New Economics Papers
on Agricultural Economics
Issue of 2007‒02‒10
twelve papers chosen by

  1. Economic changes and afforestation incentives in rural China By Sylvie Demurger; Weiyong Yang
  2. Nonparametric Measures of Economies of Scope By Alfons Oude Lansink; Spyro Stefanou
  3. Geographic Indications for Javanese Teak: A constitutional change By Dwi R. Muhtaman; Philippe Guizol; Jean-Marc Roda; Herry Purnomo
  4. Africa's Lagging Demographic Transition: Evidence from Exogenous Impacts of Malaria Ecology and Agricultural Technology By Dalton Conley; Gordon C. McCord; Jeffrey D. Sachs
  5. Differentiated products and evasion of import tariffs By Javorcik, Beata S.; Narciso, Gaia
  6. Curvas de Engel de Alimentos, Preferencias Heterogéneas y Características Demográficas de los Hogares: Estimaciones para Argentina By Georgina Pizzolitto
  7. Managing Firm Competitiveness in Global Markets By Mark Gehlhar; Anita Regmi; Spyro Stefanou; Barry Zoumas
  8. Poverty and environmental impacts of electricity price reforms in Montenegro By Silva, Patricia; Klytchnikova, Irina; Radevic, Dragana
  9. Health Security for rural poor:study of community based health insurance By Sudha, venu Menon
  10. Measuring Environmental Efficiency of Industry: A Case Study of Thermal Power Generation in India By M N, Murty; Kumar, Surender; Dhavala, Kishore
  11. The Farm, the City, and the Emergence of Social Security By Elizabeth M. Caucutt; Thomas F. Cooley; Nezih Guner
  12. Incentives, supervision, and sharecropper productivity By Jacoby, Hanan G.; Mansuri, Ghazala

  1. By: Sylvie Demurger (HIEBS - Hong Kong Institute of Economics and Business Strategy - [The Hong Kong University], GATE - Groupe d'analyse et de théorie économique - [CNRS : UMR5824] - [Université Lumière - Lyon II] - [Ecole Normale Supérieure Lettres et Sciences Humaines]); Weiyong Yang (University of International Business and Economics (Beijing) - [University of International Business and Economics (Beijing)])
    Abstract: This paper uses provincial macro-data from the mid 1980s onwards to investigate the determinants of land-use choice in rural China, by paying particular<br />attention to the decision to plant trees as competing with agriculture. The evidence supports the importance of economic motivations in the afforestation decision. A profitseeking behavior is found to be at stake in the decision to plant trees, which is made according to both the relative profitability of forestry against agriculture, and their relative risks. Afforestation is also found to strongly depend on the pressure upon land as well as<br />on household wealth.
    Keywords: afforestation incentives; rural China
    Date: 2007–01–30
  2. By: Alfons Oude Lansink (Business Economics, Wageningen University -The Netherlands); Spyro Stefanou (Pennsylvania State University)
    Abstract: Measuring economies of scope provides a tool for explaining and predicting trends towards specialization or diversification within sectors like agriculture and horticulture. Focusing on nonparametric measurement and decomposition of scope economies into pure economies of scope, allocative efficiency, congestion efficiency and pure technical efficiency, an application to a sample of Dutch cash crop farms over the period 1995-1999 is the empirical focus. The results show that the potential economies of scope are lowered largely by allocative inefficiency and to a lesser extent by congestion inefficiencies and technical inefficiency, and the contraction impact of the various sources of inefficiencies drive these farms, on average, well into the diseconomies of scope range. The economic losses associated with allocative, congestion and technical inefficiencies lead to the potential to reduce costs by 25%, 7% and 6%, respectively. An analysis of results of diversified vis-à-vis specialized farms shows that policies should enhance particularly small and cereal farms to diversify. Also, increases of prices of pesticides and fertilizer substantially reduce the potential for cost savings from diversification. Hence fertilizer and pesticide taxes may have a large impact on the decisions of farmers to either diversify or specialize. This study also finds that capital is shareable factors of production, while labor and land are not.
    Date: 2006
  3. By: Dwi R. Muhtaman; Philippe Guizol; Jean-Marc Roda; Herry Purnomo
    Abstract: The central issue addressed in this paper is whether geographic indication (GI) can be applied as a tool to encourage some furniture industries and teak producers to take collective action to improve teak product quality and increase global market competitiveness. This paper explores the possibility of implementing GI on teak as a means to improve local community rights to manage teak resources, Perum Perhutani revenues and the perception of teak wood products on national and international markets, as well as employment in the furniture industry. The paper also discusses the institutional arrangement necessary to enable GI implementation on teak. After the 1998 financial crisis, Javanese furniture industries experienced a boom, but illegal logging in state forests surged as well. Unfortunately this development was disconnected from forest resources capacities. Stakeholders made a living from bad practices and misuse of forest resources. Furniture was rejected because of its bad quality, and wood was wasted. Instead of producing high-quality teak products, Java turned to mass production of cheap furniture for national and international markets. As a result wood supply was shrinking, putting many furniture enterprises and their hundreds of thousands of employees in jeopardy. Indonesian furniture is getting a bad reputation on the international market. Indonesians by culture have the perception that teak wood is something special, and on the world market teak is the best-known tropical species. In other good news, local community enthusiasm for planting teak is growing. Building on this we expect that GI to help maintain a common interest among stakeholders. GI designation is a sign that goods have a specific geographic origin and possess qualities or have a reputation because of that place of origin and the knowledge of local communities. Most commonly, a GI consists of the name of the place of origin of the goods. Agricultural products typically have qualities that derive from their place of production and are influenced by specific local factors, such as climate and soil.
    Keywords: Teak; Geographic Indication; Furniture; Community; Collective action
    JEL: K42 L73 O13 Q16 Q17 Q23 Q34 Q56 Q57
    Date: 2006–01
  4. By: Dalton Conley; Gordon C. McCord; Jeffrey D. Sachs
    Abstract: Much of Africa has not yet gone through a "demographic transition" to reduced mortality and fertility rates. The fact that the continent's countries remain mired in a Malthusian crisis of high mortality, high fertility, and rapid population growth (with an accompanying state of chronic extreme poverty) has been attributed to many factors ranging from the status of women, pro-natalist policies, poverty itself, and social institutions. There remains, however, a large degree of uncertainty among demographers as to the relative importance of these factors on a comparative or historical basis. Moreover, econometric estimation is complicated by endogeneity among fertility and other variables of interest. We attempt to improve estimation (particularly of the effect of the child mortality variable) by deploying exogenous variation in the ecology of malaria transmission and in agricultural productivity through the staggered introduction of Green Revolution, high-yield seed varieties. Results show that child mortality (proxied by infant mortality) is by far the most important factor among those explaining aggregate total fertility rates, followed by farm productivity. Female literacy (or schooling) and aggregate income do not seem to matter as much, comparatively.
    JEL: I1 J11
    Date: 2007–02
  5. By: Javorcik, Beata S.; Narciso, Gaia
    Abstract: Emerging literature has demonstrated some unique characteristics of trade in differentiated products. This paper contributes to the literature by postulating that differentiated products may be subject to greater tariff evasion due to the difficulties associated with assessing their quality and price. Using product-level data on trade between Germany and 10 Eastern European countries during 1992-2003, the authors find empirical support for this hypothesis. They show that the trade gap, defined as the discrepancy between the value of exports reported by Germany and the value of imports from Germany reported by the importing country, is positively related to the level of tariff in 8 out of 10 countries. Further, the authors show that the responsiveness of the trade gap to the tariff level is greater for differentiated products than for homogeneous goods. A one-percentage-point increase in the tariff rate is associated with a 0.6 percent increase in the trade gap in the case of homogeneous products and a 2.1 percent increase in the case of differentiated products. Finally, the data indicate that greater tariff evasion observed for differentiated products tends to take place through misrepresentation of the import prices.
    Keywords: Free Trade,International Trade and Trade Rules,Water and Industry,Markets and Market Access,Commodities
    Date: 2007–02–01
  6. By: Georgina Pizzolitto (Centro de Estudios Distributivos, Laborales y Sociales (CEDLAS) - Universidad Nacional de La Plata)
    Abstract: El presente trabajo analiza el gasto en alimentos que realizan los hogares en Argentina mediante la estimación de curvas de Engel, teniendo en cuenta tanto características demográficas de los hogares como la presencia de heterogeneidad en sus preferencias de consumo. La estimación de distintas formas funcionales para la curva de Engel, realizadas mediante técnicas econométricas paramétricas y semi-paramétricas, sugiere que tanto las especificaciones no lineales, como las formas flexibles de Fourier presentan un mejor ajuste de los datos. Mediante regresiones por cuantiles, se comprueba la existencia de heterogeneidad no observable en el consumo de alimentos a la vez que se confirma la importancia de características demográficas del hogar en el nivel y los patrones de consumo que éstos realizan. This paper examines food consumption in Argentinean households through the estimation of food Engel curves. It also considers households demographic characteristics and heterogeneity in consumption preferences. The estimation of different functional forms for the Engel curves, using parametric and semiparametric techniques, suggests that both, non linear and Fourier flexible functional form are the best approximations to work with and adequate represent the data. Quantile regression confirms that the relation between the share of budget spend on food and the logarithm of household expenditure per head differs at different points in the conditional distribution. Household demographic characteristics are also important in determining the share of the household budget devoted to food and the consumption patterns.
    Keywords: Consumo Alimentos, Curva de Engel, Regresión por Cuantiles, Argentina.
    JEL: D12 C14
    Date: 2007–01
  7. By: Mark Gehlhar (Economic Research Service, USDA); Anita Regmi (Economic Research Service, USDA); Spyro Stefanou (Pennsylvania State University); Barry Zoumas (Pennsylvania State University)
    Abstract: The globalization profile of US food firms is mixed. US sales from foreign direct investment is now over six times the level of exports, while US processed food trade balance has moved from +$9 billion in 1995 to -$7 billion in 2004. Competitive forces drive firms to seek new areas of growth, with either portfolio expansion or penetration and expansion in new markets. Although the forces that weigh heavily on a firm are recognized, their influence in determining a firm’s action in choosing a particular strategy is not well understood. As the nature of food manufacturing is evolving and the operational scope of a food manufacturing firm has grown from local, to regional, national, and global, is there a new role for policy? What we do know is that a firm trades with other firms and that aggregate trade patterns do not fully reflect how firms view prospects, make decisions and factor in policies as they organize themselves for trade. Addressing the potential characterizations of competitiveness for the industry and the firm followed by the conflicting influences of R&D on competitiveness, we focus on what is meant by a global food firm with the use of the experiences of three industry case studies.
    Keywords: Competitiveness, Food Manufacturing, Globalization, Case study
    JEL: L2 F2 Q18
    Date: 2006–06–16
  8. By: Silva, Patricia; Klytchnikova, Irina; Radevic, Dragana
    Abstract: The Government of Montenegro is preparing an electricity tariff reform due to recent developments in the national and regional electricity markets. Electricity tariffs for residential consumers in Montenegro are likely to gradually increase by anywhere from 40 to over 100 percent. This significant price rise will impose a heavy burden on poor households and it may adversely affect the environment. In an ex-ante investigation of the welfare impact of this price increase on households in Montenegro, the authors show that the anticipated price increase will result in a significant increase in households ' energy expenditures. A simulation of alternative policy measures analyzes the impact of different tariff levels and structures on the poor and vulnerable households in particular. Higher electricity prices could also significantly increase the proportion of households using fuelwood for space heating.
    Keywords: Energy Production and Transportation,Electric Power,Environment and Energy Efficiency,Energy and Environment,Engineering
    Date: 2007–02–01
  9. By: Sudha, venu Menon
    Abstract: ABSTRACT For many people living in developing nations, illness represents a permanent threat to their income earning capacity and, therefore, their livelihood .Health insurance has been progressively more recognized as a tool to finance healthcare provision in the developing world. The high demand for good quality healthcare and the extreme underutilization of existing health services have given rise to the need for community health insurance—an arrangement that may both increase access to healthcare as well as theoretically improve its quality. While alternative forms of healthcare financing have been scrutinized, the option of insurance seems to be promising as it offers the opportunity to pool risk by converting unpredictable healthcare costs into fixed annual premiums. The typical dialogue surrounding health financing cites three main types of insurance as viable options to provide care. First is social health insurance, a practice initiated in several European countries where the working population of society provides health funds for the entire population, working and non-working. Social health insurance utilizes basic socialist principles to hold all sections of society accountable for the good of the community. The next type of insurance model is private health insurance, a structure that generally prevails in capitalist societies. Private insurance favors those who can afford to pay regular premiums, i.e. the middle class and the wealthy. Private insurance, therefore, inherently excludes the poor and only provides benefits to paying members. Finally, and most notable in discussing health for the rural poor, is community-based health insurance (CBHI). Studies conducted in various developing countries, including India, show that community-based health insurance (CBHI) schemes are highly effective in reaching poor populations. According to Friends of Women's World Banking, CBHI is defined as "any not-for-profit insurance scheme that is aimed primarily at the informal sector and formed on the basis of a collective pooling of health risks, and the members participate in its management." Such schemes frequently function in conjunction with healthcare providers or community organizations, such as local religious institutions, self-help groups (SHGs), or non-governmental organizations (NGOs).CBHI requires that people make a small contribution (i.e. pay a premium), which is then pooled to provide benefits, such as medical costs, to those within the pool who may need assistance. Unlike social or private health insurance schemes, CBHI is distinct in that it is generally initiated and managed by the community it benefits. This characteristic of CBHI is particularly important as it entails that the features of any specific CBHI scheme tailor to the local needs of the people. Against this background, the present paper attempts to analyze the Public Private Partnership [PPP] model in Health Insurance. As an example of the above-examined PPP, Chaitanya and HDFC-Chubb General Insurance, located in the Pune district of Maharashtra is taken as case study. Chaitanya and HDFC have recently joined in an endeavor attempting to provide CBHI coverage to SHG -women and their families in the Chaitanya field area. Founded in 1993, Chaitanya focuses on the establishment and strengthening of SHGs and development through micro-finance programs. Chaitanya's work has motivated the formation of the Grameen Mahila Swayamsiddha Sangha, the first independent federation of SHGs in Maharashtra. Currently, Chaitanya also carries out developmental activities including water & sanitation, agriculture, livelihood, and health. HDFC Bank and Chubb Corporation, USA entered a venture together in 2002 to jointly offer general insurance services. Specifically, HDFC-Chubb GIC offers a rural initiatives program tailored to meet the needs of the rural poor and offer insurance services at reduced costs.
    JEL: H51
    Date: 2006–12–15
  10. By: M N, Murty; Kumar, Surender; Dhavala, Kishore
    Abstract: Technical and environmental efficiency of some coal-fired thermal power plants in India is estimated using a methodology that accounts for firm’s efforts to increase the production of good output and reduce pollution with the given resources and technology. The methodology used is directional output distance function. Estimates of firm-specific shadow prices of pollutants (bad outputs), and elasticity of substitution between good and bad outputs are also obtained. The technical and environmental inefficiency of a representative firm is estimated as 0.10 implying that the thermal power generating industry in Andhra Pradesh state of India could increase production of electricity by 10 per cent while decreasing generation of pollution by 10 percent. This result shows that there are incentives or win-win opportunities for the firms to voluntarily comply with the environmental regulation. It is found that there is a significant variation in marginal cost of pollution abatement or shadow prices of bad outputs across the firms and an increasing marginal cost of pollution abatement with respect to pollution reduction by the firms. The variation in marginal cost of pollution abatement and compliance to regulation across firms could be reduced by having economic instruments like emission tax.
    Keywords: environmental and technical efficiency; shadow prices of bad outputs; air pollution.
    JEL: Q52 Q51 Q53
    Date: 2006–04
  11. By: Elizabeth M. Caucutt; Thomas F. Cooley; Nezih Guner
    Abstract: During the period from 1880 to 1950, publicly managed retirement security programs became an important part of the social fabric in most advanced economies. In this paper we study the social, demographic and economic origins of social security. We describe a model economy in which demographics, technology, and social security are linked together. We study an economy with two locations (sectors), the farm (agricultural) and the city (industrial). The decision to migrate from rural to urban locations is endogenous and linked to productivity differences between the two locations and survival probabilities. Furthermore, the level of social security is determined by majority voting. We show that a calibrated version of this economy is consistent with the historical transformation in the United States. Initially a majority of voters live on the farm and do not want to implement social security. Once a majority of the voters move to the city, the median voter prefers a positive social security tax, and social security emerges.
    JEL: E61 H2 H55
    Date: 2007–01
  12. By: Jacoby, Hanan G.; Mansuri, Ghazala
    Abstract: Although sharecropping has long fascinated economists, the determinants of this contractual form are still poorly understood and the debate over the extent of moral hazard is far from settled. The authors address both issues by emphasizing the role of landlord supervision. When tenant effort is observable, but at a cost to the landlord, otherwise identical share-tenants can receive different levels of supervision and have different productivity. Unique data on monitoring frequency collected from sharetenants in rural Pakistan confirm that, controlling for selection, " supervised " tenants are significantly more productive than " unsupervised " ones. Landlords ' decisions regarding the intensity of supervision and the type of incentive contract to offer depend importantly on the cost of supervising tenants.
    Keywords: Contract Law,Economic Theory & Research,Investment and Investment Climate,Municipal Housing and Land,Urban Housing
    Date: 2007–02–01

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