nep-agr New Economics Papers
on Agricultural Economics
Issue of 2007‒01‒13
29 papers chosen by
Angelo Zago
Universita degli Studi di Verona

  1. Agricultural Intensification, Irrigation and the Environment in South Asia: Issues and Policy Options By Mohammad Alauddin; John Quiggin
  2. The impact of commodity price changes on rural households : the case of coffee in Uganda By Bussolo, Maurizio; Godart, Olivier; Lay, Jann; Thiele, Rainer
  3. Labor markets and income generation in rural Argentina By Verner, Dorte
  4. Strengthening Policy Coherence for Development in Agricultural Policy: Policy Recommendations to Irish Aid By Alan Matthews; Hannah Chaplin; Thomas Giblin; Marian Mraz
  5. Choosing the best forage species for a dairy farm: The Whole-farm approach By Mark Neal; James Neal; Bill Fulkerson
  6. Reducing distortions to agricultural incentives : progress, pitfalls, and prospects By Anderson, Kym
  7. Can voluntary product-labeling replace trade bans in the case of GMOs? By Mads Greaker and Yuyu Chen
  8. Finance and hunger : empirical evidence of the agricultural productivity channel By Claessens, Stijn; Feijen, Erik
  9. Recent International and Regulatory Decisions about Geographical Indications, The By Marette, Stéphan; Clemens, Roxanne; Babcock, Bruce A.
  10. Rural poor in rich rural areas : poverty in rural Argentina By Verner, Dorte
  11. Semiparametric hedonic price models : assessing the effects of agricultural nonpoint source pollution By Bontemps, C.; Simioni, M.; Surry, Y.
  12. The Utilisation of EU and US Trade Preferences for Developing Countries in the Agri-Food Sector By Jean-Christophe Bureau; Raja Chakir; Jacques Gallezot
  13. Transportation Costs, Agricultural Productivity and Cross-Country Income Differences By Tasso Adamopoulos
  14. Food Safety and Social Capital: A Double Side Connection By Valeria Sodano
  15. Input Output Tables for the Management of Water Resources in Islands. The Case of Terceira Island. By Tomaz Dentinho; Pedro Ferreira; Vasco Silva
  16. Harnessing the Private Sector for Rural Development, Poverty Alleviation and HIV/Aids Prevention By Steven Lim; Michael P. Cameron; Krailert Taweekui; John Askwith
  17. Economic assessment of odour emissions: an application of Hedonic Price Method By Vinicio Vannucci; Loredana Torsello
  18. From natural resources and environmental accounting to construction of indicators for sustainable development By Knut H. Alfsen and Mads Greaker
  19. Water allocation strategies for the Kat Basin in South Africa : comparing negotiation tools and game theory models By Dinar, Ariel; Farolfi, Stefano; Patrone, Fioravante; Rowntree, Kate
  20. “The worth of a wildflower” Precautionary perspectives on the environmental risk of GMOs By Iulie Aslaksen and Anne Ingeborg Myhr
  21. Detecting collusion in timber auctions : an application to Romania By Saphores, Jean-Daniel; Vincent, Jeffrey R.; Marochko, Valy; Abrudan, Ioan; Bouriaud, Laura; Zinnes, Clifford
  22. To drink or not to drink (tap water) ? The impact of environmental quality on consumer's choices By Bontemps, C.; Nauges, C.
  23. Two-part tariffs versus linear pricing between manufacturers and retailers : empirical tests on differentiated products markets By Bonnet, C.; Dubois, P.; Simioni, M.
  24. Utility in WTP Space: A Tool to Address Confounding Random Scale Effects in Destination Choice to the Alps By Ricardo Scarpa; Mara Thiene; Kenneth Train
  25. Are there lasting impacts of aid to poor areas ? Evidence from rural China By Chen, Shaohua; Mu, Ren; Ravallion, Martin
  26. Identifying the effect of unobserved quality and experts' reviews in the pricing of experience goods : empirical application on Bordeaux wine By Dubois, P.; Nauges, C.
  27. Formal and informal risk sharing in LDCs : theory and empirical evidence By Dubois, P.; Jullien, B.; Magnac, T.
  28. Fisheries Management Under Cyclical Population Dynamics By Richard Carson; CLIVE GRANGER; Jeremy Jackson; Wolfram Schlenker
  29. Delineating Daily Activity Spaces in Rural Areas By Michael J Keane; John Lennon

  1. By: Mohammad Alauddin (University of Queensland); John Quiggin (Risk & Sustainable Management Group, School of Economics, University of Queensland)
    Abstract: High population pressure and the rapid pace of human activity including urbanization, industrialization and other economic activities have led to a dwindling supply of arable land per capita and a process of agricultural intensification in South Asia. While this process has significantly increased food production to feed the growing population, it has also entailed considerable damage to the physical environment, including degradation and depletion of natural resources and unsustainable use of land and water resources. This paper employs the analytical tools of economic theory, environmental and ecological economics to model the impact of irrigation in South Asia. It underscores the need for an eclectic approach to policy responses stemming from private and common property rights theories, externality theory and sustainability theory with a view to environmentalizing agricultural development.
    Keywords: Agricultural intensification, environmental intensification, groundwater intensity.
    JEL: O1 Q0 Q2
    Date: 2006–04
  2. By: Bussolo, Maurizio; Godart, Olivier; Lay, Jann; Thiele, Rainer
    Abstract: Policies and external shocks affecting agriculture, the main source of income for rural households, can be expected to have a significant impact on poverty. The authors study the case of Uganda. Throughout the 1990s, more than 90 percent of its poor lived in rural areas and, during the same period, large international price fluctuations as well as an extensive domestic deregulation affected the coffee sector, its main source of export revenues. Using data from three household surveys covering the 1990s, the authors confirm a strong correlation between changes in coffee prices (in a liberalized market) and poverty reduction. This is highlighted by comparing the performance of different households grouped according to their dependence on coffee farming. Regression analysis (based on pooled data from the three surveys) of consumption expenditure on coffee-related variables, other controls, and time-fixed effects corroborates that the mentioned correlation is not spurious. The authors also find that while both poor and rich farmers enter the coffee sector, the price boom benefits the poorer households relatively more, whereas the liberalization seems to create more opportunities for richer farmers. Finally, notwithstanding the importance of the coffee price boom, the agricultural policy framework and the thorough structural reforms in which the coffee market liberalization was embedded have certainly played a role in triggering overall agricultural growth. These factors appear to matter especially in the second half of the 1990s when prices went down but poverty reduction continued.
    Keywords: Crops & Crop Management Systems,Markets and Market Access,Rural Poverty Reduction,Access to Markets
    Date: 2006–12–01
  3. By: Verner, Dorte
    Abstract: This paper addresses three areas of the rural labor market-employment, labor wages, and agriculture producer incomes. Findings show that the poor allocate a lower share of their labor to farm sectors than the nonpoor do, but still around 70 percent work in agriculture, and the vast majority of rural workers are engaged in the informal sector. When examining nonfarm employment in rural Argentina, findings suggest that key determinants of access to employment and productivity in nonfarm activities are education, skills, land access, location, and gender. Employment analyses show that women have higher probability than men to participate in rural nonfarm activities and they are not confined to low-return employment. Moreover, workers living in poorer regions with land access are less likely to be employed in the nonfarm sector. There is strong evidence that educated people have better prospects in both the farm and nonfarm sectors, and that education is an important determinant of employment in the better-paid nonfarm activities. Labor wage analyses reveal that labor markets pay lower returns to poorer than to richer women and returns to education are increasing with increased level of completed education and income level. And nonfarm income and employment are highly correlated with gender, skills, household size, and education. This analysis also shows a rather heterogeneous impact pattern of individual characteristics across the income distribution, but education is important for all levels of income. Agricultural producer income analyses reveal that producers ' income monotonically increases with land size and with completed education level, and positively correlates with road access and use of electricity, fertilizer, and irrigation. Finally, farms operated by women are slightly more productive than farms operated by men.
    Keywords: Rural Poverty Reduction,Labor Markets,Population Policies,Work & Working Conditions
    Date: 2006–12–01
  4. By: Alan Matthews; Hannah Chaplin; Thomas Giblin; Marian Mraz
    Abstract: The recent White Paper on Irish Aid made coherence one of the guiding principles of Ireland 's development cooperation policy (Government of Ireland, 2006). Agriculture is at the heart of much of the debate about possible incoherence between trade and development policy. This paper presents the policy recommendations made to the Advisory Board for Irish Aid arising from a research project it supported to examine the impact which the EU's Common Agricultural Policy has on developing countries, and the impact which CAP reform would have on global poverty, and which was undertaken by a team based at the IIIS, Trinity College Dublin. Concluding the Doha Round with an ambitious reduction in agricultural trade barriers should remain the priority objective from a policy coherence perspective . However, the research recognised that Ireland 's partner countries in Sub-Saharan Africa are not likely to benefit, if at all, from further reductions in OECD country agricultural trade barriers, largely because of their preferential access to these markets. We recommend that Irish Aid should increase its efforts to strengthen the supply-side capacity of these countries to take advantage of existing market opportunities, through increased assistance for agricultural and rural development and as well as trade-related assistance. The paper also discusses how a framework for policy coherence might be established within Irish public administration.
    Keywords: Policy coherence, agricultural development, aid, Common Agricultural Policy
    Date: 2007–01–05
  5. By: Mark Neal (Risk and Sustainable Management Group, University of Queensland); James Neal (New South Wales Department of Primary Industries); Bill Fulkerson (Faculty of Veterinary Science, University of Sydney)
    Abstract: Although a handful of forage species such as perennial ryegrass are predominant, there are a wide range of forage species that can be grown in sub tropical and temperate regions in Australia as dairy pastures. These species have differing seasonal yields, nutrient quality and water use efficiency characteristics, as demonstrated in a large study evaluating 30 species University of Sydney in New South Wales, Australia. Some species can be grazed, while others require mechanical harvesting that incurs a further cost. Previous comparisons of species that relied on yields of dry matter per unit of some input (typically land or water) cannot simultaneously take into account the season in which forage is produced, or other factors related to the costs of production and delivery to the cows. To effectively compare the profitability of individual species, or combinations of species, requires the use of a whole-farm model. Linear programming was used to find the most profitable mix of forage species for an irrigated dairy farm in an irrigation region of New South Wales, Australia. It was concluded that a typical farmer facing the prevailing milk and purchased feed prices with average milk production per cow would find a mix of species including large proportions of perennial ryegrass (Lolium perenne) and prairie grass (Bromus willdenowii) was most profitable. The result was robust to changes in seasonal milk pricing and moving from year round to seasonal calving patterns.
    Keywords: Dairy, Forage, Whole-farm, Linear programming
    JEL: Q12 Q52 C61
    Date: 2006–11
  6. By: Anderson, Kym
    Abstract: Most of the world ' s poorest people depend on farming for their livelihood. Earnings from farming in low-income countries are depressed partly due to a pro-urban bias in own-country policies, and partly because richer countries (including some developing countries) favor their farmers with import barriers and subsidies. Both sets of policies reduce national and global economic growth and add to inequality and poverty in developing countries. Acknowledgement of that since the 1980s has given rise to greater pressures for reform, both internal and external. Over the past two decades numerous developing country governments have reduced their sectoral and trade policy distortions, while many high-income countries continue with protectionist policies that harm developing country exports of farm products. Recent research suggests that the agricultural protectionist policies of high-income countries reduce welfare in many developing countries. Most of those studies also suggest that full global liberalization of merchandise trade would raise value added in agriculture in developing country regions, and that much of the benefit from global reform would come not just from reform in high-income countries but also from liberalization among developing countries, including in many cases own-country reform. These findings raise three key questions that are addressed in this paper: To what extent have the reforms of the past two decades succeeded in reducing distortions to agricultural incentives? Do current policy distortions still discriminate against farmers in low-income countries? And what are the prospects for further reform in the next decade or so?
    Keywords: Economic Theory & Research,Agribusiness,Free Trade,Rural Development Knowledge & Information Systems,Pro-Poor Growth and Inequality
    Date: 2006–12–01
  7. By: Mads Greaker and Yuyu Chen (Statistics Norway)
    Abstract: Genetically modified (GM) food has raised both health-risk fears and environmental concerns. This has led some countries to ban the trade in such food triggering a great deal of controversy among countries. In this paper we ask under what conditions will voluntary labeling of GM-free food be at least as good as a trade ban? And, under what conditions can providing labels for GM-free food be protectionist? Our main finding is that the merits of a product labeling policy depend crucially on the way food products are differentiated. If they are poorly differentiated from the beginning, a labeling policy will probably not function as good as a trade ban does; while if they are already well differentiated, a labeling policy is likely the optimal policy for the importing country. Finally, as long as consumers' willingness to pay to avoid GM-food is high, a labeling policy is not protectionist. In fact, if products are poorly differentiated from the beginning, foreign firms will probably increase their profit even if they do not choose to label their products.
    Keywords: Product-labeling; GMOs; protectionsim; trade policy
    JEL: H2 H7 Q2 Q28
    Date: 2006–10
  8. By: Claessens, Stijn; Feijen, Erik
    Abstract: Using cross-country and panel regressions, the authors show that financial sector development significantly reduces undernourishment (hunger), largely through gaining farmers and others access to productivity-enhancing equipment, translating into beneficial income and general effects. They show specifically that a deeper financial sector leads to higher agricultural productivity, including higher cereal yields, through increased fertilizer and tractor use. Higher productivity in turn leads to lower undernourishment. The results are robust to various specifications and econometric tests and imply that a 1 percentage point increase in private credit to GDP reduces undernourishment by 0.22-2.45 percentage points, or about one-quarter the impact of GDP per capita.
    Keywords: Economic Theory & Research,Rural Poverty Reduction,Pro-Poor Growth and Inequality,Inequality
    Date: 2006–12–01
  9. By: Marette, Stéphan; Clemens, Roxanne; Babcock, Bruce A.
    Abstract: As worldwide consumer demand for high-quality products and for information about these products increases, labels and geographical indications (GIs) can serve to signal quality traits to consumers. However, GI systems among countries are not homogeneous and can be used as trade barriers against competition. Philosophical differences between the European Union and the United States about how GIs should be registered and protected led to the formation of a WTO dispute settlement panel. In this paper we discuss the issues behind the dispute, the World Trade Organization (WTO) panel decision, and the EU response to the panel decision leading to the new Regulation 510/2006. Given the potential for GI labels to supply consumer information, context is provided for the discussion using recent literature on product labeling. Implications are drawn regarding the importance of the panel decision and the EU response relative to GI issues yet to be negotiated under the Doha Round.
    Keywords: geographical indications, product labels, trade barriers.
    Date: 2007–01–08
  10. By: Verner, Dorte
    Abstract: Rural poverty remains a crucial part of the poverty picture in Argentina. This paper used a rural dataset collected by the World Bank in 2003. Findings show that extreme income poverty in rural areas reached 39 percent of the people or 200,000-250,000 indigent families. These families tend to: be large, and young, and to escape from poverty as they mature and children leave the household (life cycle); live largely in dispersed areas where basic service provision is often weak and delivery is difficult (in particular school attendance beyond 11 years of age falls off very rapidly compared with grouped rural or urban areas); and be more likely to be small landholders than landless laborers. The structure of poverty in rural Argentina shows that larger households are poorer than smaller households, female-headed households are poorer than male-headed households, young households/household heads are poorer than older households/household heads, the poor tend to work more in the informal sector, and a greater share of those engaged in agriculture are poor. However, poverty is by no means strictly an agricultural problem. Furthermore, the deepest poverty is among the poorly educated and young household heads with children. Without interventions to improve their opportunities and assets, their plight is likely to worsen.
    Keywords: Rural Poverty Reduction,Population Policies,Pro-Poor Growth and Inequality,Services & Transfers to Poor
    Date: 2006–12–01
  11. By: Bontemps, C.; Simioni, M.; Surry, Y.
    Abstract: In the area of environmental analysis using hedonic price models, we investigate the prerformance of various nonparametric and semiparametric specifications. The proposed model specifications are made up of two parts : a linear component for house characteristics and a non(semi) parametric component representing the nonlinear influence of environmental indications on house prices. We adopt a general-to-specific search procedure, based on recent specification tests comparing the proposed specifications with a fully nonparametric benchmark model, to select the best model specification. An application of these semiparametric models to rural districs indicates that pollution resulting from intensive livestock farming have a significant nonlinear impact on house prices. ...French Abstract : L'objectif de cet article est d'évaluer l'impact sur les prix des résidences de la pollution d'origine agricole en utilisant différentes spécifications semi paramétriques d'un modèle de prix hédoniques. Les spécifications proposées se décomposent en deux parties : une partie linéaire dans les caractéristiques des maisons et une partie non ou semi paramétrique capturant les effets non linéaires des indicateurs de pollution. Une application a un échantillon de ventes de résidences dans les communes rurales bretonnes montre que la pollution résultant de pratiques intensives dans l'élevage influe de façon significative et non linéaire sur les prix des maisons.
    JEL: C14 R21 R32 Q0
    Date: 2006
  12. By: Jean-Christophe Bureau; Raja Chakir; Jacques Gallezot
    Abstract: We calculate various indicators of the utilisation of preferences granted to developing countries by the EU and the US in the agricultural, food and fisheries sector. We conclude that only a very small proportion of the imports eligible to these preferences is actually exported outside a preferential regime. The rate of utilisation is therefore high. However, the flow of imports from poorest countries remains very limited in spite of rather generous tariff preferences, which leads to question the overall impact of the preferential agreements. In addition, preferential regimes overlap, and in such cases some regimes are systematically preferred to others. We use econometric estimates of the (latent) cost of using a given preference in order to explain why particular regimes are used. We focus on possible explanations, such as the cumulation rules (that restrict the use of materials originating from other countries), fixed administrative costs, and differences in the preferential margin.
    Keywords: Non Reciprocal Preferences, Trade and Development, Rules of Origin
    Date: 2007–01–05
  13. By: Tasso Adamopoulos (Department of Economics York University)
    Abstract: There are large differences in transportation infrastructure across nations. Constructing a measure of transportation infrastructure density for a large set of countries, I show that the disparity in this measure between the 5% income rich and the 5% income poor countries is a factor of 28. Are these differences a source of productivity differences across nations? Using a three-sector, two-region, general equilibrium model, I show that high transport costs can distort the allocation of resources not only across geographically dispersed production units within sectors but also between agriculture and non-agriculture. Taking as given the observed differences in transportation infrastructure densities, I quantify the role of transportation for cross-country income differences. The calibrated model produces an income disparity of 10.9 between the 5% rich and 5% poor countries. This corresponds to an improvement of 35% relative to the disparity predicted by a two sector model of agriculture and non-agriculture. Furthermore, the effects of advancements in transportation are non-linear: the elasticity of aggregate labor productivity with respect to the stock of transportation infrastructure in the poorest nations is 15 times higher than in the richest ones
    Keywords: Productivity Differences, Sectoral Productivity, Transportation Costs
    JEL: O1 O4 Q10
    Date: 2006–12–03
  14. By: Valeria Sodano
    Abstract: The globalisation of the agri-food system and the growing variety of food products and technologies have made it increasingly difficult for nation-states to regulate food safety and quality practices, giving rise to a shift from public to private governance, essentially in the form of private standards and TPC. The paper suggests that the current shift from public to private intervention calls for a different approach to the analysis of food safety policy, on both descriptive and normative ground. Two different concepts of social capital, one of trust and the other of power, are used in order to assess the welfare effects of the newest trends in food safety policy. Through the lens of social capital it is clear that private standards and TPC are not merely an impartial technical tool able to foster food markets efficiency and safety. Rather they are the means by which powerful actors in the chain discipline people and things in order to accomplish their own objectives
    JEL: L15 L66 K13
    Date: 2006–10
  15. By: Tomaz Dentinho; Pedro Ferreira; Vasco Silva
    Abstract: Islands are attractive places for tourists and most islands can be, sooner or later, requested by an increasing touristic demand. But islands are also places where natural capital has very defined limits. The aim of this paper is to assess the carrying capacity of islands in terms of water in relation to the touristic demand. We use an Input-Output Table Model and expand it to include the use of water by the different sectors and by the households. The model is estimated for the Azores islands using cross entropy methods. The structure of the model is obtained from the Input-Output Table of the Region. The data to estimate the model for each island comes from the employment and production of the companies in each island. Finally we simulate the model for each island for different levels of water supply accessible at different costs and discuss the competitiveness of the islands' touristic sector and their sustainability.
    Date: 2006–08
  16. By: Steven Lim (University of Waikato); Michael P. Cameron (University of Waikato); Krailert Taweekui (Khon Kaen University); John Askwith
    Abstract: In resource-constrained developing countries, mobilizing resources from outside sources may assist in overcoming many development challenges. This paper examines the Thai Business Initiative in Rural Development (TBIRD), an NGO-sponsored program that brings together the comparative advantages and self-interest of rural villages, private sector firms and a facilitating NGO, to improve social and community health outcomes in rural areas. We analyze key issues in the program with data from Northeast Thailand. We find that the TBIRD program appears to improve the income earning and other prospects of the TBIRD factory workers. Further, TBIRD factory employment exhibits a pro-poor bias. A key impact is to provide jobs for people who might otherwise be at increased risk of HIV infection through poverty-induced decisions to migrate to urban centres and participate in the commercial sex industry. This program adds another important tool for development planners in the fight against HIV/AIDS.
    Keywords: rural development; poverty; HIV/AIDS; Thailand
    JEL: O29 I38 L31
    Date: 2007–01–15
  17. By: Vinicio Vannucci; Loredana Torsello
    Abstract: Environmental economics suggests a number of techniques to assess public goods. Such methods, surrogating traditional market mechanism, allow estimations of willingness to pay for improving environmental quality. In the case study proposed in this paper an hedonic price method is implemented to assess the benefits deriving by an improvement of environmental quality due to a reduction in odor emissions. In fact, odor impacts are usually the main pressure perceived by inhabitants living near sugar production plants (localized in Tuscany, in the current case study). The implementation of the hedonic price method allows to exhibit that this kind of externalities affect the real estate market in the nearby the area
    Keywords: hedonic price method, economic assessment of natural resources, odor nuissance
    JEL: Q51
    Date: 2006–07
  18. By: Knut H. Alfsen and Mads Greaker (Statistics Norway)
    Abstract: Norway has a long history in trying to develop management tools for sustainable development. From the early development of natural resources accounts in the 1980’s, through discussions of the usefulness of indices like “green GDP” to efforts of developing sustainable development indicators, experiences have been gained. The paper seeks to both describe the landscape and discussions associated with the key terms, and to communicate some lessons drawn from the Norwegian experiences. The conclusion focuses on the fact that whatever information is collected and organised to support the relevant decision-making processes, the final outcome should always be judged in terms of its impacts on policy processes. Thus, we issue a warning against large-scale development of information systems, without due regard to the final utilisation of the output.
    Keywords: Green accounting; Natural resource and environmental accounting; sustainable development indicators; green GDP; SEEA
    JEL: N5 Q2 Q3
    Date: 2006–10
  19. By: Dinar, Ariel; Farolfi, Stefano; Patrone, Fioravante; Rowntree, Kate
    Abstract: Governments and developing agencies promote participatory approaches in solving common pool resource problems, such as in the water sector. Two main participatory approaches have been applied separately, namely negotiation and mediation. In this paper the authors apply the Role-Playing Game that is a component of the Companion Modeling approach, a negotiation procedure, and the Cooperative Game Theory (Shapley value and the Nucleolus solution concepts) that can be mirrored as a mediated mechanism to a water allocation problem in the Kat watershed in South Africa. While the absolute results of the two approaches differ, the negotiation and the cooperative game theory provide similar shares of the benefit allocated to the players from various cooperative arrangements. By evaluating the two approaches, the authors provide useful tips for future extension for both the Role-Playing Games and the Cooperative Game Theory applications.
    Keywords: Water Supply and Systems,Water Supply and Sanitation Governance and Institutions,Environmental Economics & Policies,Water Conservation,Town Water Supply and Sanitation
    Date: 2006–12–01
  20. By: Iulie Aslaksen and Anne Ingeborg Myhr (Statistics Norway)
    Abstract: How much is a wildflower worth? Inspired by “The worth of a songbird” by Funtowicz and Ravetz (1994) we use the value of a wildflower as symbol of the complexity of evaluating environmental qualities and risks. We critically discuss the application of cost-benefit analysis in evaluating environmental impacts of adoption of genetically modified organisms (GMOs). We argue that cost-benefit analysis should be supplemented with other methods, such as processes for assessing uncertainty, accommodation of scientific disagreements, and integration of stakeholders’ interests and perspectives. A more inclusive perspective is to develop precautionary approaches that recognize the multidimensional nature of environmental qualities and risks, such as irreplaceability, irreversibility, uncertainty and complexity. Precautionary approaches can contribute to develop a stronger environmental responsibility within the framework of rational self-interest.
    Keywords: cost-benefit analysis; environmental risk; environmental value; genetically modified organisms; precautionary principle; scientific uncertainty
    JEL: D81 Q20 Q50
    Date: 2006–09
  21. By: Saphores, Jean-Daniel; Vincent, Jeffrey R.; Marochko, Valy; Abrudan, Ioan; Bouriaud, Laura; Zinnes, Clifford
    Abstract: Romania was one of the first transition countries in Europe to introduce auctions for allocating standing timber (stumpage) in public forests. In comparison with the former system in the country-administrative allocation at set prices-timber auctions offer several potential advantages: greater revenue generation for the government, a higher probability that tracts will be allocated to the firms that value them most highly, and stronger incentives for technological change within industry and efficiency gains in the public sector. Competition is the key to realizing these advantages. Unfortunately, collusion among bidders often limits competition in timber auctions, including in well-established market economies such as the United States. The result is that tracts sell below their fair market value, which undermines the advantages of auctions. This paper examines the Romanian auction system, with a focus on the use of econometric methods to detect collusion. It begins by describing the historical development of the system and the principal steps in the auction process. It then discusses the qualitative impacts of various economic and institutional factors, including collusion, on winning bids in different regions of the country. This discussion draws on information from a combination of sources, including unstructured interviews conducted with government officials and company representatives during 2003. Next, the paper summarizes key findings from the broader research literature on auctions, with an emphasis on empirical studies that have developed econometric methods for detecting collusion. It then presents an application of such methods to timber auction data from two forest directorates in Romania, Neamt and Suceava. This application confirms that data from Romanian timber auctions can be used to determine the likelihood of collusion, and it suggests that collusion reduced winning bids in Suceava in 2002 and perhaps also in Neamt. The paper concludes with a discussion of actions that the government can take to reduce the incidence of collusion and minimize its impact on auction outcomes.
    Keywords: Forestry,Wildlife Resources,Markets and Market Access,Access to Markets,Technology Industry
    Date: 2006–12–01
  22. By: Bontemps, C.; Nauges, C.
    Abstract: Bottled water consumption has been steadily growing in the world for the past 30 years, in spite of its excessively high price compared to tap water. The Italian drink more bottled water than anybody else in the world, followed by the French who drink about 130 liters per year per inhabitant. In this country, despite an access to safe public drinking water, 42% of the population regularly drink bottled water. Using scanner data on French consumption combined with raw water quality and other environmental data, we show that raw water bad quality is the most important factor driving the dexision not to drink tap water. The estimated effect is found to be stronger for low-income households. We also confirm the significant direct impact of socioeconomic and demographic households' characteristics, as well as the role of cultural/regional factors. Overall, this study shows that pollution of raw water implies indirect costs for households who instead of drinking water from the tap spend up to 100 times more for bottled water. ...French Abstract : On propose dans cet article de mesurer, par une étude économétrique appropriée, l'impact des facteurs environnementaux, socioéconomiques et culturels sur la décision des ménages de boire (ou non) l'eau du robinet. L'originalité de notre approche réside d'une part, dans l'utilisation de données de consommation de ménages (SECODIP) associées à des informations sur la qualité de l'environnement dans la commune de résidence de ces ménages, en particulier la qualité des eaux brutes (IFEN-SCEES et DGS), et d'autre part dans l'utilisation du prix de potabilisation de l'eau comme mesure de la "mauvaise qualité" des eaux brutes. L'estimation d'un modèle probit sur un échantillon de 4 758 ménages montre que la "mauvaise qualité" des eaux brutes est le déterminant le plus important de la décision de (ne pas) boire l'eau du robinet. Le rôle significatif des caractéristiques des ménages et les effets régionaux sont également confirmés.
    JEL: Q53 D12 C25
    Date: 2006
  23. By: Bonnet, C.; Dubois, P.; Simioni, M.
    Abstract: We present a methodology allowing to introduce manufacturers and retailers vertical contracting in their pricing strategies on a differentiated product market. We consider in particular two types of non linear pricing relationships, one where resale price maintenance is used with two part tariffs contracts and one where no resale price maintenance is allowed in two part tariffs contracts. Our contribution allows to recover price-cost margins from estimates of demand parameters both under linear pricing models and two part tariffs. The methodology allows then to test between different hypothesis on the contracting and pricing relationships between manufacturers and retailers in the supermarket industry using exogenous variables supposed to shift the marginal costs of production and distritution. We apply empirically this method to study the market for retailing bottled water in France. Our empirical evidence shows that manufacturers and retailers use non linear pricing contracts and in particular two part tariffs contracts with resale price maintenance. At last, thanks to the estimation of our structural model, we present some simulations of counterfactual policy experiments like the change of ownership of some products between manufacturers. ...French Abstract : Dans cet article, les auteurs présentent une méthodologie permettant de modéliser des contrats dans les stratégies de fixation des prix des distributeurs et des producteurs sur un marché oû les produits sont différenciés. Notamment, ils considèrent deux types de contrats à tarifs binômes pour modéliser les relations verticales : avec ou sans prix de revente imposés par les producteurs. Ce papier permet de déterminer les marges prix coût à partir de paramètres estimés de la demande à la fois pour des modèles de double marginalisation et pour des modèles à tarifs binômes. Différentes hypothèses sur les relations entre producteurs et distributeurs sont alors testées en utilisant des variables exogènes supposées faire varier les coûts marginaux de production et de distribution. Les auteurs appliquent empiriquement cette méthode au marché de l'eau plate nature embouteillée en France. Les résultats empiriques montrent que les producteurs et les distributeurs utilisent des contrats à tarifs binômes avec prix de revente imposés. De plus, grâce aux estimations du modèle structurel, les auteurs simulent des changements de propriété des produits entre producteurs et distributeurs.
    JEL: L13 L81 C12 C33
    Date: 2006
  24. By: Ricardo Scarpa (University of Waikato); Mara Thiene (University of Padua Viale dell’Universita`); Kenneth Train (University of California at Berkeley)
    Abstract: Destination choice models with individual-specific taste variation have become the presumptive analytical approach in applied nonmarket valuation. Continuous mixtures of taste distributions are often modeled using computationally convenient distributions based on the multivariate normal. Though conceptually appealing, empirically these often imply results with untenable distributions of willingness-to-pay in the population. Furthermore, interpersonal variation in the scale of the error may confound variation in taste intensities thereby producing biased WTP estimates. We compare estimates from random utility models that use normal and log-normal distributions first for taste intensities of destination attributes and then for WTPs. Estimates from simulated maximum likelihood and hierarchical Bayes approaches are compared. The results indicate that specifications in WTP space produce more reasonable features of implied WTP distributions for the population. This approach to specification of utility is hence deemed promising in applied nonmarket valuation.
    Keywords: mixed logit random utility parameters; random willingness to pay; travel cost method; destination choice modeling
    JEL: C15 C25 Q26
    Date: 2006–12–15
  25. By: Chen, Shaohua; Mu, Ren; Ravallion, Martin
    Abstract: The paper revisits the site of a large, World Bank-financed, rural development program in China 10 years after it began and four years after disbursements ended. The program emphasized community participation in multi-sectoral interventions (including farming, animal husbandry, infrastructure and social services). Data were collected on 2,000 households in project and nonproject areas, spanning 10 years. A double-difference estimator of the program ' s impact (on top of pre-existing governmental programs) reveals sizeable short-term income gains that were mostly saved. Only modest gains to mean consumption emerged in the longer term-in rough accord with the gain to permanent income. Certain types of households gained more than others. The educated poor were under-covered by the community-based selection process-greatly reducing overall impact. The main results are robust to corrections for various sources of selection bias, including village targeting and interference due to spillover effects generated by the response of local governments to the external aid.
    Keywords: Rural Poverty Reduction,Poverty Monitoring & Analysis,Economic Theory & Research,Poverty Impact Evaluation,Social Accountability
    Date: 2006–12–01
  26. By: Dubois, P.; Nauges, C.
    Abstract: We propose a structural empirical approach à la Levinsohn and Petrin (2003) to disentangle the effect of experts' grades from the effect of unobserved quality on the pricing of experience goods. Using a panel data set of 108 châteaux selling wine on the Bordeaux "en primeur" market, we provide some empirical validation for the theoretical result that the price set by wine producers is used as a signal for wine quality. We confirm that experts' grades affect producers' choice of "en primeur" price above the effect of unobserved wine quality. Our empirical results also show that failing to control for endogeneity caused by the omission of unobserved quality leads to over-estimate the influence of experts" grades on the "primeur" price. ...French Abstract : Lorsqu'un bien d'expérience est délivré sur le marché, l'opinion des experts est supposée donner de l'information sur la qualité du bien aux futurs consommateurs. Cependant, savoir si l'opinion des experts affecte la formation des prix par elle-même reste une question empirique difficile à répondre. En effet, la vraie qualité inobservée du bien rend l'opinion des experts nécessairement endogène dans une équation de prix hédonique pour des biens d'expérience. En utilisant un panel de données sur les vins de Bordeaux, les auteurs proposent une approche structurelle permettant de séparer la valeur de l'information sur la qualité donnée par les experts de l'effet de la vraie qualité.
    JEL: D82 L15 Q11 C51
    Date: 2006
  27. By: Dubois, P.; Jullien, B.; Magnac, T.
    Abstract: We develop and estimate a model of dynamic interactions where conmmitment is limited and contracts are incomplete to explain the patterns of income and consumption in village economies of less developped countries. Households can insure through both formal contracts and informal agreements, that is, agreements specifying voluntary transfers that need to be self-enforceable. This theoretical setting nests the case of complete markets when all riks can be insured by formal contracts and the case where only informal agreements are available. We derive a non-linear system of equations of interest for income and consumption. A key prediction of our model is that income and consumption are affected by lagged consumption as a consequence of the coexistence of formal and informal contracting possibilities. Using semi-parametric specifications, we prove identification, derive testable restrictions and estimate the model using data from Pakistan villages. Empirical results are consistent with the economic arguments. Incentive constraints due to self-enforcement bind with positive probability and formal contracts are used to reduce this probability. ...French Abstract : Les auteurs développent un modèle d'interactions dynamiques avec engagement limité et contrats incomplets pour expliquer les profils de revenu et de consommation dans les économies villageoises des pays en développement. Les ménages peuvent s'assurer à travers des accords formels et informels, c'est-à-dire, des accords spécifiant des transferts volontaires qui doivent être auto-exécutoire. Ils obtiennent un système d'équations non linéraires de revenu et de consommation. Une des prédictions clé du modèle est que le revenu et la consommation sont affectés par la consommation retardée à cause de la coexistence de contrats formels et informels. En utilisant une spécification semi-paramétrique, les auteurs prouvent l'identification et ils dérivent des restrictions testables qu'ils estiment sur des données du Pakistan. Les résultats empiriques confirment leurs arguments économiques.
    JEL: C14 D13 D91 L14 O12 Q0
    Date: 2006
  28. By: Richard Carson (University of California, San Diego); CLIVE GRANGER (UNIVERSITY OF CALIFORNIA); Jeremy Jackson (Scripps Institution of Oceanography, University of California, San Diego); Wolfram Schlenker (Department of Economics and School of International and Public Affairs, Columbia University)
    Abstract: Almost all fisher models assume time-invariant parameter values of the underlying biological growth function except for an i.i.d. error term. We examine the economic implications of cyclical growth parameters in both single and multi-species models, which are frequently observed in many real-world fisheries. Neither optimal harvest rates nor optimal escapement (remaining fish stock after fishing) remain constant as current models would predict. The amplitude of the optimal escapement is incrasing in the amplitude of the biological growth function. Moreover, the optimal harvest rate lags the cycle of the biological growth function, i.e., the highest harvest rate is observed after biological conditionos have started to decline and the optimum escapement level has alrady decreased. This is in sharp contrast to current policies which are in phase with biological conditions and hence imply and increasea/decrease in harvest quotas when the biological system is improving/deteriorating. In our model, harvest closures are only optimal during time periods when growth parameters are improving most rapidly. We show that once the periodicity of the biological growth function is incorporated, many of the traditional policy prescriptions reverse.
    Keywords: fisheries modeling, time varying growth rates,
    Date: 2006–07–01
  29. By: Michael J Keane; John Lennon
    Abstract: The new relational geography challenges notions of inherently coherent integrated 'territory-based' systems of relations. This paper uses network methods and correspondence analysis to try and describe some of the spatial differentiation and relational dynamics at different rural sites. The particular focus is on delineating the daily activity spaces of households and to describe the roles of local centres. The methods used do help us capture some aspects of the diffferences that exist in work, shoping and social relations and the spaces that these relations fill. The implications of the findings for local planning and admnistration are also discussed.
    Date: 2006–08

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