bluuebunny/crossref_metadata_2025 huggingface dataset:
The Effect of Usage and Size on Tractor Depreciation
Authors: Perry Gregory M. , Bayaner Ahmet , Nixon Clair J.
Published: July 2006

An econometric model was estimated to explain prices for tractors sold at auction. Tractor age, hours of use, size, and condition were statistically significant explanatory variables. Real tractor depreciation most closely approximated a sum‐of‐the‐years digits pattern. Tractors sold at consignment and bankruptcy auctions brought a lower price than tractors sold by retiring farmers. High levels of usage did not greatly reduce tractor value, but tractors with low annual usage brought substantial premiums in the auction market.
The Demand for Cigarettes in Japan
Authors: Haden Kim
Published: July 2006

A two‐stage budgeting procedure was used to estimate demand elasticities for cigarettes in Japan. Cigarettes were disaggregated into Japanese, U.S., and rest‐of‐world. Testing for habit effects was performed at both stages. Results indicated that habit effects occur for total expenditures on cigarettes but not between types.
Marketing Margins, Market Power, and Price Uncertainty
Authors: Schroeter John , Azzam Azzeddine
Published: July 2006

This paper provides a conceptual and empirical framework for analyzing marketing margins in a noncompetitive food‐processing industry facing output price uncertainty. The framework allows the decomposition of observed margins into components reflecting the marginal cost of the processing industry, oligopoly/oligopsony price distortions, and an output price risk component. The empirical procedure is applied to a time series of spreads between wholesale pork prices and farm prices of market hogs. The principal finding is that, while farm/wholesale margins are more consistent with competitive performance now than they were fifteen years ago, the output price risk component persisted throughout the sample period.
Causality between Dairy Farm Size and Productivity
Authors: Weersink Alfons , Tauer Loren W.
Published: July 2006

The direction of causality between dairy farm size and productivity is examined for each state using multivariate Granger‐causality tests. The results only partially support the view that technological change has caused increases in dairy farm size. The direction of causality appears to be more from size to productivity. Changes in productivity and average herd size appear driven by price changes.
Providing Crop Disaster Assistance through a Modified Deficiency Payment Program
Authors: Miranda Mario J. , Glauber Joseph W.
Published: July 2006

Federal income support programs provide producers with only a limited degree of income protection in the event of a widespread crop failure. As an alternative to supplemental disaster assistance, we propose a modification of the deficiency payments program in which a producer's payment would be based on the difference between a target revenue and the average revenue in the producer's region. A regional target revenue progam would provide improved individual income protection without promoting moral hazard and would limit regional revenue shortfalls, thereby eliminating the demand for supplemental disaster assistance and reducing government costs.
The International Effects of U.S. Farm Subsidies
Authors: Fisher Eric O'N. , de Gorter Harry
Published: July 2006

Using dynamic programming, this paper examines effects of farm subsidies on U.S. exports of corn, cotton, rice, and wheat. The six policy simulations described here explore alternative proposals in the current round of the General Agreement on Tariffs and Trade. The analysis leads to two conclusions. First, abolishing domestic subsidies lowers world prices of these crops. Second, imposing tighter supply controls may not actually decrease exports in the short run.
Market Interventions, International Price Stabilization, and Welfare Implications
Authors: Devadoss S.
Published: July 2006

The welfare effects of price stabilization are quantified under free trade and under distortionary policies when an exporting country protects domestic producers with price supports, an importing country pursues a price‐fixing policy, and a second importing country follows a free trade policy. Results show that distortionary interventions cause greater world price variability. World gains from international price stabilization through a costless buffer stock scheme are higher under distortionary trade than under free trade.
Dynamic Measures of Scope and Scale Economies: An Application to German Agriculture
Authors: Fernandez‐Cornejo J. , Gempesaw C. M. , Elterich J. G. , Stefanou S. E.
Published: July 2006

Static concepts of multiproduct economies of scale and scope are extended into a dynamic setting within the cost of adjustment framework. Important properties of the dynamic measures are developed and the foundations of a dynamic theory of the firm generalizing static neoclassical theory are presented. Dynamic measures of scope and scale as well as shadow costs are estimated empirically for multiple‐output, multiple‐input German dairy farms operating under a production quota. Causes of scope economies are explored and a conceptual model to predict the evolution of the production structure of German farms is formulated.
Capital Gains and After‐Tax Internal Rates of Return
Authors: Robison Lindon J. , Hanson Steven D.
Published: July 2006

Net present value models are constructed by discounting the after‐tax cash flows of a challenging investment by the after‐tax internal rates of return (IRRs) of a defending investment. After‐tax IRRs calculated for a defending investment are shown to depend on the defender's capital gains and allowable depreciation. The often recommended adjustment to the before‐tax IRRs of one minus the marginal income tax rate is not generally applicable. Failure to correctly adjust the discount rates (the defender's IRRs) for taxes may result in incorrect inferences from comparative static models and incorrect investment valuations from empirical models. Tax rate adjustments for farmland, stocks, and bonds are shown to be different and to have varied over time.
U.S. Cigarette Consumption: The Case of Low‐Income Women
Authors: Blaylock James R. , Blisard W. Noel
Published: July 2006

We use double‐hurdle or Cragg models to test whether decisions about smoking participation and consumption levels are separate, endogenous choices. We also estimate several dominance models which assume that standard corner solutions are not applicable. A complete dominance model with independence between the participation and consumption decisions is the preferred specification for our data. The most important variables influencing participation are region, number of children, education, and ethnicity. Region, age, race, ethnicity, and health status most affected consumption levels.
Futures Markets and Marketing Firms: The U.S. Soybean‐Processing Industry
Authors: Lence Sergio H. , Hayes Dermot J. , Meyers William H.
Published: July 2006

A model of marketing firms in the presence of futures markets is presented and tested with data from the U.S. soybean‐processing industry. Results show that production increases if output futures prices rise, material input cash prices fall, or the output cash‐futures price relationship becomes more volatile. Sufficient assumptions for these results are expected‐utility‐maximizing competitive firms with nonincreasing absolute risk aversion and nonstochastic Leontief production functions, unbiased futures prices, and linearly related cash and futures prices. The standard marketing margin is inappropriate for analyzing market structure or risk in the presence of futures markets.
Computer Adoption and Use by New Mexico Nonfarm Agribusinesses
Authors: Baker Gregory A.
Published: July 2006

This research explores characteristics that influence computer adoption and successful use in nonfarm New Mexico agribusinesses. Results indicate that computer adoption is related to firm characteristics such as size and type of business, but unrelated to manager characteristics, including age and education. Manager involvement in the computer purchase decision is the most important characteristic affecting computer effectiveness as measured by user satisfaction and number of applications.
The Economic Implications of Farm Interest Groups' Beliefs
Authors: Vercammen James , Fulton Murray
Published: July 2006

It is usually assumed that interest groups fully understand their economic environment. A method of determining the economic beliefs of farm interest groups and of examining the implications for the groups if these beliefs do not conform to reality is presented. The approach obtains estimates of the perceived beliefs of a group from knowledge of its actions and assumptions regarding its objectives. A comparison of the optimal policy recommendations with those based on the perceived beliefs provides an indication of the benefits of conformity. An example involving farm organizations in western Canada illustrates the use of the method.
Decomposition of Milk Supply Response into Technology and Price‐Induced Effects
Authors: Blayney Don P. , Mittelhammer Ron C.
Published: July 2006

An economically relevant aggregate production function and an aggregate profit function are used to decompose milk supply response into technology and price effects. Decomposing milk supply response in this way provides insights into dairy industry efficiency and its impact on the effectiveness of price support programs as well as the extent to which aggregate milk production will expand despite prices motivating supply curtailment. An empirical analysis of supply response decomposition for the state of Washington is presented. Expected market price effects were obtained but were overwhelmed by technology effects resulting in milk output expansion when price signals motivated supply reduction.
The Effects of Pricing Policies on Water Conservation and Drainage
Authors: Caswell Margriet , Lichtenberg Erik , Zilberman David
Published: July 2006

A general model of adoption of input‐conserving technologies by competitive firms is introduced using drip irrigation as an example. An environmental regulation such as a drainage effluent charge is shown to influence adoption. Early adopters are likely to be producers with less efficient fixed assets (land of low quality or antiquated capital), higher input costs (higher water prices or greater depth to groundwater), and in more environmentally sensitive regions. Simulations show that drainage regulations can be expected to play a major role in adoption of more efficient irrigation technologies in California. Thus, conservation may be a key to solving resource scarcity problems and reducing external environmental costs.
The Mean and Variance of the Mean‐Variance Decision Rule
Authors: Chalfant James A. , Collender Robert N. , Subramanian Shankar
Published: July 2006

The widely used mean‐variance approach to decisions under uncertainty requires estimates of the parameters of the joint distribution of returns. When optimal behavior is determined using estimates, rather than the true values, the decision is a random variable. We consider the reliability of mean‐variance analysis by examining the bias and variance‐covariance matrix for the decision vector. The latter shows that decisions based on estimated parameters can have a large variance around the true optimum. The results show that optimal decisions can differ substantially from those based on mean‐variance analysis.
Uncertainty and Split Nitrogen Application in Corn Production
Authors: Feinerman Eli , Choi E. Kwan , Johnson Stanley R.
Published: July 2006

The split application of nitrogen provides insurance against the risk that late spring application will be infeasible because of wet soil. Risk aversion and production uncertainty have little impact on total nitrogen available to the crop but do affect the split in application and the total nitrogen applied. A risk‐averse farmer applies more (less) nitrogen prior to planting and total nitrogen than a risk‐neutral farmer if nitrogen and water are substitutes (complements). For the case of substitutes, the nitrogen lost through leaching is the premium which the risk‐averse farmer pays to insure a proper level of nitrogen.
Seasonality and Stock‐Adjustment Models of Retail Food Store Inventory Behavior
Authors: Miller Stephen E.
Published: July 2006

In this paper I apply competing specifications of the stock‐adjustment process for retail inventories to both seasonal and seasonally adjusted retail food store data. My objective is to determine whether the contradictory evidence from previous research regarding the adequacy of stock‐adjustment models can be explained by differences in model specification and the treatment of seasonality. The results indicate that seasonally adjusted data obscure important aspects of retail inventory behavior. A stock‐adjustment model which allows for the role of ending inventories in meeting expected future sales performs better than a competing model.
Pricing Accuracy and Efficiency in a Pilot Electronic Hog Market
Authors: Rhodus W. Timothy , Baldwin E. Dean , Henderson Dennis R.
Published: July 2006

Daily average prices for hogs sold through the Hog Accelerated Marketing System (HAMS), an experimental electronic market, were compared to those for similar grade hogs sold through Peoria terminal and Indiana direct markets. Results indicate that prices received by farmers using HAMS increased by $@@‐@@0.94 to $@@‐@@0.99 per 100 pounds relative to their previous alternative. Using frequency of price change and average amount of price change as measures of efficient pricing behavior, the electronic market exhibited more efficient behavior than the traditional markets, i.e., average prices changed from one day to the next more frequently and by smaller amounts.
Risk Behavior and Rational Expectations in the U.S. Broiler Market
Authors: Aradhyula Satheesh V. , Holt Matthew T.
Published: July 2006

This study examines the empirical implications of extending the rational expectations hypothesis (REH) to include price uncertainty. A general estimation framework that incorporates both the restrictions on structural parameters and the variance‐covariance terms is developed. GARCH time‐series processes are used to generate time‐varying expectations of both the means and the variances of exogenous variables. The empirical application is with a quarterly model of the U.S. broiler industry; the results indicate that the rational expectation of price variance is an important determinant of broiler supply. A formal test indicates that the restrictions implied by the REH cannot be rejected.
Estimating Multioutput Technologies
Authors: Chambers Robert G. , Just Richard E.
Published: July 2006

This paper solves the problem of determining fixed but allocatable input allocations by dual methods. A flexible, profit function approach for estimating input‐nonjoint technologies with allocatable fixed factors is developed. Variable input allocations can be calculated from the estimated technology. A correct test for input nonjointness that discriminates between true and apparent jointness is derived in a framework that permits fully linear estimation of a second‐order flexible technology. To illustrate, these methods are applied to the Just‐Zilberman‐Hochman data set.
Corner Solutions in Duality Models: A Cross‐Section Analysis of Dairy Production Decisions
Authors: Weaver Robert D. , Lass Daniel A.
Published: July 2006

Corner solutions are often observed in cross‐section samples of farm‐level production decisions. An estimation strategy is presented and applied to a uniquely comprehensive data set for Pennsylvania dairy farms. A complete set of choice functions is derived consistent with multiple outputs and multiple inputs, expected profit maximation, and the existence of corner solutions with respect to the labor hiring decision. Results illustrate that substantial estimation bias may occur if the existence of corner solutions is not recognized. Estimated elasticities of choices with respect to input and net output prices indicate substantial responsiveness of choice to price. Results indicate that changes in education and acreage operated result in substantial changes in output and input mixes and that the differences in results for farms, with and without hired labor, are substantial.
Area‐Yield Crop Insurance Reconsidered
Authors: Miranda Mario J.
Published: July 2006

One of the more promising proposals for reforming the federal crop insurance program calls for both premium rates and indemnities to be based not on the producer's individual yield but rather on the aggregate yield of a surrounding area. Area‐yield crop insurance can provide more effective yield‐loss coverage than individually tailored insurance, without most of the adverse selection and moral hazard problems that have historically undermined the actuarial performance of the federal crop insurance program.
Effects of Technological Change and Institutional Reform on Production Growth in Chinese Agriculture
Authors: Fan Shenggen
Published: July 2006

Recent rapid agricultural production growth in Chinese agriculture could be attributed to an increase in inputs, technological change, and institutional reform. An accounting approach was used to separate the relative contribution of these three factors. Institutional change, like the introduction of the household production responsibility system, has contributed to past growth in production. However, technological change is crucial to furthering production growth because of the limited potential for significant increase in the use of conventional inputs, in particular land. Continued institutional change must accompany corresponding technological changes.
The Calculation of Research Benefits with Linear and Nonlinear Specifications of Demand and Supply Functions
Authors: Voon Jan P. , Edwards Geoff W.
Published: July 2006

This paper provides a comparison of research benefits for linear and nonlinear constant elasticity (NLCE) specifications of supply and demand with a pivotal supply shift framework. The comparison allows for a sensitivity test of results to different values for demand and supply elasticity. The main finding is that the values of the gross annual research benefits calculated for the NLCE specification are larger than those calculated for the linear specification with price‐elastic supply but are smaller with price‐inelastic supply. The analysis suggests that the use of an NLCE specification and a pivotal shift due to research is usually preferable to use of a linear supply curve with pivotal shift.
Evaluating Prior Beliefs in a Demand System: The Case of Meat Demand in Canada
Authors: Chalfant James A. , Gray Richard S. , White Kenneth J.
Published: July 2006

An almost ideal demand system for meats is estimated using Canadian data. A Bayesian approach is used to impose inequality restrictions on substitution elasticities, via Monte Carlo integration and importance sampling, in order to conform with prior beliefs about curvature and monotonicity restrictions and substitution relationships. Results are more consistent with the concavity and monotonicity restrictions from demand theory than with the added restriction that all meats are substitutes.
The Application and Economic Interpretation of Selectivity Models
Authors: Huang Chung L. , Raunikar Robert , Misra Sukant
Published: July 2006

Substantial differences in economic interpretations may be inferred from the estimated selectivity model results. Using the demand for frozen concentrated orange juice (FCOJ) as an example, the study suggests that the consumption patterns are quite similar between national brand and private label when the marginal effects and elasticities are evaluated based on actual observations rather than unobserved latent variables. Results show that private label FCOJ is considered as a normal (inferior) good if the income effect is assessed based on actual (potential) purchases. The estimated cents‐off elasticities for private label FCOJ also vary substantially depending on which approach is used.
The Welfare Analytics of Transaction Costs, Externalities, and Institutional Choice
Authors: Griffin Ronald C.
Published: July 2006

A natural result of the economist's participation in externality literature has been a strong emphasis upon market and price‐guided policies. Available theoretical foundations are insufficient for supporting this ideology. Absent is a conceptual framework which integrates institutional options and their attendant resource costs with what we know of resource and technology constraints. This paper addresses this omission by incorporating an explicit role for transaction costs into traditional welfare diagrammatics.
Local Economic Conditions and Wage Labor Decisions of Farm and Rural Nonfarm Couples
Authors: Tokle J. G. , Huffman Wallace E.
Published: July 2006

Effects of geographical differences in local economic conditions on wage labor demand and wage labor participation decisions of rural couples are examined for Current Population Survey households 1978–82. Wage premiums are shown to exist for localities anticipating labor demand growth, higher unemployment rates, larger share of employment in services, and higher costs of living. These effects are stronger for males than females. Effects of local economic conditions on the probability of wage work are consistent with expected market wage and reservation wage effects, and for farm households the probability of wage work increases when expected farm output prices decline or the wage increases.
The Impact of Wage Differentials on Choosing to Work in Agriculture
Authors: Perloff Jeffrey M.
Published: July 2006

Based on a model of industry choice and wage determination, a 1% increase in the relative wage in agriculture increases the probability that a nonurban male with no more than a ninth‐grade education works in agriculture by 3.37% at the sample mean and by 1.3% when averaged over the entire sample. A 10% increase in wages may increase the proportion of those males who choose to work in agriculture by nearly a quarter.
The Costs of Indonesian Sugar Policy: A Policy Analysis Matrix Approach
Authors: Nelson Gerald C. , Panggabean Martin
Published: July 2006

Indonesian sugar policy is a complex web of contradictory policies, including mandatory production, price supports, and fertilizer and credit subsidies. The policy analysis matrix (PAM) was developed by Monke and Pearson to provide a more complete perspective on social profitability and the divergence between private and social costs than other commonly used social cost‐benefit measures. The PAM is used to analyze the effects of Indonesian sugar policy on sugar production in irrigated and dryland areas on Java, the main sugar‐producing region in Indonesia, and to identify the distribution of resource transfers.
State‐Space Modeling of Cyclical Supply, Seasonal Demand, and Agricultural Inventories
Authors: Dorfman Jeffrey H. , Havenner Arthur
Published: July 2006

The production of certain agricultural products follows an alternate bearing pattern of large and small crops. Many agricultural products also experience seasonal shifts in demand. Such patterns present a natural opportunity for profitable inventories. This paper applies state‐space modeling techniques to the problem of modeling cyclical patterns in supply and demand and presents an application to the determination of inventory levels for such agricultural products using linear quadratic control.
Dynamically Optimal After‐Tax Grain Storage, Cash Grain Sale, and Hedging Strategies
Authors: Tronstad Russell , Taylor C. Robert
Published: July 2006

This article utilizes a stochastic dynamic programming (SDP) model that considers the state variables of (a) before‐tax income, (b) grain storage, (c) quantity of futures position, (d) value of futures position, (e) wheat price, and (f) basis level. Decision variables are monthly cash grain sales and futures market transactions. In comparing the post‐sample performance of SDP to other marketing strategies over a four‐year period, SDP resulted in $@@‐@@5,961 to $@@‐@@25,021 more wealth than the other strategies considered. Also, these other strategies yielded a standard deviation of after‐tax income that was 30% to 621% greater than that from the SDP framework.
Price Changes, Supply Elasticities, Industry Organization, and Dairy Output Distribution
Authors: Adelaja Adesoji O.
Published: July 2006

Long‐run price elasticities of milk supply are decomposed into price elasticities of yield, herd size, and farm population. For northeastern U.S. dairy farms, these elasticities are shown to vary with farm size because of size‐related differences in capital intensity, specialization, yield and herd size variability, and rates of entry/exit into dairy. In the short run, price responsiveness is shown to decrease with farm size. In the long run, large farms are shown to be most price responsive. Results suggest that lower milk prices could make revenue distribution less equal in both the short and long run by altering output and population distributions.
Does Arbitraging Matter? Spatial Trade Models and Discriminatory Trade Policies
Authors: Anania Giovanni , McCalla Alex F.
Published: July 2006

When modeling discriminatory trade policies, such as targeted embargoes or targeted subsidies, failure to explicitly include assumptions about the possibility of simultaneous exporting and importing may yield misleading results. Nonlinear programming and “vector sandwich” models implicitly set rules regarding arbitraging which may be at variance with actual policies and/or country behavior. The paper introduces an alternative spatial model which allows the researcher to explicitly incorporate her own assumptions about arbitraging. An analysis of the 1980 U.S. embargo to the USSR shows how the proposed model performs relative to the most frequently used spatial trade models.
Demand for Food Fats and Oils: The Role of Demographic Variables and Government Donations
Authors: Gould Brian W. , Cox Thomas L. , Perali Federico
Published: July 2006

A systems model of U.S. food fats and oils demand is estimated using quarterly time‐series data for the period 1962–87. Demographic scaling is used to incorporate demographic variables and per capita government butter donations. In addition to price, income, and demographic demand elasticities, dietary fat intake elasticities are calculated for each of the demographic characteristics included in the study. All of the five own‐price elasticities are statistically significant, as are fifteen of the twenty cross‐price elasticities. Fourteen of the fifteen demographic elasticities are statistically significant.
Distinguishing between Market Participation and Infrequency of Purchase Models of Butter Demand
Authors: Blisard Noel , Blaylock James
Published: July 2006

Household butter expenditures are modeled by market participation and infrequency‐of‐purchase specifications. The market participation model assumes that zero expenditures represent either traditional corner solutions or consumers who never use the product, whereas the infrequency‐of‐purchase model assumes that zero expenditures represent either corner solutions or consumption out of storage. We determine that the infrequency‐of‐purchase specification is preferred to the market participation model by applying a nonnested test based upon likelihood functions. If household expenditure surveys contained information about participation and frequency of purchase, a likelihood function which contained both models could be written and estimated.
Allocatable Fixed Inputs and Two‐Stage Aggregation Models of Multioutput Production Decisions
Authors: Coyle Barry T.
Published: July 2006

Allocation decisions for a fixed input such as land are incorporated into a two‐stage aggregation model of multioutput production decisions. The resulting two‐stage model is more realistic and is as tractable for empirical research as the standard model.
Hedging Production Risk With Options
Authors: Sakong Yong , Hayes Dermot J. , Hallam Arne
Published: July 2006

The expected utility maximization problem is solved for producers with both price and production uncertainty who have access to both futures and options markets. Introduction of production uncertainty alters the optimal futures and options position and almost always makes it optimal for the producer to purchase put options and to underhedge on the futures market. Simulation results lend support to the practice of hedging the minimum expected yield on the futures market and hedging remaining expected production against downside price risk using put options. The results are strengthened if the producer expects local production to influence national prices and if risk aversion is higher at low income levels.
A Dynamic Model of Oligopoly in the Coffee Export Market
Authors: Karp Larry S. , Perloff Jeffrey M.
Published: July 2006

A linear‐quadratic, dynamic feedback oligopoly model that nests various market structures is used to estimate the degree of competitiveness and the adjustment paths of the two largest coffee exporters, Brazil and Colombia. Their estimated behavior is relatively competitive. This subgame perfect dynamic model is compared to a standard static oligopoly model and the open‐loop model (the dynamic generalization of the standard static model). Both classical and Bayesian tests of open‐loop and feedback dynamic models are reported.
Why Did the Number of Young Farm Entrants Decline?
Authors: Gale H. Fred
Published: July 2006

The influence of demographic and economic factors on the number of young farm entrants is investigated. After controlling for the demographic effect, it is found that higher commodity prices, lower real interest rates, and lower land values are associated with greater entry. Regional effects suggest lower entry in states with better nonfarm opportunities. Demographic factors suggest that the shrinking pool of potential entrants will lead to further decline in farm entry. The decline in farm entry has important implications for the future structure of farming in the United States.
Field‐Level Measurement of Land Productivity and Program Slippage
Authors: Hoag Dana L. , Foster William E. , Babcock Bruce A.
Published: July 2006

We measure the significance of heterogeneous land quality in determining the efficacy of commodity program acreage reduction requirements in reducing farm output. Field‐level analysis isolates the influence of land productivity from other factors to gauge the importance of the land decisions on slippage. Results from six North Carolina counties for 1985–88 show that yield increases from the diversion of low‐quality land by individual farmers contribute relatively little to aggregate increases in average yield. The results are consistent with other studies finding that slippage is a result of interregional effects rather than of intraregional or intrafarm effects.
Effect of Stock Size and Regulations on Fishing Industry Cost and Structure: The Surf Clam Industry
Authors: Lipton Douglas W. , Strand Ivar E.
Published: July 2006

Fishing costs are dependent on the size of the fish stock and regulations. Changes in these factors alter the equilibrium industry structure. In a multiproduct fishery, it is not possible to generalize how a reduction in industry catch will be accomplished, through a reduction in catch per vessel or in the number of vessels. Multiproduct cost functions are estimated for the Atlantic clam fishery. Simulations reveal that optimal harvest would be achieved with an increase in the number of vessels and a decrease in the catch per vessel of surf clams and an increase in the catch of ocean quahogs.
Political Preference Functions and Public Policy Reform
Authors: Rausser Gordon C. , Foster William E.
Published: July 2006

A model of policy making is developed where governments seek to maximize support from social groups through the combination of both PERT (social‐welfare‐increasing) and PERT (welfare‐transferring) policies. The implicit weights of a political preference function shift with a change in the relative cost of interest group organizing. Attention is paid to the degree of wealth transfers as total social welfare increases because of PERT policy changes. The model demonstrates that, in the case of two competing groups, the weight given to one group in the allocation of social surplus will increase as total social welfare increases with a bias toward the other group. The relative weights placed on consumers and producers based on PEST policies alone are misleading indicators of the political influence of groups. A number of general implications of this political economic analysis for the reform of public policies are investigated.
Pass‐Through of Exchange Rates and Tariffs in Brazil—U.S. Tobacco Trade
Authors: Pompelli Gregory K. , Pick Daniel H.
Published: July 2006

This paper examines the extent to which exchange rate and tariff changes are passed through in U.S. import prices of unmanufactured tobacco from Brazil. The model used considers the possibility of market imperfections in international trade and the potential effects of strategic trade policies. The results indicate that agricultural prices may not be as flexible as commonly thought. Furthermore, exchange rate and tariff changes are not fully passed through to U.S. tobacco import prices, which indicates that firms selling Brazilian tobacco may use trade strategies to maintain or even increase their trade shares in the U.S. tobacco market.
Investment Potential of Agricultural Futures Contracts
Authors: Fortenbery T. Randall , Hauser Robert J.
Published: July 2006

Investment benefits from trading live cattle, hog, corn, and soybean futures contracts are considered under the assumption that the investor's risk/return evaluation is relative to a highly diversified stock portfolio. A mean‐variance approach is used to find the “optimal” mix of investments for the initial stock portfolio and for portfolios which may include both stocks and futures. The addition of futures contracts to the portfolio rarely increases the portfolio return. This finding is consistent with risk‐premium results of previous studies. However, investment benefits from agricultural futures are found in the form of a reduction in the portfolio's nonsystematic risk.
Temporal Analysis of Income Earned by Former Agriculture Students
Authors: Preston Warren P. , Broder Josef M. , Almero Maria Cristina P.
Published: July 2006

Earnings profiles of students formerly enrolled in a college of agriculture were analyzed in the context of labor market information. Analysis of covariance was used to estimate models explaining how salary determinants changed during the alumni's careers. Gender, education, year of job market entry, profit sharing, and personal emphasis on earnings were found to be significant determinants of starting incomes. Starting incomes were found to be a prime determinant of later year salaries along with experience on the immediate job, profit sharing, oral and technical skills, marital status, and place of residence. Labor market information was found to vary in quality across participants and have a limited shelf life.
Monetary Impacts on Prices in the Short and Long Run: Some Evidence from New Zealand
Authors: Robertson John C. , Orden David
Published: July 2006

This paper presents support for long‐run monetary neutrality based on evidence that individual time series for money, manufacturing prices, and agricultural prices are nonstationary but cointegrated, with a stationary proportional long‐run relationship among their levels. Dynamic simulations from a vector error‐correction model with this restriction imposed show that monetary shocks shift relative prices in favor of agriculture in the short run and permanently raise nominal prices. Manufacturing price shocks have similar long‐run effects but initially place agriculture in a cost‐price squeeze, while agricultural price shocks are transitory and have little impact on the other series.
Incorporating Risk Aversion into Dynamic Programming Models
Authors: Krautkraemer Jeffrey A. , van Kooten G. C. , Young Douglas L.
Published: July 2006

Most previous stochastic dynamic programming (DP) applications have assumed that decision makers are risk neutral; however, risk permeates both intrayear and interyear relationships in most DP problems. Incorporating risk aversion to intrayear outcomes alone can violate the independence assumption of expected utility and can destabilize long‐run equilibrium returns. Aversion to riskiness of the long‐run returns suppresses the effect of sequential resolution of risk over time. Because tolerance of short‐run versus long‐run risk varies in dynamic situations, procedures for incorporating risk aversion should accommodate this variation. More research on risk averse DP formulations is needed.
Optimal Dynamic Hedging Decisions for Grain Producers
Authors: Martinez Steve W. , Zering Kelly D.
Published: July 2006

The application of an optimal dynamic hedging model was explored for a county in North Carolina. Corn yield, harvest corn basis, and December corn futures prices were forecast. The forecasts were used to calculate optimal dynamic hedge positions. When the hedge position was updated infrequently, commissions were only slightly higher than commissions from a fixed hedge. Gains from updating the hedge position over the corn growing season were not substantial compared to a fixed hedge position.
Measuring Recreation Values with Multiple Destination Trips
Authors: Mendelsohn Robert , Hof John , Peterson George , Johnson Reed
Published: July 2006

Traditional travel cost analysis has either ignored multiple destination trips or arbitrarily allocated trip costs across visited sites. In this paper, combinations of multiple destinations are treated as unique sites and incorporated into a demand system. Empirical demand functions for multiple destination trips that include Bryce National Park are estimated. Consumer surplus calculations for single destination and multiple destination trips are compared.
Approximating Farm‐Level Returns to Incremental Advertising Expenditure: Methods and an Application to the Australian Meat Industry
Authors: Piggott Roley R. , Piggott Nicholas E. , Wright Vic E.
Published: July 2006

Equilibrium displacement modeling is used to analyze the effects of incremental advertising expenditure by the Australian beef, lamb, and pork industries in domestic and export markets. The effects on prices, quantities traded, revenues, producer surpluses, and profits net of advertising expenditure are reported. Cross‐commodity impacts of advertising are highlighted, including how one industry has to adjust its advertising expenditure to preserve profit levels in the face of increased advertising by another industry. The procedures used are useful when decisions about advertising expenditure need to be made quickly.
Production Uncertainty and Factor Price Disparity in the Slaughter Cattle Market: Theory and Evidence
Authors: Fausti Scott W. , Feuz Dillon M.
Published: July 2006

A model of a competitive firm facing uncertainty with respect to input quality is applied to the issue of price differentials existing between slaughter cattle marketing alternatives. The marketing alternatives are live weight, dressed weight, and dressed weight and grade. The model demonstrates that price differentials between marketing alternatives are the result of buyer uncertainty over cattle quality. If buyers are assumed risk averse, then the price differential between alternatives increases. These results lead to the proposition of a theory of factor price disparity, and empirical evidence is presented in support of this theory.
Factor Bias under Stochastic Technical Change
Authors: Lambert David K. , Shonkwiler J.S.
Published: July 2006

Time‐series procedures are employed to determine the influence of technological change in inducing factor bias in U.S. agricultural production between 1948 and 1983. A dynamic measurement error model is used to link research expenditures to the unobserved technological change variable. Biasedness in labor and material factor shares is established.
Test‐Retest Reliability of Contingent Valuation with Independent Sample Pretest and Posttest Control Groups
Authors: Teisl Mario F. , Boyle Kevin J. , McCollum Daniel W. , Reiling Stephen D.
Published: July 2006

Test‐retest, the standard method used to investigate reliability of contingent valuation, is limited because when the time period between the two surveys is relatively short the study may exhibit testing recall. Conversely, when the time between the two surveys increases there is an increased chance the true value will change. The test‐retest design cannot isolate these effects. Independent pretest and posttest control groups allow testing of reliability even when recall occurs or the true value changes. Using this design, we found ex post estimates of Hicksian surplus are reliable regardless of whether respondents have direct experience with an activity.
Welfare Estimation Using Aggregate and Individual‐Observation Models: A Comparison Using Monte Carlo Techniques
Authors: Hellerstein Daniel
Published: July 2006

Due to the weak behavioral foundations of aggregate demand models, zonal travel cost models have been largely abandoned in favor of models based on individual observations. However, sample selection difficulties in individual‐observation models often require the use of distribution‐sensitive limited‐dependent variables estimators. In this paper I use Monte‐Carlo simulations to investigate whether the bias from aggregation is worse than possible bias from these narrowly specified estimators. Somewhat surprisingly, the results indicate that zonal models often outperform the individual‐observation models, especially when using an aggregate model that incorporates intrazonal variance of the explanatory variables.
Nonlinear Pricing Schemes for Agricultural Cooperatives
Authors: Vercammen James , Fulton Murray , Hyde Charles
Published: July 2006

Standard pricing practices are generally not efficient for a cooperative. Sexton (1986) suggests that membership fees/rebates can be used to facilitate efficient pricing, but such schemes may not be feasible because of membership heterogeneity and information asymmetries. In this paper a constrained efficient pricing rule for a cooperative is derived that explicitly addresses the heterogeneity and information constraints. The optimal rule generally entails nonlinear pricing which, for the case of a farm purchasing cooperative, entails a higher average price for higher delivery volumes. The constrained efficient rule is modified to distribute the benefits more evenly over the cooperative's membership.
Reversal of Fortune: Immiserizing Technical Change in Agriculture
Authors: Alston Julian M. , Martin Will J.
Published: July 2006

Several recent studies have reported the possibility of immiserizing technical change in agriculture. In these studies, the interaction of government commodity policy and technical change has been shown potentially to lead to a loss of national welfare, a negative rate of return to research. The purpose of this paper is to tie these recent results to the earlier results of Bhagwati and Johnson on immiserizing growth (technical change), and to offer a more general condition for describing the impacts of distortions on the benefits from technical change.
Risk Response in the Beef Marketing Channel: A Multivariate Generalized ARCH‐M Approach
Authors: Holt Matthew T.
Published: July 2006

A model of the farm‐retail price spread for beef is specified under rational expectations, in which systematic risk response on the part of marketing intermediaries is allowed. The three‐equation structural model contains potentially time‐varying risk terms in margin and supply equations, which I approximate and estimate using a multivariate GARCH‐in‐Mean approach. The estimated model is used to infer relative risk premia in beef margins, and to simulate short‐run equilibrium risk effects. Results indicate that price risk has, at times, had substantial impacts on farm and retail beef prices and production.
Food Marketing Technology and Contingency Market Valuation
Authors: Holloway Garth J. , Zwart Anthony C.
Published: July 2006

Marketing activities are introduced into a rational expectations model of the food marketing system. The model is used to evaluate effects of alternative marketing technologies on the distribution of the benefits of contingency markets in agriculture. Benefits depend on two parameters: the cost share of farm inputs and the elasticity of substitution between farm and nonfarm inputs in food marketing. Over a broad spectrum of technologies, consumers are likely to be the net beneficiaries and farmers the net losers from the provision of contingency markets.
Distribution of Gains from Research and Promotion in Multi‐Stage Production Systems: The Case of the U.S. Beef and Pork Industries
Authors: Wohlgenant Michael K.
Published: July 2006

A producer‐financed program that leads to either an increase in retail demand from promotion or a decrease in marketing costs from research will generate returns to producers that are generally smaller than returns generated through an equivalent change in producer supply from research. The distribution of gains depends on the degree of substitutibility between farm and nonfarm inputs. Comparative statics of equal absolute changes in demand, supply, and marketing costs in the U.S. beef and pork industries show the significance of input substitutibility for distribution of gains, and sensitivity of the results to beef and pork demand interrelationships.
Efficiency of Decoupled Farm Programs Under Distortionary Taxation
Authors: Moschini Giancarlo , Sckokai Paolo
Published: July 2006

When lump‐sum taxation is not feasible, decoupled transfers to farmers (which require raising government revenue) will entail welfare loss somewhere in the economy. Assuming the government's objective is to assure a given welfare level for farmers, we show that when decoupling is possible, free trade is always superior to some tariff protection for a small country, even under distortionary taxation. As expected, for a large country there is scope for an optimal tariff policy that improves the terms of trade. However, we show a separation between the exercise of market power through an optimal tariff, and the interaction of distortionary taxation with transfers to farmers. We conclude that decoupling is usually desirable, even in a distorted economy in which lump‐sum taxation is not feasible.
Pesticides, Productivity, and Farmer Health: A Philippine Case Study
Authors: Antle John M. , Pingali Prabhu L.
Published: July 2006

Production data from a farm‐level survey were integrated with health data collected from the same population of farmers to measure the impacts of pesticide use on farmer health and the impacts of farmer health on productivity in two rice‐producing regions of the Philippines. The relationships were then used in a simulation analysis to investigate the health and productivity tradeoffs implied by a policy to restrict pesticide use. Results show that pesticide use has a negative effect on farmer health, that farmer health has a positive effect on productivity, and that there are likely to be social gains from a reduction in insecticide use in Philippine rice production. We conclude with a discussion of the implications of the findings for pesticide policy in developing countries and for allocation of resources in agricultural research.
Retail‐Level Hedonics and the Valuation of Milk Components
Authors: Lenz John E. , Mittelhammer Ron C. , Shi Hongqi
Published: July 2006

A retail‐level hedonic model for analyzing the value of milk components contained in aggregate dairy product commodities is developed and applied to household food consumption survey data. The findings support Perrin's conjecture that a hedonic approach applied at the retail level can be used to value milk components. Milk component values are found to be a function of household sociodemographic variables. The sample‐weighted average implicit fat value estimate was very similar to values published in two of three previous component value analyses in the Journal, but protein values were significantly different.