nep-agr New Economics Papers
on Agricultural Economics
Issue of 2012‒10‒20
29 papers chosen by
Angelo Zago
University of Verona

  1. What is the Scope for Increased Fertilizer Use in Kenya? By Sheahan, Megan; Black, Roy; Jayne, Thomas S.
  2. How African Agriculture Can Adapt to Climate Change? A Counterfactual Analysis from Ethiopia By Salvatore Di Falco; Marcella Veronesi
  3. Water Conservation in Irrigated Agriculture: Trends and Challenges in the Face of Emerging Demands By Schaible, Glenn D.; Aillery, Marcel P.
  4. Improving the Lot of the Farmer: Development Challenges in Timor-Leste during the Second Decade of Independence By Lundahl, Mats; Sjöholm, Fredrik
  5. Recalibrating the Reported Rates of Return to Food and Agricultural R&D By Rao, Xudong; Hurley, Terrance M.; Pardey, Philip G.
  6. Do financial investors affect the price of wheat? By Girardi, Daniele
  7. Characterizing food prices in India By Andaleeb Rahman
  8. Greening the CAP: the way forward By Matthews, Alan
  9. Access to credit and the determinants of technical inefficiency among specialized small farmers in Chile By Saldias, Rodrigo; von Cramon-Taubadel, Stephan
  10. How Economic Conditions Affect Participation in USDA Nutrition Assistance Programs By Hanson, Kenneth; Oliveira, Victor
  11. The anatomy of a credit crisis: the boom and bust in farm land prices in the United States in the 1920s By Rodney Ramcharan; Raghuram Rajan
  12. The Heterogeneous welfare impacts of participation in contract farming schemes: Evidence from Southern India By Sudha Narayanan
  13. Determinants for Adoption of ICT-based MIS by Smallholder Farmers and Traders in Mayuge District, Uganda By Sekabira, Haruna; Bonabana, Jackline; Asingwire, Narathius
  14. Organic Food and Human Health: Instrumental Variables Evidence By Heinz Welsch
  15. Safe gambles? Farmer perceptions of transactional certainty and risk-return tradeoffs in contract farming schemes in Southern India By Sudha Narayanan
  16. Agriculture, Predation and Development By Bethencourt, Carlos; Perera-Tallo, Fernando
  17. An analysis of physical and monetary losses of environmental health and natural resources in India By Mani, Muthukumara; Markandya, Anil; Sagar, Aarsi; Strukova, Elena
  18. Does Non-farm Sector Employment reduce Rural Poverty and Vulnerability? Evidence from Vietnam and India By Katsushi S. Imai; Raghav Gaiha; Woojin Kang; Samuel Annim; Ganesh Thapa
  19. Notional contracts: The Moral economy of contract farming arrangements in India By Sudha Narayanan
  20. Returning Home after Civil War: The Consequences of Forced Displacement for Food Security, Nutrition and Poverty among Burundese Households By Philip Verwimp
  21. Adverse selection in a community-based health insurance scheme in rural Africa: implications for introducing targeted subsidies. By Parmar, Divya; Souares, Aurélia; de Allegri, Manuela; Savadogo, Germain; Sauerborn, Rainer
  22. Economics of Biofuels: An Overview of Policies, Impacts and Prospects By Moschini, GianCarlo; Cui, Jingbo; Lapan, Harvey
  23. Designing REDD+ Schemes to Address Permanence Concerns: Empirical Evidence from Kenya By Marcella Veronesi; Tim Schloendorn; Astrid Zabel; Stefanie Engel
  24. Sales and Firm Entry: The Case of Wal-Mart By Glandon, PJ; Jaremski, Matthew
  25. Is Psychological Well-being Linked to the Consumption of Fruit and Vegetables? By Blanchflower, David G.; Oswald, Andrew J.; Stewart-Brown, Sarah
  26. Parametric Bootstrap Tests for Futures Price and Implied Volatility Biases with Application to Rating Livestock Margin Insurance for Dairy Cattle By Bozic, Marin; Newton, John; Thraen, Cameron S.; Gould, Brian W.
  27. Estimation of Residential Water Demand with Imprecise Price Perception By Marie-Estelle Binet; Fabrizio Carlevaro; Michel Paul
  28. Estimating Mortality and Economic Costs of Particulate Air Pollution in Developing Countries: The Case of Nigeria By N. Yaduma; M. Kortelainen; A. Wossink
  29. Cartelization Through Buyer Groups By Chris Doyle; Martijn A. Han; ;

  1. By: Sheahan, Megan; Black, Roy; Jayne, Thomas S.
    Abstract: Despite upward trends in fertilizer application rates on maize fields over the last twenty years, there remains a perception in Kenya that fertilizer use is not expanding quickly enough and that application rates are not high enough to reverse the country’s growing national food deficit. In 2007, this manifested in the creation of a comprehensive multi-million dollar fertilizer and improved seed subsidy and training program, the National Accelerated Agricultural Inputs Access Program (NAAIAP), with the objective of raising food production and farm productivity. However, little nationwide and longer term evidence exists to determine whether higher fertilizer application rates are profitable for farmers and whether they would have an incentive to continue using it on commercial terms after graduating from the subsidy program.
    Keywords: Kenya, Fertilizer, Food Security, Agricultural and Food Policy, Consumer/Household Economics, Food Security and Poverty, International Development, Production Economics, Productivity Analysis,
    Date: 2012–07
  2. By: Salvatore Di Falco (London School of Economics and Political Science); Marcella Veronesi (Department of Economics (University of Verona))
    Abstract: We analyse and compare the impact of different adaptation strategies on crop net revenues in the Nile Basin of Ethiopia. We implement a counterfactual analysis, and estimate a multinomial endogenous switching regression model of climate change adaptation and crop net revenues. We combine data from 1,000 farm households with spatial climate data at the farm household level in Ethiopia. We find that adaptation to climate change based upon a combination of strategies -opposed to strategies adopted in isolation- increases farm net revenues. In particular, the combinations of changing crops with water or soil conservation strategies deliver the highest pay off.
    Keywords: adaptation, climate change, endogenous switching, Ethiopia, net revenues
    JEL: Q54 Q56
    Date: 2012–03
  3. By: Schaible, Glenn D.; Aillery, Marcel P.
    Abstract: This report relies on fi ndings from several national surveys and current literature to assess water resource use and conservation measures within the U.S. irrigated crop sector. U.S. agriculture accounts for 80-90 percent of the Nation’s consumptive water use (water lost to the environment by evaporation, crop transpiration, or incorporation into products. Expanding water demands to support population and economic growth, environmental flows (water within wetlands, rivers, and groundwater systems needed to maintain natural ecosystems), and energy-sector growth, combined with Native American water-right claims and supply/demand shifts expected with climate change, will present new challenges for agricultural water use and conservation, particularly for the 17 Western States that account for nearly three-quarters of U.S. irrigated agriculture. Despite technological innovations, at least half of U.S. irrigated cropland acreage is still irrigated with less effi-cient, traditional irrigation application systems. Sustainability of irrigated agriculture will depend partly on whether producers adopt more effi cient irrigation production systems that integrate improved onfarm water management practices with effi-cient irrigation application systems.
    Keywords: agricultural water conservation, irrigated agriculture, irrigation effi ciency, water supply and demand, irrigation technologies, water management practices, water conservation policy, Environmental Economics and Policy, Resource /Energy Economics and Policy,
    Date: 2012–09–27
  4. By: Lundahl, Mats (Stockholm School of Economics); Sjöholm, Fredrik (Department of Economics, Lund University)
    Abstract: Timor-Leste’s first ten years of independence have been turbulent and a large share of the population remains poor. Broad-based improvements in living standards will require improvements in agricultural production since most Timorese are subsistence farmers and since there is no modern sector to absorb a fast-growing population. This paper discusses what determines agricultural development in Timor-Leste and how such development can be achieved. This is done in two steps. The first one takes the production function as its point of departure. Agricultural output is seen as a function of inputs (land, capital and labor) and technology, which in turn are influenced by the infrastructure and institutions of the economy and by external factors which cannot be influenced by policy measures. The second part, in turn, emphasizes the fact that Timor-Leste is a market economy. A model of an agricultural household is constructed. The static optimum of the household is derived and the effects on production, consumption, sales, income and leisure of the household of different price incentives (changes in food prices, cash crop prices and prices of manufactured goods) are investigated.
    Keywords: Timor-Leste; Agriculture; Poverty; Development; Rural
    JEL: O13 Q15 Q18
    Date: 2012–10–03
  5. By: Rao, Xudong; Hurley, Terrance M.; Pardey, Philip G.
    Abstract: Prices of basic food staples and feed crops have soared in recent years, renewing concerns about the ability of global food supplies to meet the projected growth in aggregate demand. Notwithstanding these concerns, and apparently at odds with a vast body of economic evidence reporting exceptionally high rates of return to investments in agricultural R&D, growth in public R&D spending for food and agriculture has slowed worldwide, especially in rich countries. Left unchecked, the consequent slowdown in agricultural productivity will push many more people into hunger and undercut economic growth, especially in the many economies worldwide still heavily reliant on agriculture. The observed R&D spending behavior is consistent with a determination that the rate of return evidence is implausible. We examine this notion, recalibrate a new, comprehensive compilation of the evidence, and find in favor of a much reduced rate of return to research. Nonetheless, the scaling back of public agricultural R&D spending is not supported from this new economic view of the evidence.
    Keywords: Agricultural and Food Policy, Research and Development/Tech Change/Emerging Technologies,
    Date: 2012–09
  6. By: Girardi, Daniele
    Abstract: It is widely debated whether financial speculation was a significant force behind recent food price fluctuations. As a matter of fact, during the 2000s agricultural commodity derivatives markets were flooded by a ‘wall of money’ coming from financial investors. In agricultural exchanges, the greatest part of this huge financial inflow came from index traders, i.e. financial actors that follow a passive strategy of tracking a commodity index. In this article I present new empirical evidence that supports the hypothesis that financial investments have affected wheat price dynamics in recent years. In particular, I focus on Hard Red Winter (HRW) wheat. Since 2007 HRW wheat price fluctuations have been positively related to US stock market returns and oil price movements. These correlations appear to be determined by commodity index traders, since both these relationships proved to be spurious, with the most tracked commodity index as the confounding variable.
    Keywords: Agricultural Commodity Prices; Financialization; Commodity Futures Markets; Commodity Index Trading
    JEL: Q1 G13
    Date: 2012–01–01
  7. By: Andaleeb Rahman (Indira Gandhi Institute of Development Research; Institute of Economic Growth)
    Abstract: This paper seeks to improve our understanding of the behaviour of wholesale price index (WPI) of 24 selected food products in India over a long period of time. The hypothesis of declining trend in prices is not found for all commodities although we do find that price of food grains exhibit a negative trend as a result of positive productivity shock. Two main finding of this paper in the context of cyclical behaviour of prices are: asymmetry in the duration spent in boom and slump and the fact that the price cycle does not have a consistent shape. This has implications for formulating counter cyclical policies.
    Keywords: Price level, Cycles
    JEL: E31 E32
    Date: 2012–09
  8. By: Matthews, Alan
    Abstract: This paper reviews the debate on the proposal to introduce a green payment in Pillar 1 of the CAP since the publication of the Commission’s legislative proposals for the EU’s Common Agricultural Policy post-2013 in October 2011 to June 2012. Both arms of the legislative authority have begun to formulate their positions in response to stakeholder reactions. Many relevant details of how the proposals will be implemented remain unclear, but an attempt is made to examine their potential contribution to environmental improvement. Increasing the ambition of agri-environment measures in rural development programmes in Pillar 2, combined with strengthened cross-compliance standards, could offer more effective environmental protection at a lower cost in terms of foregone food production. The legislative process to date indicates that the final outcome will be based on the Commission’s original ideas but there is still scope to improve the environmental impact of CAP spending in the next MFF period.
    Keywords: Greening, agri-environment measures, direct payments, Common Agricultural Policy, Agricultural and Food Policy, Q18, Q27,
    Date: 2012–06
  9. By: Saldias, Rodrigo; von Cramon-Taubadel, Stephan
    Abstract: The influence on technical efficiency of access to credit and public support policies is studied for two groups of specialized small farmers in Chile. Using 2004 data, translog stochastic frontier production functions for 109 livestock and 342 crop producers are estimated. Mean technical efficiency is 89% and 78% for crop and livestock producers, respectively. Technical efficiency increases with decreasing use of inputs, dependence on on-farm income, farmer education, family size and the age of the family head. Extension services do not appear to help farms become more efficient, and even reduce efficiency among specialised crop pro-ducers. The volume of credit increases efficiency in crop production and reduces it in live-stock production. Correspondingly, credit constrained farmers are less efficient in crop pro-duction and more efficient in livestock. These results may reflect the fact that investments in livestock production can involve considerable adjustment costs in the short run. For livestock producers, credit volume and credit constraints are found to be endogenous to technical effi-ciency. A possible explanation is the organisation of public support for small livestock pro-ducers in Chile, which provides lenders with information about individual livestock produc-ers. This might enable lenders to target loans on the basis of efficiency. Correcting for this endogeneity does not lead to qualitatively different results, but does influence point estimates of parameters in the production function and inefficiency models. This highlights the impor-tance of testing for endogeneity in the variables used to model inefficiency effects. --
    Date: 2012
  10. By: Hanson, Kenneth; Oliveira, Victor
    Abstract: This study, based on 1976-2010 data, examines the relationship between U.S. economic conditions and participation in the U.S. Department of Agriculture’s five largest nutrition assistance programs. It also describes how changes in program policy and other factors may have influenced this relationship. The five programs are: Supplemental Nutrition Assistance Program (SNAP, formerly the Food Stamp Program), Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), National School Lunch Program (NSLP), School Breakfast Program (SBP), and Child and Adult Care Food Program (CACFP). Although SNAP’s reputation as one of the Nation’s primary counter-cyclical assistance programs—expanding during economic downturns and contracting during periods of economic growth—is well established, there has been little analysis of the effect of the economy on the other programs. The results of this study strongly suggest that, to varying degrees, economic conditions influence participation in all the major nutrition assistance programs, not just in SNAP.
    Keywords: Nutrition assistance programs, business cycle, caseloads, participation, unemployment rate, Supplemental Nutrition Assistance Program (SNAP), Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), National School Lunch Program (NSLP), School Breakfast Program (SBP), and Child and Adult Care Food Program (CACFP)., Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety, Food Security and Poverty,
    Date: 2012–09
  11. By: Rodney Ramcharan; Raghuram Rajan
    Abstract: Does credit availability exacerbate asset price inflation? What channels could it work through? What are the long run consequences? In this paper we address these questions by examining the farm land price boom (and bust) in the United States that preceded the Great Depression. We find that credit availability likely had a direct effect on inflating land prices. Credit availability may have also amplified the relationship between the perceived improvement in fundamentals and land prices. When the perceived fundamentals soured, however, areas with higher ex ante credit availability suffered a greater fall in land prices, and experienced higher bank failure rates. Land prices stayed low for a number of decades after the bust in areas that had higher credit availability, suggesting that the effects of booms and busts induced by credit availability might be persistent. We draw lessons for regulatory policy.
    Date: 2012
  12. By: Sudha Narayanan (Indira Gandhi Institute of Development Research)
    Abstract: Assessing the extent of welfare gains from participation in contract farming arrangements is important to be able to make a case for promoting contract farming as a way for smallholders to capitalize on the opportunities okered by modern supply chains. At the same time, empirical accounts of contract farming schemes in developing countries not only suggest high mortality rates but also show that many schemes have high farmer exit or attrition rates, indicating that farmer experiences might be variable. This paper demonstrates the heterogeneity of welfare impacts of contract farming participation by estimating an endogenous switching model using survey data for 474 farmers in four commodity sectors, gherkins, papaya marigold and broiler. The study shows that net welfare gains vary widely both across contract commodities and across farmers within a commodity sector. While contracting in papaya and broiler are associated with improvements in net prolt per month for those participating and potential improvements of 47 and 123 for current non-participants, the impacts for gherkins and marigold are more ambiguous. The standard deviation of point estimates of treatment ekects is quite large indicating variability in welfare gains from contracting to dikerent farmers even within the same commodity sectors. It is therefore important to recognize that notwithstanding the sign of average treatment ekects, contract farming arrangements have diverse impacts on income for individual farmers.
    Date: 2012–09
  13. By: Sekabira, Haruna; Bonabana, Jackline; Asingwire, Narathius
    Abstract: Market access is increasingly relying on ICTs like telephony, internet and radios that are only adopted at a slow pace and haphazardly. Despite the need for ICTs in Market Information Services (MIS), ICT adoption and usage in Africa is very low. Little is known about available ICTs for use in MIS including; technology, its potential users, and characteristics of both entities. Closing such knowledge gaps is justified. The study assessed adoption of ICT-based MIS by smallholder farmers and traders in Mayuge, specifically determining; ICT components used, factors influencing; adoption of ICT-based MIS and choice of ICT component used. Stratified random sampling was used to collect data with structured questionnaires administered to 150 farmers and 50 traders and analysed using SPSS and STATA. Majority of adopters were males. Fifty four percent of respondents had knowledge of existence of ICT groups but only 22% had membership despite 80% agreeing that ICTs benefit agriculture. Average experience in using ICTs was 3.16 years and 55% of respondents were of primary education. The radio was the most used old ICT whereas the mobile phone was most used new ICT and mostly for calls. Expensive handsets, poverty, poor power supply, lack of expertise and poor network coverage limited ICT use. Logit model results showed that farmers with knowledge of existence of ICT groups and those who thought that ICTs benefited agriculture were more likely adopters. Family size and land farmed previous season significantly influenced farmers’ adoption, whereas age, trading experience, family size and monthly expenses on ICTs influenced traders’ adoption. Family size significantly and positively influenced adoption for both small-scale farmers and traders. Households that majorly used ICTs for making profit were more likely to use the mobile phone, whereas those who stayed further from towns were less likely to use it. If government dedicates her support to public education, rural ICT-based initiatives like BROSDI, rural electrification and rural income generating initiatives, households could adopt ICTs for MIS more. Further research need to be done to determine the impact of ICTs on agricultural productivity, and welfare of smallholders in Uganda.
    Keywords: Smallholder farmers and traders, ICTs, market information services, logit model, Agribusiness, Research and Development/Tech Change/Emerging Technologies, Teaching/Communication/Extension/Profession,
    Date: 2012–10–05
  14. By: Heinz Welsch (University of Oldenburg, Department of Economics)
    Abstract: Organic food markets in developed countries have been rapidly expanding in recent years. Though expected health benefits are a major motive for buying organic food (OF), the health effects of consuming OF are uncertain. This study uses survey data from Germany, 2007, to explore the causal relationship between OF consumption and self-rated health status. While it finds strong and statistically significant relationships between health and indicators of the intensity and duration of OF consumption, these relationships vanish when OF consumption is instrumented by respondents’ assessment of the necessity of renewable energy. Since the instrument satisfies usual validity standards, these findings suggest that the OF-health relationship may be spurious due to common unobserved factors, in particular a health-oriented lifestyle.
    Keywords: health; food; consumption; organic agriculture
    JEL: I12 D12 Q13
    Date: 2012–10
  15. By: Sudha Narayanan (Indira Gandhi Institute of Development Research)
    Abstract: This paper examines the idea that contract farming arrangements in developing countries even while offering farmers insurance against certain kinds of risks could simultaneously exacerbate other risks or entail new risks of their own. If correct, farmer perceptions of risks and returns would vary systematically across farmers with different contracting status and also across schemes. Using survey data that elicits subjective distributions of returns and psychometric mapping of risk perceptions from farmers, the study finds that contract farming, not unlike its alternatives, is associated with multiple dimensions of uncertainty and sources of risk, in ways that likely influence participation.
    Keywords: contract farming, subjective distributions, risk perceptions, stochastic dominance, elicitation methods
    JEL: Q12 Q13 D84
    Date: 2012–09
  16. By: Bethencourt, Carlos; Perera-Tallo, Fernando
    Abstract: Predation attracts a relatively high portion of labor in developing countries and obstructs development. Agriculture also has an important weight in employment in these countries. We formulate a model in which agents devote time either to predation or to producing agricultural and manufactured goods with the following features: a subsistence level of agricultural goods must be reached and, consequently, poor countries devote more resources to agriculture; agriculture is more land intensive and, thus, has a lower labor share than manufacturing; and incentives to devote time to production increase with the labor share. The share of manufactured goods in GDP increases throughout the transition, raising the labor share, which discourages predation and fosters production. This mechanism involves an amplification effect of the differences in productivity among countries due to the reallocation of labor from predation to production. Institutional quality plays a crucial role in this process, since it discourages predation.
    Keywords: Agriculture; Predation; Growth Theory
    JEL: O41 O43
    Date: 2012–10–10
  17. By: Mani, Muthukumara; Markandya, Anil; Sagar, Aarsi; Strukova, Elena
    Abstract: This study provides estimates of social and financial costs of environmental damage in India from three pollution damage categories: (i) urban air pollution; (ii) inadequate water supply, poor sanitation, and hygiene; and (iii) indoor air pollution. It also provides estimates based on three natural resource damage categories: (i) agricultural damage from soil salinity, water logging, and soil erosion; (ii) rangeland degradation; and (iii) deforestation. The estimates are based on a combination of Indian data from secondary sources and on the transfer of unit costs of pollution from a range of national and international studies. The study estimates the total cost of environmental degradation in India at about 3.75 trillion rupees (US$80 billion) annually, equivalent to 5.7 percent of gross domestic product in 2009, which is the reference year for most of the damage estimates. Of this total, outdoor air pollution accounts for 1.1 trillion rupees, followed by the cost of indoor air pollution at 0.9 trillion rupees, croplands degradation cost at 0.7 trillion rupees, inadequate water supply and sanitation cost at around at 0.5 trillion rupees, pasture degradation cost at 0.4 trillion rupees, and forest degradation cost at 0.1 trillion rupees.
    Keywords: Health Monitoring&Evaluation,Environmental Economics&Policies,Population Policies,Brown Issues and Health,Climate Change Mitigation and Green House Gases
    Date: 2012–10–01
  18. By: Katsushi S. Imai (Economics, School of Social Sciences, University of Manchester (UK) and RIEB, Kobe University (Japan)); Raghav Gaiha (Faculty of Management Studies, University of Delhi, India); Woojin Kang (Crawford School of Economics & Government, Australian National University, Australia); Samuel Annim (Lancashire Business School, University of Central Lancashire (UK) and Department of Economics, University of Cape Coast (Ghana)); Ganesh Thapa (International Fund for Agricultural Development, Italy)
    Abstract: The present study examines whether participation in the rural non-farm sector employment or involvement in activity in rural non-farm economy (RNFE) has any poverty-reducing or vulnerability-reducing effect in Vietnam and India. To take account of sample selection bias associated with RNFE, we have applied treatment-effects model, a variant of Heckman sample selection model. It is found that log per capita consumption or log mean per capita expenditure (MPCE) significantly increased as a result of access to RNFE in 2002 and 2004 for Vietnam and in 1993-4 for India. This is consistent with poverty reducing role of accessing RNFE. However, in more recent years, this consumption poverty reducing effect disappeared. That is, it was no longer statistically significant in 2006 for Vietnam and MPCE slightly reduced due to access to RNFE in 2004-5 for India. Access to RNFE significantly reduces vulnerability in India, implying that diversification of household activities into non-farm sector would reduce such risks. However, in Vietnam, RNFE increased vulnerability in 2002, but the effect vanished in 2004 and 2006.
    Keywords: Poverty, Vulnerability, Non-farm sector, Treatment Effects Model, Vietnam, India
    JEL: C21 C31 I32 O15
    Date: 2012–10
  19. By: Sudha Narayanan (Indira Gandhi Institute of Development Research)
    Abstract: This study examines the moral economy of firm-farmer contracts in contract farming schemes in India, bringing together data from field surveys, conducted between 2007 and 2010, of 42 agribusinesses and 484 contract farmers from multiple commodity sectors. The central argument of this paper is that contract farming relationships in India are seen more as relationships and less as contracts, with formal enforcement mechanisms playing only a peripheral role in maintaining and supporting transactions. This is related only in part to the costs and inefficacy of formal enforcement mechanisms. Both firms and farmers prefer to operate outside the prescribed legal-institutional structure whenever these structures are perceived to undermine the handshake ethic. The findings indicate that state policies that presume legal institutional development to be necessary and sufficient for promoting agribusiness interaction with farmers might be misplaced if not merely ineffective.
    Keywords: contract farming, private enforcement, moral economy, legal institutions, agriculture
    JEL: K49 L14
    Date: 2012–09
  20. By: Philip Verwimp
    Abstract: Civil wars often force people to leave their homes. Displaced populations run higher risk in terms of disease, hunger and death, something that is well-documented. They leave their land, cattle and other assets behind for an uncertain existence in a refugee camp or depend on relatives or friends. But what happens when they return back home? This paper investigates the food security and poverty of formerly displaced persons and their household. Using the 2006 Core Welfare Indicator Survey for Burundi we compare their food intake and their level of expenses with that of their non-displaced neighbours. We test whether it is the duration of displacement that matters for current welfare or the time lapsed since returning. We use log-linear and ordered probit models as well as propensity score matching. We find that the individuals and households who returned home just before the time of the survey are worse off compared to those who returned several years earlier. It takes 8 to 10 years after return before the level of welfare of the displaced converges to that of the non-displaced. The duration of displacement seems not to matter. On average, the formerly displaced have 20% lower expenses per adult equivalent compared to the non-displaced, 15% lower food expenses but only 6 % lower calorie intake, showing that the formerly displaced consume relatively more high calorie products. The formerly displaced also report more children with a smaller size at birth. Despite international, government and NGO assistance, the welfare of recent returnees is lagging seriously behind in comparison with the local non-displaced populations.
    Keywords: Forced Displacement; Food Security; Nutrition; Poverty; Burundi
    Date: 2012–10–03
  21. By: Parmar, Divya; Souares, Aurélia; de Allegri, Manuela; Savadogo, Germain; Sauerborn, Rainer
    Abstract: Background Although most community-based health insurance (CBHI) schemes are voluntary, problem of adverse selection is hardly studied. Evidence on the impact of targeted subsidies on adverse selection is completely missing. This paper investigates adverse selection in a CBHI scheme in Burkina Faso. First, we studied the change in adverse selection over a period of 4 years. Second, we studied the effect of targeted subsidies on adverse selection. Methods The study area, covering 41 villages and 1 town, was divided into 33 clusters and CBHI was randomly offered to these clusters during 2004–06. In 2007, premium subsidies were offered to the poor households. The data was collected by a household panel survey 2004–2007 from randomly selected households in these 33 clusters (n = 6795). We applied fixed effect models. Results We found weak evidence of adverse selection before the implementation of subsidies. Adverse selection significantly increased the next year and targeted subsidies largely explained this increase. Conclusions Adverse selection is an important concern for any voluntary health insurance scheme. Targeted subsidies are often used as a tool to pursue the vision of universal coverage. At the same time targeted subsidies are also associated with increased adverse selection as found in this study. Therefore, it’s essential that targeted subsidies for poor (or other high-risk groups) must be accompanied with a sound plan to bridge the financial gap due to adverse selection so that these schemes can continue to serve these populations.
    Date: 2012
  22. By: Moschini, GianCarlo; Cui, Jingbo; Lapan, Harvey
    Abstract: This paper provides an overview of the economics of biofuels. It starts by describing the remarkable growth of the biofuel industry over the last decade, with emphasis on developments in the United States, Brazil and the European Union, and it identifies the driving role played by some critical policies. After a brief discussion of the motivations that are commonly argued in favor of biofuels and biofuel policies, the paper presents an assessment of the impacts of biofuels from the economics perspective. In particular, the paper explains the basic analytics of biofuel mandates, reviews several existing studies that have estimated the economic impacts of biofuels, presents some insights from a specific model, and outlines an appraisal of biofuel policies and the environmental impacts of biofuels. The paper concludes with an examination of several open issues and the future prospects of biofuels.
    Keywords: biodiesel; Biofuel policies; ethanol; Greenhouse gas emissions; mandates.
    JEL: F1 H2 Q2
    Date: 2012–05–24
  23. By: Marcella Veronesi (Department of Economics (University of Verona)); Tim Schloendorn (Institute for Environmental Decisions, ETH Zurich); Astrid Zabel (Institute for Environmental Decisions, ETH Zurich); Stefanie Engel (Institute for Environmental Decisions, ETH Zurich)
    Abstract: Reducing Emissions from Deforestation and Forest Degradation (REDD+) is an important topic in the debate on policies to mitigate climate change. This is the first study to test and compare the environmental impact of different REDD+ payment schemes in the field, and provide some insights on the effectiveness of different policies with respect to the permanence of forest-based emission reductions. This study implements a stated preference experiment of time allocation in the unique setting of the Kasigau Corridor REDD+ Project in Kenya, where charcoaling is a major source of forest degradation. The impact on time allocation is analyzed under the presumption that a hypothetical agricultural policy or an eco-charcoaling policy was introduced. We find that a policy that indexes eco-charcoal payments to charcoalers’ opportunity costs is the most effective policy in providing permanence in REDD+: it lowers the amount of labor allocated to charcoaling even at high charcoal prices.
    Keywords: REDD, permanence, deforestation, time allocation, Kenya
    JEL: I38 J22 O13 Q18 Q23 Q28
    Date: 2012–04
  24. By: Glandon, PJ (Department of Economics, Colgate University); Jaremski, Matthew (Department of Economics, Colgate University)
    Abstract: Temporary price reductions or “sales†have become increasingly important in the evolution of the price level. We present a model of repeated price competition to illustrate how entry causes incumbents to alternate between high and low prices. Using a six year panel of weekly observations from a grocery chain, we find that individual stores employ more sales as the distance to Wal-Mart falls. Moreover, the increase in the frequency of sales was concentrated on the most popular products, suggesting the use of a loss-leader strategy.
    Keywords: Wal-Mart, Retail Prices, Price Competition, Temporary Sales Prices
    JEL: E30 L11 L13
    Date: 2012
  25. By: Blanchflower, David G. (Dartmouth College USA); Oswald, Andrew J. (University of Warwick and CAGE UK and IZA Germany); Stewart-Brown, Sarah (Warwick Medical School UK)
    Abstract: Humans run on a fuel called food. Yet economists and other social scientists rarely study what people eat. We provide simple evidence consistent with the existence of a link between the consumption of fruit and vegetables and high well-being. In cross-sectional data, happiness and mental health rise in an approximately dose-response way with the number of daily portions of fruit and vegetables. The pattern is remarkably robust to adjustment for a large number of other demographic, social and economic variables. Well-being peaks at approximately 7 portions per day. We document this relationship in three data sets, covering approximately 80,000 randomly selected British individuals, and for seven measures of well-being (life satisfaction, WEMWBS mental well-being, GHQ mental disorders, self-reported health, happiness, nervousness, and feeling low). Reverse causality and problems of confounding remain possible. We discuss the strengths and weaknesses of our analysis, how government policy-makers might wish to react to it, and what kinds of further research -- especially randomized trials -- would be valuable.
    Keywords: Subjective well-being ; healthy food ; GHQ; diet ; mental health ; depression ; happiness ; WEMWBS.
    Date: 2012
  26. By: Bozic, Marin; Newton, John; Thraen, Cameron S.; Gould, Brian W.
    Abstract: A common approach in the literature, whether the investigation is about futures price risk premiums or biases in option-based implied volatility coefficients, is to use samples in which consecutive observations can be regarded as uncorrelated. That will be the case for non- overlapping forecast horizons constructed by either focusing on short time-to-maturity contracts or excluding some data. In this article we propose a parametric bootstrap procedure for uncovering futures and options biases in data characterized by overlapping horizons and correlated prediction errors. We apply our method to test hypotheses that futures prices are efficient and unbiased predictors of terminal prices, and that squared implied volatility, multiplied by time left to option expiry, is an unbiased predictor of terminal log-price variance. We apply the test to corn, soybean meal and Class III milk futures and options data for the period 2000-2011. We find evidence for downward bias in soybean meal futures, as well as downward volatility bias in Class III milk options. Importance of these results is illustrated on the example of premium determination for Livestock Gross Margin Insurance for Dairy Cattle (LGM-Dairy).
    Keywords: parametric bootstrap, risk premium, volatility bias, revenue insurance, LGM-Dairy, Demand and Price Analysis, Research Methods/ Statistical Methods, Risk and Uncertainty,
    Date: 2012–10
  27. By: Marie-Estelle Binet (University of Rennes 1 - CREM, UMR CNRS 6211, France); Fabrizio Carlevaro (University of Geneva, Department of Economics, Switzerland); Michel Paul (CEMOI, University of Réunion, France)
    Abstract: Based on a detailed sample of time unbalanced panel data on residential water consumption in the French overseas territory of Réunion, we investigate which water price specification should be included in an econometric analysis of residential water demand. To identify the relevant price variable, we estimate the residential demand function for water using the perceived price methodology developed by Shin (1985). The empirical results support the hypothesis that households respond to the average price perceived from the latest water bill. Households facing an increasing block rate schedule perceive a price of water that is generally lower than its actual marginal price. This conclusion emphasizes the relevance of a marginal price information policy to promote water saving.
    Keywords: billing information, price perception, residential demand for water, time unbalanced panel data
    JEL: D12 C26 Q25
    Date: 2012–10
  28. By: N. Yaduma; M. Kortelainen; A. Wossink
    Date: 2012
  29. By: Chris Doyle; Martijn A. Han; ;
    Abstract: Retailers may enjoy stable cartel rents in their output market through the formation of a buyer group in their input market. A buyer group allows retailers to credibly commit to increased input prices, which serve to reduce combined final output to the monopoly level; increased input costs are then refunded from suppliers to retailers through slotting allowances or rebates. The stability of such an “implied cartel” depends on the retailers’ incentives to secretly source from a supplier outside of the buyer group arrangement at lower input prices. Cheating is limited if retailers sign exclusive dealing or minimum purchase provisions. We discuss the relevancy of our findings for antitrust policy.
    Keywords: buyer groups, collusion, exclusive dealing, minimum purchase clauses, rebates
    JEL: K21 L13 L41 L42
    Date: 2012–10

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