nep-agr New Economics Papers
on Agricultural Economics
Issue of 2006‒07‒21
twelve papers chosen by
Angelo Zago
Universita degli Studi di Verona

  1. 2005 Iowa Land Value Survey By Duffy, Michael; Smith, Darnell
  2. 06-03 "Feeding the Factory Farm: Implicit Subsidies to the Broiler Chicken Industry" By Elanor Starmer, Aimee Witteman and Timothy A. Wise
  3. Production-weighted Estimates of Aggregate Protection in Rich Countries toward Developing Countries By David Roodman
  4. The Economic Impacts of Increased Fruits and Vegetable Consumption in Iowa: Phase II By Swenson, David A.
  5. Measuring the Economic Impacts of Buy Local Campaigns in Iowa By Swenson, David A.
  6. Status of Institutional Reforms for Integrated Water Resources Management in Asia: Indications from Policy Reviews in Five Countries By D. J. Bandaragoda
  7. Valuing Environmental Factors in Cost-Benefit Analysis Using Data Envelopment Analysis By Timo Kuosmanen
  8. Proportionality of Willingness to Pay to Small Risk Changes – The Impact of Attitudinal Factors in Scope Tests By Andrea M. Leiter; Gerald J. Pruckner
  9. Carbon Leakage Revisited: Unilateral Climate Policy with Directed Technical Change By Corrado Di Maria; Edwin van der Werf
  10. Trust, Trust Games and Stated Trust: Evidence from Rural Bangladesh By Olof Johansson Stenman; Minhaj Mahmud; Peter Martinsson
  11. The Impact of Population on CO2 Emissions: Evidence From European Countries By Inmaculada Martínez-Zarzoso; Aurelia Bengochea-Morancho; Rafael Morales-Lage
  12. The White House and the Kyoto Protocol: Double Standards on Uncertainties and Their Consequences By Philippe Tulkens; Henry Tulkens

  1. By: Duffy, Michael; Smith, Darnell
    Abstract: Paper reports the results of the Iowa State Land value survey
    Date: 2006–04–05
  2. By: Elanor Starmer, Aimee Witteman and Timothy A. Wise
    Abstract: Since the passage of the 1996 Farm Bill, the U.S. market prices of soybeans and corn have dropped 21% and 32%, respectively. These commodities are now sold on the market at a price below what they cost to produce. If U.S. agricultural policies contribute to the prevalence of below-cost soybeans and corn, then the beneficiaries of such policies include the consumers of these products, particularly the industrial operations for which they are important raw materials. Most significant of these operations are corporate-owned livestock production facilities. This paper focuses on the broiler chicken industry, which, in the United States, is fully industrialized and vertically integrated. We compare average costs of production with market prices for corn and soybeans, then use these cost-price margins to estimate the implicit subsidies to broiler producers due to feed prices that are below production costs. We find that the broiler industry gained monetary benefits averaging $1.25 billion per year in the period following the passage of the 1996 Farm Bill (1997-2005). In contrast, broiler industry gains averaged a much smaller $377 million per year between 1986 and 1996. We conclude that the corporate broiler industry is a major winner from recent changes to U.S. agriculture policy, while family farmers and taxpayers lose out. This finding is not significantly altered when we adjust our calculations to account for the overvaluation of agricultural land, nor does it appear to reverse under future cost/price scenarios. As policymakers turn their attention to the 2007 Farm Bill, they would do well to examine the ways in which agribusiness firms in general, and industrial livestock operations in particular, benefit from policies ostensibly designed to support family farmers.
  3. By: David Roodman
    Abstract: A challenge in the development of aggregate indexes of trade protection is finding weights to put on various tariffs that a) reflect their importance to exporters and b) are not endogenous to the protection being measured. One common basis for weights is actual imports; but these, as is well-known, are endogenous. Various authors have worked to correct this endogeneity, but doing so is difficult in product areas where protection is both high and widespread. For this reason, I develop a new set of estimates of overall protection in rich countries with respect to developing ones that eschews import weights as much as possible in favor of weights based on the value of exporter’s total production in each product area. The results are generally much higher than those from the Bouët et al. (2004) “MAcMap” data set; there, weights are based on imports of large reference groups of countries. I conclude that product areas in which protection is high and widespread are systematically de-emphasized when using pure MAcMap weights to aggregate across major product groups. In particular, when gauging rich-country protection with respect to developing countries, agriculture is de-emphasized. I also develop estimates of trade-distorting subsidies by country and commodity and translate these into tariffequivalents with the methodology of Cline (2004) in order to estimate overall protection levels. Agricultural tariffs dominate subsidies in trade-distorting effect, and agricultural protection in turn dominates goods protection generally. Japan is most protective, largely because of rice tariffs near 900%, followed by Norway and Switzerland. Because of their greater reliance on agriculture, the poorest countries face higher trade barriers than wealthier developing countries, despite tariff preferences.
    Keywords: Doha Round, measuring trade openness, agricultural subsidies
    JEL: F13 O19 H25
    Date: 2005–08
  4. By: Swenson, David A.
    Abstract: This report measures the potential net economic impacts that could accrue to the state of Iowa were it to achieve various levels of fruits and vegetable production and direct and grocery sales to consumers. Two of the scenarios anticipate expanded Iowa production of 37 fruits and vegetables so that they substitute directly for existing imported commodities for a quarter of the year. Both scenarios add a new industry where farmers directly market their production to consumers.The third and fourth scenarios examine the economic impact that would occur under a consumption-based consideration where all Iowans followed a diet including five or seven servings of Iowa-grown fruits and vegetables per day for three months of the year.
    JEL: C5
    Date: 2006–07–13
  5. By: Swenson, David A.
    Abstract: In Iowa, both in urban areas and more rural territories, there is a general awareness of sales leakages. These leakages take the forms of out-of-region intermediate input purchases, overall household and institutional imports, and the normal regional competitive losses in small communities to neighboring trade centers. As an economic development service extension, we have developed a useful prototype for measuring regional import substitute opportunities and identifying the potential regional gains from such a campaign. This paper will describe the basics of the approach using IMPLAN along with an example of a recent buy local report.
    JEL: C5
    Date: 2006–07–13
  6. By: D. J. Bandaragoda (International Water Management Institute)
    Keywords: water resource management / institutional development / water policy / water resources development / case studies / water shortage / river basins / water conservation / irrigation management / water law / drinking water / cost recovery / water pollution / national planning / Asia / China/ Indonesia / Philippines / Sri Lanka / Thailand /
    Date: 2006
  7. By: Timo Kuosmanen (MTT Agrifood Research Finland)
    Abstract: Environmental cost-benefit analysis (ECBA) refers to social evaluation of investment projects and policies that involve significant environmental impacts. Valuation of the environmental impacts in monetary terms forms one of the critical steps in ECBA. We propose a new approach for environmental valuation within ECBA framework that is based on data envelopment analysis (DEA) and does not demand any price estimation for environmental impacts using traditional revealed or stated preference methods. We show that DEA can be modified to the context of CBA by using absolute shadow prices instead of traditionally used relative prices. We also discuss how the approach can be used for sensitive analysis which is an important part of ECBA. We illustrate the application of the DEA approach to ECBA by means of a hypothetical numerical example where a household considers investment to a new sport utility vehicle.
    Keywords: Cost-Benefit Analysis, Data Envelopment Analysis, Eco-Efficiency, Environmental Valuation, Environmental Performance, Performance Measurement
    JEL: C61 D61 Q51
    Date: 2006–06
  8. By: Andrea M. Leiter (alpS GmbH - Center for Natural Hazard Management); Gerald J. Pruckner (University Linz)
    Abstract: Sensitivity (proportionality) of willingness to pay to (small) risk changes is often used as a criterion to test for valid measures of economic preferences. In a contingent valuation (CV) study conducted in Austria in February 2005 1,005 respondents were asked their willingness to pay (WTP) for preventing an increase in risk by 1/42,500 and 3/42,500, respectively. WTP for the higher risk variation is significantly higher than WTP for the lower risk change. We find evidence that those respondents who have personal experience with avalanches combine the information about future risk increase, provided in the survey, with the observed number of mortal avalanche accidents in the past. The proportionality of WTP holds if such prior experiences are taken into account and the influence of attitudinal factors in scope tests are controlled for.
    Keywords: Contingent Valuation, Willingness to Pay, Scope Test, Sensitivity of WTP
    JEL: D81 J17 Q54
    Date: 2006–06
  9. By: Corrado Di Maria (CentER and Tilburg University); Edwin van der Werf (CentER and Tilburg University)
    Abstract: A common critique to the Kyoto Protocol is that the reduction in emissions of CO2 by countries who comply with it will be (partly) offset by the increase in emissions on the part of other countries (carbon leakage). This paper analyzes the effect of technical change on carbon leakage in a two-country model where only one of the countries enforces an exogenous cap on emissions. Climate policy induces changes in relative prices, which cause carbon leakage through a terms-of-trade effect. However, these changes in relative prices in addition affect the incentives to innovate in different sectors. We allow entrepreneurs to choose the sector for which they innovate (directed technical change). This leads to a counterbalancing induced-technology effect, which always reduces carbon leakage. We therefore conclude that the leakage rates reported in the literature so far may be too high, as these estimates neglect the effect of relative price changes on the incentives to innovate.
    Keywords: Climate Policy, Carbon Leakage, Directed Technical Change, International Trade
    JEL: F18 O33 Q54 Q55
    Date: 2006–06
  10. By: Olof Johansson Stenman (Göteborg University); Minhaj Mahmud (Keele University, Centre for Economic Research and School of Economic and Management Studies); Peter Martinsson (Göteborg University)
    Abstract: Levels of trust are measured by asking standard survey questions on trust and by observing the behaviour in a trust game using a random sample in rural Bangladesh. Follow-up questions and correlations between stated expectations and the sent amount in the trust game reveal that the amount sent in the trust game is a weak measure of trust. The fear of future punishment, either during or after this life, for not being sufficiently generous to others, was the most frequently stated motive behind the respondents' behaviour, highlighting the potential importance of motives that cannot be inferred directly from people's behaviour.
    Keywords: Trust; trust game; social capital; motivations; Bangladesh.
    JEL: C93 Z13
    Date: 2006–06
  11. By: Inmaculada Martínez-Zarzoso (Universitat Jaume I); Aurelia Bengochea-Morancho (Universitat Jaume I); Rafael Morales-Lage (Universitat Jaume I)
    Abstract: This paper analyses the impact of population growth on CO2 emissions in European Union countries. Traditionally, researchers have assumed a unitary elasticity of emissions with respect to population growth. In this study population is treated as a predictor in the model, instead of being included as part of the dependent variable (per capita emissions), thus relaxing the above-mentioned assumption of unitary elasticity. We also contribute to the existing literature by taking into account the presence of heterogeneity in the sample and considering a dynamic specification. The sample covers the period 1975- 1999 for the current European Union members. Our results show that the impact of population growth on emissions is more than proportional for recent accession countries whereas for old EU members, the elasticity is lower than unity and non significant when the properties of the time series and the dynamics are correctly specified. The different impact of population change on CO2 emissions for the current EU members should therefore be taken into account in future discussions of climate change policies within the EU.
    Keywords: CO2 Emissions, European Union, Panel Data, Population Growth
    JEL: Q25 Q4 Q54
    Date: 2006–06
  12. By: Philippe Tulkens (TERI School of Advanced Studies); Henry Tulkens (CORE, Université Catholique de Louvain)
    Abstract: This paper compares the level of uncertainty widely reported in climate change scientific publications with the level of uncertainty of the costs estimates of implementing the Kyoto Protocol in the United States. It argues that these two categories of uncertainties were used and ignored, respectively, in the policy making process in the US so as to challenge the scientific basis on the one hand and on the other hand to assert that reducing emissions would hurt the economy by an amount stated without any qualification. The paper reviews the range of costs estimates published since 1998 on implementing the Kyoto Protocol in the US. It comments on the significance of these cost estimates and identifies a decreasing trend in the successive estimates. This implies that initially some of the most influential economic model-based assessments seem to have overestimated the costs, an overestimation that may have played a significant role in the US decision to withdraw from the Protocol. The paper concludes with advocating that future economic estimates always include uncertainty ranges, so as to be in line with a basic transparency practice prevailing in climate science.
    Keywords: United States, Kyoto Protocol, Cost Estimates, Uncertainties
    JEL: Q5 Q54 Q58 C82
    Date: 2006–06

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