New Economics Papers
on Agricultural Economics
Issue of 2011‒11‒28
38 papers chosen by

  1. Land Markets in the EU Candidate Countries of Croatia, Former Yugoslav Republic of Macedonia and Turkey By Bojnec, Stefan
  2. Developments in the Agricultural and Rural Capital Market of the Former Yugoslav Republic of Macedonia By Angelova, Biljana; Bojnec, Stefan
  3. Do agricultural subsidies crowd out or stimulate rural credit institutions? The Case of CAP Payments By Ciaian, Pavel; Pokrivcak, Jan
  4. Agricultural and Rural Capital Markets in the EU Candidate Countries: Croatia, the Former Yugoslav Republic of Macedonia and Turkey By Bojnec, Stefan
  5. Productivity and Credit Constraints Firm-Level Evidence from Propensity Score Matching By Ciaian, Pavel; Falkowski, Jan; Kancs, d'Artis; Pokrivcak, Jan
  6. Separability between own food production and consumption in Turkey By Hasan Tekguc
  7. Effects of Maize Fertilizer Subsidies on Food Security in Malawi By Bentry Mkwara; Dan Marsh
  8. The valuation of biodiversity conservation by the South African Khomani San "bushmen" community By Johane Dikgang; Edwin Muchapondwa
  9. Small and as Productive : Female Headed Households and the Inverse Relationship between Land Size and Output in Kenya By Mwangi wa Githinji; Charalampos Konstantinidis; Andrew Barenberg
  10. Farm Level Capital: Capital positions, structures, the dynamics of farm level investments, capital accumulation and leverage positions By Myyrä, Sami; Pietola, Kyosti; Heikkilä, Anna-Maija
  11. The Penetration of Financial Instability in Agricultural Credit and Leveraging By Pietola, Kyösti; Myyrä, Sami; Heikkilä, Anna-Maija
  12. The Optimal Allocation of Global Land Use in the Food-Energy-Environment Trilemma By Steinbuks, Jevgenijs; Hertel, Thomas
  13. Industry-science connections in agriculture: Do public science collaborations and knowledge flows contribute to firm-level agricultural research productivity? By Toole, Andrew A.; King, John L.
  14. Rural Labour Market Developments in the Former Yugoslav Republic of Macedonia By Janeska, Verica; Bojnec, Stefan
  15. Strategic Pricing and Health Price Policies By Bonnet, Céline; Réquillart, Vincent
  16. A century of growth? A history of tobacco production and marketing in Malawi 1890-2005 By Prowse, Martin
  17. Size-class and returns to cultivation in India: A Cold case reopened By Sarthak Gaurav; Srijit Mishra
  18. The Welfare Effect of Common Property Forestry Rights:Evidence from Ethiopian Villages By Dambala Gelo; Steven F. Koch
  19. A comparative value chain analysis of burley tobacco in Malawi - 2003/04 and 2009/10 By Prowse, Martin
  20. What drives the global land rush? By Rabah Arezki; Klaus Deininger; Harris Selod
  21. Aligning Local Incentives to Regional Goals: Water Conservation in the Upper Tigris-Euphrates River System By Hasan Tekguc
  22. Coping with Fuel Wood Scarcity: Household Responses in Rural Ethiopia By Abebe Damte; Steven F. Koch; Alemu Mekonnen
  23. An Empirical Investigation of the Relationship between Food Insecurity, Landlessness, and Violent Conflict in Pakistan By Sadia Mariam Malik
  24. The fate of Zimbabwe's children: Insights from changes in nutrition outcomes, 1999-2006 By Obert Pimhidzai
  25. Poverty and health behaviour: Comparing socioeconomic status and a combined poverty indicator as a determinant of health behaviour By Aue, Katja; Roosen, Jutta
  26. Fiscal Reform for a Stronger Fairer and Cleaner Mexican Economy By Nicola Brandt; Rodrigo Paillacar
  27. Land, Poverty and Human Development in Kenya By Mwangi wa Githinji
  28. The Persistence and Transition of Rural Poverty in Pakistan: 1998-2004 By G. M. Arif; Nasir Iqbal; Shujaat Farooq
  29. An evaluation of government proposed restrictions on television advertising of food products to children By Joshua P. Berning; Rui Huang; Adam Rabinowitz
  30. Measuring Consumers' Attachment to Geographical Indications: Implications for Competition Policy By Hassan, Daniel; Monier-Dilhan, Sylvette; Orozco, Valérie
  31. Pay-as-you-Drive Vehicle Insurance as a Tool to Reduce Crash Risk: Results so far and Further Potential By Jan Willem Bolderdijk; Linda Steg
  32. The Economic Impact of Water Restrictions on Water-Dependent Business in South East Queensland, Australia By Doreen Burdack
  33. An Informationalised Economy in Africa? The Impact of New ICT on the Wood Products Industry in Durban, South Africa By Pádraig Carmody;
  34. Why Does It Always Rain on Me? A Spatio-Temporal Analysis of Precipitation in Austria By Nikolaus Umlauf; Georg Mayr; Jakob Messner; Achim Zeileis
  35. General knowledge about climate change, factors influencing risk perception and willingness to insure By Menny, Claas; Osberghaus, Daniel; Pohl, Max; Werner, Ute
  36. Contingent Valuation of Community Forestry in Ethiopia: Should We Care About Preference Anomalies in Double-Bounded CVM? By Dambala Gelo; Steven F. Koch
  37. Hedonic Prices and Implicit Markets: Estimating Marginal Willingness to Pay for Differentiated Products Without Instrumental Variables By Kelly C. Bishop; Christopher Timmins
  38. A Mechanism Design Approach to Climate Agreements By Martimort, David; Sand-Zantman, Wilfried

  1. By: Bojnec, Stefan
    Abstract: The paper provides an overview and a comparison of land markets covering the three candidate countries for European Union membership: Croatia, the Former Yugoslav Republic (FYR) of Macedonia and Turkey. We analyse and compare agricultural land structures and factors driving land markets. The analyses are based on the available cross-section and time-series evidence on agricultural land structures and land productivity (yields). The land productivity measured by production per hectare of agricultural land varies between the three countries. Agricultural land structures are the result of historical evolution in land markets and land-leasing developments with additional different institutional environments and agrarian and land reforms.
    Keywords: Land markets, land structures, land productivity, candidate countries, European Union, Agricultural and Food Policy, Land Economics/Use, Political Economy,
    Date: 2011–09
  2. By: Angelova, Biljana; Bojnec, Stefan
    Abstract: The undeveloped rural capital market in the Former Yugoslav Republic of Macedonia is constrained by an urbanârural development gap, with limited capacities for rural development and imperfections in the rural capital market. Among the most striking hindrances are the illegal status of a large share of agricultural buildings and other real estate in rural areas, particularly on the individual family farms that prevail in the country, and the insufficient knowledge and abilities of individual farmers in applying for credit. National, EU and other donor funds are being used to improve knowledge, skills and other human resources, and to address the illegal status of buildings and facilities. During the most recent years, government support for agricultural, rural and regional development has been introduced to promote good agricultural practices, production and economic activity in rural areas. The elimination of imperfections and improvements to the functioning of the capital market â making access to credit and funds easier, especially for small-scale family farms and for rural development â are seen as measures contributing to agriculture and more balanced rural and regional development.
    Keywords: Capital market, farm income, subsidies, loans, agricultural and rural development, Former Yugoslav Republic of Macedonia, Agricultural and Food Policy, Agricultural Finance, Political Economy,
    Date: 2011–10
  3. By: Ciaian, Pavel; Pokrivcak, Jan
    Abstract: In this paper we estimate the impact of subsidies from the EUâs common agricultural policy on farm bank loans. According to the theoretical results, if subsidies are paid at the beginning of the growing season they may reduce bank loans, whereas if they are paid at the end of the season they increase bank loans, but these results are conditional on whether farms are credit constrained and on the relative cost of internal and external financing. In the empirical analysis, we use farm-level panel data from the Farm Accountancy Data Network to test the theoretical predictions for the period 1995â2007. We employ fixed-effects and generalised method of moment models to estimate the impact of subsidies on farm loans. The results suggest that subsidies influence farm loans and the effects tend to be non-linear and indirect. The results also indicate that both coupled and decoupled subsidies stimulate long-term loans, but the long-term loans of large farms increase more than those of small farms, owing to decoupled subsidies. Furthermore, the results imply that short-term loans are affected only by decoupled subsidies, and they are altered by decoupled subsidies more for small farms than for large farms; however, when controlling for endogeneity, only the decoupled payments affect loans and the relationship is non-linear.
    Keywords: Agricultural and Food Policy, Agricultural Finance, Political Economy,
    Date: 2011–09
  4. By: Bojnec, Stefan
    Abstract: This paper analyses agricultural and rural capital factor markets in the three European Union candidate countries: Croatia, the Former Yugoslav Republic (FYR) of Macedonia and Turkey. Aggregate capital market indicators and their dynamics, and factors driving agricultural and rural capital markets are analysed and compared in these countries. In general, agricultural and rural capital markets show similarities with general capital market developments, but agricultural and rural capital markets are facing specific credit constraints related to agricultural assets and rural fixed asset specificities, which constrain their mortgages and collateral use. Credit market imperfections have limited access to the investment credits necessary for the restructuring of small-scale individual farms. Government transfers are used to differing extents in the candidate countries, but generally tend to increase over time. Remittances and donor funds have also played an important role in agricultural and rural economy investments.
    Keywords: Capital market, agriculture and rural areas, European Union, candidate countries, Agricultural and Food Policy, Agricultural Finance, Political Economy,
    Date: 2011–10
  5. By: Ciaian, Pavel; Falkowski, Jan; Kancs, d'Artis; Pokrivcak, Jan
    Abstract: Drawing on a unique, farm-level panel dataset with 37,409 observations and employing a matching estimator, this paper analyses how farm access to credit affects farm input allocation and farm efficiency in the Central and Eastern European transition countries. We find that farms are asymmetrically credit constrained with respect to inputs. Farm use of variable inputs and capital investment increases up to 2.3% and 29%, respectively, per â¬1,000 of additional credit. Our estimates also suggest that farm access to credit increases total factor productivity up to 1.9% per â¬1,000 of additional credit, indicating that an improvement in access to credit results in an adjustment in the relative input intensities on farms. This finding is further supported by a negative effect of better access to credit on labour, suggesting that these two are substitutes. Interestingly, farms are found not to be credit constrained with respect to land.
    Keywords: Agricultural and Food Policy, Agricultural Finance, Political Economy,
    Date: 2011–09
  6. By: Hasan Tekguc (Mardin Artuklu Univeristy)
    Abstract: Complete markets imply the separation of food production and consumption decisions such that they can be modeled to occur sequentially and can be studied independently. Separation is very often assumed implicitly in empirical studies of food demand. If there is such separation, then food sourced within the household should not have any influence upon the budget share of each food group. Using this insight, this paper first develops a procedure to test for the separation of household food production and consumption decisions. Furthermore, it incorporates the testing procedure into the Almost Ideal Demand Systems model and utilizes survey data from 2003 for Turkey for empirical testing. It concludes that the separation assumption is unwarranted for Turkey. Next, It investigates the extent of bias in elasticity estimates when separation assumption is unwarranted. It concludes that ignoring the nonseparation of consumption and production decisions in rural areas leads to significant overestimation of food expenditure elasticity for the dairy products and eggs and own-price elasticity for bread and cereals.
    Keywords: Agricultural household models, own-produced food consumption, Turkey, elasticity estimates, dairy products
    JEL: Q12 D12 D13
    Date: 2011–04
  7. By: Bentry Mkwara (University of Waikato); Dan Marsh (University of Waikato)
    Abstract: This study employs spatial analysis to examine the impact of smallholder fertilizer subsidies on national and household food security in Malawi. It illustrates that at national level, food security is positively linked to fertilizer subsidies. However, at household level, maize production is heavily skewed with the south lagging behind the centre and the north. In the short-to-medium term, replacing the current countrywide subsidy program with a more targeted one is highly recommended. Furthermore, by diversifying into other crops or small-scale businesses, smallholders may be able to increase their income and hence food buying power.
    Keywords: maize; subsidy; food security; Malawi
    JEL: C01 Q18
    Date: 2011–11–18
  8. By: Johane Dikgang; Edwin Muchapondwa
    Abstract: The restitution of land to the Khomani San "bushmen" and Mier "agricultural" communities in May 2002 marked a significant shift in conservation in the Kgalagadi area in South Africa. The Khomani San and Mier communities were awarded land inside and outside the Kgalagadi Transfrontier Park. Given that the Khomani San interact more with nature, biodiversity conservation will only benefit from the land restitution in this case if the Khomani San are good environmental stewards. Therefore, this paper uses the contingent valuation method to investigate the values assigned to biodiversity conserved under the various forms of land tenure arrangements by the Khomani San in the Kgalagadi area and compares them to similar valuations by the adjacent Mier community. The proposed conservation programme sought to plant as many native trees, shrubs and grasslands as required to reduce biodiversity loss by 10% in terms of the quantities of each of the selected major species of the area. Despite the fact that the conservation programme has both winners and losers when implemented under any of the three land tenure arrangements considered, the findings suggest that the Khomani San, whose attitudes towards modern conservation have not been evaluated until now, and the adjacent Mier community generally attach a significant economic value to biodiversity in their area. The net economic value for conserving biodiversity under the various forms of land tenure arrangements by the Khomani San ranged from R928 to R4 672 relative to the Mier community’s range of R25 600 to R64 000. However, for both communities, in order for all members of the local communities to support biodiversity conservation unconditionally, mechanisms for fair distribution of the associated costs and benefits should be put in place.
    Keywords: biodiversity, contingent valuation, Khomani San, Kgalagadi, land restitution
    JEL: Q01 Q53 Q57
    Date: 2011
  9. By: Mwangi wa Githinji (University of Massachusetts Amherst); Charalampos Konstantinidis (University of Massachusetts Amherst); Andrew Barenberg (University of Massachusetts-Amherst)
    Abstract: Access to land and particularly its distribution has reemerged as an important part of both academic and policy discussions in the last decade, leading to the resuscitation of the debate on the relationship between size of holdings and output per land unit. Across the world, studies have suggested the existence of a decreasing relationship between land size and output per unit of land. The most-widely accepted explanation for this relationship is that households with smaller holdings tend to be labor rich relative to land, and therefore can achieve higher output through the increased application of labor. Despite the rich literature on this topic there has been little work on whether this relationship is valid for female-headed households, particularly in the case of African countries. Past African studies have found female-headed households to be smaller by close to one adult in comparison to male-headed households. Given this difference one would expect there to be a difference in the outcome of land redistribution for different types of households, ceteris paribus. Additionally, the aggregate impact in African countries could be substantial, as female-headed households comprise in several cases up to 30 percent of the rural households. In this paper we will examine empirically whether the inverse size and output relationship is different between female and male headed households in the case of Kenya, using the Kenya Integrated Household Budget and Expenditure Survey of 2006, which includes modules on agricultural holdings and agricultural output in addition to the standard demographic characteristics. By controlling for the endogeneity of crop choice and fertilizer use we are able to find that cash crop production and human capital, and not differences in household size, determines the differences in male and female headed land productivity. Hence, our study goes beyond the simple discussion of the inverse relationship between land size and output per unit and the potential impact of redistribution. Specifically we will be able to address the kind of broad rural development policies in addition to land redistribution that would allow female headed households to do at least as well as (if not better than) male headed households. JEL Categories: J16, O13, Q15
    Keywords: Agriculture, Gender, Kenya, Africa, Crop Choice, Land Productivity
    Date: 2011–11
  10. By: Myyrä, Sami; Pietola, Kyosti; Heikkilä, Anna-Maija
    Abstract: This paper aims to describe and highlight the key issues of farm capital structures, the dynamics of investments and accumulation of farm capital, and the financial leverage and borrowing rates on farms in selected European countries. Data collected from the Farm Account Data Network (FADN) suggest that the European farming sector uses quite different farm business strategies, capabilities to generate capital revenues, and segmented agricultural loan market regimes. Such diverse business strategies have substantial, and perhaps more substantial than expected, implications for the financial leverage and performance of farms. As an illustration, the financial risks clearly increased in the Danish agricultural sector with loan rates following an upward sloping trend in 2006; the first sign of the forthcoming financial crisis that may also severely hit highly leveraged agricultural firms. By using standard measures for farm assets and lending rates, we reveal that countries adopt different approaches to evaluating agricultural assets, or the agricultural asset markets simply differ substantially depending on the country in question. This has implications for most of the financial indicators. In those countries that have seen rapidly increasing asset prices at the margin, which were revised accordingly in the accounting systems for the whole stock of assets, firm values increased significantly, even though the firms had been disinvesting. If there is an asset price bubble and it bursts, there may be serious knock-on effects for some countries. The large variation in leverage positions and their substantial decrease over time raises new issues to be addressed in more analytical studies.
    Keywords: Agricultural and Food Policy, Agricultural Finance, Political Economy,
    Date: 2011–10
  11. By: Pietola, Kyösti; Myyrä, Sami; Heikkilä, Anna-Maija
    Abstract: This paper describes the aggregate rural capital markets of the EU and the main differences between the markets of its member countries. The results of our study suggest that the agricultural credit markets are still quite segmented and the segments are country- rather than currency- or region-specific. Financial instability in Europe is also penetrating the agricultural sector and the variation of interest rates for agricultural credit is increasing across countries. Perhaps the most dramatic signal of growing financial instability is that the financial leverage (gearing rate) of European farms rose in 2008 by almost 4 percentage points, from 14 to 18%. The 4 percentage-point annual rise was twice the 2 percentage-point rise observed during the economic recession in the late 1980s and early 1990s. The distribution of the financial leverage of agriculture across countries does not, however, reflect the distribution of country-specific risk premiums in the manner that they are observed in government bond yields. Therefore, in those countries that have the weakest financial situation in the public sector and in which the bond markets are encumbered with high country-specific risk premiums, the agricultural sector is not directly exposed to a very large risk of increasing interest rates, since it is not so highly leveraged. For example in Greek and Spanish agriculture, the financial leverage (gearing) rate is only 0.6% and 2.2% respectively, while the highest gearing rates are found elsewhere (in Denmark), reaching 50%.
    Keywords: Agricultural and Food Policy, Agricultural Finance,
    Date: 2011–09
  12. By: Steinbuks, Jevgenijs; Hertel, Thomas
    Abstract: This study analyzes the optimal allocation of the world's land resources over the course of the next century in the dynamic forward-looking framework, which brings together distinct strands of economic, agronomic, and biophysical literature and incorporates key drivers affecting global landuse. We show that, while some deforestation is optimal in the near term, the desirability of further deforestation is elimated by mid-century under the baseline scenario. While the adverse productivity shocks from climate change have a modest effect on global land use, when combined with high growth in energy prices they lead to significant deforestation and higher GHG emissions than in the baseline. Imposition of GHG emissions constraint further heightens the competition for land, as fertilizer use declines and land-based mitigation strategies expand. However, the effectiveness of such a pre-announced constraint is completely diluted by intertemporal substitution of deforestation which accelerates prior to imposition of the target.
    Date: 2011
  13. By: Toole, Andrew A.; King, John L.
    Abstract: Prior research shows long-run productivity growth in agriculture is associated with increases in the stock of public scientific knowledge and private patented inventions. However, private inventions may be a function of the stock of public knowledge. In this paper, we examine the possibility that public knowledge contributes to productivity through its relationship with private sector invention. Our analysis identifies connections between the stock of public knowledge and private firm R&D and examines whether the degree of 'connectedness' to public science is associated with greater firm-level research productivity in agriculture. Bibliographic information identifies the nature and degree to which firms use public agricultural science through citations and collaborations on scientific papers. Fixed effects models show that greater citations and collaborations with university researchers are associated with greater private agricultural research productivity. --
    Keywords: Public science,research productivity,patents,citations,collaboration,R&D,bibliometrics
    JEL: Q16 O31
    Date: 2011
  14. By: Janeska, Verica; Bojnec, Stefan
    Abstract: The significant changes in the quantitative and qualitative characteristics of human resources in rural Macedonia can be explained by the continued trend of emigration from villages to urban areas and abroad. The intensity of emigration has altered the demographic structure and reproductive base of the rural population, along with the income of rural households. The rural and agricultural labour market faces a mismatch with respect to the unfavourable age, education and spatial distribution of the total labour force. A reduction in the participation of women in the agricultural labour force is a new feature. The overall transformation is apparent in the income structure of rural households. An increase in the share of households with mixed income sources notably stems from households that receive remittances and foreign currency funds from family members abroad. The demographic revitalisation of rural areas depends on economic revitalisation, with a more rational use of the labour force and human resources, as well as a restructuring of agricultural production and agricultural holdings. In addition, improvements are necessary in the functioning of market institutions to better meet the needs of smaller farmers and the rural economy.
    Keywords: Rural labour market, agricultural transformation, rural households, emigration process, rural economy business management, Agricultural and Food Policy, Labor and Human Capital, Political Economy,
    Date: 2011–09
  15. By: Bonnet, Céline; Réquillart, Vincent
    Abstract: Healthier food diet is likely to prevent numerous non communicable diseases. Then there is a growing interest in evaluating the impact of food price taxation on food consumption. However, strategic reactions of both manufacturers and retailers are missing in empirical analysis. Rather, passive pricing is assumed. We develop a structural econometric model, to analyze vertical relationships between the food industry and the retail industry. We apply this model to the beverage industry and consider taxation of sugar. After selecting the ’best’ model of vertical relationships, we simulate different taxation scenarios. We consider excise tax as well as ad valorem tax. We find that firms behave differently when facing an ad valorem tax or an excise tax. Excise tax is overshifted to consumer prices while ad valorem tax is undershifted to consumer prices. We find that an excise tax based on sugar content is the most efficient at reducing soft drink consumption. Our results also indicate that ignoring strategic pricing by firms leads to misestimate the impact of taxation by 15% to 40% depending on the products and the tax implemented.
    Keywords: excise tax, ad valorem tax, vertical contracts, strategic pricing, differentiated products, soft drinks
    JEL: H32 L13 I18
    Date: 2011–04
  16. By: Prowse, Martin
    Abstract: During the past century tobacco production and marketing in Nyasaland/Malawi has undergone periods of dynamism similar to changes since the early 1990s. This article highlights four recurrent patterns. First, estate owners have either fostered or constrained peasant/smallholder production dependent on complementarities or competition with their estates. Second, rapid expansion of peasant/smallholder production has led to three recurrent outcomes: a large multiplier effect in tobacco-rich districts; re-regulation of the marketing of peasant/smallholder tobacco by the (colonial) state; and, lastly, concerns over the supply of food crops. The article concludes by arguing that whilst the reform of burley tobacco production and marketing in the 1990s engaged with the first two issues, it may have benefitted from paying greater attention to the latter two issues as well.
    Date: 2011–11
  17. By: Sarthak Gaurav (Indira Gandhi Institute of Development Research); Srijit Mishra (Indira Gandhi Institute of Development Research)
    Abstract: This paper investigates the relationship between returns to cultivation per hectare and size-class of land cultivated in India, using unit level data from the 59th round National Sample Survey, 2003. The analysis is done separately for `kharif' and `rabi' - for total value of cultivation from all crops at the all India level. The empirical evidence rejects the null hypothesis of no relationship and points to the existence of an inverse association. We argue that the efficiency of the small-holders has to be taken with a pinch of salt because their low absolute returns brings into focus the question of their livelihood sustainability which is further aggravated on account of higher unit costs. Being the first exercise in a series of proposed explorations into disaggregated analyses across states, and for specific crops, it opens up the classic debate on farm size and productivity in the 21st century.
    Keywords: agrarian crisis, agriculture, efficiency, livelihood sustainability, NSS, productivity, size-class
    JEL: O13 Q12
    Date: 2011–10
  18. By: Dambala Gelo (Department of Economics, University of Pretoria); Steven F. Koch (Department of Economics, University of Pretoria)
    Abstract: In this study, welfare impacts associated with a unique common-property forestry program in Ethiopia were examined. This program is different from other programs, because it is two-pronged: a community forest is developed and additional support is provided for improved market linkages for the community’s forestry products. The treatment effects analysis is based on both matching, which assumes random treatment assignment conditional on the observable data, and instrumental variable (IV) methods, which relax the matching assumptions. Data for the analysis is taken from selected villages in Gimbo district, southwestern Ethiopia. The program was found to raise the average welfare of program participant households. Correcting for selection into the program led to both increased welfare impacts and less precise estimates, as is common in IV analyses. The analysis results underscore the benefits to be derived from expanding the current forestry management decentralization efforts, although these benefits, given the design of the program, cannot be separated from the benefits to be derived from increasing market access for forestry products. However, the evidence suggests that placing property rights in the hands of those closest to the forest, combined with improved forest product market linkages, offers one avenue for both rural development and environmental improvement.
    Keywords: community forestry, treatment effects, IV, matching and Ethiopia
    Date: 2011–11
  19. By: Prowse, Martin
    Abstract: This article conducts a value chain analysis of smallholder burley tobacco production in Malawi for the 2003/04 and 2009/10 agricultural seasons. The comparison suggests in 2003/04 smallholder profits from growing burley were limited by two main factors: first, the practices of leaf merchant companies on the auction floors who operated as a cartel (and governed the burley supply thread); and secondly, by inefficient marketing arrangements. By the 2009/10 season the rents, governance and systemic efficiency within the supply thread had changed considerably: there was greater competition on the auction floors largely due to direct state intervention (which increased growers' net margins in nominal terms), improvements in marketing arrangements, tighter state regulation (including the introduction of minimum prices for grades of burley) and increased systemic efficiency (through a rapid expansion of contract farming). The article concludes by highlighting some of the opportunities and threats that this form of vertical integration poses smallholder growers.
    Date: 2011–11
  20. By: Rabah Arezki; Klaus Deininger; Harris Selod
    Abstract: This paper studies the determinants of foreign land acquisition for large-scale agriculture. To do so, gravity models are estimated using data on bilateral investment relationships, together with newly constructed indicators of agro-ecological suitability in areas with low population density as well as indicators of land rights security. Results confirm the central role of agro-ecological potential as a pull factor. In contrast to the literature on foreign investment in general, the quality of the business climate is insignificant whereas weak land governance and tenure security for current users make countries more attractive for investors. Implications for policy are discussed.
    Keywords: Agriculture , Agroindustries , Demand , Economic models , Foreign investment , Land tenure ,
    Date: 2011–10–31
  21. By: Hasan Tekguc (Mardin Artuklu Univeristy)
    Abstract: Instead of international agreement between Syria, Iraq, and Turkey, the best hope for sustainable water conservation in the Euphrates-Tigris river basin lies with policies that can be justified on individual and local grounds within Turkey: reducing water run-off and accompanied pollution; reducing soil salinity; developing drought resistant strains of crops; and storing water as an insurance against future droughts that are likely to increase in occurrence and intensity as a result of climate change induced extreme weather. After reviewing the predictions on climate change for the region, irrigation related problems including out-migration, I evaluate policy options for water conservation: i) agricultural training and extension services, ii) escalating user fees for water to encourage conservation at micro level, iii) reforming of Water User Associations (WUAs). The least controversial policy to pursue is on-the-ground agricultural training and extension. Unfortunately, implementing escalating user fees for water – the most advocated solution – cannot be separated from democratizing WUAs – the most vexing problem – to open board seats and management to ordinary members.
    Keywords: South-eastern Turkey, climate change, salinity, migration, Water User Associations
    JEL: Q53 Q57 H41
    Date: 2011–02
  22. By: Abebe Damte (Department of Economics, University of Pretoria); Steven F. Koch (Department of Economics, University of Pretoria); Alemu Mekonnen (School of Economics, Addis Ababa University)
    Abstract: This study examines the coping mechanisms applied by rural households in the face of fuel wood scarcity by using survey data from randomly selected rural households in Ethiopia. The determinants of collection of other biomass energy sources were also examined. The results of the empirical analysis show that rural households residing in forest-degraded areas respond to fuel wood shortages by increasing their labour input to fuel wood collection. However, for households in high forest cover regions, forest stock and forest access may be more important factors than scarcity of fuel wood in determining household’s labour input to fuel wood collection. The study also finds that there is limited evidence of substitution between fuel wood and dung or fuel wood and crop residues. Therefore, supply-side strategies alone may not be effective in addressing the problem of forest degradation and biodiversity loss. Any policy on natural resource management, especially related to rural energy, should make a distinction between regions with different levels of forest degradation.
    Keywords: Fuel wood, labor allocation, biomass, rural Ethiopia
    Date: 2011–11
  23. By: Sadia Mariam Malik (Pakistan Institute of Development Economics, Islamabad.)
    Abstract: This study is an attempt to examine empirically the association between socio-economic measures of deprivation—such as food insecurity, landlessness, unemployment, and human under-development—and the incidence of violent conflict as measured by the number of violent attacks across districts in Pakistan. The study uses a linear probability model in which the dependent variable is defined on the basis of the presence or absence of violent attacks in a particular district. The results of the study indicate that in addition to the provincial-level fixed characteristics, landlessness and food insecurity are positively and robustly associated with the probability of violent attacks across districts in Pakistan. Quite contrary to the general impression held, the number of madrassahs (religious seminaries), employment rate, and literacy rate appear to be statistically irrelevant, on average, in terms of determining the probability of the presence of violent conflict across districts in Pakistan. While emphasising the need to collect better data on the intensity of violent conflict— to take into account both the incidence as well as the origin of violent attacks across districts in Pakistan—the study raises some important questions regarding the role of landlessness and food insecurity that need to be investigated further in future studies on socio-economic drivers of violent conflict in Pakistan.
    Keywords: Violent Conflict, Militancy, Food Insecurity, Landlessness, Pakistan
    JEL: O29 D63 D74 F52
    Date: 2011
  24. By: Obert Pimhidzai (World Bank)
    Abstract: The economic situation in Zimbabwe deteriorated significantly between 2000 and 2009. However, little empirical effort has been directed towards analysing changes in outcomes at micro levels during this challenging period. This paper therefore investigates changes in welfare during this period, with specific reference to child health outcomes. In addition to using height and weight for age as proxies for welfare, the analysis further overcomes the absence of consumption data expenditure by using a food variety score to proxy for access to food and an asset index based on principal component analysis to provide an alternative for economic ranking. Results from a comparative analysis of the 1999 and 2005/6 DHS data show that average height and weight for age z-scores for children aged 5 years or under worsened by 19% and 16% respectively while food consumption declined by 34%. These declines were across the entire wealth distribution but were more pronounced among children in middle quartile and the poorest households, but least for the rich. Multivariate regressions of height and weight for age show that a large part of their decline between 1999 and 2005/06 is explained by the deterioration in access to food over this period. Oaxaca-Blinder decompositions show that deterioration in access to food explains half the overall decline in mean height for age.
    Keywords: Zimbabwe, Africa, Nutrition, Stunting, Food Variety Score, Diet Diversity Score, Height for age, Weight for age
    Date: 2011–09
  25. By: Aue, Katja; Roosen, Jutta
    Abstract: Studies in the area of health economics and public health have shown that low socioeconomic status (SES) and poverty are related to lower levels of health. Attempts to explain these differences have often made reference to the observation that poor health behaviours cluster in low SES respectively poverty groups. However, relatively little attention has been paid to the defining concept of SES and its appropriate measurement. Therefore data from the German Socio-Economic Panel are used to analyse the relationship between two multidimensional measurements to describe a) poverty respectively b) a low SES and health behaviour, including dietary behaviour, weight status and health behaviour in general. This study shows that both multidimensional indicators allow identifying an inverse relationship between low SES respectively poverty and several types of health behaviour. However, comparing both indicators it is evident that individuals may be affected by poverty in different ways which has various effects on their health behaviour. Additionally, future research should focus not only on multidimensional poverty measurements but also on dynamic effects.
    Keywords: poverty, social inequality, diet, BMI, health behaviour, Agricultural and Food Policy, Consumer/Household Economics, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, Health Economics and Policy, I1, I3,
    Date: 2010
  26. By: Nicola Brandt; Rodrigo Paillacar
    Abstract: With slow growth and high inequality Mexico needs investments in infrastructure, education and social policies. Mexico has increased spending in all of these areas. This was easily financed thanks to fiscal reforms in 2007 and 2009 as well as high oil prices in recent years. Oil revenues, which account for around one third of budgetary receipts, are highly volatile, especially due to price movements, and the prospects for production are uncertain, even though less so than in previous years. Mexico has the lowest tax revenues as a share of GDP in the OECD and much of Latin America, even when oil-related revenues are included. The government should improve the efficiency of its public spending. Mexico spends significant sums on energy subsidies, which are in large part captured by higher-income groups. Moreover, these subsidies are not in line with Mexico’s ambitious goals to reduce greenhouse gas (GHG) emissions. These subsidies should be gradually withdrawn in line with the government’s goals. Extending cash benefits to the poor instead would be much more efficient to fight poverty and help citizens and the economy as a whole to buffer income shocks. Agricultural spending should be re-structured to finance more investment in public goods and less support for producers, which has proven ineffective in increasing agricultural productivity. Broadening the tax base by withdrawing some of the most distortive tax expenditures would make an important contribution to strengthen revenues. This would also help make the tax system simpler, thus reducing compliance costs as well as opportunities for tax avoidance and evasion. Efforts to enhance tax enforcement should continue.<P>Une réforme des finances publiques pour une économie mexicaine plus forte, plus juste et plus saine<BR>With slow growth and high inequality Mexico needs investments in infrastructure, education and social policies. Mexico has increased spending in all of these areas. This was easily financed thanks to fiscal reforms in 2007 and 2009 as well as high oil prices in recent years. Oil revenues, which account for around one third of budgetary receipts, are highly volatile, especially due to price movements, and the prospects for production are uncertain, even though less so than in previous years. Mexico has the lowest tax revenues as a share of GDP in the OECD and much of Latin America, even when oil-related revenues are included. The government should improve the efficiency of its public spending. Mexico spends significant sums on energy subsidies, which are in large part captured by higher-income groups. Moreover, these subsidies are not in line with Mexico’s ambitious goals to reduce greenhouse gas (GHG) emissions. These subsidies should be gradually withdrawn in line with the government’s goals. Extending cash benefits to the poor instead would be much more efficient to fight poverty and help citizens and the economy as a whole to buffer income shocks. Agricultural spending should be re-structured to finance more investment in public goods and less support for producers, which has proven ineffective in increasing agricultural productivity. Broadening the tax base by withdrawing some of the most distortive tax expenditures would make an important contribution to strengthen revenues. This would also help make the tax system simpler, thus reducing compliance costs as well as opportunities for tax avoidance and evasion. Efforts to enhance tax enforcement should continue.
    Keywords: taxation, public spending, energy subsidies, fiscalité, dépenses publiques, subvention énergétiques
    JEL: H3 H4 H7
    Date: 2011–11–14
  27. By: Mwangi wa Githinji (University of Massachusetts Amherst)
    Abstract: The question of poverty has become central to the work of development economists in the last decade and a half. The 2000 World Development Report was entitled Attacking Poverty and the UN held a series of World Conferences in the 1990s, all of which addressed in some form or fashion the problem of poverty. Despite this and because of limited data there has been relatively little empirical work at the household level on determinants of poverty in Africa generally and Kenya specifically. In the few econometric studies that have been done for Kenya land has not been a significant determinant of poverty. This is a surprising result for a country where 80 per cent of the population depends on agriculture. Further the little that has been done has not incorporated the role of human development in the determination of poverty. Via an examination of a nationwide sample this paper will examine the role that land and social capital play in determining households poverty status in rural Kenya in addition to the standard theorized determinants. JEL Categories: O150, Q150
    Keywords: Poverty, Rural, Land, Kenya, Africa, Human Development
    Date: 2011–11
  28. By: G. M. Arif (Pakistan Institute of Development Economics, Islamabad.); Nasir Iqbal (Pakistan Institute of Development Economics, Islamabad.); Shujaat Farooq (Pakistan Institute of Development Economics, Islamabad.)
    Abstract: This study has used two rounds of the two panel data sets to examine the poverty dynamics in rural Pakistan (Sindh and Punjab). The Pakistan Socio- Economic Survey (PSES ) covers two periods, 1998 and 2000, while the Pakistan Rural Household Survey (PRHS) covers the 2001 and 2004 period. More than one-fifth of the households were chronically poor in the PSES rounds , and 11 percent in the PRHS rounds. Further, both chronic and transitory poverty are higher in Sindh and southern Punjab than in centra l and northern Punjab. Illiteracy, household size, dependency ratio, lack of livestock, landlessness, lack of ownership of dwellings, and health expenditure are the factors responsible for aggravating long-term poverty. The higher incidence of transitory poverty in rural Sindh and southern Punjab indicates the impact of large investments made in the public sector to raise the living standards there to the level of the better-off regions.
    Keywords: Poverty, Chronic Poverty, Household Panel Datasets, Rural Pakistan
    JEL: I3 I32
    Date: 2011
  29. By: Joshua P. Berning (Department of Agriculture and Resource Economics, University of Connecticut); Rui Huang (Department of Agriculture and Resource Economics, University of Connecticut); Adam Rabinowitz (Department of Agriculture and Resource Economics, University of Connecticut)
    Abstract: Several US agencies have collectively worked to establish voluntary principles to guide how firms market food to children and to establish a threshold for the nutritional quality of foods marketed to children. Based on the proposed standards, the authors evaluate television advertising for breakfast cereals, which is both heavily advertised and a common meal item for children. They find that the majority of cereals advertised from 2006-2008 do not meet the nutritional guidelines for sugar content. Cereals that do not meet the nutritional guidelines generate more overall advertising exposure than cereals that do. Further, children and adolescents are exposed to more advertising for products that do not meet the nutritional guidelines. Exposure to advertising is greatest for children 2-11, particularly for cereals that are high in sugar content. Based on prior history of cereal reformulations and the large share of products that fail to meet the guidelines for sugar indicates there might be potential for further reformulation of these products to meet the proposed principles.
    Keywords: nutrition guidelines, television advertising, voluntary restrictions
    Date: 2011–11
  30. By: Hassan, Daniel; Monier-Dilhan, Sylvette; Orozco, Valérie
    Abstract: Geographical Indications (GIs) are considered as upmarket products because they are based on tradition and convey information about their geographical origin. Otherwise, the limitation of the geographical areas devoted to GIs and the exclusivity they benefit on the product lead to suspicions of monopoly power. Quality and market power should however reflect a stronger attachment, making consumers less price sensitive than for standard goods. This research aims to compare theses conjectures to empirical measures concerning the French cheese market. Price elasticities are computed from a demand model on 21 products, 11 Protected Designation of Origin (PDO) products and 10 non PDOs. The results are counterintuitive, PDOs being as price elastic as or more price elastic than standard products. This finding thus challenges the widespread idea that PDOs systematically correspond to high quality. It also has important implications in terms of competition policy, showing that PDO cheeses suppliers cannot decide on price increases without suffering large reductions in demand.
    Keywords: Geographical indications, demand model, price elasticities, competition policy
    JEL: C51 D12 Q18
    Date: 2011–03
  31. By: Jan Willem Bolderdijk; Linda Steg
    Abstract: In this paper, we provide an extensive summary of a field experiment we have recently conducted on the behavioural effects of pay-as-you-drive (PAYD) vehicle insurance (Bolderdijk et al., 2011a). We start with a review of the rationale for PAYD schemes from a behavioural science perspective. Next, we describe the design of our study, and discuss and elaborate on the main empirical findings. Based on this, we present practical guidelines for policy makers and insurance companies aiming to introduce PAYD schemes as a tool to reduce crash risk, improve traffic safety, and reduce the negative environmental impacts of car use.
    Date: 2011–10–26
  32. By: Doreen Burdack
    Date: 2011–09
  33. By: Pádraig Carmody (Geography and Institute for International Integration Studies, Trinity College Dublin);
    Abstract: Sub-Saharan Africa (SSA) experienced a process of marginalization in the global economy in the 1980s and 1990s. Some now assert this is being reversed by an information technology revolution on the sub-continent. SSA now has the fastest growing mobile phone penetration rates in the world and most people there now live under the "footprint" of mobile phones. However, while many claims are made for the poverty reduction potential of new ICTs, very little research has been done on how access affects firm strategies, and innovation and consequently may contribute to broader economic transformation; vital to sustainable poverty reduction. This paper contextualises the adoption of new ICTs and then examines evidence of the uses and impacts of new ICTs in the wood products industry in Durban, South Africa and its surrounding region. It finds that while ICT usage is being routinised in the sector, their impacts are incremental than transformative. Consequently while these technologies are being absorbed into the socio-technical regime, their overall economic impact is limited.
    Keywords: Information technology, wood products, South Africa
    Date: 2011
  34. By: Nikolaus Umlauf; Georg Mayr; Jakob Messner; Achim Zeileis
    Abstract: It is popular belief that the weather is "bad" more frequently on weekends than on other days of the week and this is often perceived to be associated with an increased chance of rain. In fact, the meteorological literature does report some evidence for such human-induced weekly cycles although these findings are not undisputed. To contribute to this discussion, a modern data-driven approach using structured additive regression models is applied to a newly available high-quality data set for Austria. The analysis investigates how an ordered response of rain intensities is influenced by a (potential) weekend effect while adjusting for spatio-temporal structure using spatially varying effects of overall level and seasonality patterns. The underlying data are taken from the HOMSTART project which provides daily precipitation quantities over a period of more than 60 years and a dense net of more than 50 meteorological stations all across Austria.
    Keywords: rainfall, generalized additive model, structured additive regression model, ordered probit model, HOMSTART, BayesX, R
    JEL: C14 C23 Q54
    Date: 2011–11
  35. By: Menny, Claas; Osberghaus, Daniel; Pohl, Max; Werner, Ute
    Abstract: In two empirical surveys in Germany the link between the information respondents have about climate change and their risk perception of the phenomenon was analysed. We found that a better understanding of the effects of climate change might lead to a decrease of the perceived hazard. In contrast, a high self-declared knowledge about climate change might correspond with higher risk perception. Further factors affecting the risk perception of climate change are gender, experience of extreme weather events and trust in external aid. Surprisingly, information campaigns based on scientific facts are not effective for increasing risk perception and willingness to insure. Higher risk perception might induce higher interest in precautionary measures like insurance. --
    Keywords: Climate Change,Knowledge Illusion,Insurance,Risk Perception,Information,Psychometric paradigm
    JEL: Q54 Q58 D83
    Date: 2011
  36. By: Dambala Gelo (Department of Economics, University of Pretoria); Steven F. Koch (Department of Economics, University of Pretoria)
    Abstract: This study examines the potential for anomalous response behaviour effects within the context of double-bounded contingent valuation methods applied to community forestry programs in rural Ethiopia. Anomalous responses considered include shift effects, framing effects and anchoring effects, and these effects are considered within a double-bounded contingent valuation study. The results confirmed the presence of incentive incompatibility and framing effects. However, anchoring effects are not uncovered. After controlling for these biases, the community forestry program considered is shown to offer a welfare gain ranging from Ethiopian Birr (ETB) 20.14 to 22.80. In addition to these welfare benefits, the results raise questions with respect to the validity of previous welfare estimates associated with double-bounded CVM studies in developing countries, suggesting that future studies should control for incentive incompatibility and framing effects bias.
    Keywords: Double-bounded CVM, incentive incompatibility bias, anchoring bias
    JEL: Q26 Q23 Q28
    Date: 2011–11
  37. By: Kelly C. Bishop; Christopher Timmins
    Abstract: The hedonic model of Rosen (1974) has become a workhorse for valuing the characteristics of differentiated products despite a number of well-documented econometric problems. For example, Bartik (1987) and Epple (1987) each describe a source of endogeneity in the second stage of Rosen's procedure that has proven difficult to overcome. In this paper, we propose a new approach for recovering the marginal willingness-to-pay function that altogether avoids these endogeneity problems. Applying this estimator to data on large changes in violent crime rates, we find that marginal willingness-to-pay increases by ten cents with each additional violent crime per 100,000 residents.
    JEL: Q51 R0
    Date: 2011–11
  38. By: Martimort, David; Sand-Zantman, Wilfried
    Abstract: We analyze environmental agreements in contexts with asymmetric information, voluntary participation by sovereign countries and possibly limited enforcement. Taking a mechanism design perspective, we study how countries can agree on effort levels and compensations to take into account multilateral externalities. We delineate conditions for efficient agreements and trace out possible inefficiencies to the conjectures that countries hold following disagreement. We show how optimal mechanisms admit simple approximations with attractive implementation properties. Finally, we also highlight how limits on commitment strongly hinder performances of optimal mechanisms.
    JEL: D82
    Date: 2011–08–31

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NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.