New Economics Papers
on Agricultural Economics
Issue of 2006‒03‒05
twelve papers chosen by

  1. ÒOne size fits allÓ? Ð The relationship between the value of genetic traits and the farm system By Mark Neal; Bill Fulkerson
  2. Investigating distance effects on environmental values: A choice modelling approach By Giovanni B. Concu
  3. Urban water supply in Australia: the option of diverting water from irrigation By John Quiggin
  4. The Willingness to Pay to Remove Billboards and Improve Mountain Views By Peter A. Groothuis; Jana D. Groothuis; John C. Whitehead
  5. Are non-use values distance-independent? Identifying the market area using a choice modelling experiment By Giovanni B. Concu
  6. The state-contingent approach to production under uncertainty By John Quiggin; Robert G. Chambers
  7. The Rise and Fall of Cooperative Credit in Colonial Burma By Sean Turnell
  8. Sustainable food consumption, involvement, certainty and values: an application of the theory of Planned Behaviour By I. VERMEIR; W. VERBEKE
  9. Comparative Risk Aversion for State-Dependent Preferences By Robert G. Chambers; John Quiggin
  10. Participation in Environmental Organizations: An Empirical Analysis By Benno Torgler; Maria A.Garcia-Valinas
  11. The risk premium for equity: implications for resource allocation, welfare and policy By Simon Grant; John Quiggin
  12. Economists and uncertainty By John Quiggin; Robert G. Chambers

  1. By: Mark Neal (Risk and Sustainable Management Group, University of Queensland); Bill Fulkerson (University of Queensland)
    Abstract: The wide use of artificial insemination by dairy farmers has facilitated the development of a multi-billion dollar international market in animal genetics. In the major western dairy producing nations, each country has developed a single index to rank bulls, based on the value of traits they are expected to pass on to their offspring. One of the assumptions behind these indexes is that there is a positive linear relationship between profit (and welfare) with increases in a particular trait, regardless of the farm system. In this paper, it is shown, with examples, that the assumption of linearity is false. More importantly, it is shown that for a combination of reasons, including risk aversion, constraints and other issues, the optimal direction of genetic improvement for New Zealand dairy farmers on an individual and industry level could be quite different. Alternatives to the Òone size fits allÓ index are described.
    JEL: O32 D81 Q16
    Date: 2006–02
  2. By: Giovanni B. Concu (Risk and Sustainable Management Group, University of Queensland)
    Abstract: This paper describes a Choice Modelling experiment set up to investigate the relationship between distance and willingness to pay for environmental quality changes. The issue is important for the estimation and transfer of benefits. So far the problem has been analysed through the use of Contingent Valuation-type of experiments, producing mixed results. The Choice Modelling experiment allows testing distance effects on parameters of environmental attributes that imply different trade-offs between use and non-use values. The sampling procedure is designed to provide a Ògeographically balancedÓ sample. Several specifications of the distance covariate are compared and distance effects are shown to take complex shapes. Welfare analysis also shows that disregarding distance produces under-estimation of individual and aggregated benefits and losses, seriously hindering the reliability of costbenefit analyses.
    Keywords: choice Modelling techniques, distance, aggregation, sampling, functional forms.
    JEL: Q51 Q58
    Date: 2005–12
  3. By: John Quiggin (Risk & Sustainable Management Group, School of Economics, University of Queensland)
    Abstract: Most urban areas in Australia are facing the prospect of increasing scarcity of water. Further pressure arises from evidence that existing levels of water use in many catchments are environmentally unsustainable. One option, feasible for some but not all Australian cities is the diversion to urban areas of water currently used for irrigated agriculture. Such diversions are currently constrained by a range of government policies. However, plans for the creation of a national water market raise the possibility that water rights may be purchased from irrigators and used to increase the supply of water for residential use. A number of policy concerns, notably relating to stranded assets and environmental externalities must be addressed in the consideration of such purchases.
    JEL: Q25
    Date: 2006–02
  4. By: Peter A. Groothuis; Jana D. Groothuis; John C. Whitehead
    Abstract: We use the contingent valuation method to measure the amount citizens are willing to pay to improve mountain-view aesthetics through the removal of billboards. Our approach addresses both the perceived property rights as well as the perceptions of the status quo in the southern Appalachian Mountains. We find that individuals who retire to the mountains have different preferences for land use and mountain views than individuals who have ancestors who lived in Watauga County. In the aggregate, we find that citizens are willing to pay up almost one-half million dollars to remove billboards from Watauga County roadsides. This study provides insights to the debate surrounding land use in the mountains.
    Date: 2006
  5. By: Giovanni B. Concu (Risk and Sustainable Management Group, University of Queensland)
    Abstract: This article tests for the effect of distance on non-use values using a Choice Modelling (CM) experiment. Estimating a distance decay relationship for non-use values (NUVs) is important because it would define the market area for an environmental good, i.e. identify the limits for aggregating individual benefit estimates. In contrast to the common definition of NUVs as non-usersÕ values, the CM experiment designs the environmental attributes so that NUV changes can be disentangled from Use Value (UV) changes. The experiment also allows for testing different specification of the distance covariates. Data are obtained from a geographically representative sample. Results show that NUVs do not depend on distance. Aggregation of NUVs is based on income and individualsÕ environmental attitudes.
    Keywords: choice modelling, non-use values, aggregation, distance, geographical sampling.
    JEL: Q51 Q58
    Date: 2005–12
  6. By: John Quiggin (Department of Economics, University of Queensland); Robert G. Chambers (Dept of Agricultural and Resource Economics, University of Maryland, College Park)
  7. By: Sean Turnell (Department of Economics, Macquarie University)
    Abstract: Cooperative credit was the British Empire's all-purpose answer to problems of rural poverty and indebtedness, usury, and land alienation. Originating in the idealism of the 'Rochedale Pioneers' and in schemes from rural Germany, cooperative credit was imported into India with an evangelical zeal to solve all manner of perceived economic and social ills. With only slightly less moral fervour it was transplanted from India into Burma in the first decade of the Twentieth Century, and by 1920 several thousand cooperative credit societies had mushroomed across the country. The purpose of this paper is to trace the development of cooperative credit in Burma from these promising beginnings, until the near collapse of the movement on the eve of the Great Depression. The paper explores the way in which cooperative credit was seen by the imperial authorities as a device to limit the role of Indian money-lenders in Burma, and as the basis for the establishment of formal rural credit markets. The paper concludes that poor implementation, on top of official myopia as to the cultural, historical and economic differences between India, Burma and Europe, brought about the demise of a movement that promised much.
    JEL: Q14 Q13 O16 N25
    Date: 2005–06
    Abstract: This study investigates determinants of sustainable consumption behaviour in Belgium. To gain a better insight in sustainable consumption, we conducted a study where sustainable attitudes and behaviour as well as some individual characteristics like involvement, certainty and values related to sustainable products are scrutinized. We explore if determinants as hypothesised by the theory of planned behaviour (TPB) – attitudes, perceived behavioural control, social norms - influence sustainable consumption intention in general and according to different levels of involvement, certainty and values. The empirical research builds on a survey with a sample of 456 young consumers, using a questionnaire and an experimental design with manipulation of key constructs through showing advertisements for sustainable dairy. The stepwise multiple regression showed that 50% of the variance in intention to consume or purchase sustainable dairy was explained by the combination of attitudes, perceived social influences, perceived consumer effectiveness and perceived availability. In addition, different levels of involvement, certainty and value orientation entail different strengths of the determinants. The findings yield public policy and marketing recommendations for stimulating sustainable food consumption among the young.
    Keywords: sustainable consumption, attitudes, behavioural intention, involvement, certainty, values
    Date: 2005–12
  9. By: Robert G. Chambers (Dept of Agricultural and Resource Economics, University of Maryland, College Park); John Quiggin (Department of Economics, University of Queensland)
    Abstract: The idea that preferences may be state-dependent fits naturally with an analysis of uncertainty based on explicit representation of random variables as state-contingent consumption or production bundles. In this paper we show how these concepts of risk-aversion may be extended to the case of state-dependent preferences, whether or not these preferences are autocomparable in the sense of Karni. We characterize autocomparability as a special case. We show how standard comparative static results, originally derived for the state-independent expected utility model, may be extended to general state-dependent preferences, without the requirement for additive separability.
    Date: 2005–06
  10. By: Benno Torgler; Maria A.Garcia-Valinas
    Abstract: The literature on volunteering has strongly increased in the last few years. However, there is still a lack of substantial empirical evidence about the determinants of environmental participation. This empirical study analyses a cross-section of individuals using micro-data of the World Values Survey wave III (1995-1997), covering 38 countries, to investigate this question. The results suggest that not only socio-demographic and socio-economic factors have an impact on individuals’ active participation in environmental organizations, but also political attitudes. Furthermore, regional differences are observed.
    Keywords: Environment; Environmental Participation; International Perspective; Political Interest; Social Capital
    JEL: Q26 R22 Z13 I21
    Date: 2006–02
  11. By: Simon Grant (Department of Economics, Rice University); John Quiggin (Department of Economics, University of Queensland)
    Abstract: This paper describes experiences in the development and testing of three distinct financial models to support farm forestry decisions involving non-traditional tree species in northern Australia and in the Philippines. A variety of options were examined with respect to model design, yield prediction, computing platform, forestry performance criteria and other features. Two of the models focus on the forestry enterprise in isolation, while the third evaluates forestry within the context of the overall farm business. It is found that choice of model design depends on the particular type of application intended and availability of financial data for this application. Some complementarities were gained in replicating features when progressing from one model to the next. Model construction and testing were challenging tasks requiring considerable funds and for two of the models proceeding over a number of years. Validation involved the gradual gaining of confidence in a model as it progressed through various versions. For the more complex models, greater effort in development of the user interface was found to be warranted. The models have proved more suitable for use by extension agents than individual landholders. Even with major resource inputs into model development, a number of desirable additional features can be identified.
    Keywords: equity premium puzzle, public investment
    JEL: G12 H1
    Date: 2004–08
  12. By: John Quiggin (Department of Economics, University of Queensland); Robert G. Chambers (Dept of Agricultural and Resource Economics, University of Maryland, College Park)
    Date: 2005–04

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