bluuebunny/crossref_metadata_2025 huggingface dataset:
Industrial Growth in the Tennessee Valley Region, 1959 to 1968
Authors: Garrison Charles B.
Published: July 2006

Shift analysis and the technique of entropy indicate an increase in the strength of rural and small‐town counties competing with urban areas for manufacturing employment during the study period. Increase in the strength of the most rural counties apparently was confined to labor‐oriented industries, but small towns and small cities were successful in attracting industries of varying orientations. Despite the rapid rate of industrialization, rural counties experienced slow or negative population growth; this is attributed to the absence of sizeable employment multiplier effects and to offsetting employment declines in extractive industries. The implication is that considerable potential exists for further rural industrialization.
Programming for Agricultural Development: The Case of Egypt
Authors: Sherbiny Naiem A. , Zaki Mokhlis Y.
Published: July 2006

A multiregional linear programming model incorporating the agronomic and institutional characteristics of Egyptian agriculture is constructed. Substantial gains would arise from crop reallocation between regions based on comparative advantage. The programmed gains would not require large additional investments or technical improvements.
Market Liquidity in the FCOJ Futures Market
Authors: Ward Ronald W.
Published: July 2006

Speculation is essential for maintaining liquidity within futures markets. Deviations in speculative trading about a liquidity level may, however, distort market price performance. The liquidity level for FCOJ futures has been derived. Speculation in excess of liquidity occurred infrequently and such excesses showed only limited effects on price performance.
Education in Farm Production: The Case of Taiwan
Authors: Wu Craig C.
Published: July 2006

The role of education in production is studied for the medium‐stage developing agriculture of Taiwan. Results suggest that, in a densely populated agriculture where production is typically carried out by small family farms, education of farmers of a moderate level (about six years of schooling on average) is able to contribute to production when rapid development is in progress. Unlike in U.S. agriculture, the contribution of worker effect surpasses that of allocative and scale effects, suggesting that the relative importance of these effects may vary with farm size and with the average level of education.
Rural Household Savings Behavior in South Korea, 1962–76
Authors: Hyun K. N. , Adams D. W. , Hushak L. J.
Published: July 2006

This study documents the extent of savings in representative rural households in South Korea during 1962–76. A technique for measuring permanent income from cross‐section data is used to estimate marginal savings behavior. The results show that households saved a remarkably large part of their incomes. During the late 1960s these savings were, on the margin, about one‐fifth of permanent incomes and about four‐fifths of transitory incomes. Authors also conclude that useful measures of permanent and transitory income can be estimated from cross‐section data.
The Price‐Forecasting Performance of Futures Markets for Live Cattle and Hogs: A Disaggregated Analysis
Authors: Martin Larry , Garcia Philip
Published: July 2006

Four hypotheses about the price‐forecasting performance of live cattle and hog futures are tested using disaggregated data. Live cattle futures are found to have inadequate forecasting performance for each hypothesis and do not provide better forecasts than lagged cash prices. Live hog futures perform well for three hypotheses, but not when economic conditions are unstable. Hog futures provide better forecasts than lagged cash prices. The analysis does not support the contention that these futures markets are agencies for rational price formation.
Estimating Farm‐Level Input Demand and Wheat Supply in the Indian Punjab Using a Translog Profit Function
Authors: Sidhu Surjit S. , Baanante Carlos A.
Published: July 2006

Application of the translog profit function to farm‐level data from Punjab, India, allowed a more disaggregated analysis of the farm production structure compared to the case of Cobb‐Douglas formulation. The flexibility afforded by translog formulation permitted measurement of the different impacts that exogenous variables have within and across input demand and output supply functions. Policy‐relevant elasticity estimates with respect to variable inputs and output prices, fixed inputs, a few soil‐related “state‐of‐nature” variables measured by soil analysis, and education, which are usually considered constraints to farm production, were obtained, and two examples of policy applications were developed.
Adult Equivalent Scales: An Alternative Approach
Authors: Buse Rueben C. , Salathe Larry E.
Published: July 2006

Adult equivalent scales were estimated for five food groups and total food consumed at home. The scales were specified as continuous functions of age and restrictions were placed on the scales so that they approximate the way an individual affects household food expenditures throughout his life. The scale function is easily incorporated into expenditure models, and statistical tests can be used to determine the importance of household composition in explaining household expenditure behavior. Children were found to consume less total food—beef, pork, and vegetables—than adults, while the middleaged spent less on fruit than the elderly.
Regional Economic Impacts of Policies to Control Erosion and Sedimentation in Illinois and Other Corn Belt States
Authors: Osteen Craig , Seitz Wesley D.
Published: July 2006

This analysis indicates that the adoption of different soil erosion control policies by different states in the Corn Belt will not result in significant shifts of production activities among the states. Some price impacts would occur but they would be felt throughout the region. More significant impacts may occur at the substate level. Farm operators on more erosive lands may be adversely affected. These results were generated using a general equilibrium linear programming model of crop production and markets in the Corn Belt.
Property Rights and the Potitical Economy of Resource Scarcity
Authors: Castle Emery N.
Published: July 2006

Changes in resource availability place, property rights under stress. Major policy issues exist with respect to rights to land, water, and the ocean fishery. Sometimes these policy issues are confronted in the context of structural changes in property rights, that is, by changing the relationship among those who hold rights both within the private or between the public and private sector. In some instances, changes in resource availability may trigger macro policies designed to affect the distribution of income, employment, or inflation. These macro policies typically also have an indirect but very real effect on property rights.
European Community Agriculture and the World Market
Authors: Swinbank Alan
Published: July 2006

The European Communities' common agricultural policy is more complex than some studies would indicate. Not only do the member states succeed in maintaining nationally preferred price support levels through the use of green currencies and monetary compensatory amounts, but the protective mechanisms applied have a differential impact on some commodities and some supplying countries. The introduction, in 1979,of the European Monetary System had repercussions for the agricultural sector, including the use of a new unit of account.
The Expected Utility Hypothesis and Demand‐Supply Restrictions
Authors: Pope Rulon D.
Published: July 2006

The implications of expected utility theory are examined in order to determine restrictions relevant to reduced form econometric models. In general, Hicksian certainty restrictions do not hold under risk aversion. However, under output price uncertainty, the qualitative nature of the Hicksian restrictions are generally preserved for a commonly used class of polynomial utility functions. These and additional restrictions are considered in the context of a linear model amenable to econometric analysis.
Efficiency and Equity in the Producer Levy of India
Authors: Hayami Yujiro , Otsuka Keijiro , Subbarao K.
Published: July 2006

India's producer levy scheme has been considered a prime example of government market intervention to depress price incentives for farm producers. Analysis in this study shows that the scheme increases the average producer price for the short run with inelastic supply. In this case, significant improvements in income distribution can be obtained with little loss of economic efficiency if the scheme is implemented effectively. However, if the scheme is applied for the long run, it might result in market instability. More critically, the scheme is likely to have an adverse effect on income distribution in the absence of effective implementation.
The Adjustment of Product and Factor Markets: An Application to the Pacific Northwest Forest Products Industry
Authors: Merrifield David E. , Haynes Richard W.
Published: July 2006

An equilibrium model of output and factor markets is used to calculate comparative static effects of demand and factor supply shifts on output and factor prices and employment in the Pacific Northwest forest products industry. The technological link between output and factor levels is provided through a three‐input production function. Results over the 1950–76 sample period suggest that changes in product‐to‐factor price ratios and factor employment are a consequence of differing factor supply elasticities and that factor supply shifts have limited effect on output price and employment levels because of substitution possibilities occurring in the production process and marketplace.
Distributional Constraints on Acceptance of Nonpoint Pollution Controls
Authors: Park William M. , Shabman Leonard A.
Published: July 2006

An economically efficient, nonpoint pollution control strategy for a multijurisdictional 208 area may result in a benefit‐cost distribution that will prohibit its acceptance. Vesting financial authorities in a regional water quality management agency would allow for implementation of a local compensation scheme designed to facilitate acceptance. Such a scheme would involve raising revenues from water quality beneficiaries that would, in turn, be paid as inducements for implementation of nonpoint control practices. These propositions are first defended with a theoretical argument. Then a linear programming model is applied for an empirical case analysis.
Forecasting and Hedging: An Illustration of Risk Reduction in the Hog Industry
Authors: Brandt Jon A.
Published: July 2006

Hog producers and first handlers can reduce the risk of unfavorable price fluctuations by combining the information from forecasting models with a selective hedging strategy. Six quarterly price‐forecasting approaches (econometric, ARIMA, expert, naive, and two composites) were evaluated over the 1976–82 period using a simple yet pragmatic hedging decision rule. The results indicate that relatively modest improvements in prices received by producers or paid by first‐handlers relative to cash marketing were possible. Statistically significant reductions in short‐term risk exposure were achieved by both groups through most of the approaches evaluated.
An Analysis of Reconstituted Fluid Milk Pricing Policy
Authors: Whipple Glen D.
Published: July 2006

This analysis suggests that alteration of the reconstituted fluid milk pricing provisions of federal and state milk market orders would have a substantial impact on market equilibrium. A reactive programming model of the U.S. milk market was used to simulate the effects of altered reconstituted fluid milk pricing policy. The solutions indicate that reconstituted fluid milk, as a lower cost alternative to fresh fluid milk, would make up a substantial portion of the fluid milk consumption in some markets.
The Structure of U.S. Agricultural Technology, 1910–78
Authors: Antle John M.
Published: July 2006

This paper utilizes 1910–78 time‐series data and a single product aggregate translog profit function to measure the structure of U.S. agricultural technology. Duality relations are used to devise a multifactor measure of biased technical change. A measure of nonhomotheticity is introduced which indicates the effects scale change has had on aggregate cost shares. The empirical analysis finds that different, nonhomothetic technologies characterized the prewar and postwar periods. Differing technical change biases are consistent with relative price trends during the two periods, showing that the long‐run structure of U.S. agricultural technology has been consistent with the Hayami‐Ruttan induced innovation theory.
Farm Size and Community Quality: Arvin and Dinuba Revisited
Authors: Hayes Michael N. , Olmstead Alan L.
Published: July 2006

A comparative analysis of Arvin and Dinuba. California, suggests that many factors besides differences in farm size contributed to Arvin's retarded community development. Rather than being closely matched communities, the two towns had developed within significantly different economic, demographic, and geographic settings. Goldschmidt's hypothesis that large farms accounted for differences in community quality may still be correct; but, because of methodological flaws, his study of Arvin and Dinuba offers little support for this assertion.
A Stochastic Dominance Comparison of Reduced Tillage Systems in Corn and Soybean Production under Risk
Authors: Klemme Richard M.
Published: July 2006

Returns per acre of reduced tillage systems including conventional, chisel, till‐plant, and no‐till are examined under general assumptions concerning risk. These returns are calculated using com and soybean experimental plot yields. Stochastic dominance rankings indicate an advantage (second degree) of conventional and chisel over no‐till when soil loss costs are not assigned. Annual per acre soil loss costs of $@@‐@@5–15 shift rankings towards the reduced tillage systems. A $@@‐@@10 per acre cost results from corn yield losses of 0.06% per year (170 bushel per acre yield base) over fifty years with a 5% real discount rate.
Modeling Dynamic Agricultural Production Response: The Case of Swine Production
Authors: Chavas Jean‐Paul , Kliebenstein James , Crenshaw Thomas D.
Published: July 2006

Crop and livestock production processes are typically dynamic and involve growing biological assets which are eventually marketed. This study presents a production model of biological growth based on a differential equation specification. Economic implications for optimal input use and optimal replacement policy are discussed in this context. The approach is applied to the growing‐finishing phase of a swine production enterprise. The results demonstrate that the knowledge of the growth function is crucial in evaluating dynamic production decisions.
Farm Real Estate Price Components, 1920–78
Authors: Castle Emery N. , Hoch Irving
Published: July 2006

The research reported demonstrates that farm real estate price involves important components in addition to the capitalized value of rent for the services of land and buildings in farm production, develops an expectations model for the farm real estate market, and compares predictions from the expectations model with farm real estate prices for the 1920–78 period. Capitalized rent explains only about half of real estate values both in the 1970s and over the longer 1920–78 period. The remainder can be explained by the capitalization of capital gains, including real gains or losses from price level changes.
Applying Theil's Multinomial Extension of the Linear Logit Model to Meat Expenditure Data
Authors: Bewley Ronald , Young Trevor
Published: July 2006

One of the chief drawbacks of the multinomial extension of the linear logit model is that, after the standard linearization, the parameters which are directly estimated have no obvious economic meaning. This paper presents alternative transformations which facilitate interpretation. In one linearization the estimated coefficients will be elasticities at a selected data point such as the mean. In another form, the coefficients will be Slutsky parameters. The latter version is chosen for an empirical analysis of the demand for meat in Great Britain. A number of issues concerning the model's error structure and dynamic specification are discussed.
Liquidation Bias in Futures Price Spreads
Authors: Paul Allen B.
Published: July 2006

This paper reports an unmistakable tendency during the final weeks of trading for the price of most commodity futures contracts to rise by a small but statistically significant amount relative to the price of the next maturity. Of four explanations examined, two squeeze theories are least plausible in the light of available evidence. The other two theories, one a variant of the Keynes‐Hicks hypothesis, the other a theory based on the overlap of trading and delivery, are more plausible. Yet they differ in character, generality, and in their implications for market efficiency. More data are needed to appraise them.
Bayesian Evaluation of a Specific Hypothesis
Authors: Fryar Edward O. , Arnold J. T. , Dunn James E.
Published: July 2006

A bayesian procedure is developed to compute the posterior probability that a set of parameter estimates is arbitrarily close to a specified set of values. This procedure allows researchers to directly measure the evidence favoring a specific hypothesis. Because of the current inability to measure this evidence directly, some researchers are confusing the inability to reject a null hypothesis with the justification for accepting it and are thus committing a null hypothesis error. To illustrate the applicability of this new procedure, it is used to evaluate the evidence supporting one version of the efficient market hypothesis. Contrary to the results of an earlier study, little support was found for the efficient market hypothesis.
Specification Tests for the Partial Adjustment and Adaptive Expectations Models
Authors: Doran Howard E.
Published: July 2006

The partial adjustment and adaptive expectations hypotheses give rise to simple dynamic models with a long history in empirical research. Tests of their adequacy, however, do not appear to figure prominently in the literature. Specification tests are derived by nesting these two models in the more general partial adjustment‐adaptive expectations model and deriving the likelihood ratio, Lagrange multiplier, and Wald tests. Monte‐carlo experiments are conducted to assess the power of these tests (together with other tests, including Durbin's h‐test) for small samples.
To Violate or Not Violate the Law: An Example from Egyptian Agriculture
Authors: Abdou Dyaa K. , Gardner B. Delworth , Green Richard
Published: July 2006

Egyptian agriculture is heavily regulated by laws and administrative regulations. This paper explores some of the economic implications of two laws that are widely violated: the land allotment to cotton and the imposed quota for rice. Logit and probit models are utilized to assess factors which are associated with law violations in two villages. Violators of both laws tend to be poorer, have less owned land, have fewer number of land pieces, have fewer cattle, and are located nearer the free village markets than the nonviolators.
A Note on the Use of the Cobb‐Douglas Profit Function
Authors: Chand Ramesh , Kaul J. L.
Published: July 2006

Factor demand and output supply functions formulated within the framework of the Cobb‐Douglas profit function have been widely used for the study of technological and production behavior of the farm firm. There are certain inbuilt rigidities in this function that have been very often construed as empirical findings by various authors. As such, a note of caution in the use of this function was thought necessary. An attempt is made to spell out the characteristics of this function with proofs.
ECOP's Futures Task Force Report: An Overview
Authors: Geasler Mitchell R.
Published: July 2006

Extension currently is failing to keep up with societal changes. The primary problem of Extension appears to be, in my opinion, its present, functioning mindset, a mindset that seems to be one of survival rather than one of potential. We could say that the mindset of Extension appears to be more concerned with management than leadership; that is, more concerned with doing things right, rather than doing the right things. As a result, Extension seems to be missing much of the big picture and is beginning to slip in its role as a societal leader. To be successful in the future, Extension must decide to lead and then to do so with a vision and a boldness.
Linear Approximation Using MOTAD and Separable Programming: Should It Be Done?
Authors: McCarl Bruce A. , Önal Hayri
Published: July 2006

Linear approximation techniques have often been applied to nonlinear mathematical programming models for computational efficiency reasons. Price‐endogenous agricultural sector models and risk models have found numerous applications. This article addresses the issue of approximation efficiency. Based on computational experience with a series of moderate and large‐scale sector and risk models, it is concluded that direct nonlinear solution is more efficient than using linear approximations for sector and risk models having objective function nonlinearities. On the other hand, the experimental results indicate that approximation should continue in case of models with nonlinearities in their constraints.
Performance of the Weekly Gulf‐Kansas City Hard‐Red Winter Wheat Basis
Authors: Tilley Daniel S. , Campbell Steven K.
Published: July 2006

Weekly Gulf of Mexico cash price minus Kansas City futures price bases for hard‐red winter wheat are hypothesized to be related to export commitments and free stocks, grain embargoes, liquidity, and contract month used to calculate the basis. Regression results suggest that increased (decreased) exports or decreased free stocks cause the Gulf cash price to increase (decrease) relative to futures prices. The grain embargo caused Gulf cash prices to decrease relative to futures prices during the period of the embargo. Contract month was found to significantly affect the basis. Market liquidity issues are not resolved.
Agricultural Product Supplies and Input Demands: Regional Comparisons
Authors: Shumway C. Richard , Alexander William P.
Published: July 2006

Supply equations for five output groups and demand equations for four input groups in ten regions of the United States are estimated and evaluated. The econometric estimation is conducted for complete regional product supply and input demand systems subject to competitive theory. The results document the extreme diversity of production relationships within the United States. They clearly indicate the unequal effects of changes in economic conditions and government policies on major production regions.
Landowner Characteristics: A Basis for Locational Decisions in the Urban Fringe
Authors: Barnard Charles H. , Butcher Walter R.
Published: July 2006

Discontiguous urban growth is explained more by landowner characteristics than by parcel characteristics. Discriminant analysis of the sell/hold decisions of owners of undeveloped parcels demonstrated the greater importance of landowner characteristics in determining urban fringe sales. Sales, in turn, exhibit a high degree of association with development in the near term. These results suggest that discontiguous patterns of urban growth arise largely from the scattered availability of sites owned by persons with reservation prices below market value. Institutional constraints on development that rely on rent changes induced by subsidies and penalties will be ineffective.
Analyzing Equity Capital Programs of Banks for Cooperatives
Authors: Ahmad Ismail , Duft Ken D. , Mittelhammer Ron C.
Published: July 2006

Characteristics of Banks for Cooperatives term loan and equity capital programs contribute toward complex intermittent exchanges of positive and negative cash flows between the cooperative lender and borrower and complicate the analysis of the net present value and effective interest of the financing project. A multiperiod linear program was developed to analyze the effect of variations in equity capital program components on the present value of the financing project. Furthermore, the concept of a “mixed financing project” was used to analyze the effective interest rate associated with such projects.
The Distribution of Gains from Technological Advance When Input Quality Varies
Authors: Offutt Susan E. , Garcia Philip , Pinar Musa
Published: July 2006

Empirical evidence about new corn production technology in Illinois supports the hypothesis that yield‐ and output‐enhancing effects vary depending on whether technology is input (here, land) quality‐dependent or independent. In turn, these differences affect the distribution of economic surplus from technology adoption across geographic regions with varying land quality. A competitive, market‐clearing model for a traded commodity is used to estimate the gains in economic surplus from technological advance.
Informational Efficiency of Markets for Stumpage
Authors: Washburn Courtland L. , Binkley Clark S.
Published: July 2006

This paper examines the weak‐form informational efficiency of markets for pine sawtimber stumpage in the U.S. South. Analyses of annual and quarterly rates of price change generally indicate that stumpage markets are efficient. When viewed over monthly intervals, stumpage markets do not pass the tests for weak‐form efficiency. This failure is attributed to friction in the market due to the time and cost involved in consumating timber sales. The results have implications for price‐responsive timber harvest scheduling, for the application of asset pricing models to forestry investments, and for policies governing sales of timber from public lands.
The Elasticity of Export Demand for U.S. Cotton
Authors: Duffy Patricia A. , Wohlgenant Michael K. , Richardson James W.
Published: July 2006

The conceptually relevant elasticity for policy analysis is the total export demand elasticity, which takes into account feedback effects of the U.S. price on other countries' prices. In this paper, a total export demand elasticity for U.S. cotton is estimated in an extended Armington framework. The results indicate that the export demand facing the United States is probably elastic; however, estimated total demand elasticities are considerably less elastic than the estimated direct demand elasticities, which do not account for feedback effects resulting from finite excess supply elasticities in the rest of the world.
Effects of Government Programs on Rice Acreage Decisions under Rational Expectations: The Case of Taiwan
Authors: Huang C‐H
Published: July 2006

The effects of government programs on rice production in Taiwan are examined under the rational expectations hypothesis. Results suggest that a crop‐shifting program designed to divert rice production to other targeted crops was unsuccessful because of contradictory government programs. Under rational expectations, the marginal effects of a price‐support program on acreage decline as soon as targeted price is no longer increasing.
At‐Home Consumption of Cheese: A Purchase‐Infrequency Model
Authors: Gould Brian W.
Published: July 2006

For many commodities, zero purchases are recorded in household budget surveys even though positive consumption occurs. This may reflect a survey period that is shorter than the purchase cycle. The present study estimates a purchase‐infrequency model for cheese using the 1987 BLS Consumer Expenditure Survey. Appropriateness of the Tobit specification is examined along with the assumption of independence of the two‐stage expenditure decision process.
A Nonparametric Analysis of the Influence of Research on Agricultural Productivity
Authors: Chavas Jean‐Paul , Cox Thomas L.
Published: July 2006

Nonparametric productivity analysis is extended by modeling technical progress as a function of public and private research expenditures. Results indicate that 30‐year lags are required to fully capture the effects of public research expenditures on U.S. agricultural productivity. Compared to public research, private research has a stronger influence on farm productivity in the short term but a smaller influence in the longer term. The internal rate of return is 0.28 for public research and 0.17 for private research.
Regional and Temporal Impacts of Technical Change in the U.S. Dairy Sector
Authors: Weersink Alfons , Tauer Loren W.
Published: July 2006

The regional and temporal impacts of technical change in the U.S. dairy industry are assessed in terms of production and income distribution through a dynamic equilibrium model. Dynamic duality is used to obtain the production equations. The traditional milk‐producing regions of the Northeast and Lake states will maintain their base of national output, while the Pacific region increases its base at the expense of the remaining regions. Regional dairy income varies temporally.
Variance of Agricultural Prices, Industrial Prices, and Money
Authors: Han Doo Bong , Penson John B. , Jansen Dennis W.
Published: July 2006

The relative uncertainty of agricultural prices and industrial prices with respect to the uncertainty of growth in the money supply are investigated utilizing multivariate ARCH and GARCH analysis. The conditional variances of agricultural prices were shown to dwarf the variances of industrial prices and the money supply. The relatively greater sensitivity of the conditional variance of agricultural prices to changes in the variance of the money supply than industrial prices found in this analysis provides a further perspective on the uncertainty confronting farmers, including the impacts of the monetary policy shock that precipitated the farm financial crisis in the early 1980s.
Consistent Estimation of General Equilibrium Welfare Effects
Authors: Thurman Walter N. , Wohlgenant Michael K.
Published: July 2006

A general equilibrium demand curve is appropriate for measuring the surplus changes in several markets induced by a policy intervention in one market. Guidelines for the identification and consistent estimation of such a demand curve are discussed. Specifically, conditions are stated under which the dropping of prices of related goods yields a consistent estimate of the slope of the general equilibrium demand curve. Also, a method similar to Leamer's is proposed to provide consistent bounds for the general equilibrium demand slope when the slope is underidentified.
Farmer Behavior under Risk of Failure
Authors: Foster William E. , Rausser Gordon C.
Published: July 2006

We analyze input decisions under risk of farm failure. Inputs with immediate cash outlays have greater effective than observed prices because their cost increases the probability of failure, and their optimal marginal products are higher than observed prices would warrant under strict profit maximizing without failure risk. An algebraic example illustrates the market equilibrium effects of failure risk. We apply the model to an analysis of Illinois corn production (1971–79). Results indicate that larger farms deviate less than smaller farms from strict profit maximization. Over the period studied, farmers moved further from setting marginal products equal to observed prices.
Endangered Species and the Safe Minimum Standard
Authors: Ready Richard C. , Bishop Richard C.
Published: July 2006

The safe minimum standard of conservation is a decision rule for problems like endangered species preservation that involve irreversibility and uncertainty. It has been motivated as the minimax‐loss solution to a two‐person game against nature. However, two equally plausible games can be used to model decisions involving endangered species. For one game, the safe minimum standard, and therefore preservation, is preferred. For the other game, extinction is preferred. Although the safe minimum standard is intuitively appealing, it cannot be motivated by game theory.
The Endowment Effect and the Coase Theorem
Authors: Jacques Stephanie
Published: July 2006

The Coase theorem prediction that the final allocation of resources will be independent of the liability rule relies on one important assumption: an individual will value a right or an asset the same whether considering its acquisition or its loss (MWP maximum willingness to pay should equal MCA minimum compensation to accept). However, the marginal rate of substitution between one good and another seems to be affected by a phenomenon described as the endowment effect. In such a case, the individual who is assigned the property right is more likely to retain it and the Coase theorem does not hold anymore.
Formally Testing the Present Value Model of Farmland Prices
Authors: Falk Barry
Published: July 2006

This paper applies recent statistical developments in the study of stock market price movements to study the plausibility of the constant expected returns version of the present value model as an explanation of farmland prices. Using Iowa farmland price and rent data over the 1921–86 sample period, formal test results indicate that, although farmland price and rent movements are highly correlated, price movements are not consistent with the implications of this model. There appear to be persistent predictable excess positive and/or negative returns in the Iowa farmland market.
Efficient Spatial Allocation of Irrigation Water
Authors: Chakravorty Ujjayant , Roumasset James
Published: July 2006

In the presence of conveyance losses, the efficient quantity of water applied falls with distance from the water source, but the amount of water “sent” (including conveyance losses) actually increases with distance from the source, except toward the tail end of the irrigation system. This implies that if marginal cost pricing were implemented, farmers at the middle and lower reaches of the system would have to pay more money for less water received. The model is illustrated and alternative financing schemes compared for an empirically derived demand function for irrigation water.
Farm Production Decisions Under Cross and Conservation Compliance
Authors: Hoag Dana L. , Holloway Herb A.
Published: July 2006

The success of soil conservation compliance (CC) hinges on participation in commodity programs. Using mixed integer programming, the profitability of participation in commodity programs was examined on seventeen surveyed North Carolina farms. Without CC, cross compliance in commodity programs increased projected soil erosion by over 80% when participation increased from 30% to nearly 90%. With CC, erosion fell by two‐thirds at the high participation level but decreased by only 1% with low participation. Individual farm acreage base and crop yield strongly affected the profitability of CC. Compliance is increasingly profitable on farms with more base acreage and higher yields.
The Potential for Water Market Efficiency When Instream Flows Have Value
Authors: Griffin Ronald C. , Hsu Shih‐Hsun
Published: July 2006

Most of the effort being expended to revise western water policy concerns the maintenance of instream waters to the exclusion of traditional diversionary interests. Absent from the economics literature is a theoretical treatment addressing the interface between diversionary and instream water uses. At issue is the potential for refining market operations to accomplish efficient allocation in the presence of both diversionary and instream uses. Optimization methods are employed to examine this issue in a highly generalized framework. If a specific structure is adopted, markets and other incentive‐based policies are demonstrated to be capable of efficient water allocation.
A Structural Investigation of Biotechnological Impacts on Cotton Quality and Returns
Authors: Chiou George T. , Chen Dean T. , Capps Oral
Published: July 2006

A structural quality/quantity choice model is developed to evaluate the impact of improved fiber quality and the resulting economic surplus under biotechnological scenarios. Two major biotechnology scenarios are considered for a comparative analysis of fiber quality improvement. Results show impacts on fiber quality improvement and economic returns.
Seasonal Labor Utilization in Agriculture: Theory and Evidence from Agrarian Households in India
Authors: Skoufias Emmanuel
Published: July 2006

This paper develops and tests a dynamic, stochastic model of seasonal labor demand of farm households in a developing country. Seasonality in agriculture is modeled as a dynamic two stage process (planting and harvesting) with sequential dependence of decisions. Yield risk is an important determinant of behavior in the planting stage only. The proposed model is estimated using plot‐specific cross‐section time‐series data from India. Consistent estimates of the male and female labor demand functions in the planting and harvesting stages are obtained by panel data econometric methods that control for the nonseparability of the model.
Market Instability and Nonlinear Dynamics
Authors: Chavas Jean‐Paul , Holt Matthew T.
Published: July 2006

The potential role of nonlinear dynamics in generating market instability is investigated using a simple market equilibrium model of the U.S. dairy industry. The supply function reflects the nonlinear dynamics of the dairy herd, as estimated by Chavas and Klemme. It is shown that, in the absence of any uncertainty, an inelastic demand contributes to market instability and chaos.
Pesticides and Worker Safety
Authors: Harper Carolyn R. , Zilberman David
Published: July 2006

A key problem in pesticide regulation is uncertainty about health risks. Trade‐offs between economic benefits and worker health safety are examined using an empirical illustration. Alternative decision rules for regulation under uncertainty are considered: a safety fixed rule, which protects individuals from excessive health risks, and uncertainty‐adjusted cost‐benefit analysis, which evaluates aggregate trade‐offs between health and economic welfare. These criteria may lead to opposite policy conclusions, suggesting that the most appropriate public policy is a safe minimum standard (SMS), which allows weighing of costs and benefits only after some minimum acceptable level of health safety has been assured.
Farming the Tax Code: The Impact of High Marginal Tax Rates on Agricultural Tax Shelters
Authors: Long James E.
Published: July 2006

Surprisingly little scholarly work has examined the practice of “farming the tax code,” in which accounting losses on agricultural investments are used to shelter other income from taxation. Economic theory suggests that the amount of investment in agricultural tax shelters is positively related to the marginal tax rate. This hypothesis is empirically investigated using a sample of federal individual income tax returns filed for 1983. Both the probability of reporting a farm tax loss and the amount of farm losses are increased by a rise in the marginal tax rate, especially among upper income taxpayers.
Impact of the WIC Program on Food Expenditures
Authors: Arcia Gustavo J. , Crouch Luis A. , Kulka Richard A.
Published: July 2006

Participation in the WIC program tends to shift grocery expenditures in favor of more nutritious food. Dairy data show that WIC women consumed more nutrient‐dense foods than non‐WIC women. WIC women and their families spent significantly less on meals away from home than control families, suggesting a more efficient use of the food budget. WIC's impact on unintended recipients is negligible, while its impact on foods for WIC children is positive and highly significant. Recall data on monthly food expenditures indicate that total food expenditures and grocery expenditures did not increase as a result of program participation.
Effect of U.S. Immigration Reform on Labor‐Intensive Agricultural Commodities
Authors: Gunter Lewell F. , Jarrett Joseph C. , Duffield James A.
Published: July 2006

A major concern in development of the 1986 Immigration Reform and Control Act was the potential for reductions in seasonal farm labor supply. Although the act appears to have increased farm labor supply, future immigration policy will likely be affected by similar concerns. Muth's model of industry supply and factor demand is adapted to analyze effects of labor supply reductions on selected U.S. crops. Labor factor share and output demand elasticity are the most important factors influencing the impact of labor supply on production, and effects of moderate supply decreases will be small if recent output demand conditions continue.
A Method for Calculating Profit‐Neutral Land Set Asides
Authors: Arnade Carlos
Published: July 2006

Changes in land set asides and prices can be coordinated to ensure that the profits of agricultural producers do not change. This concept is made operational by estimating and inverting a profit function to obtain an indirect transformation function. Profit‐neutral combinations of land set asides and prices for a subsector of Brazilian agriculture are calculated.
Transaction Costs as Determinants of Vertical Coordination in the U.S. Food Industries
Authors: Frank Stuart D. , Henderson Dennis R.
Published: July 2006

Vertical coordination is a more comprehensive concept than vertical integration, capturing market, contractual, and ownership coordination. Williamson suggests that transaction costs motivate the use of nonmarket arrangements to vertically coordinate production. This paper presents a vertical coordination index incorporating industry input‐output relationships and nonmarket arrangements. In an econometric analysis, the vertical coordination index is utilized to examine transaction cost effects on food industry vertical linkages. Empirical results support the hypothesis that transaction costs are a primary motivation to vertically coordinate via nonmarket arrangements. Results also suggest the vertical coordination index is more robust than traditional vertical integration measure.
Market Effects of Cotton Integrated Pest Management
Authors: White Fred C. , Wetzstein Michael E.
Published: July 2006

Widely reported research results indicate that cotton integrated pest management (IPM) generally reduces chemical use and increases net returns. Despite these favorable research results, many farmers have not adopted IPM and others have adopted only some of the available technologies. Given rising marginal costs and diminishing marginal benefits from IPM technology transfer, an optimal control framework is developed to identify optimal rates of technology transfer through educational programs. Results from an analysis of this dynamic adoption process for cotton IPM are presented. Considering the complex and evolving nature of cotton IPM, continuing educational efforts to transfer IPM technologies are warranted.
Measuring Returns to an Innovation in an Imperfectly Competitive Market: Application to Mechanical Harvesting of Processing Tomatoes in Taiwan
Authors: Huang Shu‐Yu , Sexton Richard J.
Published: July 2006

In this paper we develop and apply a general imperfect competition model to evaluate returns to a cost‐reducing innovation. Most related work has applied models of perfect competition. Results demonstrate that welfare estimates derived from a model of perfect competition may be seriously distorted when the relevant market is imperfectly competitive. Application to mechanical harvesting of processing tomatoes in Taiwan reveals the potential for significant benefits to adoption of mechanical harvesting in Taiwan. However, farmers' incentives to adopt the harvester are attenuated because total benefits are reduced by oligopsony power in tomato procurement, and imperfectly competitive processors will capture a large share of the benefits that remain.
Agricultural Insurance and Soil Depletion in a Simple Dynamic Model
Authors: Innes Robert , Ardila Sergio
Published: July 2006

We study the effects of agricultural insurance on farm production choices, soil depletion and the environment when there are two related risks, one in short‐to‐medium run production revenues and the other in land value. The analysis considers “pure” and “truncating” insurance programs that stabilize linear combinations of short‐run revenue risk and land price risk. Production‐revenue‐stabilizing insurance is often found to elicit increased farmer output, thus exacerbating environmental externalities and causing further soil depletion. Land‐value‐stabilizing insurance typically elicits lower output thus mitigating environmental externalities and pushing farmers closer to their complete‐insurance output levels.
The Role of Transportation Costs in the Economics of Commodity Markets
Authors: Roehner Bertrand M.
Published: July 2006

Transportation costs still play an important role in the economics of commodity markets. In this paper I present a theoretical framework aimed at describing spatial arbitrage under uncertainty; I analyze the effect of changing transport costs on different, yet related, variables: volume of trade, volatility of prices, and levels of spatial price differentials. As a tribute to Enke and Samuelson the model is referred to as the stochastic Enke‐Samuelson model. It provides predictions for variables (such as price volatilities or correlations) which cannot be defined in the deterministic framework of the standard spatial price equilibrium model. The statistical tests display a convergent array of evidence in favor of the model.
Extension Commercialization: How Much to Charge for Extension Services
Authors: Dinar Ariel
Published: July 2006

As public agricultural extension organizations around the world examine the possibility of privatizing or commercializing part or all their services, several issues arise. In this paper I address the question of how to price the services provided. Using available data from Israel, a supply (marginal cost) function is estimated for the Israel Extension Service, and a demand function for extension services is estimated. The derived number of visits and the per visit price are calculated. Several general extension‐related policy issues that may also be applicable to other countries are discussed.
Incentive Payments to Encourage Farmer Adoption of Water Quality Protection Practices
Authors: Cooper Joseph C. , Keim Russ W.
Published: July 2006

Farmers can be encouraged to voluntarily adopt environmentally sound management practices through the use of incentive payments. This paper uses both a bivariate probit with sample selection model and a double hurdle model on data from a survey of farmers to predict farmer adoption of the practices as a function of the payment offer. The five management practices addressed here are integrated pest management, legume crediting, manure testing, split applications of nitrogen, and soil moisture testing. Also estimated are models that predict the acreage on which these practices would be applied given the decision to accept the incentive payments estimated.
Contract Design for the Purchase of Environmental Goods from Agriculture
Authors: Wu JunJie , Babcock Bruce A.
Published: July 2006

An environmental stewardship program, whereby farmers are paid directly for the environmental goods they provide, is developed by combining the microparameter distribution model with mechanism design principles. The program overcomes the information asymmetry between farmers and governments and accounts for the deadweight losses from distortionary taxes. The characteristics of optimal input and payment schedules of the program are derived. These optimal schedules are determined by the tradeoffs between farming profits, environmental benefits, and deadweight losses from taxes, and are second‐best except under restrictive conditions on deadweight losses from taxes and on the marginal product of inputs and marginal pollution costs.
Hotelling's Theory, Enhancement, and the Taking of the Redwood National Park
Authors: Berck Peter , Bentley William R.
Published: July 2006

The United States has used its power of eminent domain to take a considerable fraction of all remaining old‐growth redwood for inclusion in the Redwood National Park. Hotelling's theory implies that the price of redwood remaining in private hands should have increased. In this paper we provide an estimate of how much the taking increased the price of redwood as well as a test of the underlying Hotelling theory.