nep-agr New Economics Papers
on Agricultural Economics
Issue of 2008‒05‒24
eleven papers chosen by
Angelo Zago
University of Verona

  1. Static and Dynamic Distributional Effects of Decoupled Payments: Single Farm Payments in the European Union By Pavel Ciaian; d’Artis Kancs; Johan F.M. Swinnen
  2. Study on the scope for reconstruction of the grazing livestock sector of Xinjiang based on organic farming methods By Chai Jun; Bill Slee; Maurizio Canavari; Chen Tong; Huliyeti Hasimu
  3. Food Consumption, Paternalism and Economic Policy By Thunström, Linda
  4. Valuing environmental impacts of coastal development projects: a choice modelling application in Spain. By David Hoyos Ramos; Pere Riera Micaló; Javier Fernández Macho; Carmen Gallastegui; Dolores García
  5. On the measurement of sustainability of rural water supply in India: A Supervaluationist–Degree Theory approach By Kesavan, Pushpangadan; Gangadhara, Murugan
  6. Food price policies and the distribution of body mass index: Theory and empirical evidence from France. By Fabrice Etilé
  7. Preference Heterogeneity and Habit Persistence: The Case of Breakfast Cereal Consumption By Thunström, Linda
  8. Measuring the Impacts of Sea Level Rise on Marine Recreational Shore Fishing in North Carolina By John C. Whitehead; Ben Poulter; Christopher F. Dumas; Okmyung Bin
  9. A Study of the Provision of Environmental Information in Financial Analysts Reports By Cunningham, Gary; Hassel , Lars; Nilsson, Henrik
  10. Environmental Regulation as a Coordination Device for the Introduction of a Green Product: The Porter’s Hypothesis Revisited By Philippe Barla; Christos Constantatos; Markus Herrmann
  11. Portfolio performance and environmental risk By Olsson, Rickard

  1. By: Pavel Ciaian; d’Artis Kancs; Johan F.M. Swinnen
    Abstract: This paper analyses the distributional effects of decoupled Single Farm Payments (SFP) in the European Union. In a static world the SFP benefit only farmers, irrespective of the implemented SFP model and irrespective of whether entitlements are tradable or not, except when the size of the allocated entitlements is larger than the eligible area and/or if entrants are eligible for the SFP. Then the SFP gets either partially or fully capitalized into land values and landowners benefit. In a dynamic world the effects depend on the nature of structural change, on the tradability of entitlements, and on the implementation model.
    Keywords: Land market, agricultural policy rents, decoupled subsidies, land capitalization
    JEL: D23 D30 H21 Q12 Q18
    Date: 2008
  2. By: Chai Jun (Xinjiang Agricultural University); Bill Slee (The Macaulay Institute); Maurizio Canavari (Alma Mater Studiorum University of Bologna); Chen Tong (Xinjiang Agricultural University); Huliyeti Hasimu (Xinjiang Agricultural University)
    Abstract: This paper explores the feasibility of developing organic livestock farming in the pastoral area of Xinjiang, in order to address the problems of grassland degradation and to promote the sustainable development of the grazing livestock sector. Research shows that organic grazing farming may reduce the stocking rate of grassland and relieve the strained relationship between animal and grassland, as well between man and nature. As a result, the value of multifunctional grazing systems may be more widely recognized. As well as including production and economic objectives, cultural, social and environmental implications will also be taken into account. Additionally, herders may also have an improved source of income to poor rural people. The potential markets for organic products are very big and the traditional ruminant livestock husbandry systems in Xinjiang are very close to organic livestock farming. It is considered necessary to change from a production-oriented approach to farming system research to a wider consideration of the systems and policies needed to support the development of organic grazing livestock alongside consideration of how to fund the relevant research and training and establish the systems of quality guarantee associated with organic production.
    Keywords: Grazing Livestock, Organic Farming, Xinjiang
    JEL: Q56
    Date: 2008–04
  3. By: Thunström, Linda (Department of Economics, Umeå University)
    Abstract: The thesis consists of a summary and four papers, concerned with food consumption, behavior associated with overconsumption of food and analysis of the economic policy reforms designed to improve health. <p> Paper [I] estimates a hedonic price model on breakfast cereal, crisp bread and potato product data. The purpose is to examine the marginal implicit prices for food characteristics associated with health. A trade-off exists between health and taste. For instance, sugar, salt and fat are tasty but can be unhealthy if overconsumed; whereas fiber is unhealthy if underconsumed. If the marginal implicit price for sugar is negative, consumers value health over its taste. Our results are the marginal implicit price for sugar is negative for breakfast cereals and crisp bread—consumers value health over the taste of sugar. For salt, we find the opposite—a positive marginal implicit price, suggesting people value its taste over health. For fat, we find a negative marginal implicit price of fat in breakfast cereals and potato products containing salt, whereas we find a positive marginal implicit price of fat in hard bread and potato products that contain no salt. For the one healthy characteristic, fiber, we find a negative marginal implicit price in breakfast cereals and a positive implicit price in hard bread. <p> Paper [II] uses a general equilibrium model to derive the optimal policy if people overconsume unhealthy food due to self-control problems. Individuals lacking self-control have a preference for immediate gratification, at the expense of future health. We show the optimal policy to help individuals with self-control problems to behave rationally is a combination of subsidies for the health capital stock and the physical capital stock. <p> Paper [III] estimates a demand system for grain consumption based on household panel data and detailed product characteristics, and simulate the effect on grain consumption of economic policy reforms designed to encourage a healthier grain diet. Our results imply it is more cost-efficient to subsidize the fiber content than to subsidize products rich in fiber given the goal to increase the fiber intake of the average Swedish household. Our results also imply subsidies alone give rise to an increase in fiber, and to other unhealthy nutrients. Also, subsidies alone have negative effects on the budget. We therefore simulate the effect of policy reforms in which the subsidies are funded either by taxes on the content of unhealthy nutrients or by taxes on products that are overconsumed. Our results suggest that price instruments need to be substantial to change consumption. For instance, removing the VAT on products rich in fiber has little effect on consumption. <p> Paper [IV] explores habit persistence in breakfast cereal purchases. To perform the analysis, we use a mixed multinomial logit model, on household panel data on breakfast cereal purchases. If habit persistence in consumption is strong, short and long-run responses to policy reforms will differ. Our results are breakfast cereal purchases are strongly associated with habit persistence. Our results also imply preferences for breakfast cereals are heterogeneous over households and the strength of habit persistence is similar over educational and income groups.
    Keywords: food consumption; food characteristics; health; willingness-to-pay; habit persistence; preference heterogeneity; taxation; subsidies; quasi-hyperbolic discounting
    JEL: C35 D10 D12 D61 D62 H21 H23 I10 I18
    Date: 2008–05–15
  4. By: David Hoyos Ramos (Unidad de Economía Ambiental - Instituto de Economía Pública); Pere Riera Micaló (Universidad Autónoma de Barcelona); Javier Fernández Macho (Departamento de Economía Aplicada III); Carmen Gallastegui (Institute for Public Economics. University of the Basque Country); Dolores García (Departament d’Economia Aplicada. Universitat de les Illes Balears)
    Abstract: Developmental monetary benefits of coast artificialisation projects are rarely confronted with the environmental benefits that its conservation may entail. As a consequence, policy-makers often face decision making processes in which monetary benefits have to be balanced with physical impacts ending up in undervaluation or overvaluation of environmental aspects. Non-market valuation of coastal and marine resources is thus a growing concern in the assessment of cost-benefit analysis of coastal developmental projects. This paper attempts to estimate the effects on people’s utility of the potential environmental impacts of a new seaport in Pasaia, Spain. A choice modelling technique is proposed as a means of estimating marginal impacts for different environmental attributes of mount Jaizkibel, namely its landscape, flora, avifauna and seabed. The results from a multinomial logit model reveal that, on average, individuals would pay 1.39 euros for a one percentage protection of its landscape; 0.87 euros for protecting its flora; 0.68 euros for protecting its avifauna; and 0.63 euros for protecting its seabed.
    Keywords: choice modelling; environmental valuation; social welfare
    JEL: Q51
    Date: 2008–05–19
  5. By: Kesavan, Pushpangadan; Gangadhara, Murugan
    Abstract: The paper proposes an empirical methodology for understanding the nature and behavior of Sustainable Development as a vague and multidimensional concept by a case study of participatory and demand determined Rural Drinking water Supply systems in India. It combines for the first time, two of the most influential models – ‘Supervaluationism’ and ‘Degree Theory’- on the measurement of ‘Vagueness’, for timely public intervention in reversing the process of Un-sustainability. Analysis clearly brings out the role of institutional, financial and environmental factors that should be part of Public Policy, for ensuring sustainability of potable water supply
    Keywords: sustainability; supervaluationism; degree theory
    JEL: Q5 Q56
    Date: 2008–02–11
  6. By: Fabrice Etilé
    Abstract: This paper uses French food expenditures data to examine the effect of the prices of 23 food product categories on the distribution of Body Mass Index (BMI) in a sample of French adults. A dynamic choice model that uses standard assumptions from physiology is developed. It is shown that the slope of the price-BMI relationship is affected by the individual's Physical Activity Level (PAL). When the latter is unobserved, identification of price effects at conditional quantiles of the BMI distribution requires quantile independence between PAL and the covariates, especially income. Then, using quantile regression results, unconditional BMI distributions can be simulated for various price policies. It is found that increasing the price of beverages, fats and sugars and sweets by 10%, and decreasing the price of fruits and vegetables by 10% would reduce the prevalence of overweight and obesity by 7 and 5 percentage points respectively.
    Date: 2008
  7. By: Thunström, Linda (Department of Economics, Umeå University)
    Abstract: This paper estimates the strength and heterogeneity across households in state dependence associated with breakfast cereal consumption, where positive state dependence implies habit persistence and negative state dependence implies variety-seeking in consumption. The analysis relies on a discrete choice model and finds that breakfast cereal consumption is generally highly habitual, but the degree of habit persistence exhibits heterogeneity across households. In addition, some households can be characterized as variety-seeking. The strength of habit persistence is similar across income and educational groups. The strength of habit persistence seems to be weaker for households with several adults and children compared to one-adult-households.
    Keywords: consumer choice; habit persistence; food consumption; preference heterogeneity
    JEL: C35 D12
    Date: 2008–05–15
  8. By: John C. Whitehead; Ben Poulter; Christopher F. Dumas; Okmyung Bin
    Abstract: We develop estimates of the economic effects of sea level rise on marine recreational shore fishing in North Carolina. We estimate the relationship between angler behavior and spatial differences in beach width using the Marine Recreational Fishing Statistics Survey and geospatial data. We exploit the empirical relationship between beach width and site choice by simulating the effects of (1) sea level rise on beach width and (2) beach width on angler site choice. We find that the welfare losses are potentially substantial, ranging up to a present value of $1.26 billion over 75 years. Key Words: marine recreational fishing, travel cost method, climate change, sea level rise
    JEL: Q51
    Date: 2008
  9. By: Cunningham, Gary (Umeå School of Business); Hassel , Lars (Umeå School of Business); Nilsson, Henrik (Umeå School of Business)
    Abstract: Reporting of environmental information along with financial information has become an important research topic. Research to date has focused on the nature of the information reported by companies. This study extends prior research by examining the inclusion of environmental information by financial analysts in their research reports of companies in the chemical and in the oil and gas industries. Both companies and the financial analysts are divided into subsets by geographic region, Europe and North America. Results show that only 35 per cent of financial analysts’ reports have environmental information. Those reports that do have such information have more environmental information for North American companies than for European companies and analysts tend to report more information for companies in their regions. The chemical industry receives more attention, especially for downside information.
    Keywords: Environmental information; financial analysts’ reports; equity valuation; content analysis
    Date: 2007–11–27
  10. By: Philippe Barla (Department of Economics, Universite Laval); Christos Constantatos (Department of Economics, University of Macedonia); Markus Herrmann (Department of Economics, Universite Laval)
    Abstract: According to Porter’s hypothesis, environmental regulation increases the regulated firms’ profits. However, if a “greener” strategy is more profitable why does it need regulatory intervention in order to be implemented? Let a greener product increase the adopter’s marginal cost while providing no additional benefits during the first period. In the second period, when the product's environmental attributes become known and appreciated by consumers, the adopter enjoys higher demand. By adopting the green product alone, a firm loses profits in the first period due to a) its increased costs, and b) its reduced market share; in the second period, it enjoys additional profits due to c) its increased quality, and d) its increased market share. If both firms adopt the green product market shares remain unaffected, therefore b) and d) disappear. While simultaneously adopting the green product can be profitable for both firms, for a single firm to pioneer adoption may not be so. Environmental regulation acts, therefore, as a co-ordination device reducing market inertia. By inducing both firms to act simultaneously it allows them to pass from one Nash equilibrium to another one with higher profits.
    Keywords: Porter’s hypothesis, environmental regulation, differentiated products, coordination
    JEL: Q20 Q28 L13 L50
    Date: 2008–05
  11. By: Olsson, Rickard (Umeå School of Business)
    Abstract: This paper examines the performance of US stock portfolios constructed and rebalanced to have different environmental (EV) risk. EV risk is proxied by EV risk ratings from GES Investment Services. Portfolios with high EV risk generate higher raw returns than low EV risk portfolios, but when risk and other factors are controlled for using the three Fama-French factors and a momentum factor, the risk-adjusted returns of both high and low EV risk portfolios are not statistically different from zero. The evidence thus indicate that a portfolio of stocks with low EV risk, intended to be more responsible, neither underperform or outperform on a risk-adjusted basis.
    Keywords: Socially responsible investment; environmental risk; portfolio performance evaluation
    Date: 2007–11–24

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