New Economics Papers
on Agricultural Economics
Issue of 2008‒05‒10
seven papers chosen by

  1. Private ex-ante transaction costs for repeated biodiversity conservation auctions: a case study By Markus Groth
  2. Agricultural Trade Reform and Rural Prosperity: Lessons from China By Jikun Huang; Yu Liu; Will Martin; Scott Rozelle
  3. Strategic environmental policy under free trade with transboundary pollution By Sikdar, Shiva; Lapan, Harvey E.
  4. Economic and Trade Policy Impacts of Sustained High Oil Prices By Edward Christie; Mario Holzner
  5. Economic Impacts of Fall Commercial Nutrient Regulation By Otto, Daniel
  6. Stochastic Dominance, Entropy and Biodiversity Management By Catherine M. Chambers; Paul E. Chambers; John R. Crooker; John C. Whitehead
  7. Exploring Respondent’s Perception of Bid Precision in Non-Market Valuation By Christopher Azevedo; John R. Crooker; Brian Pattiz

  1. By: Markus Groth (Centre for Sustainability Management, Leuphana University of Lüneburg)
    Abstract: The European Union’s Council Regulation (EC) No 1698/2005 on support for rural development by the European Agricultural Fund for Rural Development has introduced promising changes in rewarding farmers by the implementation of conservation auctions and granting farmers’ transaction costs. The paper therefore deals with the evaluation of private transaction costs within a case study using repeated auctions to reward plant biodiversity. Based on a review of the current literature the paper develops a specific definition of transaction costs as well as a methodology to measure and calculate the farmers’ private transaction costs. The case study enfolds two field experiment auctions and two corresponding surveys. The transaction costs are measured by the use of written questionnaires and will be discussed both as a first reference value of farmers’ transaction costs as well as compared to the individual payments within the case study auctions in order to investigate the real-life performance of this specific application of repeated conservation auctions in biodiversity protection efforts.
    Keywords: agri-environmental policy, biodiversity conservation auctions, transaction costs, ecological services, plant biodiversity, experimental economics, EAFRD-Regulation
    JEL: C93 D44 D82 H41 L14 Q24 Q28 Q57 R52
    Date: 2008–05–05
  2. By: Jikun Huang; Yu Liu; Will Martin; Scott Rozelle
    Abstract: Tariffs on agricultural products fell sharply in China both prior to, and as a consequence of, China's accession to the WTO. The paper examines the nature of agricultural trade reform in China since 1981, and finds that protection was quite strongly negative for most commodities, and particularly for exported goods, at the beginning of the reforms. Since then, the taxation of agriculture has declined sharply, with the abolition of production quotas and procurement pricing, and reductions in trade distortions for both imported and exported goods. Rural well-being has improved partly because of these reforms, and also because of strengthening of markets, public investment in infrastructure, research and development, health and education, and reductions in barriers to mobility of labor out of agriculture. Many challenges remain in improving rural incomes and reducing rural poverty.
    JEL: F1 O1 Q17 Q18
    Date: 2008–04
  3. By: Sikdar, Shiva; Lapan, Harvey E.
    Abstract: We analyze the effects of free trade on environmental policies in a strategic setting with transboundary pollution. Trade liberalization can result in a race to the bottom in environmental outcomes, making both countries worse off. With command and control policies (quotas), there is no race to the bottom. However, with internationally tradable permits, unless pollution is a pure global public bad, there is a race to the bottom in environmental policy. In our model carbon leakage alone, and not a terms of trade motive, drives countries to relax domestic environmental policy. Quantity-based tools strictly welfare-dominate price-based tools under free trade.
    Keywords: Free trade; Transboundary pollution; Environmental policy; Carbon leakage; Race to the bottom
    JEL: D6 F1 H2 Q5
    Date: 2008–05–01
  4. By: Edward Christie (The Vienna Institute for International Economic Studies, wiiw); Mario Holzner (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: This study provides an overview of the most important economic and trade policy impacts of high oil prices in the European Union. The potential reasons for recent oil price increases are briefly discussed, followed by a review of the macroeconomic effects of higher oil prices, namely on growth, inflation and trade balances. Industry-specific effects are then assessed, offering both a historic perspective and descriptive elements regarding possible future developments. Price effects are also assessed, covering final energy product prices, industrial commodity prices and agricultural and food prices. The study then presents the main responses of economic agents to higher energy prices, with a particular focus on corporate supply chains, production relocations, fuel substitution efforts and energy efficiency measures. Finally, the potential for appropriate policy responses at the Community level is discussed, notably with respect to available trade policy and external policy instruments.
    Keywords: oil price, oil shock, commodity prices, corporate responses, energy efficiency, trade policy
    JEL: Q43 Q48 Q49
    Date: 2008–04
  5. By: Otto, Daniel
    Abstract: Concern that nutrient (nitrogen (N) and phosphorus (P)) runoff are seriously contributing to hypoxia in the Gulf of Mexico has led some environmental groups to call for the banning of fall fertilizer applications; especially fall anhydrous ammonia. However, restricting fertilizer application to only the spring season has agronomic as well as economic implications for farmers in the Midwest.
    Date: 2008–05–01
  6. By: Catherine M. Chambers; Paul E. Chambers; John R. Crooker; John C. Whitehead
    Abstract: In this paper we develop a model of population dynamics using the Shannon entropy index, a measure of diversity that allows for global and specific population shocks. We model the effects of increasing the number of parcels on biodiversity, varying the number of spatially diverse parcels to capture risk diversification. We discuss the concepts of stochastic dominance as a means of project selection, in order to model biodiversity returns and risks. Using a Monte Carlo simulation we find that stochastic dominance may be a useful theoretical construct for project selecitons but it is unable to rank every case. Key Words: Stochastic Dominance, Entropy, Biodiversity Management
    JEL: Q24
    Date: 2008
  7. By: Christopher Azevedo (University of Central Missouri); John R. Crooker (University of Central Missouri); Brian Pattiz (Iowa State University)
    Abstract: Bid design is an important component of the nonmarket valuation process. To date, no research has been done on the possible effects of using round dollar amounts. It seems reasonable to believe that respondents may respond to round dollar amounts differently than they would respond to bids that include both dollar and cent amounts. One possibility is that the respondent may infer that the dollar/cent bids are more precise estimates of the true cost than the round dollar amount, and therefore put more thought into their response to survey questions. In order to explore this idea, we test whether the use of a precise versus imprecise bid design influences respondent’s willingness to pay. In particular, our sample of survey recipients was stratified into two groups based on whether they were presented with imprecise or precise bids (round dollar bids or dollar/cent bids). Precise bids were generated by adding or subtracting a randomly-drawn number of cents (between -200 and +200 cents) to each of the imprecise bid levels. We explore this issue in the context of a valuation project concerned with The Battle of Lexington State Historic Site in Lexington, MO.
    Date: 2008–05

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