New Economics Papers
on Agricultural Economics
Issue of 2012‒01‒03
twenty-six papers chosen by

  1. The role of investment, fundamental Q and financing frictions in agricultural investment decisions: an analysis pre and post financial crisis By Conor M. O'Toole; Carol Newman; Thia Hennessy
  2. Economic Assessment of the Benefits of Chloro-s-triazine Herbicides to U.S. Corn, Sorghum, and Sugarcane Producers By Mitchell, Paul D.
  3. Effect of climate variables on yield of major food-crops in Nepal -A time-series analysis- By Joshi, Niraj Prakash; Maharjan, Keshav Lall; Piya , Luni
  4. Experimental economics shows how food price policies may improve diet while increasing socioeconomic inequalities in nutrition. By Darmon, N.; Lacroix, A.; Muller, L.; Ruffieux, B.
  5. Effects of EU CAP implementation on Bulgarian farms By Bachev, Hrabrin
  6. Food Price Surges and Poverty in Urban Colombia: New Evidence from Household Survey Data By Laura Kiku Rodriguez-Takeuchi; Katsushi S. Imai
  7. What Drove the Crop Price Hikes in the Food Crisis? By Tetsuji Tanaka; Nobuhiro Hosoe
  8. Recent Trends in Employment and Unemployment: Assessing the impact of the economic downturn on part-time farmers By David Meredith
  9. The Valuation of Agricultural Land and the Influence of Government Payments By Feichtinger, Paul; Salhofer, Klaus
  10. How Far Do Shocks Move Across Borders? Examining Volatility Transmission in Major Agricultural Futures Markets By Manuel A. Hernández; Raúl Ibarra-Ramírez; Danilo R. Trupkin
  11. Lessons Learned from Implementing the Sustainable Development Program in the State of Acre in Brazil By Cristina Dengel; John Horton
  12. Cost of production estimates for wheat, milk and pigs in selected EU member states By Kleinhanß, Werner; Offermann, Frank; Butault, Jean-Pierre; Surry, Yves
  13. City and Countryside Revisited. Comparative rent movements in London and the South-East, 1580-1914 By David Ormrod; James M. Gibson; Owen Lyne
  14. Impacts of Policy Measures on the Development of State-Owned Forests in Northeastern China: Theoretical Results and Empirical Evidence By Jiang, Xuemei; Gong, Peichen; Bostedt, Goran; Xu, Jintao
  15. Does Eco-Certification Boost Regulatory Compliance in Developing Countries? ISO 14001 in Mexico By Blackman, Allen
  16. Livestock for the poor: under what conditions? By Britta Augsburg
  17. Exploring the potential of non-timber forest products: the case of Ethiopian honey export to Denmark By Aravindakshan, Sreejith; Janka Negawo, Worku; Humayun Kabir, Mir; Galib, Md. Waliul
  18. Are households’ poverty levels in Mekong Delta of Vietnam affected by access to credit? By Vuong Quoc, Duy
  19. A Comprehensive Decision Approach for Rubber Tree Planting Management in Africa By Fabrice Valognes; Hélène Ferrer; Moussa Diaby; André Clément-Demange
  20. Poverty Dynamics of Households in Rural China: Identifying Multiple Pathways for Poverty Transition By Katsushi S. Imai; Jing You
  21. Collection and marketing of non-timber forest products by the Chepang community in Chitwan district of Nepal By Piya, Luni; Maharjan, Keshav Lall; Joshi, Niraj Prakash; Dangol, Dharma Raj
  22. Consumer responses to various nutrition "front of pack" logos : a framed field experiment By Muller, L.; Ruffieux, B.
  23. Supply chain coordination by risk sharing contracts under random production yield and deterministic demand By Karl Inderfurth; Josephine Clemens
  24. A Whole-of-Government Approach to Reducing Tropical Deforestation By Wolosin, Michael; Riddle, Anne; Morris, Daniel
  25. Impacts of Rural Electrification in Rwanda By Bensch, Gunther; Kluve, Jochen; Peters, Jörg
  26. Trading Efficiency in Water Quality Trading Markets: An Assessment of Trade-Offs By McDonald, Hugh; Kerr, Suzi

  1. By: Conor M. O'Toole (Department of Economics, Trinity College Dublin); Carol Newman (Department of Economics, Trinity College Dublin); Thia Hennessy (Department of Agricultural Economics, Rural Economy Development Programme, Teagasc)
    Abstract: This paper uses a fundamental Q model of investment to consider the role played by financing frictions in agricultural investment decisions, controlling econometrically for censoring, heterogeneity and errors-in-variables. Our findings suggest that farmer's in- vestment decisions are not driven by market fundamentals. We find some evidence that debt overhang restricts investment but investment is not dependent on liquidity or internal funds. The role of nancing frictions in determining investment decisions changes in the post-financial crisis period when debt overhang becomes a significant impediment to farm investment. The evidence suggests that farmers increasingly rely on internal liquidity to drive investment. Finally, we find no evidence that farmers use off-farm capital to fund on-farm investment.
    Date: 2011
  2. By: Mitchell, Paul D. (University of WI)
    Abstract: U.S. crop producers derive substantial economic benefits from the chloro-s-triazine herbicides atrazine, simazine and propazine. These triazine herbicides generate yield gains for U.S. crop farmers, and in many cases, also reduce total costs for herbicides. Atrazine, the most widely used triazine herbicide, is the keystone of herbicide-based weed control in corn and other regionally important crops in the U.S. Corn acreage, yields and prices have increased over time so that the three-year average value of corn produced in the U.S. has increased more than 2.7 times, from $18.6 billion in 1990-1992 to $50.9 billion in 2007-2009. Over this same period, crop production practices also evolved, including the widespread adoption of transgenic crops and reduced tillage systems. Given these and other changes since previous economic assessments of the producer benefits from triazine herbicides, an update assessment seems warranted. The primary benefit of atrazine and the other triazine herbicides to farmers is improved weed control that increases harvested yields and usually reduces costs, as alternative herbicides are less effective and/or more expensive. Based on yield loss and herbicide cost changes estimated using models, the economic value of the yield losses prevented by the triazine herbicides are estimated to range between $3.0 and $3.3 billion per year for U.S. corn, sorghum, sweet corn, and sugarcane farmers. Most of these benefits accrue to Midwestern field corn farmers using atrazine, but farmers in other regions and growing these other crops also derive substantial benefits. The annual yield benefits and net herbicide cost savings from triazine herbicides are worth an estimated $2.36 to $2.65 billion for U.S. field corn growers, $341 million for U.S. sorghum growers, $210 million for U.S. sweet corn growers, and between $60 and $120 million for U.S. sugarcane growers. Atrazine and the other triazine herbicides generate other types of benefits for farmers not accounted for in these reported values. Atrazine works well with other herbicides, often enhancing the value of less efficacious herbicides. Atrazine also increases the value of crop rotations by reducing weed populations and weed seed banks in crops commonly rotated with atrazine-treated crops. Atrazine also serves as an important tool for managing herbicide resistance, helping to preserve future weed control benefits for other herbicides. Finally, atrazine provides effective weed control that has aided adoption of conservation tillage and no-till systems in corn and other crops. Reducing or eliminating tillage reduces soil erosion and associated negative environmental impacts of agriculture, which improves water quality and further enhances the sustainability of U.S. crop production. Because specific dollar-denominated estimates of the value of these benefits to farmers are not included in this assessment, the estimated $3.0 to $3.3 billion in benefits per year should be considered a lower bound on the full value of the benefits generated by atrazine and the other chloro-s-triazine herbicides in U.S. crop production.
    Date: 2011–11
  3. By: Joshi, Niraj Prakash; Maharjan, Keshav Lall; Piya , Luni
    Abstract: Climate change influences crop yield vis-à-vis crop production to a greater extent in countries like Nepal where agriculture depends largely on natural circumstances. Plausible scenarios of climate change like higher temperatures and changes in precipitation will directly affect crop yields. Therefore, this study assesses the effect of observed climate variables on yield of major food-crops in Nepal, namely rice, wheat, maize, millet, barley and potato based on regression model for historical (1978-2008) climatic data and yield data for the food-crops. The yield growth rate of all the food-crops is positive. However, the growth rate for all crops, except potato and wheat, is below population growth rate during the period. Climate variables like temperature and precipitation are the important determinants of crop yields. Trend of precipitation is neither increasing nor decreasing significantly during this period. However, temperature is increasing by 0.7 0C during the period. Climate variables show some influences on the yield of these major food-crops in Nepal. Increase in summer rain and maximum temperature has contributed positively to rice yield. Also, increase in summer rain and minimum temperature has positive impact on potato yield. However, increase in summer rain and maximum temperature adversely affected the yield of maize and millet. Increase in wheat and barley yield is contributed by current trend of winter rain and temperature. Consideration of spatial variation in similar type of study in Nepal that will be helpful in identifying the region more vulnerable to climate change in terms of crop yield is highly recommended.
    Keywords: Climate variables; temperature; rainfall; food-crops; Nepal
    JEL: Q19
    Date: 2011–03
  4. By: Darmon, N.; Lacroix, A.; Muller, L.; Ruffieux, B.
    Abstract: The aime of this paper is to compare the impact of food price policies on the nutritional quality of food baskets chosen by low-income and medium-income women. Experimental economics was used to simulate a fruit and vegetable price subsidy (FV policy) and a mixed policy subsidizing healthy products and taxing unhealthy ones(NP policy)Low-income (n=95) and medium–income (n=33) women selected a daily food basket at current prices and then at policy prices. Energy density (ED) and the mean adequacy ratio (MAR) were used as nutritional quality indicators. At baseline, low-income women selected less healthy baskets than medium–income ones (less fruit and vegetables, more unhealthy products,higher ED, lower MAR). Both policies improved nutritional quality (fruit and vegetable quantities increased, ED decreased,the MAR increased), but the magnitude of the improvement was often lower among low income women. For instance, their ED decreased by 5.3% with the FV policy and by 7.3% with the NP policy, whereas decreases of 13.2% and 12.6% respectively were recorded for the medium–income group.
    JEL: C93 D12 I18
    Date: 2011
  5. By: Bachev, Hrabrin
    Abstract: This paper assesses impacts of EU CAP implementation on Bulgarian farms of different type and specialization. First, a framework for assessing the CAP effects on farms is presented. Next, an evaluation is made of the impacts of CAP on: economic results and income of farms; production and governance efficiency of farms; level of competitiveness of farms; and economic, social, and environmental sustainability of farms. Finally, factors for improvement of CAP impact on farms in the country are identified.
    Keywords: impacts of EU CAP; income; efficiency; competitiveness; and sustainability of farms
    JEL: O17 Q13 O13 Q12 Q14 Q18
    Date: 2011–12–01
  6. By: Laura Kiku Rodriguez-Takeuchi (School of Social Sciences, University of Manchester, UK); Katsushi S. Imai (School of Social Sciences, University of Manchester, UK)
    Abstract: The present study simulates the impacts of price surges in 2006-2008 on household poverty in the main Colombian cities. It is found that the price surges increased both extreme and moderate poverty in urban areas in short and medium terms. However, the magnitude of poverty rise is not homogeneous geographically or by household types – e.g., the poorest or less educated households were more badly affected than the wealthier or educated households. We suggest 'demographic targeting' or 'geographical targeting' as a policy option that selects and supports poor households by demographic characteristics or by geographical areas according to the degree of vulnerability. Protecting those households from food price shocks would be still important now given that rising and volatile food prices have continued due to erratic climate patterns and demand and supply conditions along with economic and financial crisis.
    Keywords: food price surges, urban poverty, Colombia
    JEL: C21 I32 O15 O54
    Date: 2011–12
  7. By: Tetsuji Tanaka (School of Oriental and African Studies, University of London); Nobuhiro Hosoe (National Graduate Institute for Policy Studies)
    Abstract: In the late 2000s, the world grain markets experienced severe turbulence with rapid crop price rises caused by bad crops, oil price hikes, export restrictions, and the emergence of biofuels as well as financial speculation. We review the impacts of the first four real-side factors using a world trade computable general equilibrium model. Our simulation results show that oil and biofuels-related shocks were the major factors among these four in crop price hikes but that these real-side factors in total can explain only about 10% of the actual crop price rises.
    Date: 2011–12
  8. By: David Meredith (REDP,Spatial Analysis Unit, Teagasc, Ashtown Research Centre,Ashtown, Dublin 15)
    Abstract: This paper provides an overview of contemporary trends in national employment and unemployment before providing a synopsis of the regional distribution of unemployment and how it has changed in recent years. Using Quarterly National Household Survey data (QNHS) the analysis then focuses on a sub-group within the QNHS data who report employment in Agriculture, Forestry or Fishing as a secondary occupation. This latter group derive the majority of their income off-farm and fall firmly within the 'part-time' farming category. Exploring changes in employment patterns amongst this group not only highlights the impact of the recession on farm-based families but also reveals some of the ongoing consequences of the restructuring of Ireland’s rural economy. The paper concludes by considering the implications of these findings with regard to demand for state supports to farmers.
    Date: 2011
  9. By: Feichtinger, Paul; Salhofer, Klaus
    Abstract: This study gives an overview of the theoretical foundations, empirical procedures and derived results of the literature identifying determinants of land prices. Special attention is given to the effects of different government support policies on land prices. Since almost all empirical studies on the determination of land prices refer either to the net present value method or the hedonic pricing approach as a theoretical basis, a short review of these models is provided. While the two approaches have different theoretical bases, their empirical implementation converges. Empirical studies use a broad range of variables to explain land values and we systematise those into six categories. In order to investigate the influence of different measures of government support on land prices, a meta-regression analysis is carried out. Our results reveal a significantly higher rate of capitalisation for decoupled direct payments and a significantly lower rate of capitalisation for agri-environmental payments, as compared to the rest of government support. Furthermore, the results show that taking theoretically consistent land rents (returns to land) and including non-agricultural variables like urban pressure in the regression implies lower elasticities of capitalisation. In addition, we find a significant influence of the land type, the data type and estimation techniques on the capitalisation rate.
    Keywords: Agricultural and Food Policy, Land Economics/Use,
    Date: 2011–12–14
  10. By: Manuel A. Hernández; Raúl Ibarra-Ramírez; Danilo R. Trupkin
    Abstract: This paper examines the level of interdependence and volatility transmission in global agricultural futures markets. We follow a multivariate GARCH approach to explore the dynamics and cross-dynamics of volatility across major exchanges of corn, wheat, and soybeans between the United States, Europe, and Asia. We account for the potential bias that may arise when considering exchanges with different closing times. The results indicate that agricultural markets are highly interrelated and there are both own- and cross- volatility spillovers and dependence among most of the exchanges. The results also show the major role Chicago plays in terms of spillover effects over the other markets, particularly for corn and wheat. Additionally, the level of interdependence between exchanges has only increased in recent years for some of the commodities.
    Keywords: Volatility transmission, agricultural commodities, futures markets, Multivariate GARCH.
    JEL: Q02 G15 Q11 C32
    Date: 2011–12
  11. By: Cristina Dengel; John Horton
    Abstract: The IDB's strategy in Brazil seeks to promote and further the reform and modernization of the public sector, to support efforts to improve the competitiveness of Brazilian goods, to support the efforts to reduce social inequalities and poverty and, finally, to address the problems of environmental and natural resource management. The Sustainable Development Program in the State of Acre supported the four elements of this strategy by including activities to strengthen the capacity for environmental management at the state level thus promoting modernization of the state, by bolstering competitiveness through improvement of the quality of the transportation infrastructure, by actions to foster the productivity of rural communities and small producers thus supporting efforts to reduce inequality and by actions for conservation and protection of the Amazon rainforest. This note gives an overview of key achievements and challenges to reach such results as well as outlines the key lessons learned accumulated over the course of the projects.
    Keywords: Economics :: Economic Development & Growth, Environment & Natural Resources :: Biodiversity & Natural Resources Management, Environment & Natural Resources :: Forests & Forestry, Infrastructure & Transport, lessons learned, sustainable development, Brazil, land management
    Date: 2011–08
  12. By: Kleinhanß, Werner; Offermann, Frank; Butault, Jean-Pierre; Surry, Yves
    Abstract: This study summarizes cost estimates based on the EU Farm Accountancy Data Network using the General Cost of Production Model, developed, applied and tested within the FACEPA project. Results are provided for wheat, pigs and milk for the main producer countries of the EU for the period 1999 to 2007. Estimated input-output coefficients are generally based on monetary figures, expressing cost shares referring to total output. Effects of scale, specialization and location can be derived by estimates based on respective sub-samples. Costs per unit are derived based on input-output coefficients and output values, providing costs per hectare or ton for wheat and per ton of milk. There is a considerable variation between Member States not only of production costs, but also of output, and output plus subsidies (due to the national implementations of full or partially decoupling schemes), especially for wheat and milk. --
    Keywords: econometric analysis,production costs
    JEL: C39 Q12
    Date: 2011
  13. By: David Ormrod; James M. Gibson; Owen Lyne
    Abstract: Economic historians have traditionally argued that urban growth in England was driven primarily by prior improvements in agricultural supply in the two centuries before the industrial revolution. Recent revisionist scholarship by writers such as Jan Luiten van Zanden and Robert Allen has suggested that 'the city drove the countryside, not the reverse'. This paper assembles new serial data on urban and agricultural rent movements in Kent, Essex and London, from 1580-1914, which enables us to provide a tentative estimate of the strength of the urban variable and the productivity of land across the rural-urban continuum. Our initial findings support the revisionist view, and throw new light on London's position within the wider metropolitan region. Comparative rent movements suggests a greater continuity between town and countryside than has often been assumed, with sharp increases in rental values occurring on the rural-urban fringes of London and the lower Medway valley.
    Keywords: Europe; pre-1913; agriculture; land-use; tenure; rural-urban relations; spatial competition; urban history
    JEL: N53 N93 Q15 R12 R14 Y1
    Date: 2011–11
  14. By: Jiang, Xuemei; Gong, Peichen; Bostedt, Goran; Xu, Jintao
    Abstract: State-owned forest enterprises (SOFEs) in northeast China and Inner Mongolia play important roles both in timber production and in the maintenance of ecological security. However, since the late 1970s, forest resource and economic crises have seriously restricted these functions. Based on a theoretical and an empirical analysis of the harvest and investment behavior of the SOFEs, we examined the effects of forest policies and the socioeconomic conditions on the behavioral choices of the SOFEs. Both the extent to which SOFE supervising authorities emphasized improvement of forest resources in their annual evaluations and the increases in expenses necessary to manage SOFEs had significant impacts on harvest and investment decisions as well as development of forest resources. Promoting the management and utilization of non-timber resources, as well as reforms to increase the efficiency of forest protection and management, have reduced timber harvests as intended, which in turn has increased investment and improved forest resources. The effects have been relatively small, however. In contrast, reforms aimed at timber harvest and afforestation activities actually contributed to increasing the timber harvest, which affected the development of the forest resources negatively.
    Keywords: state-owned forest enterprise, “double crises,” sustainable forest management, forest policy
    JEL: Q23 Q28
    Date: 2011–12–22
  15. By: Blackman, Allen (Resources for the Future)
    Abstract: Private sector initiatives certifying that producers of goods and services adhere to defined environmental process standards are increasingly popular worldwide. According to proponents, they can circumvent chronic barriers to effective public sector environmental regulation in developing countries. But eco-certification programs will have limited effects on producers’ environmental performance if, as one would expect, they select for those already meeting certification standards. Rigorous evaluations of the environmental effects of eco-certification in developing countries that control for selection bias are rare. We use plant-level data on more than 80,000 Mexican facilities to determine whether ISO 14001 series certification of environmental management systems boosts regulatory compliance. We use propensity score matching to control for nonrandom selection into the program. We find that plants recently fined by environmental regulators were more likely to be certified, all other things equal, but that certified plants were subsequently fined just as often as similar uncertified plants. These results suggest that in Mexico, the ISO 14001 program attracts dirty plants under pressure from regulators—not just relatively clean ones—but does not have a large, lasting impact on their regulatory compliance.
    Keywords: voluntary environmental regulation, duration analysis, propensity score matching, Mexico
    JEL: Q56 Q58 O13 O54 C41
    Date: 2011–08–23
  16. By: Britta Augsburg (Institute for Fiscal Studies)
    Abstract: <p><p>This study evaluates an intervention in the dairy subsector by an Indian livelihood promotion institution and conducts a detailed analysis of the main cost and benefit factors of the activity. Two rounds of data are available which allows for the comparison of impacts and costs and benets under different circumstances - a relatively good year as well as one officially declared as a drought period. Results suggest that the programme is benecial but impacts cannot be sustained under the macro shock. Looking at the main cost factors reveals that fodder availability was a major problem. The results help to suggest an improved programme design.</p></p>
    Date: 2011–12
  17. By: Aravindakshan, Sreejith; Janka Negawo, Worku; Humayun Kabir, Mir; Galib, Md. Waliul
    Abstract: Its diverse agroecology has endowed Ethiopia with enormous honey production potential in Africa. Nevertheless, due to the undeveloped production system and poor market linkage with the global arena, the country could not fetch proportional benefits from this resource. To enhance better understanding on the problem and recommend appropriate improvement measures for the sector, prevailing opportunities and constraints were explored in relation to honey export to Denmark. Major honey stakeholders were contacted to assess the opportunities and constraints of Ethiopian honey export. Semi-structured interview, participatory appraisal technique and short questionnaire interview were adopted for data collection. The results show improving opportunities for exporting companies through creating conducive policy and support from the government of Ethiopia and NGOs. On the other hand, current supply of honey by producers in terms of quantity and quality are major constraints for the exporters. In relation to importer, there are growing demands for Ethiopian honey due to its organic source. Similarly, consumers. survey showed that the demand for organic honey has the highest priority in contrast to origin and price. However, most consumers lack information and have concern over Ethiopian honey; especially in terms of quality and characteristics. Development strategy that improves smallholder honey production capacity, better business communication with potential Danish honey importers and promotion of organic honey to consumers may make a significant contribution to enhance Ethiopian honey export to Denmark.
    Keywords: Non-timber Forest Products; Ethiopia; honey; export; markets; Denmark
    JEL: N57 Q23 N50 F14 D40
    Date: 2011–10
  18. By: Vuong Quoc, Duy
    Abstract: This paper investigates the impact of access to formal credit on household poverty in Mekong Delta (MD) – Vietnam. The analysis is based on some indicators of household poverty such as households’ total assets, educational costs, healthcare costs, food consumption, non-farm expenses, off-farm expenses and total income. Based on the given indicators, a comparison is made between borrowers and non-borrowers in a sample of 325 households using the Matching Methods. The findings suggest that the borrowers are better off in education expenditure, healthcare expenses, and total income than those of non-borrowers. The results show that access to formal credit is likely to reduce poverty levels among rural households in Mekong Delta.
    Keywords: Formal credit; propensity score matching; household welfare; individual and group based lending
    JEL: G2 O2 I3 E5
    Date: 2011
  19. By: Fabrice Valognes (CREM - Centre de Recherche en Economie et Management - CNRS : UMR6211 - Université de Rennes 1 - Université de Caen); Hélène Ferrer (CREM - Centre de Recherche en Economie et Management - CNRS : UMR6211 - Université de Rennes 1 - Université de Caen); Moussa Diaby (CREM - Centre de Recherche en Economie et Management - CNRS : UMR6211 - Université de Rennes 1 - Université de Caen); André Clément-Demange (BEPC - Biologie du développement des espèces pérennes cultivées - CIRAD : UMR57 - IRD - INRA : UR1098 - Université Montpellier II - Sciences et Techniques du Languedoc - Montpellier SupAgro)
    Abstract: The main objective of this study is to settle a rigorous field of decision analysis for rubber tree clones selection. Nowadays, there does not exist any process based upon a rigorous method to select the best clone to be plant in order to get the highest return on investment. The only known selection method is to use the experience of different protagonists acting in the plantation. So, we need a tool that takes into account very important criteria in order to achieve the main objective. This goal is achieved by using multicriterion analysis methods to the clone selection. The ranking procedure uses Elimination and Choice Expressing the Reality (ELECTRE III). For each criterion, indifference and preference thresholds are determined after establishing the relative importance of each criterion including rubber tapping, cumulative production during 15 years, cumulative production between 15 and 25 years, wind resistance, disease resistance, physiological resistance, grafting and quality of the rubber.
    Keywords: multicriteria decision making;ELECTRE III;rubber tree;agricultural resource management
    Date: 2011–07–01
  20. By: Katsushi S. Imai (School of Social Sciences, University of Manchester, UK); Jing You (School of Agricultural Economics and Rural Development, Renmin University of China)
    Abstract: The objective of our study is to identify pattern and causes of households' transitions in and out of poverty using the long household panel data on rural China in the period 1989-2009. We propose a discrete-time multi-spell duration model that not only corrects for correlated unobserved heterogeneity across transitions and various destinations within the transition, but also addresses the endogeneity due to dynamic selection associated with household's livelihood strategies. Duration dependence is generally found to be negative for both poverty exit and re-entry. The household who chose either farming or out-migration as a main livelihood strategy was more likely to escape from this persistent poverty than those who took local non-agricultural employment, while the role of social protection, such as health insurance, was not universally good for alleviating chronic poverty. Overall, the present study emphasises the central role of agriculture in helping the chronically poor escape from poverty.
    Keywords: poverty transition, discrete-time duration model, correlated unobserved heterogeneity, dynamic selection, rural China
    JEL: C33 C41 I32 O15
    Date: 2011–12
  21. By: Piya, Luni; Maharjan, Keshav Lall; Joshi, Niraj Prakash; Dangol, Dharma Raj
    Abstract: Chepangs are highly marginalized indigenous nationalities of Nepal, who live nearby the forests that are rich in Non-timber Forest Products (NTFPs) of commercial importance. These NTFPs can be a potential source of income for Chepangs. This study describes the role of Chepangs in the marketing channel of those NTFPs and analyses the household socio-economic characteristics that influence the collection and marketing of NTFPs by Chepangs in Shaktikhor VDC of Chitwan district using backward multiple regression method. Empirical evidences show that collection and marketing of NTFPs is not an attractive source of income especially for those relatively better-off Chepang households who possess higher landholdings, food self-sufficiency, and income from other alternative sources. This is because the current price offered for the NTFPs collected by the community is very nominal, that do not even cover the labour costs involved. Praja Cooperative Limited (PCL), a Chepang community based institution in Shaktikhor, is struggling to provide better prices for Chepangs. However, it is facing challenges due to limited institutional management capacity of Chepangs. Further empowerment of PCL can contribute to improve the bargaining power of Chepang community in NTFP trade.
    Keywords: backward multiple regression; household socio-economic characteristics; indigenous nationalities; marketing channel; Praja Cooperative Limited
    JEL: M31
    Date: 2011–06
  22. By: Muller, L.; Ruffieux, B.
    Abstract: In a laboratory experiment, we study consumer responses to 7 Nutrition ‘Front of Pack’ Logos. In addition to the Guideline Daily Amounts (GDA) logo, the six other logos vary according to three criteria: (i) Granularity (What object do we rate? Product vs. Nutrient), (ii) Reference Set (How do we distinguish between products? All Products vs. Product Family), and (iii) Policy Range (Do we include bad ratings? Green vs. Green and Red). 364 subjects, all parents accustomed to shopping, were asked to fill their shopping cart for their family for the next couple of days in an e-shopping environment. To do so, they could choose among 273 products grouped into 35 product families. They were then given the opportunity to revise their shopping cart after one of the seven logos had been exhaustively applied to all 273 products. The nutritional quality of a cart was assessed according to its salt, free sugar and saturated fatty acids content. We found that all of the seven logos significantly improved the nutritional quality of the shopping carts. On average, rating the product rather than the nutrient was more efficient. Informing on both healthy and unhealthy products was also more efficient on average but had significant toxic effects. The GDA logo lies at the median of our logo chart list. Unlike free sugar and saturated fatty acids, salt appears to be a particular case, as our logos proved to be insufficient for reducing its consumption.
    JEL: C93 D12 I18
    Date: 2011
  23. By: Karl Inderfurth (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg); Josephine Clemens (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)
    Abstract: From a large body of research studies we know that properly designed contracts can facilitate coordinated decision making of multiple actors in a supply chain (SC) so that efficiency losses for the SC as a whole can be avoided. In a newsvendor-type SC with stochastic demand it is well-known that due to the double marginalization effect a simple wholesale price contract will not achieve coordination. More complex contracts, however, do so, especially those which enable an appropriate sharing of risks between the SC actors. While the effectiveness of risk sharing contracts is well understood for SC situations with random demand and reliable supply, we do not know much about respective SC coordination problems if demand is deterministic, but supply is unreliable due to random production yield. For a buyer-supplier SC representing the latter SC setting, it is analyzed how the distribution of risks affects the coordination of buyer's ordering and supplier's production decision. In a basic random yield, deterministic demand setting both parties are exposed to risks of over-production or underdelivery, respectively, if a simple wholesale price contract is applied. The resulting risk distribution will always be such that SC coordination cannot be achieved. It can be shown, however, that two more sophisticated contract types with penalty and reward elements for the supplier can change the risk distribution in such a way that SC coordination is possible under random yield. Additionally, it is proved that also the wholesale price contract will guarantee SC coordination if the supplier has a second (emergency) procurement source at her disposal that is more costly, but reliable. Moreover, restricting oneself to wholesale price contracts it is shown that it can be beneficial to both parties to utilize this emergency source even if it is not profitable from a SC perspective.
    Keywords: Supply chain coordination, contracts, random yield, risk sharing, emergency procurement
    Date: 2011–12
  24. By: Wolosin, Michael; Riddle, Anne (Resources for the Future); Morris, Daniel (Resources for the Future)
    Abstract: Tropical forests provide critical global and local ecosystem services and habitat for many of the world’s plants and animals. Their loss threatens the sustainable economic growth and social stability of developing countries, and illegal deforestation abroad places U.S. producers at an unfair disadvantage. For these and other reasons, the United States has long been engaged in programs to reduce forest loss. This engagement has recently increased, with the new Presidential Global Climate Change Initiative including a pillar dedicated to slowing forest loss. While promising, this new funding and coordination is insufficient, with a narrow focus on climate-based development assistance. Engaging the full suite of forest policy levers in the federal government, or taking a “whole-of-government” approach, would provide greater immediate impact in preventing forest loss while building the foundations of a working landscape ethic. In this discussion paper, we explore the opportunities to expand U.S. contributions to reducing tropical deforestation through this approach. A whole-of-government approach to international deforestation consists of coordinating and focusing the programs across the federal government that could reduce the rate of tropical forest loss. It is an integrated strategy that employs existing activities and authorities of the U.S. government and directs them under an overarching goal of reducing deforestation in tropical forest countries, while continuing to support other developing-country goals, such as economic development, health, food security, and biodiversity. We identify three major areas where policy adjustments and actions by relevant authorities can have immediate and tangible impact on reducing deforestation.
    Keywords: tropical deforestation, forest conservation, U.S. policy, REDD, reducing emissions from deforestation, whole-of-government, environment and trade, forest policy
    Date: 2011–07–06
  25. By: Bensch, Gunther (RWI); Kluve, Jochen (Humboldt University Berlin and RWI); Peters, Jörg (RWI)
    Abstract: Rural electrification is believed to contribute to the achievement of the MDG. In this paper, we investigate electrification impacts on different indicators. We use household data that we collected in Rwanda in villages with and without electricity access. We account for self-selection and regional differences by using households from the electrified villages to estimate the probability to connect for all households – including those in the non-electrified villages. Based on these probabilities we identify counterfactual households and find robust evidence for positive effects on lighting usage. Effects on income and children's home studying become insignificant if regional differences are accounted for.
    Keywords: rural electrification, energy access, impact evaluation, matching, difference-in-difference
    JEL: O12 O13 O18 O22
    Date: 2011–12
  26. By: McDonald, Hugh (Motu Economic and Public Policy Research); Kerr, Suzi (Motu Economic and Public Policy Research)
    Abstract: Declining water quality as a result of increased nutrient leaching is a serious and growing concern, both internationally and in New Zealand. Water pollution issues have traditionally been addressed with command-and-control type regulation, but market-based nutrient trading schemes are becoming more widespread. In New Zealand, a cap-and-trade system has been implemented in Lake Taupo and another has been designed for Lake Rotorua. Despite the importance placed on avoiding transaction costs in water quality trading markets, there has been little discussion in the literature of practical policies to decrease these transaction costs, or any real assessment of when it is and is not optimal to decrease transaction costs. This paper begins to address these issues. We find that strong efforts to control time-of-trade transaction costs are most likely to be worthwhile in schemes with heterogeneous participants and large expected values and volumes of trading. The trading inefficiency that results from search and bargaining, and trade registration costs can be minimised at some cost. Regulators can reduce trade approval costs if they establish baseline leaching levels for all participants and design standardised leaching monitoring systems as part of the set-up of the system, and monitor all sources equally regardless of whether participants trade instead of estimating and approving changes in traders’ leaching at the time of each trade (as occurs in a baseline-and-credit system). Finally we find that while regulators may be tempted to restrict trading or increase measuring and monitoring requirements to increase the environmental certainty of a scheme’s outcome, environmental risk may be better addressed through a less certain but more stringent environmental target.
    Keywords: water quality markets, transaction costs, nutrient trading markets, trading ratios
    JEL: Q53 Q15 D23
    Date: 2011–12

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.