New Economics Papers
on Agricultural Economics
Issue of 2009‒03‒07
nine papers chosen by

  1. Gender differentials in agricultural productivity: evidence from Nepalese household data By Thapa, Sridhar
  2. Technical efficiency, farm size and tropical deforestation in the Brazilian Amazonian Forest By Marchand, Sebastien
  3. Waiting for the Invisible Hand: Market Power and Endogenous Information in the Modern Market for Food By Trenton Smith; Hayley Chouinard; Philip Wandschneider
  4. Can payments for watershed services help save biodiversity? A spatial analysis of highland Guatemala By Pagiola, Stefano; Zhang, Wei; Colom, Ale
  5. A Government Decision Model for Invasive Species: Choosing the Most Efficient Government Program for the Management of Livestock Diseases By Zhang, Yichen; Muhammad, Andrew; Coble, Keith
  6. Land Use Change, Benefit Transfer and Ecosystem Valuation in North Georgia By Ngugi, Daniel; Mullen, Jeff; Bergstrom, John
  7. Old World versus New World: the origins of organizational diversity in the international wine industry, 1850-1914 By James Simpson
  8. Milk Marketing Order Winners and Losers By Hayley H. Chouinard; David E. Davis; Jeffrey LaFrance; Jeffrey M. Perloff
  9. Wine Taxes, Production, Aging and Quality By Rachael E. Goodhue; Jeffrey LaFrance; Leo K. Simon

  1. By: Thapa, Sridhar
    Abstract: This study analyzes productivity differentials between men and women in the peasant agriculture in Nepal. Both Cobb-Douglas and translog production functions are estimated using data from the Nepal Living Standard Survey 2003/04. Evidence is found for higher value of marginal product of adult family male than adult female, while marginal products of other inputs are found to be relatively higher than the prevailing market wages and prices, implying that these inputs have become gradually a binding constraint in production. Male managed farms produce more output per hectare with higher command in market input use, obtaining credit, and receiving agricultural extension services than female managed farms. In contrast, the result does not clearly support the hypothesis of separability or aggregation of male and female labour, but there is little justification of weak separability. Moreover, head’s sex as proxy for farm manager does not show any difference between male and female managed farms. However, the coefficients of location and household characteristics show significant variations in farm output among ethnic and caste groups residing in different ecological belts of Nepal. Overall, adult male labour is found to contribute more in production process than adult female labour.
    Keywords: gender differentials; agriculture; production functions; marginal products; Nepal
    JEL: J24 Q12 J16
    Date: 2008–12
  2. By: Marchand, Sebastien
    Abstract: The aim of this paper is to estimate the impact of farm productivity on deforestation and to analyse whether this effect depends on farm size. Census-tract-level data from the Censo Agropecuario 1995-96 is used and data collected are based on Brazilian agricultural activity. This dataset allows us to analyse the agricultural productivity and the land use across the Brazilian Legal Amazon. A two step approach is used. In the first step, a stochastic production frontier model is used in order to estimate technical efficiency and in the second one, this estimated efficiency is introduced in a land use model to estimate the impact of productivity on deforestation. We found that technical efficiency has a convex non-linear effect. This result suggests that less and more efficient farms use more land for agricultural activities and that these farms increase deforested areas. However the majority of farms are on the ascendant slope so that efficiency implies more deforestation in Brazilian Legal Amazon. Moreover farm size has a robust negative effect on deforestation. This result implies that small farms convert more natural (forested) land into agricultural land than large landowners.
    Keywords: Tropical deforestation; Productivity; Stochastic frontier model; Land use model; Brazil
    JEL: Q23 O54 O13 Q15
    Date: 2009–02–26
  3. By: Trenton Smith; Hayley Chouinard; Philip Wandschneider (School of Economic Sciences, Washington State University)
    Abstract: In many ways, the modern market for food exemplifies the economist’s conception of perfect competition, with many buyers, many sellers, and a robust and dynamic marketplace. But over the course of the last century, the U.S. has witnessed a dramatic shift away from traditional diets and toward a diet comprised primarily of processed brand-name foods with deleterious long-term health effects. This, in turn, has generated increasingly urgent calls for policy interventions aimed at improving the quality of the American diet. In this paper, we ask whether the current state of affairs represents a market failure, and—if so—what might be done about it. We review evidence that most of the nutritional deficiencies associated with today’s processed foods were unknown to nutrition science at the time these products were introduced, promoted, and adopted by American consumers. Today more is known about the nutritional implications of various processing technologies, but a number of forces—including consumer habits, costly information, and the market power associated with both existing brands and scale economies—are working in concert to maintain the status quo. We argue that while the current brand-based industrial food system (adopted and maintained historically as a means of preventing competition from small producers) has its advantages, the time may have come to consider expanding the system of quality grading employed in commodity markets into the retail market for food.
    Keywords: credence goods, history, food policy, certification
    JEL: D23 D83 I18 Q18
    Date: 2009–02
  4. By: Pagiola, Stefano; Zhang, Wei; Colom, Ale
    Abstract: Payments for environmental services (PES) are a promising mechanism for conservation. PES could either provide additional funding for protected areas, pay land users to conserve biodiversity outside protected areas, or both. For PES to work, it requires a secure long-term source of financing. Obtaining payments directly for biodiversity conservation is difficult, however. In most cases, water users are the most likely such source, either directly or indirectly. Thus the potential for PES to help conserve biodiversity depends, in a large measure, on the degree to which areas of interest for conservation of water services overlap with areas of interest for conservation of biodiversity. This paper examines the extent of such overlap in the case of highland Guatemala. The results show that this potential varies substantially within the country, with some biodiversity conservation priority areas having very good potential for receiving payments, and others little or none. Overall, about a quarter of all biodiversity conservation priority areas have potential for receiving payments. Thus PES is far from being a silver bullet for biodiversity conservation, but it can make a meaningful contribution to this objective.
    Keywords: payments for environmental services; pes; watershed; biodiversity
    JEL: Q25 Q57
    Date: 2009–01–28
  5. By: Zhang, Yichen; Muhammad, Andrew; Coble, Keith
    Abstract: The impact of invasive species has grown substantially in recent years as evident by the trends in government expenditures in response to outbreaks. In this paper, authors analyze advantages and disadvantages of current government compensation measures for invasive species. The conceptual models are built to describe the relationship between producers’ utility and the effect of adoption of different measures under different observability condition. As a case study, a survey is designed to analyze producer behavior in mitigating AI & END outbreaks.
    Keywords: Agricultural and Food Policy, invasive species, indemnification programs, insurance programs, tiered indemnification,
    Date: 2009–02
  6. By: Ngugi, Daniel; Mullen, Jeff; Bergstrom, John
    Abstract: This study seeks to forecast land use change in a North Georgia ecosystem, and estimate the economic value of the ecosystem using benefit transfer techniques. We forecast land use change based on a structural time series model and a simple growth rate model. The study suggests a lower bound willingness to pay value of about USD 16,000 per year to ensure compliance with fishing and drinking water quality standards with regard to fecal coliform bacteria and dissolved oxygen. Conservation efforts are likely to cost less than the cost of defensive behavior or ecosystem restoration.
    Keywords: Ecosystem, Economic value, North Georgia, land use, water quality, structural time series, benefit transfer, forecasting, Environmental Economics and Policy, Land Economics/Use, Q51, Q53, Q57, R14,
    Date: 2009
  7. By: James Simpson
    Abstract: Wine production in Europe today is dominated by small family vineyards and cooperative wineries, while in the New World viticulture and viniculture is highly concentrated and vertically integrated. This paper argues that these fundamental organizational differences appeared from the turmoil in wine markets at the turn of the twentieth century. As technological change endangered existing rents, growers, wine-makers, and merchants lobbied governments to introduce laws and create new institutions that regulated markets in their favor. The political voice and bargaining power of the economic agents varied greatly both within, and between, countries, leading to the introduction of very different policies.
    Keywords: Wine history, Farm organization, Vertical co-ordination, Agricultural commodity chains, Cooperatives, Appellations
    JEL: L14 N51 Q13
    Date: 2009–02
  8. By: Hayley H. Chouinard; David E. Davis; Jeffrey LaFrance; Jeffrey M. Perloff (School of Economic Sciences, Washington State University)
    Abstract: Determining the impacts on consumers of government policies affecting the demand for food products requires a theoretically consistent micro-level demand model. We estimate a system of demands for weekly city-level dairy product purchases by nonlinear three stage least squares to account for joint determination between quantities and prices. We analyze the distributional effects of federal milk marketing orders, and find results that vary substantially across demographic groups. Families with young children suffer, while wealthier childless couples benefit. We also find that households with lower incomes bear a greater regulatory burden due to marketing orders than those with higher income levels.
    Keywords: Milk, marketing orders, dairy industry regulation
    Date: 2008–12
  9. By: Rachael E. Goodhue; Jeffrey LaFrance; Leo K. Simon (School of Economic Sciences, Washington State University)
    Abstract: We consider the impact of taxes on the quantity and quality produced of goods, such as wine, for which market value accrues with age by a competitive producer. Any pair of taxes that includes a volumetric sales tax and any one of three other types of tax – an ad valorem sales tax, an ad valorem storage tax, or a volumetric storage tax – spans the full range of feasible tax revenues with positive tax rates. For any tax system that reduces quality relative to the firm’s no-tax equilibrium, there is another tax system that increases tax revenues, eliminates the quality distortion, and does not increase the quantity distortion. Many wine industry observers believe that most, if not all, existing tax systems tend to result in the suboptimal provision of quality. Our results suggest that the wide variety of wine tax systems is not prima facie evidence that these systems, or most of them, are inefficient. Provided the system includes a volumetric sales tax it may be efficient, regardless of which of the other instruments, or how many of them, are used. Assertions regarding inefficiency must be evaluated on an empirical case-by-case basis. Our analysis provides a theoretical framework for such research.
    Keywords: aging, Alchian-Allen effect, tax policy, wine
    Date: 2009–02

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