New Economics Papers
on Agricultural Economics
Issue of 2006‒11‒04
twelve papers chosen by

  1. Economic Appraisal of Profitability and Sustainability of Peri-Urban Agriculture in Bangkok By Vagneron, I.
  2. Theoretical and Applied Economics of Water Demand Management: All Dressed Up and Nowhere to Go By John Keith
  3. The Assignment of Property Rights on the Western Frontier: Lessons for Contemporary Environmental and Resource Policy By Gary D. Libecap
  4. On Technical Change in the Elasticities of Resource Inputs By Jakub, GROWIEC; Ingmar, SCHUMACHER
  5. British Colonial Institutions and Economic Development in India By Shilpi Kapur; Sukkoo Kim
  6. Unraveling the worldwide pollution haven effect By Grether, Jean-Marie; Mathys, Nicole A.; de Melo, Jaime
  7. The Causes of Order Effects in Contingent Valuation Surveys: An Experimental Investigation By Jeremy Clark; Lana Friesen
  8. Trade reforms and welfare : an ex-post decomposition of income in Vietnam By Isik-Dikmelik, Aylin
  9. US Park Recreation Values (1968-2003): A Review of the Literature By Pamela Kaval
  10. Caracterización del mercado laboral rural en Colombia By José Leibovich; Mario Nigrinis; Mario Ramos
  11. Modeling Timber Supply, Fuel-Wood, and Atmospheric Carbon Mitigation By Kenneth Lyon
  12. Valuing Environmental Changes in the Presence of Risk: A Review and Discussion of Some Empirical Issues By W Shaw; Mary Riddell; Paul Jakus

  1. By: Vagneron, I.
    Abstract: Promoters of urban and peri-urban agriculture generally stress its positive role in terms of food security, income, employment and improvement of the urban environment. Unfortunately, competition with agricultural and non-agricultural uses of peri-urban farm land often translates into intensive farming systems that are detrimental to the environment. Based on two original surveys of peri-urban farms in the area of Bangok, this paper ranks four cropping systems (fish, shrimp, rice, and fruits) according to their economic profitability. A second step of the analysis aims at taking into account the cost of water into the analysis, so as to assess whether the hierarchy formerly established is modified. Although all environmental costs are not introduced and environmental benefits are ignored, this work paves the way for further research in the area of taking into account the environmental impact of farming activities. ...French Abstract : Les tenants de l'agriculture urbaine et péri-urbaine invoquent généralement son rôle positif en termes de sécurité alimentaire, de génération d'emplois et de revenus et d'amélioration de l'environnement urbain. Toutefois, la concurrence entre usages agricoles et non agricoles de la terre en zone péri-urbaine est malheureusement souvent à l'origine de systèmes agricoles intensifs préjudiciables à l'environnement. A partir de deux enquêtes effectuées dans des exploitations de la zone péri-urbaine de Bangkok, cet article tente de classer quatre systèmes productifs (aquaculture, pisciculture, riziculture et arboriculture fruitière) en fonction de leur rentabilité économique. Dans une seconde partie, nous cherchons à évaluer dans quelle mesure l'introduction du coût de l'eau (l'eau propre étant paradoxalement une ressource rare à Bangkok) dans l'analyse économique de la rentabilité des activités modifie la hiérarchie précédemment établie. Bien qu'imparfait (tous les coûts environnementaux ne sont pas inclus et d'éventuels bénéfices environnementaux sont ignorés), cet article constitue une tentative de prise en compte de l'impact environnemental dans les l'analyse économique des activités agricoles.
    JEL: D24 O13 Q12 Q51
    Date: 2006
  2. By: John Keith
    Abstract: Economists have advocated efficient use of water resources through the demand management tool of marginal cost (including opportunity cost) pricing policies for several decades, using increasingly sophisticated models to point out the welfare gains of this policies. More recently, water markets have become de rigueur in many articles, books and texts as a way to “automatically” include both delivery and opportunity costs. A review of the experience in both the developed and developing world, however, suggests that the adoption of these policies has been infrequent at best, particularly for irrigated agriculture. The objective of this paper is to review existing demand management activities in many countries, including the U.S., and to try to provide some understanding of the failure of water management agencies to employ these tools. Water subsidies for agricultural water are found in many developed countries, such as the United States, and widely among developing countries, even when water is in critically short supply. Most papers and reports describing the application of marginal cost pricing and/or water markets, the same few references appear over and over (Chile, Israel, and Australia, for example). Many authors suggest that the reason for the widespread absence of full marginal cost pricing and/or water markets lies in the rent seeking behavior of current beneficiaries and the inertia in water management systems. While these barriers are important, technical and institutional difficulties also play a critical role, especially in irrigated agriculture. Based on examples from many countries, it is clear that water measurement at the user level does not exist and that it will be costly to implement and maintain, reducing the ability of managers to apply efficient pricing. Moreover, creating water (use) rights also requires some form of water control and measurement at the user level. For systems with many very small farmers, the problem is multiplied substantially. Institutional barriers also are difficult to overcome. Some of these barriers, such as reluctant administrations and powerful lobbies, reflect, at least in part, the kind of rent-seeking and inertia economists (and others) often point out. Some involve the economic reality of long-term leasehold interest and consequent large losses of investment value. Some are related to institutions other than those for water, such as insecure and/or fragmented land tenure. Still others are cultural and social, and represent a broad consensus of society, rather than specific beneficiary groups. The many examples of the institutional and technical difficulties suggest that as demand management increasingly becomes the rhetoric of water economists, and the water management community in general, finding workable solutions to the those problems is absolutely essential if efficient water pricing and water markets are to be implemented.
    Date: 2004–12
  3. By: Gary D. Libecap
    Abstract: In addressing environmental and natural resource problems, there is a move away from primary reliance upon centralized regulation toward assignment of property rights to mitigate the losses of open-access. I examine the assignment of private property rights during the 19th and early 20th centuries to five natural resources, mineral land, timberland, grazing and farm land, and water on federal government lands in the Far West. The region was richly endowed with natural resources, but assigning property rights to them required adaptation from established, eastern practices as defined by the federal land laws. The property rights that emerged and their long-term welfare effects provide a laboratory for examining current questions of institutional design to address over-fishing, excessive air pollution, and other natural resource and environmental problems. A major lesson is that property rights allocations based on local conditions, prior use, and unconstrained by outside government mandates were most effective in addressing not only the immediate threat of open-access, but in providing a longer-term basis for production, investment, and trade. Another lesson is how hard it is to repair initial faulty property allocations. Accordingly, path dependencies in property rules are real, and they have dominated the economic history of resource use in the West.
    JEL: K11 N21 N22 N5 Q15 Q2 Q28 Q3 Q32
    Date: 2006–10
  4. By: Jakub, GROWIEC (UNIVERSITE CATHOLIQUE DE LOUVAIN, Center for Operations Research and Econometrics (CORE)); Ingmar, SCHUMACHER (UNIVERSITE CATHOLIQUE DE LOUVAIN, Center for Operations Research and Econometrics (CORE))
    Abstract: This article considers an economy whose production function takes both renewable and non-renewable resources as inputs. We extend the current literature by allowing for exogneous technical change in the elasticity of subsstitution between these two types of resources. In addition, we study the consequences of biased technical change which alters the resources’ relative productivities. We derive long-run asymptotic results, which we use to compare several cases. In the benchmark case of no technical change, our results are close to those obtained by Dasgupta and Heal (1974). In the case of technical change helps obtain positive long-run production despite the depletion of non-renewable resources. In the biased technical change case, long-run production is only possible either if non-renewable resources are non-essential or if biased technical change is quick enough to compensate for the decreasing flow of non-renewable resources. We embed our production function in an optimal model and study its dynamics. As a steady state (or a balanced growth path) is only attainable as time goes to infinity, we resort to numerical simulations to convey what is happening during the short and medium run. Our results provide new considerations for the debate on natural resources. We suggest that technical change should be directed to the resource which is most important for production.
    Keywords: Elasticity of substitution, Technical change, Biased technical change, Non-renewable resources, Renewable resources
    JEL: Q20 Q30 O30
    Date: 2006–06–29
  5. By: Shilpi Kapur; Sukkoo Kim
    Abstract: We explore the impact of British colonial institutions on the economic development of India. In some regions, the British colonial government assigned property rights in land and taxes to landlords whereas in others it assigned them directly to cultivators or non-landlords. Although Banerjee and Iyer (2005) find that agricultural productivity of non-landlord areas diverged and out-performed relative to landlord areas after 1965 with the advent of the Green Revolution, we find evidence of superior economic performance of non-landlord regions in both the pre- and the post-independence periods. We believe that landlord and non-landlord regions diverged because their differing property rights institutions led to differences in incentives for development.
    JEL: N45 O10 P14
    Date: 2006–10
  6. By: Grether, Jean-Marie; Mathys, Nicole A.; de Melo, Jaime
    Abstract: This paper contributes to the debate on the existence of pollution haven effects by systematically measuring the pollution content of trade (measured by the pollution content of imports, PCI) and decomposing it into three components-a " deep " component (unrelated to the environmental debate but including variables traditionally present in the gravity model) and two components (factor endowments and environmental policies) that occupy center stage in the debate on trade and the environment. The decomposition is carried out for 1986-88 for an extensive data set covering 10 pollutants, 48 countries, and 79 ISIC 4-digit sectors. Illustrative decompositions presented for three of the 10 pollutants in the data set indicate a significant pollution haven effect which increases the PCI of the North because of stricter environmental regulations in the North. At the same time, the factor endowment effect decreases the PCI of the North as the North is relatively well-endowed in capital and pollution-intensive activities are also capital-intensive. On a global scale, because the bulk of trade is intraregional with a high North-North share, these effects are small relative to the " deep " determinants of the worldwide pollution content of trade. In sum, although the impact has been stronger on vertical (North-South) trade flows, differences in factor endowments and environmental policies have only marginally affected the pollution content of world trade during the 1986-88 period.
    Keywords: Environmental Economics & Policies,Water and Industry,Brown Issues and Health,Transport Economics Policy & Planning,Water Resources Assessment
    Date: 2006–11–01
  7. By: Jeremy Clark (University of Canterbury); Lana Friesen
    Abstract: CV researchers have found that the hypothetical values respondents place on a nested sequence of environmental goods are sensitive to the order in which the goods are presented. Typically, the smallest bundle of goods is valued more highly if presented first than if following more comprehensive bundles. Such effects appear even when each bundle is valued from an "exclusive" list, or as an alternative to any other, so that income and substitution effects are controlled. Order of presentation has also affected the degree to which values are sensitive to scope. We conduct lab experiments where participants are asked to value sequences of nested goods for actual purchase from an exclusive list using the incentive compatible BDM mechanism. We test whether order effects occur in valuation for a) induced value goods, b) actual private goods, and c) identical private goods that are to be donated to charities. We find significant order effects when the goods are valued for own use, but not when they are valued for donation.
    Keywords: Order effects; exclusive list; warm glow; contingent valuation
    Date: 2006–01–16
  8. By: Isik-Dikmelik, Aylin
    Abstract: This paper analyzes the impact of trade reforms on household welfare. In particular, it studies the importance of each of the links that together constitute the impact using data from the Vietnamese experience in the 1990s. The implementation of trade reforms in the 1990s, most noteworthy of which was the liberalization of rice, resulted in substantial improvement in welfare as evidenced by the drastic decline in poverty. Using analytical and empirical methods, the author examines the role of each channel (direct versus indirect) in this improvement for different groups of households. Results indicate that the growth has been broad based and pro-poor. Poorer households experienced more growth for each and every group analyzed. And contrary to the standard literature, net buyer households had more growth compared with net sellers, emphasizing the importance of indirect links. Decomposition of the growth shows that for rural households, both the direct effect and the multiplier effect drive growth while the multiplier effect was key in urban areas. The importance of the secondary effects underscores the need for a broader model to estimate the impact of trade reforms fully.
    Keywords: Rural Poverty Reduction,Economic Theory & Research,Small Area Estimation Poverty Mapping,Inequality,Consumption
    Date: 2006–11–01
  9. By: Pamela Kaval (University of Waikato)
    Abstract: The results of outdoor recreation consumer surplus studies for national parks, national forests, state parks and state forests in the United States from 1968 through 2003 are compared and analyzed across activity type, locational region, and park designation. The resulting data set includes 1,229 observations, spanning 36 years, 28 types of activities, and 106 locations. All consumer surplus data were converted to 2006 United States dollars per person per day for comparison purposes. It was discovered that activity and park type played a significant role in consumer surplus values. Activities such as mountain biking, windsurfing, and rock-climbing were among the highest valued activities while visiting environmental education centers was the lowest. When comparing park types, it was found that on average, activities at National Parks had higher values than national forests, state parks, or state forests. This meta-analysis is the most extensive literature review in the history of non-market consumer surplus values for outdoor recreation in the United States ever conducted and should prove beneficial to anyone seeking information on outdoor recreation studies as well as those wishing to conduct a benefit transfer analysis for their own land management area.
    Keywords: consumer surplus values; non-market valuation; Outdoor recreation; benefit transfer
    JEL: Q26
    Date: 2006–10–15
  10. By: José Leibovich; Mario Nigrinis; Mario Ramos
    Abstract: Este trabajo se concentra en analizar las características predominantes del empleo rural en Colombia. Con análisis de las ECH de 2005 se concluye que el problema no es de desempleo, sino de baja calidad de empleo y bajos ingresos. Estimaciones de la productividad laboral y de la PTF del sector agropecuario permiten confirmar que los bajos ingresos laborales están asociados a baja productividad laboral. Con ayuda de un modelo teórico en la tradición de las teorías de desarrollo (Lewis (1954), Harris-Todaro (1970)), se caracteriza el mercado laboral rural como un mercado segmentado: un segmento moderno, pequeño, con una productividad del trabajo elevada, donde se cumple la regulación; un segmento tradicional, abundante, donde el mercado se ajusta vía precios y se viola la regulación; y un segmento que migra a las cabeceras por razones económicas. Las estimaciones econométricas permiten explicar de qué depende la probabilidad de pertenecer al segmento moderno y al tradicional y en el caso de los migrantes, evaluar el impacto que éstos tienen en la participación laboral en las cabeceras y en los ingresos. Se observa de manera general que la probabilidad de pertenecer al segmento moderno en el campo es baja. En términos de género, nivel educativo, parentesco y región, las probabilidades son mayores para el hombre, para los que tienen secundaria completa o superior, para los jefes de hogar y para los pobladores de la región atlántica. De otra parte, en las cabeceras, los migrantes provenientes del campo tienen una probabilidad del 75% de estar en el sector moderno. Las implicaciones de política son de gran calado. El objetivo de mejorar los ingresos en el campo, requiere desarrollar una estrategia de aumento de la productividad laboral, sobre todo en el sector agropecuario, que debe ir acompañado de aumentos notables en la producción para evitar caídas del empleo. Esto es factible con una estrategia de exportaciones de bienes agropecuarios.
    Keywords: Empleo, productividad, desarrollo rural Classification JEL: J23;O47;R11.
  11. By: Kenneth Lyon
    Abstract: There is general agreement that global warming is occurring and that the main contributor to this probably is the buildup of green house gasses, GHG, in the atmosphere. Two main contributors are the utilization of fossil fuels and the deforestation of many regions of the world. This paper examines a number of current issues related to mitigating the global warming problem through forestry. We use discrete time optimal control to model a simplified carbon cycle. The burning of fossil fuels increases atmospheric carbon while the burning of fuel-wood along with its forest source maintain an atmospheric carbon level. The standing timber in the forests is a carbon sink, as are wood buildings and structures, and fossil fuel in the ground. Through time the buildings and structures decay and release carbon to the atmosphere. We also present a numerical example to help illustrate the characteristics of the model. The conclusions are that the forest sector can have a significant impact.
    Date: 2004–12
  12. By: W Shaw; Mary Riddell; Paul Jakus (Department of Economics, Utah State University)
    Abstract: The theory of ex-ante welfare measures is well establlished and has been addressed extensively in papers relating to the valuation of environmental resources when environmental variables have a random component. However, there have been many new developments in incorporating risks and uncertainty into economic models, and perhaps more importantly, there seems to be remaining confusion as to how to empirically implement such models. To date, a variety of estimation techniques have been utilized, with varying degrees of success in deriving an ex-ante welfare measure under risk. This manuscript assesses the state of the art by discussing the sources of risk, uncertainty, and error in utility models that incorporate risk. We are most interested in how to incorporate these ideas into empirical models and we examine how econometric estimation methods can best be used to obtain ex-ante welfare measures. We also present the current thinking on endogenous versus exogenous risks as well as subjective versus “expert” risk measures, and discuss some of the advantages and disadvantages likely to be encountered when using subjective-based risk estimates in empirical applications based on alternatives to the expected utility models.
    Date: 2005–02

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