New Economics Papers
on Agricultural Economics
Issue of 2006‒09‒16
eleven papers chosen by

  1. Selling a Piece of the Farm Credit System By Jolly, Robert W.; Roe, Josh
  2. History and Unique Features of the Farm Credit System By Harl, Neil E.
  3. Are Rural Credit Markets Competitive? Is There Room for Competition in Rural Credit Markets? By Kilkenny, Maureen; Jolly, Robert W.
  4. On Modelling Variety in Consumption Expenditure on Food By Raghbendra Jha; Raghav Gaiha; Anurag Sharma
  5. Economies of Feedlot Scale, Biosecurity, Investment, and Endemic Livestock Disease By Hennessy, David A.
  6. FCSA Sale to Rabobank: Selling What? On Whose Authority? And For Whose Benefit? By Ginder, Roger
  7. Productivity in Economies with Financial Frictions: Facts and a Theory By David Benjamin, Felipe Meza
  8. Environmental Liability and Redevelopment of Old Industrial Land By Hilary Sigman
  9. Playing Chiken with Salmon By Jon Olaf Olaussen
  10. Social dynamics of obesity By Mary Burke; Frank Heiland
  11. Reflections on U.S. Disaster Insurance Policy for the 21st Century By Howard Kunreuther

  1. By: Jolly, Robert W.; Roe, Josh
    Abstract: Not available.
    JEL: G0
    Date: 2006–05–31
  2. By: Harl, Neil E.
    Abstract: Not available
    Date: 2006–09–08
  3. By: Kilkenny, Maureen; Jolly, Robert W.
    Abstract: Not available.
    Date: 2006–05–31
  4. By: Raghbendra Jha; Raghav Gaiha; Anurag Sharma
    Abstract: In this paper we compute nutrient-expenditure elasticities for two macro nutrients (calories and protein) and five micro nutrients (calcium, thiamine, riboflavin, calcium and iron) using an all India sample of rural households for 1994. We show that in each case the respective elasticities are positive and significant. This lends support to our hypothesis that an increase in income would increase nutrient intake by varying amounts, contrary to some assertions. We then compute differences in the elasticity of substitution for rich and poor across commodity groups and show that these differences, while significant, are small. This further corroborates our conclusion that increases in income of the poor would lead to greater increases in their nutrient intake as compared to the non-poor, although the magnitudes will be small.
    JEL: C34 I32 J21 J43
    Date: 2006
  5. By: Hennessy, David A.
    Abstract: Infectious livestock disease creates externalities for proximate animal production enterprises. The distribution of production scale within a region should influence and be influenced by these disease externalities. Taking the distribution of the unit costs of stocking an animal as primitive, we show that an increase in the variance of these unit costs reduces consumer surplus. The effect on producer surplus, total surplus, and animal concentration across feedlots depends on the demand elasticity. A subsidy to smaller herds can reduce social welfare and immiserize the farm sector by increasing the extent of disease. While Nash behavior involves excessive stocking, disease effects can be such that aggregate output declines relative to first-best. Disease externalities can induce more adoption of a cost-reducing technology by larger herds so that animals become more concentrated across herds. For strategic reasons, excess overall adoption of the innovation may occur. Larger herds are also more likely to adopt biosecurity innovations, explaining why larger herds may be less diseased in equilibrium.
    Keywords: agricultural industrialization, biosecurity, inefficiency, Nash behavior, overinvestment, technology adoption.
    Date: 2006–09–08
  6. By: Ginder, Roger
    Abstract: Currently not available.
    Date: 2006–06–07
  7. By: David Benjamin, Felipe Meza
    Abstract: We document and account for two facts regarding the relation between international interest rates and total factor productivity (TFP) in a sample of developing countries. First, there is a negative correlation between both variables at quarterly frequency. Second, the share of agricultural labor and interest rates are positively correlated, whereas the share of agricultural labor and TFP are negatively correlated. Manufacturing labor shows opposite correlations. These relationships are particularly strong in the aftermath of financial crises. We then construct a model in which the presence of costly intermediation can produce such relationships. We show that, after increases in interest rates, the presence of significant requirement to intermediate factors of production in high productivity sectors, like manufacturing, causes resources to leave these sectors. Resources end up in low productivity sectors where intermediation is cheaper like agriculture. We show that the channel we identify is quantitatively important in the case of Korea after the 1997 financial crisis. Keywords; small open economy, financial intermediation, total factor productivity JEL Classification: E44, F41,F32
  8. By: Hilary Sigman (Rutgers University)
    Abstract: Many communities are concerned about the reuse of potentially contaminated land ("brownfields") and believe that environmental liability is a hindrance to redevelopment. However, with land price adjustments, liability might not impede the reuse of this land. Existing literature has found price reductions in response to liability, but few studies have looked for an effect on vacancies. This paper studies variations in state liability rules --- specifically, strict liability and joint and several liability --- that affect the level and distribution of expected private cleanup costs. It explores the effects of this variation on industrial land prices and vacancy rates and on reported brownfields in a panel of cities across the United States. In the estimated equations, joint and several liability reduces land prices and increases vacancy rates in central cities. Neither a price nor quantity effect is estimated from strict liability. The results suggest that liability is at least partly capitalized, but does still deter redevelopment.
    Keywords: Environmental policy, Tort reform, Real estate, Brownfields
    JEL: Q5 K32 R33
    Date: 2006–08–18
  9. By: Jon Olaf Olaussen (Department of Economics, Norwegian University of Science and Technology)
    Abstract: Wild Atlantic salmon are traditionally harvested from both the sea and spawning rivers during spawning runs. From an economic point of view, the return from sport fishing in rivers is several times higher than marine ‘for meat only’ harvests. This situation calls for a side payment regime where river owners pay marine fishermen not to fish, and where both parties gain. This paper argues that the reason why such side payment regimes are rarely seen, despite the obvious mutual gain, is due to the potential free-riding incentives among river owners. Although it is shown that the decision each river owner faces can be described as a game of chicken, taking the stochastic ecology into account may reveal a different pay-off structure. It is also demonstrated that the stochastic ecology of salmon, combined with price rigidities in the rivers, may explain the lack of side payment regimes.
    Keywords: Atlantic salmon; game of chicken; recreational versus commercial fishing; side payment; stochastic ecology
    JEL: Q22 Q26 D81
    Date: 2006–08–29
  10. By: Mary Burke; Frank Heiland
    Abstract: In order to explain the substantial recent increases in obesity rates in the United States, we consider the effect of falling food prices in the context of a model involving endogenous body weight norms and an explicit, empirically grounded description of human metabolism. Unlike previous representative agent models of price-induced gains in average weight, our model, by including metabolic heterogeneity, is able to capture changes in additional features of the distribution, such as the dramatic growth in upper-quartile weights that are not readily inferred from the representative agent setting. We calibrate an analytical choice model to American women in the 30-to-60-year-old age bracket and compare the model’s equilibrium weight distributions to data from NHANES surveys spanning (intermittently) the period from 1976 through 2000. The model predicts increases in average weight and obesity rates with considerable accuracy and captures a considerable portion of the relative growth in upperquantile weights. The differential response to price declines across the distribution depends on the fact that human basal metabolism (or resting calorie expenditure) is increasing and yet concave in body weight, and therefore food price effects on weight tend to be larger for individuals who are heavier initially. The lagged adjustment of weight norms helps to explain recent observations that obesity rates have continued to rise since the mid 1990s, despite an apparent leveling off of price declines. The predicted increase in body weight aspirations agrees with an observed trend in self-reported desired weights, and it defies the conventional wisdom that thinness has been a growing obsession among American women in recent decades.
    Keywords: Food prices ; Obesity
    Date: 2006
  11. By: Howard Kunreuther
    Abstract: The devastation caused by hurricanes during the 2004 and 2005 seasons has been unprecedented and is forcing the insurance industry to reevaluate the role that it can play in dealing with future natural disasters in the United States. As shown in Table 1 the four hurricanes that hit Florida in the fall of 2004 -- Charley, Frances, Ivan and Jeanne---and Hurricanes Katrina and Rita in 2005 comprised half of the top 12 disasters with respect to insured losses between 1970 and 2005. On a related note, 18 of the 20 most costly disasters occurred between 1990 and 2005 and 10 occurred in the 21st Century. This context is totally different than the scale of economic loss the country has suffered from natural disasters and other extreme events in the 20th century. The first section of the paper addresses the first question by outlining two principles on which a disaster insurance program should be based. Section 3 then focuses on the second question by analyzing the insurability of a risk and examining the challenges facing the private sector in providing coverage against natural disasters. Section 4 turns to the third question and delineates the opportunities and challenges of a comprehensive disaster insurance program. Section 5 poses a set of open issues that are currently being addressed by a research project on disaster insurance undertaken by the Wharton Risk Center in conjunction with the Insurance Information Institute and Georgia State University. The concluding section summarizes the key issues associated with providing disaster insurance in the 21st century.
    JEL: G22 H23
    Date: 2006–08

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