New Economics Papers
on Agricultural Economics
Issue of 2012‒04‒17
24 papers chosen by

  1. The Determinants of Rural Household Food Security on the Punjab, Pakistan: An Econometric Analysis By Bashir, Muhammad Khalid; Schilizzi, Steven; Pandit, Ram
  2. Participation, compliance and synergies at the farm level between the single payments scheme and farm certification labels By Wieck, Christine; Annen, Dominic N.
  3. Economic Reforms and Agriculture in Bangladesh: Assessment of Impacts using Economy-wide Simulation Models By Raihan, Selim
  4. Agricultural Output, Calories and Living Standards in England before and during The Industrial Revolution By Morgan Kelly; Cormac Ó Gráda
  5. 2011 Annual Report of the Southwestern Minnesota Farm Business Management Association By Nordquist, Dale W.; Nitchie, Donald L.; Kurtz, James N.; Paulson, Garen J.; Froslan, Janet M.; Woodford, John L.
  6. Development strategy in Bihar through revitalizing the agricultural sector : a preliminary analysis By Fujita, Koichi
  7. The Agricultural Productivity Gap in Developing Countries By Douglas Gollin; David Lagakos; Michael E. Waugh
  8. Adaptation and Innovation: An Analysis of Crop Biotechnology Patent Data By Shardul Agrawala; Cécile Bordier; Victoria Schreitter; Valerie Karplus
  9. Ntms, Agricultural and Food Trade, and Competitiveness. A Special Issue of The World Economy By Beghin, John C.; David Orden
  10. Oil and Agriculture in the Post-Separation Sudan By Siddig, Khalid H.A.
  11. Effects of Global Liquidity on Commodity and Food Prices By Ansgar Belke; Ingo Borden; Ulrich Volz
  12. Land fragmentation, cropland abandonment, and land market operation in Albania By Deininger, Klaus; Savastano, Sara; Carletto, Calogero
  13. Food security and storage in the Middle East and North Africa By Larson, Donald F.; Lampietti, Julian; Gouel, Christophe; Cafiero, Carlo; Roberts, John
  14. Food Prices and the Multiplier Effect of Export Policy By Paolo E. Giordani; Nadia Rocha; Michele Ruta
  15. Equitable access to land as a means of poverty reduction in rural china By Hao, Yan
  16. Assessment of the Impact of Avian Influenza Related Regulatory Policies on Poultry Meat Trade and Welfare By Wieck, Christine; Schlueter, Simon W.; Britz, Wolfgang
  17. Environmental and production cost impacts of no-till in Finland: Estimates from observed behavior. By Laukkanen, Marita; Nauges, Céline
  18. Climate (change) and conflict: resolving a puzzle of association and causation By Christian Almer; Stefan Boes
  19. Ricardo's Theory of Comparative Advantage: Old Idea, New Evidence By Costinot, Arnaud; Donaldson, Dave
  20. Comparison of the Investment Behavior of German and Kazakhstani Farmers: an Experimental Approach By Tubetov, Dulat; Maart, Syster Christin; Musshoff, Oliver
  21. Who faces higher prices? -An empirical analysis based on Japanese homescan data- By Abe, Naohito; Shiotani, Kyosuke
  22. Non-Homothetic Growth Models for the Environmental Kuznets Curve By Katsuyuki Shibayama; Iain Fraser
  23. Willingness to pay more for water in a climate of confrontation: The case of Sucre, Bolivia By Francisco González Gómez; Jorge Guardiola; Edna Guidi Gutiérrez
  24. The tropical timber industry in Gabon: a forward linkages approach to industrialisation By Terheggen, Anne

  1. By: Bashir, Muhammad Khalid; Schilizzi, Steven; Pandit, Ram
    Abstract: Pakistan is one of the leading producers of important agricultural commodities in the world with a relatively high proportion of undernourished population (26 %). This study aims to examine the food security trends in Pakistan in general, and to find out the household level food security and its key determinants in the rural areas of the Punjab Province in particular. Both secondary and primary data were used. Secondary data were obtained from Food and Agriculture Organization (FAO), World Bank and Government of Pakistan’s data sources. Primary data were collected from 1152 households in 12 districts of the Punjab province using questionnaire survey. The analysis was done in two phases i.e. (Phase-A) identification of food security trends, at national level and (Phase-B) household food security and its determinants. For Phase-A, graphical representations are produced and for Phase-B primary data were analyzed in two further stages. In stage one the food security status of households was calculated using the calorie intake method. The second stage focused on identifying the socio-economic factors affecting food security using the logistic regression. The secondary data revealed that Pakistan is a food sufficient as well as food secure country at the national level. But at the household level 23 percent of the sample households were measured to be food insecure. Econometric analysis revealed that monthly income, livestock assets, joint family system and education levels (middle, intermediate and graduation) were positively impacting the rural household food security. On the other hand, greater household heads’ age and family size had negative impacts on household food security. It is suggested that income generating opportunities needs to be created along with improvements in secondary and technical education systems, and family planning programs to alleviate food insecurity in the study region.
    Keywords: Food security, rural households, logistic regression, Punjab, Pakistan, Agricultural and Food Policy, Community/Rural/Urban Development, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, I30, Q18 and R20.,
    Date: 2012–03–28
  2. By: Wieck, Christine; Annen, Dominic N.
    Abstract: Most European farmers receive direct payments under the Single Payment Scheme and in addition, are member of farm certification schemes. Incentives to participate in these schemes are manifold: farm requirements often at least partially overlap, farm structure allows rather easy compliance, but also low monitoring intensities, detection rates, or sanctions may contribute to “free ride” on participation. The paper develops a theoretical model that explains farmer’s joint compliance behaviour and determinants of participation and tests the model using individual farm survey data. Evidence from the survey indicates that farmers weigh the relevance of compliance, control, detection and sanctions differently for the Single Payment Scheme and farm certification but strive to comply with all rules. Hence, potentially expected trade-off between costs and gains of participation and related compliance behaviour only partially occurs.
    Keywords: Single payment scheme, cross compliance, farmers’ participation, determinants, Agricultural and Food Policy, Demand and Price Analysis, Q12, Q18,
    Date: 2012–03–01
  3. By: Raihan, Selim
    Abstract: Agriculture is a major economic activity in Bangladesh. It currently employs around 50 percent of country’s labor force and contributes around 20 percent of country’s GDP. Growth in agricultural sector has important linkages with the overall economy through various channels. It is important to note that, at the WTO, Bangladesh, as an LDC, is not bound to undertake any liberalisation in its domestic agricultural sector in terms of tariff cut or subsidy withdrawal. However, there are concerns that actions taken by the developed and developing countries in terms of reduction in agricultural domestic support measures might have important negative implications for the net food importing countries like Bangladesh. It is also important to note that under bilateral trading arrangements, such as India-Bangladesh bilateral FTA, there are scopes for increased trade in agricultural products between Bangladesh and India. Bangladesh’s market access for its agricultural exports in India is likely to increase whereas there will be increased imports of agricultural products from India. Therefore, liberalisation in the trade in agriculture has important implications for the agricultural commodities which are either exported or imported. Increased market access of agricultural exports from Bangladesh under such trade agreement will lead to rise in production and employment in those export-oriented sectors; whereas, domestic liberalisation in the agricultural sectors may dampen output and employment in the import-competing agricultural sectors. It thus appears that the growth in the domestic agricultural sector doesn’t only rely on the domestic policies and programs, rather global and regional trade policies have important implications for this sector. Moreover, the various economic policies and programs, such as domestic fiscal policies, import policies and programs for growth in agricultural productivity also affect the development of the agricultural sector in an economy. This study explores the links between major economic policy reforms and growth the agricultural sector in Bangladesh. This study examines how economic policy reforms affect the agricultural sector in Bangladesh in terms of output, import, export and employment. Under a general equilibrium framework, this study explores three trade liberalization scenarios (a global agricultural trade liberalization scenario under WTO-Doha agreement, Bangladesh – India bilateral FTA, and domestic agricultural trade liberalization), one fiscal policy scenario (rise in agricultural subsidy) and one technological change scenario (rise in agricultural productivity).
    Keywords: Agricultural Trade Liberalization; WTO; FTA; CGE Model; Bangladesh
    JEL: F15 C68 F17 F14
    Date: 2011–12
  4. By: Morgan Kelly (University College Dublin); Cormac Ó Gráda (University College Dublin)
    Abstract: This paper surveys the results of four recent, separate attempts at estimating agricultural output and food availability in England and Wales at points between the Middle Ages and the Industrial Revolution. It highlights their contrasting implications for trends in economic growth and nutritional status over time. It also offers some suggestions aimed at narrowing gaps between the evidence and how it has been interpreted.
    Keywords: agriculture, nutrition, economic growth
    Date: 2012–04–11
  5. By: Nordquist, Dale W.; Nitchie, Donald L.; Kurtz, James N.; Paulson, Garen J.; Froslan, Janet M.; Woodford, John L.
    Abstract: This report summarizes the individual farm records of the members of the Southwestern Minnesota Farm Business Management Association for 2011. Whole-farm information and enterprise costs and returns are reported. The year-end analysis of the individual farms was performed by the Association fieldmen using the FINPACK software from the Center for Farm Financial Management. The individual analyses were summarized at the Department of Applied Economics using RankEm Central. In addition to the average of all farms, the averages for the high and low income groups are also presented. The tables are divided into four major groups: whole-farm information, crop enterprises, livestock enterprises, and summary information. The summary information includes whole farm historical trends and information by county, farm size, type of farm, debt to asset ratio, and operator age. Of the 114 farms in the Southwestern Association, the data for 107 farms are included in this report. The rest were omitted because the records were incomplete at the time that this report was prepared. In addition to this report, members receive an annual farm business analysis; on-farm instructional visits; end-of-year income tax planning and preparation; periodic meetings, tours, and seminars; a monthly newsletter; and other managerial and educational assistance. Each farmer pays an annual fee which covers the majority of the cost, with the balance defrayed by University of Minnesota Extension and research programs of the University of Minnesota.
    Keywords: Agricultural Finance, Farm Management,
    Date: 2012
  6. By: Fujita, Koichi
    Abstract: Based mainly on secondary data and partly on primary information obtained through field surveys in selected rural areas in Bihar in 2011, this paper firstly argues the critical importance of agricultural growth for overall economic development, and then reviews the sluggish growth of agriculture in Bihar in the past and examines the major reasons for this. The long-term negligence of agricultural research (especially development and diffusion endeavors for improved rice varieties suitable to the local conditions of Bihar) by the state government and some sort of ‘backwardness’ in tube-well irrigation technology can be pointed out as important constraints. There is, in particular, the ‘paradox’ in Bihar agriculture of why rice and wheat yields have remained so low in spite of the relatively well-developed irrigation by tube-wells. Finally, by showing the process of a rapid increase in autumn and winter rice yields during the 1990s in West Bengal, it is suggested that Bihar farmers and policy-makers should learn from the experience of West Bengal in order to get some hints for the development of the rice sector in Bihar.
    Keywords: India, Community development, Agriculture, Rice, Wheat, Local economy, Bihar, Agricultural backwardness, Rice improved varieties, Tube-wells, Experience of West Bengal
    JEL: O1 Q1 Q18
    Date: 2012–03
  7. By: Douglas Gollin; David Lagakos; Michael E. Waugh
    Date: 2011
  8. By: Shardul Agrawala; Cécile Bordier; Victoria Schreitter; Valerie Karplus
    Abstract: Innovation in technologies that promote mitigation and adaptation will be critical for tackling climate change. It can decrease the costs of policy measures and provide new opportunities for the private sector. However, most discussions of innovation have focused on mitigation, while little attention has been paid to innovation for adaptation. This paper uses agricultural crop biotechnology as a case study of innovative activity. The agricultural sector is considered to be particularly vulnerable to climate change, in addition to facing the pressures of meeting the demands of a rising world population. Innovation in plant breeding to develop crop varieties that are more resilient to climate change impacts is one of several possible adaptation options for agriculture. This paper neither advocates nor discourages the use of biotechnology, but focuses on providing estimates of the level and trends of innovation in this field.
    Keywords: innovation, agriculture, patents, climate change, adaptation, biotechnology, innovation, agriculture, brevets, changement climatique, adaptation, biotechnologie
    JEL: O39 Q16 Q54
    Date: 2012–03–26
  9. By: Beghin, John C.; David Orden
    Abstract: NTMs, Agricultural and Food Trade, and Competitiveness  Special Issue of The World Economy (forthcoming). Selected Papers from a European Commission co-funded Project on Assessment the Impacts of Non-tariff Measures on Competitiveness of the EU and Selected Trade Partners. Guest Editors: John Beghin and David Orden. The PDF file  has the Table of Contents and teh introduction. Please contact the authors for individual papers. Once the articles are available on line, we will link directly to them.Contents:Overview  Key Findings of the NTM-Impact Project      David Orden, John Beghin, and Guy Henry  The Impact of Regulatory Heterogeneity on Agri-food Trade     Niven Winchester, Marie-Luise Rau, Christian Goetz, Bruno Larue, Tsunehiro Otsuki, Karl Shutes, Christine Wieck, Heloisa Lee Burnquist, Maurício Jorge Pinto de Souza, and Rosane Nunes de Faria  Convergence of US and EU Production Practices under the New FDA Food Safety Modernization Act  John Humphrey  Case Studies The Trade and Welfare Impacts of Australian Quarantine Policies: The Case of Pigmeat John Beghin and Mark Melatos Potential of Regional and Seasonal Requirements in US Regulation of Fresh Lemon Imports Caesar Cororaton and Everett Peterson Assessment of the Impact of Avian Influenza Related Regulatory Policies on Poultry Meat Trade and Welfare Christine Wieck, Simon Schlueter and Wolfgang Britz Compositional Standards, Import Permits and Market Structure: The Case of Canadian Cheese Imports Marie-Hélène Felt, Bruno Larue and Jean-Philippe Gervais  Effects of GlobalGAP on Horticultural Exports and Employment in Senegal   Liesbeth Colen, Miet Maertens and Jo Swinnen  
    Keywords: Non-tariff measures (NTMs); standards; agricultural tariffs; agricultural and agri-food trade; trade impact; welfare impact
    JEL: F13 F14 Q17 Q18
    Date: 2012–02–26
  10. By: Siddig, Khalid H.A.
    Abstract: The Comprehensive Peace Agreement (CPA), which was signed by the government of Sudan and the Sudanese People’s Liberation Movement (SPLM) ended more than 20 years of civil war. According to the CPA, the Sudan’s government has 50% of the oil exploited from the wells existing in the south in addition to the oil produced from the northern wells. The latter represents about 30% of the total oil production in Sudan. In January 2011, the people in southern Sudan have voted for separation from the Sudan and in July 2011 the Republic of South Sudan was officially announced as Africa’s newest state. Now the CPA period is over and the south possesses its entire production of oil, but need to use the export infrastructure that exists in the north to export it. For that the south need to pay fees and customs for which the exact amounts need to be further negotiated. Sudan would lose a huge part of its revenue from oil, which constituted a growing share in its trade, government revenue and GDP during the last decade. This paper tries to investigate the consequences of separation on the Sudan’s economy. A regional general equilibrium model with Africa database of the Global Trade Analysis Project (GTAP) is applied. Results show that the entire economy would be hit when a 20% cut in oil output is simulated. The study introduces the non-oil exports of the agricultural sector as an alternative to oil and recommends enhancing the efficiency in agriculture and promoting agricultural exports to gradually bring the economy back on track.
    Keywords: oil, agriculture, Sudan, South Sudan, separation, CGE modelling, Agricultural and Food Policy, Crop Production/Industries, Food Security and Poverty, International Relations/Trade, Labor and Human Capital, Land Economics/Use, Production Economics, Productivity Analysis, C6, D5, D6, F1, F2, H5, N5,
    Date: 2012–04
  11. By: Ansgar Belke; Ingo Borden; Ulrich Volz
    Abstract: This paper investigates the relationship between global liquidity and commodity and food prices applying a global cointegrated vector-autoregressive model. We use different measures of global liquidity and various indices of commodity and food prices for the period 1980–2011. Our results support the hypothesis that there is a positive long-run relation between global liquidity and the development of food and commodity prices, and that food and commodity prices adjust significantly to this cointegrating relation. Global liquidity, in contrast, does not adjust, it drives the relationship.
    Keywords: Commodity prices; food prices; global liquidity; cointegration; CVAR analysis
    JEL: E52 E58 C32
    Date: 2012–03
  12. By: Deininger, Klaus; Savastano, Sara; Carletto, Calogero
    Abstract: Albania's radical farmland distribution is credited with averting an economic crisis and social unrest during the transition. But many believe it led to a holding structure too fragmented to be efficient, and that public efforts to consolidate plots are needed to lay the foundation for greater rural productivity. This paper uses farm-level data from the 2005 Albania Living Standards Measurement Survey to explore this quantitatively. The analysis finds no support for the argument that fragmentation reduces productivity. However, producers fail to utilize about 10 percent of the country's productive land, and, in the majority of cases, this land has been idle for at least five years. Farmers quote inefficiently-small plots as the reason for this in few cases, casting doubt on the scope for land consolidation to solve this issue. Instead, the data are consistent with the notion of land market imperfections, which can be traced to gaps in the legal and policy framework, as well as inefficiencies in registry operations, leading to land abandonment on a large scale. To maintain the productive potential of Albania's rural economy and, if and when needed, the ability to conduct consolidation in a cost-effective and sustainable manner, it will be critical to complement the emphasis on consolidation with an effort to address those gaps and inefficiencies on a priority basis.
    Keywords: Banks&Banking Reform,Rural Development Knowledge&Information Systems,Rural Land Policies for Poverty Reduction,Land Use and Policies,Municipal Housing and Land
    Date: 2012–04–01
  13. By: Larson, Donald F.; Lampietti, Julian; Gouel, Christophe; Cafiero, Carlo; Roberts, John
    Abstract: In times of highly volatile commodity markets, governments often try to protect their populations from rapidly-rising food prices, which can be particularly harsh for the poor. A potential solution for food-deficit countries is to hold strategic reserves, which can be called on when international prices spike. But how large should strategic stockpiles be? This paper develops a dynamic storage model for wheat in the Middle East and North Africa (MENA) region, where imported wheat dominates the average diet. The paper uses the model to analyze a strategy that sets aside wheat stockpiles, which can be used when needed to keep domestic prices below a targeted price. This paper shows that if the target is set high and reserves are adequate, the strategy can be effective and robust. Contrary to most interventions, strategic storage policies are counter-cyclical and, when the importing region is sufficiently large, a regional policy can smooth global prices. This paper shows that this is the case for the MENA region. Nevertheless, the policy is more costly than the pro-cyclical policy of a targeted intervention that directly offsets high prices with a subsidy similar to food stamps.
    Keywords: Markets and Market Access,Access to Markets,Economic Theory&Research,Emerging Markets,Food&Beverage Industry
    Date: 2012–04–01
  14. By: Paolo E. Giordani (Luiss "Guido Carli"); Nadia Rocha (World Trade Organization); Michele Ruta (World Trade Organization)
    Abstract: This paper studies the relationship between export policy and food prices. We show that, when individuals are loss averse, food exporters may use trade policy to shield the domestic economy from large price shocks. This creates a complementarity between the price of food in international markets and export policy. Speci?cally, unilateral actions by exporting countries give rise to a "multiplier e¤ect": when a shock in the international food market drives up (down) its price, governments respond by imposing export restrictions (subsidies), thus exacerbating the initial shock and soliciting further export activism. We test this theory with a new dataset that comprises monthly information on trade measures across 125 countries and 29 food products for the period 2008-10, ?nding evidence of a multiplier e¤ect. Global restrictions in a product (i.e. the share of international trade covered by export restrictions) are positively correlated with the probability of imposing a new export restriction on that product, especially for staple foods. Large exporters are found to be more reactive to restrictive measures, suggesting that the multiplier e¤ect is mostly driven by this group. Finally, we estimate that a 1 per cent surge in global restrictions increased international food prices by 1.1 per cent on average during 2008-10. These ?ndings contribute to inform the broader debate on the proper regulation of export policy within the multilateral trading system.
    Keywords: Loss aversion; Export policy; Multiplier e¤ect; Food crisis; WTO
    JEL: F13 F59 Q02 Q17
    Date: 2012
  15. By: Hao, Yan
    Abstract: In China, as in many developing countries, poverty is primarily a rural phenomenon. Considerable efforts have been made over the last few decades to reduce poverty in China's rural areas; and indeed, the poverty rate in these areas has fallen from 30.7% in 1978 to 3.8% in 2009. This paper begins with a review of ancient Chinese texts on the importance of equitable access to land. In an agrarian economy, the issue of land distribution is critical not only to a country's economic prosperity but also to its political survival. After reviewing the achievements and failures of the Communist government's land policy introduced in the 1950s, I discuss the household contract system launched by the government in the early 1980s. Under the new system, the formerly collectively owned farmland was contracted out equally to villagers on a household basis, who hold the land in quasiprivate ownership. The policy ensuring farmers' equal access to land has profound political, economic, and social implications in today's China. Given the well-documented correlation between landlessness and rural poverty, the role of land security in reducing poverty in rural China should not be underestimated. However, this policy alone cannot eliminate poverty completely. Even when families are equally granted a piece of land, they may still suffer from poverty if the land cannot produce enough food or generate sufficient income. I enumerate a number of on-going anti-poverty programs at national and local level that supplement the policy on equitable access to land. While these supplementary programs are indeed important, China's experience shows that equitable access to land is an especially effective means to combat rural poverty. --
    Keywords: China,rural poverty,poverty reduction,Communist government,land policy,land distribution,developing countries
    JEL: I38 P25 R52
    Date: 2011
  16. By: Wieck, Christine; Schlueter, Simon W.; Britz, Wolfgang
    Abstract: We use two methodological approaches to analyze avian influenza related quarantine measures. First, a Heckman type gravity model is used to estimate the trade impact and second, a spatial partial equilibrium simulation model is developed to simulate welfare changes. The simulation model considers spread and transmission risk according to the disease status of the importing country as well as parameter uncertainty of the calibrated coefficients by using a Monte Carlo approach. The econometric results show that the principle of regionalization is preferred to import trade bans for uncooked meat. The simulation results verify the negative welfare impact of currently implemented regulatory policies and indicate that significant trade diversion effects according to the disease status of countries occur. The welfare results confirm that a trade ban is not the most appropriate measure to address the infection risk resulting from the spread of the avian influenza virus.
    Keywords: animal disease, quarantine measure, non-tariff measure, welfare, gravity model, simulation model, Agricultural and Food Policy, Demand and Price Analysis, F14, F17, Q11, Q17, Q18,
    Date: 2012–02–13
  17. By: Laukkanen, Marita; Nauges, Céline
    Date: 2011–08
  18. By: Christian Almer; Stefan Boes
    Abstract: There is an ongoing discussion especially among political scientists and economists whether and how climate variability affects civil conflicts and wars in developing countries. Given the predicted climatic changes, several studies argue that increasing temperatures or decreasing precipitation will lead to more conflicts in the future. This paper aims at linking the different strands of the literature by analyzing the causal mechanisms at work. We use short-term weather variability as well as long-term changes in Sub-Saharan Africa and find that climate (change) significantly affects agricultural output, to some extent also GDP, and has no robust direct effects on civil wars. Negative shocks in GDP, however, have the expected fostering effects on civil conflicts.
    Keywords: Civil conflict; climate change; economic shocks; Africa
    JEL: D74 Q54 C36 N47
    Date: 2012–04
  19. By: Costinot, Arnaud; Donaldson, Dave
    Abstract: When asked to name one proposition in the social sciences that is both true and non-trivial, Paul Samuelson famously replied: `Ricardo's theory of comparative advantage'. Truth, however, in Samuelson's reply refers to the fact that Ricardo's theory of comparative advantage is mathematically correct, not that it is empirically valid. The goal of this paper is to assess the empirical performance of Ricardo's ideas. We use novel agricultural data that describe the productivity in 17 crops of 1.6 million parcels of land in 55 countries around the world. Crucially, this dataset contains information about the productivity of each parcel of land in all crops, not just those that are currently being grown. This direct information about relative productivity differences across economic activities allows us to compute, for the first time, the output predicted by Ricardo's theory of comparative advantage. Despite all of the real-world considerations from which this theory abstracts, we find that Ricardo's theory of comparative advantage has significant explanatory power in the data, at least within the scope of our analysis.
    Keywords: comparative advantage; Ricardian theory
    JEL: F10 F11
    Date: 2012–04
  20. By: Tubetov, Dulat; Maart, Syster Christin; Musshoff, Oliver
    Abstract: Kazakhstan and Germany have different development levels of the agricultural sectors. One of the explanations for this fact might be the different investment behavior of farmers in the two countries. We experimentally analyze whether the investment behavior of farmers is consistent with the normative benchmarks of the net present value criterion or the real options approach. Furthermore, we experimentally compare the investment behavior of farmers in the two countries in an agricultural and a non-agricultural treatment. In addition, farmers were confronted with the two treatments in a different order. Our results show that both theories cannot exactly predict the investment behavior of farmers. Farmers invest later than the net present value criterion suggests and earlier than the real options approach suggests. However, German farmers invest later than Kazakhstani farmers, which mean that the investment behavior of German farmers is more in accordance with the superior real options approach. Therefore, the different investment behavior might partly be an explanation for different development levels of the agricultural sectors of the two countries. Moreover, results are independent from the framing of an agricultural and a non-agricultural treatment. However, farmers learn from their former investment decisions and consider the value of waiting over time.
    Keywords: Experimental Economics, Investment Timing, Real Options, Kazakhstan, Germany, Agricultural Finance, Institutional and Behavioral Economics, International Development, Risk and Uncertainty, C91, D03, D81, D92,
    Date: 2012–04
  21. By: Abe, Naohito; Shiotani, Kyosuke
    Abstract: On the basis of household-level scanner data (homescan) for Japan over a three-year period, we construct a household-level price index, and we investigate the causes of the differences in prices across households. As noted by Aguiar and Hurst (2007), large price differentials across households are observed. The differences across age and income groups, however, are small. In addition, we find that elderly people face higher prices than younger people, which is opposite of the results of Aguiar and Hurst (2007). The most important determinant of the price level is the reliance on bargain sales; an increase in the purchase at bargain sales by one standard deviation decreases the price level by more than 0.9%, while the shopping frequency has only limited effects on the price level.
    Date: 2012–03
  22. By: Katsuyuki Shibayama; Iain Fraser
    Abstract: In this paper, we study the impact of the economic growth on the environment. First, we show that, at each income level, eta determines the direction of environmental degradation, where eta is the elasticity of substitution between consumption and the environment. That is, for eta large enough, as income increases people accept environmental degradation by enjoying more consumption as compensation, and vice versa. Intuitively, there are two effects operating; the income effect encourages the demand for better environmental quality simply because the environment is a normal good, whereas the substitution effect discourages it because maintaining the environment becomes more expensive as technology improvement increases the production of the general consumption good per unit of emission. The strength of the substitution effect is governed by eta. Hence, the impact of economic growth on the environment crucially depends on eta. Second, we demonstrate that exponential utility generates the environmental Kuznets curve (EKC) under a wide class of models without adding any other peculiar assumptions. Under exponential utility, eta is decreasing in income; intuitively, when a country is poor (large eta), people seek more consumption at the cost of environmental degradation, but, once it becomes rich enough (small eta), they seek increased environmental quality.
    Keywords: Environmental Kuznets Curve; Economic Growth; Non-Homothetic Preferences; Generalized Isoelastic Preferences
    JEL: O13 Q56
    Date: 2012–02
  23. By: Francisco González Gómez (Dpto. Economía Aplicada); Jorge Guardiola (Universidad Cardenal Herrera); Edna Guidi Gutiérrez (Instituto Iberoamericano de Municipalistas)
    Date: 2012–03
  24. By: Terheggen, Anne
    Abstract: The breadth and depth of forward linkages in the tropical timber industry of Gabon is a result of three inter-acting drivers: the nature of final markets, ownership of production, and sector-specific policy. The Forestry Code set explicit domestic processing targets built on the trajectory of French processors. Still, while this is theoretically in line with European market demands for wood products, the forced beneficiation resulted in Chinese, Malaysian, and Gabonese producers, whose prime activity is the exploitation of logs for processing industries in China, to limit their participation in forward linkages to the sawnwood sub-sector, characterised by low entry barriers and negative producer margins. Gabon's comparative advantage lies in the exploitation of its natural resource tropical timber for export markets. Logging is also a 'superior' technology allowing the appropriation of resource rents. These are largely diluted in processing due to production cost penalties such as high reservation wages, inadequate infrastructure, lack of skills, and the political economy of Gabon. The conflict between the envisaged forward linkages approach to industrialisation (in light of falling oil reserves), industry actors' market focuses, motivations, and capabilities, as well as conclusions drawn about comparative advantages and linkage-blockages, has significant consequences for industrial development.
    Keywords: emerging economies; China; Gabon; timber sector; global value chains; trade; industrialization; resource-based growth
    JEL: F00 L73 O25 L78 O13 F14 A10
    Date: 2011–03

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