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on Agricultural Economics |
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Issue of 2012‒04‒10
24 papers chosen by |
| By: | Rodomiro Ortiz |
| Abstract: | This document discusses the impact that global climate change has on food production both globally and in Latin America and the Caribbean. The author discusses environmental issues including extreme temperatures, water scarcity, flooding, and soil erosion. Using available information, this document discusses the impacts of these issues on Mesoamerica, the Caribbean Islands, the Andean Community, and the Southern Cone. Finally, the paper addresses climate change mitigation and prospects for adapting agriculture to climate change. |
| Keywords: | Environment & Natural Resources :: Climate Change, Environment & Natural Resources :: Environmental Policy, Environment & Natural Resources :: Biodiversity & Natural Resources Management, Environment & Natural Resources :: Water Management, Agriculture & Food Security :: Agricultural Policy, Agriculture & Food Security :: Plant, Animal, & Food Production, Rural & Urban Development :: Rural Development, Subsistence Agriculture, Climate Change, Water Availability, Soil Erosion, Water Resources, Greenhouse Gas Emissions |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:64698&r=agr |
| By: | Britaldo Soares Filho; Letícia Lima; Maria Bowman; Letícia Viana |
| Abstract: | This paper discusses the feedbacks between climate change, deforestation, and agricultural expansion and presents scenarios of agricultural demand and forest conservation and restoration policies in Brazil. In addition, it discusses the implications of these scenarios for food and befoul supply, the provision of ecosystem services, and climate change mitigation. Modeling these scenarios provides an integrated assessment of plausible pathways for achieving the goals of the National Climate Change Plan, for making an objective source of information available for the debate on the Forest Code, and for supporting Brazil's cropland expansion plan as well as anticipating potential conflicts. |
| Keywords: | Environment & Natural Resources :: Biodiversity & Natural Resources Management, Environment & Natural Resources :: Climate Change, Environment & Natural Resources :: Forests & Forestry, Agriculture & Food Security :: Plant, Animal, & Food Production, Climate Change, Forest Conservation, Brazil |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:64798&r=agr |
| By: | Abbott, Philip |
| Abstract: | Dramatically increased international agricultural commodity prices from 2007 to mid-2008 brought food inflation and greater incidence of poverty and malnutrition to developing countries. Higher food prices in 2011 threaten to repeat that crisis. The international community responded strongly to these concerns in 2008 and 2009, promising greater financial support for food aid, safety nets, and agricultural development. The focus of international dialogue differed somewhat from the priorities of national governments, and the objectives of national governments mostly targeting short-run responses to both food security and agriculture prevailed. But a long-run trend of declining foreign assistance to agriculture appears to have reversed.Nevertheless, foreign assistance was small relative to promises made by donors, increased grain and fertilizer import costs, budgetary costs of mitigating policy responses, an investment costs needed to accelerate agricultural production. Both food aid and agricultural development projects have in the past come under the criticisms found in the aid effectiveness debate. Issues to be addressed if renewed efforts toward agricultural development and food aid are to be effective are explored here. High returns to agricultural research require that enabling institutions are developed. National ownership and governance of initiatives that share donor objectives focusing on poverty and long-run development are critical to success. |
| Keywords: | foreign assistance, food crisis, agricultural development, food aid, safety nets, aid effectiveness, international commodity prices |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2012-19&r=agr |
| By: | Luiz Antonio Martinelli |
| Abstract: | This document discusses Latin America's dual role as a conservator of natural resources and producer of agricultural services. The author addresses the expansion of agriculture across the region and intensification of agriculture in Latin America. The environmental impact of this expansion and intensification is a major focus of this study as well as an assessment of agricultural and ecosystem services. |
| Keywords: | Agriculture & Food Security, Environment & Natural Resources :: Biodiversity & Natural Resources Management, Environment & Natural Resources :: Climate Change, Energy & Mining :: Renewable Energy, Agriculture, Ecosystem Services |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:64718&r=agr |
| By: | Ianchovichina, Elena; Loening, Josef; Wood, Christina |
| Abstract: | This paper presents new estimates of pass-through coefficients from international to domestic food prices by country in the Middle East and North Africa. The estimates indicate that, despite the use of food price subsidies and other government interventions, a rise in global food prices is transmitted to a significant degree into domestic food prices in many countries in the Middle East and North Africa, although cross-country variation is significant. In nearly all countries, domestic food prices are highly downwardly rigid. The finding of asymmetric price transmission suggests that not only international food price levels matter, but also food price volatility. High food pass-through tends to increase inflation pressures, where food consumption shares are high. Domestic factors, often linked to storage, logistics, and procurement, have also played a major role in explaining high food inflation in the majority of countries in the region. |
| Keywords: | Food&Beverage Industry,Markets and Market Access,Emerging Markets,Currencies and Exchange Rates,Food Security |
| Date: | 2012–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6018&r=agr |
| By: | Godswill, M.; Namara, Regassa; Hagos, Fitsum; Awulachew, Seleshi Bekele; Ayana, M.; Awulachew, Bossio, Deborah |
| Keywords: | Rainfed farming / Irrigated farming / Efficiency / Irrigation schemes / Small scale systems / Cropping patterns / Crop production / Economic aspects / Statistical analysis / Ethiopia |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:iwt:worppr:h044123&r=agr |
| By: | Susanne B. Hecht |
| Abstract: | Catastrophic deforestation and environmental degradation have become habits of thought about forest landscapes in Latin America's tropics. Yet these truisms blind analysts to three surprising changes. First, deforestation has slowed dramatically. Next, forest resurgence-largely a function of natural regeneration-is widely documented throughout the region on previously deforested lands. Finally, the importance of tree systems and complex environmental mosaics in working landscapes to produce livelihoods and environmental services and as supporting matrices for conservation is increasingly recognized. These dynamics over the last decade would have been unimaginable in the 1980s, the period that most shaped Euro-American perceptions of tropical forest trends. Deforestation "hot spots", each with a different political ecology, remain and command attention, but it is important to recognize that platforms for alternatives exist. Latin America has become an innovator in tropical environmental policy, institutions, incentives, and practices that support forested landscapes. These dynamics and other related issues will be further elucidated in this document. |
| Keywords: | Agriculture & Food Security, Environment & Natural Resources :: Biodiversity & Natural Resources Management, Environment & Natural Resources :: Climate Change, Environment & Natural Resources :: Forests & Forestry, Forest, forest resurgence, environmental services |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:64998&r=agr |
| By: | Dambala Gelo; Steven F. Koch |
| 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 welfare of the average program participant households. Correcting for selection into the program led to both increased welfare 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 results suggest 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 |
| JEL: | Q23 Q28 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:277&r=agr |
| By: | D'Souza, Anna; Jolliffe, Dean |
| Abstract: | This paper investigates the impact of increases in wheat flour prices on household food security using unique nationally-representative data collected in Afghanistan from 2007 to 2008. It uses a new estimator, the Unconditional Quantile Regression estimator, based on influence functions, to examine the marginal effects of price increases at different locations on the distributions of several food security measures. The estimates reveal that the negative marginal effect of a price increase on food consumption is two and a half times larger for households that can afford to cut the value of food consumption (75th quantile) than for households at the bottom (25th quantile) of the food-consumption distribution. Similarly, households with diets high in calories reduce intake substantially, but those at the bottom of the calorie distribution (25th quantile) make very small changes in intake as a result of the price increases. In contrast, households at the bottom of the dietary diversity distribution make the largest adjustments in the quality of their diets, since such households often live at subsistence levels and cannot make large cuts in caloric intake without suffering serious health consequences. These results provide empirical evidence that when faced with staple-food price increases, food-insecure households sacrifice quality (diversity) in order to protect calories. The large differences in behavioral responses of households that lie at the top and bottom of these distributions suggest that policy analyses relying solely on ordinary least squares estimates may be misleading. |
| Keywords: | Food&Beverage Industry,Regional Economic Development,Rural Poverty Reduction,Markets and Market Access |
| Date: | 2012–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6024&r=agr |
| By: | Fabrice Larceneux (DRM - Dauphine Recherches en Management - CNRS : UMR7088 - Université Paris IX - Paris Dauphine); Florence Benoît-Moreau (DRM - Dauphine Recherches en Management - CNRS : UMR7088 - Université Paris IX - Paris Dauphine); Valérie Renaudin (DRM - Dauphine Recherches en Management - CNRS : UMR7088 - Université Paris IX - Paris Dauphine) |
| Abstract: | An organic label offers a market signal for producers of organic food products. In Western economies, the label has gained high recognition, but organic food still represents a small part of total food consumption, which raises questions about the label's efficacy. By considering organic labels as a signal of quality for consumers, this article studies how this signal interacts with brand signals when both are visible to consumers, applying a cobranding framework. This research examines the moderating effect of the brand on organic label effects. In a 2×2 experimental design using real consumers (N0122) in a shopping context, it found that, depending on brand equity, the marginal effect of organic labelling information in terms of perceived product quality varies. In particular, when brand equity is high (low), the organic label appears less (more) effective. However, regardless of the brand equity level, an organic label makes the environmentally friendly attribute salient, which has a positive impact on perceived quality. Pertinent implications for marketing and public policy are discussed. |
| Keywords: | Organic label . Brand equity . Label equity . Cobranding . Perceived quality |
| Date: | 2012–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-00656485&r=agr |
| By: | Mobarak, A. Mushfiq (Yale University); Rosenzweig, Mark (Yale University) |
| Abstract: | Unpredictable rainfall is an important risk for agricultural activity, and farmers in developing countries often receive incomplete insurance from informal risk-sharing networks. We study the demand for, and effects of, offering formal index-based rainfall insurance through a randomized experiment in an environment where the informal risk sharing network can be readily identified and richly characterized: sub-castes in rural India. A model allowing for both idiosyncratic and aggregate risk shows that informal networks lower the demand for formal insurance only if the network indemnifies against aggregate risk, but not if its primary role is to insure against farmer-specific losses. When formal insurance carries basis risk (mismatches between payouts and actual losses due to the remote location of the rainfall gauge), informal risk sharing that covers idiosyncratic losses enhance the benefits of index insurance. Formal index insurance enables households to take more risk even in the presence of informal insurance. We find substantial empirical support of these nuanced predictions of the model by conducting the experiment (randomizing both index insurance offers, and the locations of rainfall gauges) on castes for whom we have a rich history of group responsiveness to household and aggregate rainfall shocks. |
| JEL: | O13 O16 O17 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:yaleco:97&r=agr |
| By: | Carlos Gustavo Machicado (Institute for Advanced Development Studies); Felix Rioja (Department of Economics, Georgia State University); Antonio Saravia (Deloitte Tax LLP) |
| Abstract: | We calibrate a simple neoclassical model of structural transformation to a set of Latin American countries and show that slow growth in agricultural productivity can substantially delay the development process and result in signicant dierences in per capita incomes. Some of our results indicate that low agricultural productivity delayed the beginning of the industrialization process in Paraguay and Bolivia by about 100 years compared to the leader of the group, Chile. The development pro- cess can be accelerated, however, by increasing productivity in the non-agricultural sector. In fact, in the long run, it is non-agricultural productivity what determines the speed of convergence. Improvements in non-agricultural productivity between 20% to over 100% would be required for the other Latin American countries in our set to signicantly close the income gap with Chile by the end of the century. |
| Keywords: | Economic Development, Latin America, Agriculture Productivity, Manufacturing Productivity |
| JEL: | O47 O57 E13 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:adv:wpaper:201203&r=agr |
| By: | Francisco Peñaranda; Augusto Rupérez Micola |
| Abstract: | We use the recent introduction of biofuels to study the effect of industry factors on the relationships between wholesale commodity prices. Correlations between agricultural products and oil are strongest in the 2005-09 period, coinciding with the boom of biofuels, and remain substantial until 2011. We disentangle three possible drivers for the linkage: substitution, energy costs, and financialization. The timing and magnitude of the biofuels-to-oil relationships are different to those of other commodities, and far higher than can be justified by costs and financialization. Substitution and costs drive the monthly correlations of long-term futures, and each of the three contribute equally to the daily co-movement of the short-term ones. The findings survive many robustness checks and appear in the stock market. |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:fmg:fmgdps:dp695&r=agr |
| By: | Hennessy, David A. |
| Abstract: | Concerns about biosecurity in the food system raise a variety of issues about how the system is presently organized, why it might be vulnerable, what we could reasonably do to better secure it, and the costs of doing so. Emphasizing the role of incentives in efficient resource allocation, this article considers economic dimensions of three aspects of the general problem. One is the global problem, or the way biosecurity measures can affect how countries relate to each other and the global consequences that result. Another is how to best manage the immediate aftermath of a realized threat in order to minimize damage. The third is how to seek to prevent realization of the threat. Some policy alternatives are presented. |
| Date: | 2012–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:35015&r=agr |
| By: | Du, Xiaodong; Hennessy, David A.; Yu, Cindy |
| Abstract: | While controversy surrounds skewness attributes of typical yield distributions, a better understanding is important for agricultural policy assessment and for crop-insurance rate setting. Day (1965) conjectured that crop yield skewness declines with an increase in nitrogen use at low levels but not at higher levels. Employing four corn yield experimental plot datasets, we investigate the conjecture by introducing (a) a flexible Bayesian extension of the Just–Pope technology to incorporate skewness and (b) a quantile-based measure of skewness shift. Bayesian estimation provides strong evidence in favor of negative skewness at commercial nitrogen rates and for Day’s conjecture. There was weaker evidence in favor of positively skewed cotton yield and little evidence in favor of the conjecture. The results are confirmed by the quantile-based measure. We also find evidence that skewness becomes more negative upon moving from corn-after-corn to corn-after-soybean. |
| Keywords: | crop insurance; Gibbs sampler; Just and Pope technology; negative skewness; quantile regression; rotation effect |
| Date: | 2012–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:35022&r=agr |
| By: | Vijayaraghavan, K.; Dutz, Mark A. |
| Abstract: | This paper describes and analyzes a series of complementary policy initiatives in India to adapt and commercialize existing global biotechnologies to meet local needs in healthcare, agriculture, industry and the environment in a more affordable manner. This evolving approach has been implemented through six complementary elements, namely (1) translational research; (2) technology access through global consortia; (3) commercialization supported by public-private partnerships, broadly interpreted; (4) skills development; (5) regulation; and (6) institutional governance, including special purpose vehicles, for effective project management. The paper focuses on two public-private partnership initiatives, the Small Business Innovation Research Initiative and the Biotechnology Industry Partnership Program, which together have allocated more than US$70 million in public funding to almost 150 projects, contributing to a total public-private investment of more than $170 million over the past five years. The authors'key recommendation, to ensure effective resource use and better policy impact, is for these innovation-support initiatives to adopt more continuous monitoring with quicker feedback from learning to implementation, and more rigorous impact evaluation including approaches that allow the results of firms benefiting from support to be compared with an appropriate group of firms not benefiting from support. |
| Keywords: | ICT Policy and Strategies,Agricultural Knowledge&Information Systems,Rural Development Knowledge&Information Systems,E-Business,Agricultural Research |
| Date: | 2012–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6022&r=agr |
| By: | Hennessy, David A. |
| Abstract: | The use of plausible stochastic price processes in price risk analysis has allowed advances not seen in crop yield risk analysis. This study develops a stochastic process for yield modeling and risk management. The Pólya urn process is an internally consistent dynamic representation of yield expectations over a growing season that accommodates agronomic events such as growing degree days. The limiting distribution is the commonly used beta distribution. Binomial tree analysis of the process allows us to explore hedging decisions and crop valuation. The method is empirically flexible to accommodate alternative assumptions on the growing environment, such as intra-season input decisions. |
| Keywords: | crop insurance; crop abandonment; stochastic process; derivative analsysis; growing degree days |
| Date: | 2012–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:35020&r=agr |
| By: | Gemechu, Eskinder D.; Butnar, Isabela; Llop Llop, Maria; Castells i Piqué, Francesc |
| Abstract: | The main aim of this work is to define an environmental tax on products and services based on their carbon footprint. We examine the relevance of conventional life cycle analysis (LCA) and environmentally extended input-output analysis (EIO) as methodological tools to identify emission intensities of products and services on which the tax is based. The short-term price effects of the tax and the policy implications of considering non-GHG are also analyzed. The results from the specific case study on pulp production show that the environmental tax rate based on the LCA approach (1,8%) is higher than both EIO approaches (0,8% for product and 1,4% for industry approach), but they are comparable. Even though LCA is more product specific and provides detailed analysis, EIO would be the more relevant approach to apply economy wide environmental tax. When the environmental tax considers non-GHG emissions instead of only CO2, sectors such as agriculture, mining of coal and extraction of peat, and food exhibit higher environmental tax and price effects. Therefore, it is worthwhile for policy makers to pay attention on the implication of considering only CO2 tax or GHG emissions tax in order for such a policy measure to be effective and meaningful. Keywords: Environmental tax; Life cycle analysis; Environmental input-output analysis. |
| Keywords: | Medi ambient -- Impostos, Medi ambient -- Anàlisi d'impacte, 33 - Economia, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:urv:wpaper:2072/182644&r=agr |
| By: | Goswami, Rupak; Paul, Malay |
| Abstract: | As a profession, Extension has been prompted to embrace a broadened mandate that goes beyond transferring technologies and triggering agricultural development. International organisations have started to shift from ‘agricultural’ to ‘rural’ focus in their programmes and it is inevitable that extension’s success in future will not be judged in terms of technology transfer or (even) agricultural development alone. As a consequence, the scope of evaluating extension programmes will have to broaden itself for justifying the government expenditure and to enliven its prospect as a profession. Sustainable Livelihoods (SL) Framework provides excellent scope to capture the multifaceted impact of development programmes on clients’ livelihoods in terms of increase in their asset base and decrease in vulnerabilities. The present article describes development of a tool to assess the impact of Joint Forest Management (JFM) intervention in selected villages of the Ayodhya Hills of Purulia district, West Bengal and also shows the results of its field testing. The development of the tool followed a simple indicator-based multi-stakeholder approach taking SL framework as a reference. Conceptualisation of ‘impact pathway’ with continuous incorporation of stakeholder views helped to develop this tool. This was followed by the development of a ‘perception analysis tool’, using recall data, to assess the impact of JFM intervention on the respondents. The field testing of the tool successfully captured the impact of JFM on peoples’ assets and vulnerabilities. It could also discriminate successful Forest Protection Committee from the less successful one. This type of indicator-based multi-stakeholder approach may be applied for the future ‘extension plus’ programmes, which will contribute towards the sustainable livelihoods of its clients rather than disseminating technologies and/or technical information only. |
| Keywords: | Broad-based Extension; Impact Assessment; Impact Pathway; Sustainable Livelihoods Framework; Perception Analysis Tool; Joint Forest Management |
| JEL: | Q16 Q23 |
| Date: | 2011–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:37793&r=agr |
| By: | Wang, Tong; Hennessy, David A.; O'Connor, Annette |
| Abstract: | In 2010 the United States implemented the Veterinary Medicine Loan Repayment Program (VMLRP) to address perceived regional shortages in certain veterinary occupations, including food animal practice. With county as the unit of analysis, this paper describes a pair of models to evaluate factors associated with being designated a private practice shortagearea in 2010. One model is used to explain food animal veterinarian location choices so as to provide an objective evaluation of comparative shortage. The other model seeks to explain the counties chosen as shortageareas. Model results are then used to evaluate the program. On the whole the program appears to perform quite well. For several states, however, VMLRP shortage designations are inconsistent with the food animal veterinarian location model. Comparative shortage is generally more severe in states that have no VMLRP designated private practice shortage counties than in states that do. |
| Keywords: | food animal veterinarians; loan repayment program; practice location |
| Date: | 2012–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:35024&r=agr |
| By: | Hennessy, David A. |
| Abstract: | No satisfactory motivation has been forwarded in favor of any crop yield distribution, including thenormal. This article explores the foundations of yield distributions for the Law of the Minimum resourceconstraint technology at the plot level of analysis.With independent, identical, uniform resourceavailability distributions the yield skew is positive, whereas it is negative whenever the distributionsare normal. Simulations show how asymmetries in resource availabilities determine skewness. It issuggested that a negative yield skew occurs whenever production is tightly controlled so that the lefttails of some resources availabilities distributions are thin. Irrigation may increase yield skewness. |
| Keywords: | beta-normal distribution; crop insurance; Liebig technology; limiting factors; order statistics; reliability; weakest-link |
| JEL: | O32 Q12 Q15 Q16 |
| Date: | 2012–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:35018&r=agr |
| By: | Okamoto, Ikuko |
| Abstract: | Fishermen depend on Lake Inle in Myanmar for their livelihood. However, the lake has been undergoing environmental degradation over the years. Adding to the long-term decrease in the catch because of this degradation, these fishermen faced extremely low water levels in 2010, which they had previously not experienced. Based on field surveys, this paper aims to reveal how fishermen adapted and coped with the changing environment as well as the sudden shock of the abnormally low water levels. |
| Keywords: | Fisheries, Environmental problems, Myanmar, Coping, Adaptation, Resource, Fishermen |
| JEL: | Q13 Q2 Q22 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper329&r=agr |
| By: | Hennessy, David A. |
| Abstract: | Empirical studies point to negative crop yield skewness, but the literature provides few clear insights as to why. This paper formalizes three points on the matter. Statistical laws on aggregates do not imply a normal distribution. Whenever the weather-conditioned mean yield has diminishing marginal product with respect to a weather-conditioning index, then there is a disposition toward negative yield skewness. This is because high marginal product in bad weather stretches out the yield distribution's left tail relative to that for weather. For disaggregated yields, unconditional skewness is decomposed into weather-conditioned skewness plus two other terms and each is studied in turn. |
| Keywords: | conditional distribution; crop insurance; negative skewness; normal distribution; statistical laws |
| Date: | 2012–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:35019&r=agr |
| By: | de santis, roberta |
| Abstract: | Whether the Environmental Kutznets curve relationship holds for biodiversity or not remains an open issue. While there are several studies investigating the EKC relationship for biodiversity, they suffer from some limitations and the empirical evidence is inconclusive. More specifically, with few exceptions, the previous EKC studies for biodiversity looked into the diversity of a particular species or a number of species rather than a broader measure of biodiversity. In addition, these studies do not control for some economic factors that could directly or indirectly affect the biodiversity stock such as trade and foreign direct investments (FDI). International trade, in fact, could influence the biodiversity trough the effects on economic growth, production specialization and technological innovation diffusion. The presence or not of FDI in a country could be of help in assessing the “pollution haven” hypothesis that has obvious feedbacks on biodiversity. The innovative features of this paper are its attempts to estimate a ECK for biodiversity using an overall index of biodiversity terrestrial and marine and the inclusion in the traditional ECK equation of proxies for trade and FDI. According to our estimates for the main OECD countries in the period 1990-2010, the ECK hypothesis is partially verified. Rising incomes are first associated with increasing biodiversity then with decreasing biodiversity and eventually with increasing biodiversity again. This non-monotonic relationship could be explained by the fact that a certain level of income (production) there may be some biodiversity losses that cannot be continuously substituted with environmental-friendly production technology due to ecological threshold and the unique nature of the damage. |
| Keywords: | Biodiversity risk; Trade; FDI; Environmental Kuznets curve |
| JEL: | Q32 O11 F18 |
| Date: | 2012–03–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:37730&r=agr |