New Economics Papers
on Agricultural Economics
Issue of 2010‒07‒24
seven papers chosen by

  1. Agricultural Insurances Based on Meteorological Indices: Realizations, Methods and Research Agenda By Antoine Leblois; Philippe Quirion
  2. The Effect of Risk, Ambiguity and Coordination on Farmers’ Adaptation to Climate Change: A Framed Field Experiment By Francisco Alpizar; Fredrik Carlsson; Maria Naranjo
  3. Efficiency of Organic Input Units under NPOF Scheme in India By D. Kumara Charyulu; Subho Biswas
  4. Contract Design to Sequester Carbon in Agricultural Soils By Mireille CHIROLEU-ASSOULINE; Sébastien ROUSSEL
  5. The Benefits of Contaminated Site Cleanup Revisited: The Case of Naples and Caserta, Italy By Anna Alberini; Milan Šcasný; Dennis Guignet; Stefania Tonin
  6. The Economics of Collective Brands By Arthur Fishman; Israel Finkelstein; Avi Simhon; Nira Yacouel
  7. Health, Nutrition and Academic Achievement: New Evidence from India By Geeta Kingdon

  1. By: Antoine Leblois (CIRED (Centre International de Recherche sur l’Environnement et le Développement)); Philippe Quirion (CIRED, CNRS, LMD-IPSL (Laboratoire de Météorologie Dynamique – Institut Pierre-Simon Laplace))
    Abstract: In many low-income countries, agriculture is mostly rain-fed and yields highly depend on climatic factors. Furthermore, farmers have little access to traditional crop insurance, which suffers from high information asymmetry and transaction costs. Insurances based on meteorological indices could fill this gap since they do not face such drawbacks. However their implementation has been slow so far. In this article, we first describe the most advanced projects that have taken place in developing countries using these types of crop insurances. We then describe the methodology that has been used to design such projects, in order to choose the meteorological index, the indemnity schedule and the insurance premium. We finally draw an agenda for research in economics on this topic. In particular, more research is needed on implementation issues, on the assessment of benefits, on the way to deal with climate change, on the spatial variability of weather and on the interactions with other hedging methods.
    Keywords: Agriculture, Insurance, Climatic Risk
    JEL: G21 O12 Q12 Q18 Q54
    Date: 2010–06
  2. By: Francisco Alpizar (Environment for Development Center, Tropical Agricultural and Higher Education Center); Fredrik Carlsson (Göteborg University); Maria Naranjo (Environment for Development Center, Tropical Agricultural and Higher Education Center)
    Abstract: The risk of losses of income and productive means due to adverse weather associated to climate change can significantly differ between farmers sharing a productive landscape. It is important to learn more about how farmers react to different levels of risk, under measurable and unmeasurable uncertainty. Moreover, the costs associated to investments in reduced vulnerability to climatic events are likely to exhibit economies of scope. We explore these issues using a framed field experiment that captures realistically the main characteristics of production, and the likely weather related losses of premium coffee farmers in Tarrazu, Costa Rica. Given that the region recently was severely hit by an extreme, albeit very infrequent, climatic event, we expected to observe, and found high levels of risk aversion, but we do observe farmers making trade-offs under different risk levels. Although hard to disentangle at first sight given the high level of risk aversion, we find that farmers opt more frequently for safe options in a setting characterized by unknown risk. Finally, we find that farmers to a large extent are able to coordinate their decisions in order to achieve a lower cost of adaptation, and that communication among farmers strongly facilitates coordination.
    Keywords: Risk Aversion, Ambiguity Aversion, Technology Adoption, Climate change, Field Experiment
    JEL: C93 D81 H41 Q16 Q54
    Date: 2010–06
  3. By: D. Kumara Charyulu; Subho Biswas
    Abstract: This paper discusses in detail the vast and rich agricultural knowledge that India has developed since ancient times, and the entire agricultural community trying to find an alternative sustainable farming system, which is ecologically sound, economically and socially acceptable. [Working Paper No. 2010-04-01]
    Keywords: Efficiency, organic input units, DEA analysis, drivers for efficiency
    Date: 2010
  4. By: Mireille CHIROLEU-ASSOULINE; Sébastien ROUSSEL
    Abstract: According to several studies, agricultural carbon sequestration could be a relatively low cost opportunity to mitigate greenhouse gas (GHG) concentration and a promis-ing means that could be institutionalised. However the potential for additional carbon quantities in agricultural soils is critical and comes from the agricultural .rms behaviour with regards to land heterogeneity. In this paper, our aim is to set incentive mechanisms to enhance carbon sequestration by agricultural .rms. A policymaker has to arrange incentives as agricultural .rms have private information and do not spontaneously switch to the required practices. Moreover, a novelty in our paper is to show that the potential for additional carbon sequestration is similar to an exhaustible resource. As a result, we construct an intertemporal principal-agent model with adverse selection. Our contribution is to specify contracts in order to induce truthful revelation by the .rms regarding their intrinsic characteristics towards carbon sequestration, while analytically characterizing the optimal path to sequester carbon as an exhaustible resource.
    Date: 2010–07
  5. By: Anna Alberini (University of Maryland, Fondazione Eni Enrico Mattei and the School of Biological Sciences, Queen’s University); Milan Šcasný (Environment Center, Charles University); Dennis Guignet (University of Maryland); Stefania Tonin (University of Venice-IUAV)
    Abstract: Guerriero and Cairns (2009) recently estimate that contaminated sites and improper waste management result in 848 excess deaths per year in the provinces of Naples and Caserta in Southern Italy, 403 of which are fatal cancers. In the absence of estimates of the Value of a Prevented Fatality (VPF) in Italy or specific to the hazardous waste context, they use figures recommended by DG-Environment. Contrary to their claims, estimates of the VPF are available for Italy that are specific to the hazardous waste context, and for causes of death that have been linked to contaminated site exposures. We review them in this paper. We also produce new estimates of the cancer VPF using data from a recent survey conducted in Milan, Italy, in late November to mid-December 2008. The evidence points to much higher VPF figures than the ones used by Guerriero and Cairns, and hence to much larger estimates of the reduced mortality benefits of remediating the hazardous waste in the Naples and Caserta areas. We also examine the importance of the discount rates, since the mortality benefits of remediation begin in 20 years and are assumed to continue over 30 years.
    Keywords: Value of a Prevented Fatality, Stated Preferences, Hazardous Waste Sites, Contaminated Sites, Cancer, Mortality Benefits, Cost-Benefit Analysis
    JEL: I18 J17 K32 Q51 Q53
    Date: 2010–06
  6. By: Arthur Fishman (Department of Economics, Bar Ilan University); Israel Finkelstein (The Hebrew University); Avi Simhon (The Hebrew University); Nira Yacouel (The Hebrew University)
    Abstract: We consider the consequences of a shared brand name such as geographical names used to identify high quality products, for the incentives of otherwise autonomous firms to invest in quality. We contend that such collective brand labels improve communication between sellers and consumers, when the scale of production is too small for individual firms to establish reputations on a stand alone basis. This has two opposing effects on member firms’ incentives to invest in quality. On the one hand, it increases investment incentives by increasing the visibility and transparency of individual member firms, which increases the return from investment in quality. On the other hand, it creates an incentive to free ride on the group’s reputation, which can lead to less investment in quality. We identify parmater values under which collective branding delivers higher quality than is achievable by stand alone firms.
    Date: 2010–07
  7. By: Geeta Kingdon
    Abstract: Using new and unique panel data, we investigate the role of long-term health and childhood malnutrition in schooling outcomes for children in rural India, many of whom lack basic numeracy and literacy skills. Using data on students’ performance on mathematics and Hindi tests, we examine the role of the endogeneity of health caused by omitted variables bias and measurement error and correct for these problems using a household fixed effects estimator on a sub-sample of siblings observed in the data. We also present several extensions and robustness checks using instrumental variables and alternative estimators. We find evidence of a positive causal effect of long-term health measured as height-for-age z-score (HAZ) on test scores, and the results are consistent across several different specifications. The results imply that improving childhood nutrition will have benefits that extend beyond health into education.
    Keywords: Health, Nutrition, Schooling, India
    JEL: I12 I21
    Date: 2010

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