable is not stationary. Consistent estimation methods are proposed.
Optimal Management of Game and Forage Resources in a Private Fee‐Hunting Enterprise
Authors: Huffaker Ray G.
Published: July 2006

The paper formulates a bioeconomic model of a private fee‐hunting enterprise to examine the optimal management of this agroecological system under a wide range of bioeconomic circumstances. An empirical application demonstrates that the economic viability of the enterprise (concerning managers) and the sustainability of the underlying biological resources (concerning public regulators) depend critically on the initial endowment of resources and on the existence of publicly‐mandated or self‐imposed restrictions on maximum allowable hunting rates. Perhaps surprising is the implication that in some circumstances regulators may be able to promote resource sustainability by relaxing hunting controls.
Moral Hazard Cycles in Individual‐Coverage Crop Insurance
Authors: Vercammen James , van Kooten G. Cornelis
Published: July 2006

This paper examines the moral hazard implications of individual‐coverage crop insurance contracts. Individual‐coverage contracts are informationally superior to standard contracts because the farmer's coverage is proportional to his average historical yield. Despite this apparent benefit, the steady‐state solution is shown to be characterized by moral hazard cycles, where moral hazard is practiced in alternative periods. The amplitude of the cycle and, thus, the variability in planned production is shown to be larger the lower the degree of production uncertainty, the fewer the number of years used in the averaging process, the higher the coverage threshold, and the lower the level of co‐insurance.
Acreage Response Under Canada's Western Grains Stabilization Program
Authors: Miranda Mario J. , Novak Frank , Lerohl Mel
Published: July 2006

An aggregate acreage supply model for the Canadian prairies is estimated assuming that farmers base short‐run acreage decisions on the ex ante rational expectation and variance of per‐hectare revenue. To account for the effects of government intervention, a structural model of the Western Grains Stabilization Program is incorporated into the estimation framework. Results indicate the Program contributed to modest increases in cropped acreage between 1976 and 1990.
Simple Econometrics of Pesticide Productivity
Authors: Chambers Robert G. , Lichtenberg Erik
Published: July 2006

This paper develops a multioutput generalization of the Lichtenberg‐Zilberman damage‐control technology. The dual representation of the technology is shown to be conditionally additive in the price of abatement activities and other prices. An econometric procedure for estimating the dual technology is developed and applied to an aggregate U.S. agricultural data set. The conditionally additive nature of the model allows estimation of pest damage from the dual technology. Our estimates of aggregate U.S. pest damage are much lower than previous estimates.
Estimating Intertemporal Supply Response in the Fed Beef Market
Authors: Marsh John M.
Published: July 2006

A partial adjustment model with monthly lag structures on expected output and input prices is used to estimate intertemporal supply behavior of fed beef. Previous research has provided conflicting supply elasticities. The present work reconciles the conflicts by integrating different lengths of run into cattle marketing and placement decisions. For example, the model dynamics incorporate short‐run changes in cattle asset values and long‐run adjustments in resource use. Empirical results provide no evidence of short‐run supply fixity; supply elasticities switch from negative to positive over time.
Tests of Weak Separability in Disaggregated Meat Products
Authors: Nayga Rodolfo M. , Capps Oral
Published: July 2006

Parametric tests of weak separability are conducted among twenty‐one disaggregate meat products, using scanner data and the absolute price version of the Rotterdam model. The tests indicate that consumers neither select among various cuts or qualities of a particular meat type nor select among meat types of like quality. Four partitions of the meat products are examined; in each case, the hypothesis of weak separability is rejected.
Vessel Entry‐Exit Behavior in the Gulf of Mexico Shrimp Fishery
Authors: Ward John M. , Sutinen Jon G.
Published: July 2006

Given the heterogeneous nature of the fishing fleet and complex vessel behavior, traditional marginalist supply models are not well suited for modeling vessel mobility. A discrete choice model is utilized here to predict the probability that a vessel will enter, exit, or remain in the Gulf of Mexico shrimp fishery based on a myopic profit maximization criterion. The multinomial logit model indicates that fisherman behavior is not influenced by stock variability. The crowding externality as represented by size of fishing fleet exhibits a strong negative impact on the probability of entry, independent of changes in abundance, exvessel prices, or harvest costs. The Gulf of Mexico shrimp fishery was not an autonomous system of fishing vessels as initially believed.
Rice Trade Liberalization and Implications for U.S. Policy
Authors: Song JooHo , Carter Colin A.
Published: July 2006

The U.S. government's rice program treats rice as a homogeneous commodity, even though rice's two primary subspecies, indica and japonica, are differentiated commodities in world markets. Trade liberalization under the Uruguay round of GATT is expected to increase demand for japonica more than for indica. We develop a U.S. rice model which treats rice as a differentiated product. U.S. government programs are modeled and trade liberalization scenarios are analyzed under alternative policies. Compared to the current policy, a more flexible U.S. policy that treats rice as a differentiated commodity could result in both higher farm incomes and lower government expenditures after trade liberalization.
Changing Time Attitudes in Intertemporal Analysis
Authors: Barry Peter J. , Robison Lindon J. , Nartea Gilbert V.
Published: July 2006

Intertemporal analysis is extended by generalizing the time weight function of an investor's utility function to account for changes in time attitudes. The resulting measures of decreasing, constant, and increasing time attitudes are comparable to the Arrow‐Pratt measures of risk attitudes. They help to enrich intertemporal theory, provide meaningful hypotheses for testing, and broaden the scope for decision analysis over time. Effects of the time attitude measures are illustrated in a model of an agricultural firm.
The Effect of Futures Markets and Corners on Storage and Spot Price Variability
Authors: Netz Janet S.
Published: July 2006

When a futures market is introduced, the volume of storage should become more sensitive to changes in the return to storage. The increase in storage sensitivity means that storage will absorb a larger proportion of demand and supply shocks than it did previously, reducing spot price volatility. Data from the Chicago Board of Trade support the hypotheses of increased storage sensitivity and reduced spot price volatility. The effect of futures on spot price volatility is sensitive to the competitive structure of the futures market. Futures market manipulation causes spot price variance to increase. Despite manipulation, the development of the wheat futures market caused the coefficient of variation of spot price to decline significantly.
The Value of Pest Information in a Dynamic Setting: The Case of Weed Control
Authors: Swinton Scott M. , King Robert P.
Published: July 2006

The value of weed scouting information for soil‐applied and post‐emergence weed management is estimated using a dynamic, whole‐farm, stochastic simulation model. The model simulates outcomes of four expected utility functions from management strategies using three levels of weed information. Results from a representative Minnesota corn and soybean farm indicate high value of weed seedling counts (for post‐emergence control) but relatively low value of weed seed counts (for soil‐applied control). While herbicide use is often reduced under information based management, this is not always the case.
Finished Product Inventories and Price Expectations in the Softwood Lumber Industry
Authors: Lewandrowski Jan K. , Wohlgenant Michael K. , Grennes Thomas J.
Published: July 2006

A monthly model is presented of the U.S. softwood lumber sector. Price expectations and beginning‐period inventories have important roles in producers' production, sales, and inventory decisions. Cross‐price effects among domestic producing regions are minimal. However, there is substantial competition between U.S. and Canadian producers. Our model produces supply elasticities, demand elasticities, and inventory response parameters that are different from and more comprehensive than those obtained in previous work.
Teaching Evaluation in Agricultural Economics and Related Departments
Authors: Broder Josef M. , Taylor William J.
Published: July 2006

Departments use student evaluations of teaching (SETs) with little evidence that evaluation forms and procedures measure or contribute to teaching quality. SETs in agricultural economics and related departments in the United States and Canada are examined here in a resource allocation framework. Empirical models are estimated which characterize faculty reliance on SETs and faculty satisfaction with SET forms. We find that departmental reliance on SETs increases with faculty participation, that faculty have specific preferences for SET form and content, and that improvements in SETs are more likely to result from increasing the quality rather than the quantity of SET questions.
Land Development and Pigouvian Taxes: The Case of Peatland
Authors: Goetz Renan U.
Published: July 2006

In this paper the determination of an optimal Pigouvian tax for a competitive firm when a negative production externality is present concurrent with the development of land for production purposes is analyzed within a dynamic framework. Conditions are established for a convex social net return function where a Pigouvian tax is not required or where the imposition of a Pigouvian tax leads to the decision not to develop the land at all. In the case of a concave social net return function the Pigouvian tax is either a linear or a nonlinear tax on the private net returns.
A Joint‐Product Analysis of the Adoption of Modern Cereal Varieties in Developing Countries
Authors: Traxler Greg , Byerlee Derek
Published: July 2006

Semi‐dwarf wheat varieties have been slow to diffuse in some regions despite their superior grain yield. We analyze varietal differences in yields of the joint products of grain and straw, the decision to adopt new varieties, and nitrogen demand. The low straw yield of semi‐dwarf varieties under low input conditions is shown to be a plausible explanation for their slow adoption in some regions. First generation modern varieties induced a large increase in the derived demand for nitrogen, but subsequent varietal development appears to have had little impact on nitrogen demand.
Pleasures of Cockaigne: Quality Gaps, Market Structure, and the Amount of Grading
Authors: Hollander Abraham , Monier‐Dilhan Sylvette , Ossard Hervé
Published: July 2006

The article explores under what circumstances high‐quality producers would not voluntarily submit to grading when low‐quality firms would readily do so and under what conditions high‐quality firms would have a lesser proportion of their output graded than would their low‐quality counterparts. It also investigates how market structure affects the decison to grade, establishing that a competitive industry carries out the optimal amount of grading. When some firms have finite market shares, the industry engages in excessive grading.
Assessing Efficiency Gains from Individual Transferable Quotas: An Application to the Mid‐Atlantic Surf Clam and Ocean Quahog Fishery
Authors: Weninger Quinn
Published: July 2006

Delayed fishing fleet restructuring complicates the assessment of efficiency gains from individual transferable quota (ITQ) fisheries management programs. This article presents a methodology to estimate harvest sector efficiency gains in lieu of incomplete fleet restructuring. The methodology is applied to assess the efficiency gains in the Mid‐Atlantic surf clam and ocean quahog fishery ITQ program. While roughly 128 vessels harvested clams under the previous management regime, the analysis suggests that 21–25 vessels will remain under lTQs. The efficiency gains are estimated to be between $@@‐@@11.1 million and $@@‐@@12.8 million annually (1990 dollars).
The Effect of Supply Management on Herd Size in Alberta Dairy
Authors: Richards Timothy J. , Jeffrey Scott R.
Published: July 2006

A supply management program limits the aggregate supply of a commodity, often through the use of marketable quota licenses. The static, aggregate welfare effects of supply controls are well known, but the farm‐level, dynamic effects on dairy investment are not. A theoretical cost‐of‐adjustment model is used to show that supply management reduces the rate of quasi‐fixed input adjustment at the farm level. In fact, when a quasi‐fixed input is complementary to quota licenses, investment or disinvestment can be impaired to such an extent that the input moves away from the long‐run equilibrium. As a result, overinvestment in this input can significantly reduce productivity growth.
Reforms, the Weather, and Productivity Growth in China's Grain Sector
Authors: Zhang Bin , Carter Colin A.
Published: July 2006

We use disaggregate county‐level production data to study the effects of economic reform on China's grain production between 1980 and 1990. China's grain production area is divided into five regions based on geographic, agronomic, and meteorological criteria. Regional grain production functions are estimated, and weather is explicitly modeled. The institutional impact of economic reform was found to explain about 38% of the production growth from 1980 to 1985. This is lower than the estimates reported in many previous studies. Regional differences in efficiency gains from economic reform and in the effects of weather on grain production are found to be significant.
Evaluation of Price Policy in the Presence of Water Theft
Authors: Ray Isha , Williams Jeffrey
Published: July 2006

Mathematical programming models of “representative” farms are commonly used to evaluate policies such as input subsidies and output price supports. On canals in India, upstream farmers routinely use more irrigation water than allotted. In such circumstances, the programming model should encompass farmers' locational heterogeneity. Here, a representative watercourse with thirty farms is calibrated to the eight crops, fifteen irrigation turns, yield responses to water, and seepage in Maharashtra. Not only does water “theft” increase the social cost of price policies, but the policies' increased inducement to theft by upstream farmers leaves those downstream with less water and lower incomes.
Rural Manufacturing on the Crest of the Wave: A Count Data Analysis of Technology Use
Authors: Gale H. Frederick
Published: July 2006

This study compares the extent of technology use by rural and urban manufacturing plants. Count data regression models explain technology use as a function of rural‐urban indicator variables, plant characteristics, and location characteristics. The results show no difference in technology use due to rural‐urban location. Characteristics of nonmetro plants, including size, prevalency of branch plants, and nature of production process, tend to raise nonmetro manufacturing technology use. Lower nonmetro schooling levels, an older labor force, and mix of industries with low technology use tend to reduce technology use in nonmetro areas.
Transaction Costs and the Present Value Model of Farmland: Iowa, 1900–1994
Authors: Lence Sergio H. , Miller Douglas J.
Published: July 2006

The present study investigates whether the farmland “constant‐discount‐rate present‐value‐model (CDR‐PVM) puzzle” is due to transaction costs. The theoretical implications of transaction costs for the CDR‐PVM of farmland are discussed, and two bootstrap tests of such implications are introduced and applied to Iowa farmland prices and rents. Empirical results regarding the validity of the CDR‐PVM in the presence of typical transaction costs are ambiguous. Econometric tests indicate that the CDR‐PVM is consistent with typical transaction costs assuming a one‐period holding horizon, but not when an infinite‐holding horizon is hypothesized.