nep-agr New Economics Papers
on Agricultural Economics
Issue of 2013‒12‒15
28 papers chosen by
Angelo Zago
University of Verona

  1. A Socio-Economic Study on Adoption of Modern Agricultural Technologies in Bihar, India By Singh, K.M.; Singh, R.K.P.; Kumar, Abhay
  2. What Drives the Global "Land Rush"? By Rabah Arezki; Klaus Deininger; Harris Selod
  3. A Natural Resource Theory of U.S. Crop Insurance Contract Choice By Du, Xiaodong; Hennessy, David A.; Feng, Hongli
  4. The Impact of CAP Payments on the Exodus of Labour from Agriculture in Selected EU Member States By Tocco, Barbara; Davidova, Sophia; Bailey, Alastair
  5. Financialization of food - The determinants of the time-varying relation between agricultural prices and stock market dynamics By Girardi, Daniele
  6. Land Tenure and Productivity in Agriculture: The Case of the Stolypin Reform in Late Imperial Russia By Paul Castaneda Dower; Andrei Markevich
  7. On agricultural commodities' extreme price risk By Maarten van Oordt; Philip Stork; Casper de Vries
  8. Interplay of Land Governance and Large-Scale Agricultural Investment: Evidence from Ghana and Kenya By Kerstin Nolte; Susanne Vaeth
  9. Long-term Agricultural Growth in India, Pakistan, and Bangladesh from 1901/02 to 2001/02 By Kurosaki, Takashi
  10. Distributional Impact of Commodity Price Shocks: Australia over a Century By Sambit Bhattacharyya; Jeffrey G. Willliamson
  11. A Spatial Analysis of Agricultural Land Prices in Bavaria By Feichtinger, Paul; Salhofer, Paul
  12. Measuring Maize Price Volatility in Swaziland using ARCH/GARCH approach By Sukati, Mphumuzi
  13. Consumers' behaviour towards food safety: A litterature review By Maria Aguiar Fontes; Eric Giraud-Héraud; Alexandra Seabra Pinto
  14. Impact of 2011 Floods, and Flood Management in Thailand By Nipon POAPONSAKORN; Pitsom MEETHOM
  15. Research on fresh agriculture product based on overconfidence of the retailer under options and spot markets dominated By Kai Nie; Man Yu
  16. Do the CAP Subsidies Increase Employment in Sweden? Estimating the Open Economy Relative Multiplier Using an Exogenous Change in the CAP By Blomquist , Johan; Nordin, Martin
  17. Feeling the Heat: Temperature, Physiology & the Wealth of Nations By Geoffrey Heal; Jisung Park
  18. The Rapid Growth of Egypt’s Agricultural Output 1890–1914 As an Early Example of the Green Revolutions of Modern South Asia: Some Implications for the Writing of Global History By Roger Owen
  19. Does the Quality of Electricity Matter? Evidence from Rural India By Ujjayant Chakravorty; Martino Pelli; Beyza Ural Marchand
  20. Potatoes, Milk, and the Old World Population Boom By Cook, C. Justin
  21. SRI Cultivation in Andhra Pradesh : Achievements, Problems and Implications for GHGs and Work By Duvvuru, Narasimha Reddy; Motkuri, Venkatanarayana
  22. After the Drought: The Impact of Microinsurance on Consumption Smoothing and Asset Protection By Sarah A. Janzen; Michael R. Carter
  23. Optimal Expectations and the Welfare Cost of Climate Variability By Alem, Yonas; Colmer, Jonathan
  24. Firm voluntary measures for environmental changes, eco-innovations and CSR: Empirical analyses based on data surveys By LE BAS Christian; POUSSING Nicolas
  25. The Economic Cost of Global Fuel Subsidies By Lucas W. Davis
  26. Two Decades of European Climate Policy: A Critical Appraisal By Christoph Böhringer
  27. Pollution Permit Systems and Firm Dynamics: Does the Allocation Scheme Matter? By Evangelina Dardati
  28. The Price of Wine By Dimson, Elroy; Rousseau, Peter L.; Spaenjers, Christophe

  1. By: Singh, K.M.; Singh, R.K.P.; Kumar, Abhay
    Abstract: Technology adoption has been the main obstacle in realizing agricultural potential in the country in general and Bihar in particular. The present study focuses on level of adoption, access of farmers to farm technology, quality of modern technology, access to agricultural extension institutions and problems faced by extension officials in transfer of farm technology. It has been observed that the coverage of agricultural development programmes is limited to few villages, however, line department still dominates in spreading of modern agricultural technology. Small size of land holding and fragmented land emerged as main constraint to adoption of modern horticultural technology in Bihar. While analyzing use of modern varieties of principal crops, a comparatively high level of adoption on small and medium farms was observed. Hence, there is no relationship between size of farm and adoption of modern varieties of seeds in Bihar. Inadequate staff, infrequent supervision and lack of conveyance facility are some other factors responsible for poor transfer of technologies in Bihar.
    Keywords: Transfer of technology, Adoption of technology, Modern agricultural technology, Bihar
    JEL: Q1 Q12 Q16
    Date: 2013–12–07
  2. By: Rabah Arezki; Klaus Deininger; Harris Selod
    Abstract: We review evidence regarding the size and evolution of the "land rush" in the wake of the 2007-2008 boom in agricultural commodity prices and study determinants of foreign land acquisition for large-scale agricultural investment. Using data on bilateral investment relationships to estimate gravity models of transnational land-intensive investments confirms the central role of agro-ecological potential as a pull factor but contrasts with standard literature insofar as quality of the destination country’s business climate is insignificant and weak tenure security is associated with increased interest for investors to acquire land in that country. Policy implications are discussed.
    Keywords: Land Acquisition, Large-Scale Agriculture, Foreign Investments, Agro-Ecological Potential, Land Availability, Land Governance, Property Rights
    JEL: F21 O13 Q15 Q34
    Date: 2013–08–15
  3. By: Du, Xiaodong; Hennessy, David A.; Feng, Hongli
    Abstract: A large variety of subsidized crop insurance products are available to U.S. crop growers. Distinct and perhaps puzzling patterns in the choices of insurance products and coverage levels can be discerned. Where production conditions are better and yields are less risky then (a) higher insurance coverage levels are chosen; and (b) revenue insurance is preferred over yield insurance. Also, (c) the extent of preference for revenue insurance is stronger in more productive areas. Assuming, as many do, that growers seek to maximize subsidy transfers, point (a) can be explained by the interaction between yield technology and natural resource endowments. Points (b) and (c) can be explained by location in conjunction with the “natural hedge†and a contract design bias in how revenue insurance guarantees are computed. Empirical study of Risk Management Agency data on corn, soybean, and wheat yields, and insurance contract choices lend support to our model inferences.
    Keywords: agricultural policy; contract choice; crop insurance; land use; yield risk measurement.
    JEL: Q15 Q18 Q24
    Date: 2013–08–06
  4. By: Tocco, Barbara; Davidova, Sophia; Bailey, Alastair
    Abstract: This paper examines the determinants of exit from agriculture under the implementation of CAP payments in four selected EU countries (France, Hungary, Italy and Poland) in the period 2005-08. The study employs micro-data from the European Union Labour Force Survey and regional data from the Farm Accountancy Data Network. We differentiate among the different measures of farm payments, looking at the individual impact of Pillar 1 instruments, i.e. coupled and decoupled payments, and at those in Pillar 2, targeted at rural development. The main results suggest that total subsidies at the regional level are negatively associated with the out-farm migration of agricultural workers in the two New member states, Hungary and Poland, so that the CAP would seem to hinder the exit of labour from agriculture. Conversely, the non-significant results for the ‘old’ member states may be interpreted as the result of opposing effects of coupled payments and rural development support. The diverse impact of CAP on the likelihood of leaving agriculture in the four countries reflects the heterogeneity across European member states, due to different market and production structures, which does not allow a common and simple generalisation of the effect of the CAP on labour allocation.
    Date: 2013–08
  5. By: Girardi, Daniele
    Abstract: This paper studies the correlation of agricultural prices with stock market dynamics. We discuss the possible role of financial, macroeconomic and monetary factors in driving this time-varying relation, with the aim of understanding what has caused positive correlation between agricultural commodities and stocks in recent years. While previous works on commodity-equity correlation have focused on broad commodity indices, we study 16 main agricultural prices, in order to be able to assess patterns that are specific to agricultural commodities (but also differences across agricultural markets). We show that an explanation based on a combination of financialization and financial crisis is consistent with the empirical evidence, while global demand factors and monetary forces don't appear to play a significant role. In particular, we find that the correlation between agricultural price changes and stock market returns tends to get higher as the so-called TED spread (our proxy for financial turmoil) increases. Moreover, the impact of financial turmoil on the correlation gets stronger as the share of financial investors in agricultural derivatives markets (our proxy for financialization) rises. Our findings suggest that the influence of financial shocks on agricultural prices is likely to decrease as global financial tensions settle down but also that, as long as agricultural derivatives markets are populated mainly by financial investors, it can be expected to rise again when it is less needed, i.e. in the presence of new financial turmoil.
    Keywords: financialization, agricultural prices, DCC, cross-market correlations
    JEL: G15 Q1
    Date: 2013–10–10
  6. By: Paul Castaneda Dower (New Economic School and Centre of Economic and Financial Research); Andrei Markevich (New Economic School and University of Warwick)
    Abstract: We study the effect of improvements in peasants’ land tenure, launched by the Stolypin reform, on agricultural productivity in late imperial Russia. The reform allowed peasants to obtain land titles and consolidate plots. We find that land consolidations increased productivity. We argue that changes in peasant de facto land usage rights caused this effect. In contrast, the titling component of the reform was associated with a decrease in land productivity. We present evidence that this negative effect was driven by transaction costs to exit the commune and the outflow of labor from the countryside.
    Date: 2013–12
  7. By: Maarten van Oordt; Philip Stork; Casper de Vries
    Abstract: Price risk is among the most substantial risk factors for farmers. Through a two-sector general equilibrium model, we describe how fat tails in agricultural prices may occur endogenously as a result of productivity shocks. Using thirty years of daily futures price data, we show that the returns of all agricultural commodities in our sample closely follow a power law in the tail of their distributions. We apply Extreme Value Theory to estimate the size and likelihood of the highest losses a farmer may encounter. Back-testing verifies the validity of these risk measurement methods.
    Keywords: Agricultural commodities; extreme value theory; heavy tails; risk management
    JEL: C14 Q11 Q14
    Date: 2013–11
  8. By: Kerstin Nolte (GIGA German Institute of Global and Area Studies); Susanne Vaeth (University of Marburg)
    Abstract: Recognising the increased demand for agricultural land, this comparative analysis examines the effect of large-scale land acquisitions on their surrounding institutional environment. An embedded case study design allows us to analyse two specific land deals in Ghana and Kenya. We find that insufficiencies in these countries’ land governance systems are partly caused by discrepancies between de jure and de facto procedures; and that weak legal frameworks, coupled with poor enforcement, produce outcomes that depend to a large extent on the investors. We also find that large-scale land acquisitions have a feedback effect on the land governance system, which suggests that large-scale land acquisitions can be drivers of institutional change.
    Date: 2013
  9. By: Kurosaki, Takashi
    Abstract: This paper investigates the growth performance of agriculture in India, Pakistan, and Bangladesh in the twentieth century. The use of unusually long-term data that correspond to the current borders for the period 1901-2002 and the focus on crop shifts as a source of growth distinguish this study from the existing ones. The empirical results show a sharp discontinuity between the preand the post- independence periods in all three countries: growth rates in total output, labor productivity, and land productivity rose from zero or very low figures to significantly positive levels, which were sustained throughout the post-independence period. The improvement in aggregate land productivity explained the most of this output growth, of which approximately one third was attributable to shifts to more lucrative crops.
    Date: 2013–11
  10. By: Sambit Bhattacharyya; Jeffrey G. Willliamson
    Abstract: Abstract. This paper studies the distributional impact of commodity price shocks over the both the short and very long run. Using a GARCH model, we find that Australia experienced more volatility than many commodity exporting developing countries over the periods 1865- 1940 and 1960-2007. A single equation error correction model suggests that commodity price shocks increase the income share of the top 1, 0.05, and 0.01 percents in the short run. The very top end of the income distribution benefits from commodity booms disproportionately more than the rest of the society. The short run effect is mainly driven by wool and mining and not agricultural commodities. A sustained increase in the price of renewables (wool) reduces inequality whreas the same for non-renewable resources (minerals) increases inequality. We expect that the initial distribution of land and mineral resources explains the asymmetric result.
    Keywords: comodity price shocks, commodity exporters, top incomes, inequality
    JEL: F14 F43 N17 O13
    Date: 2013–07–23
  11. By: Feichtinger, Paul; Salhofer, Paul
    Abstract: This paper empirically analyses a dataset of more than 11,000 agricultural land sales transactions between 1999 and 2007 in order to identify the factors influencing agricultural land prices in Bavaria. The authors confirm strong spatial relationships in their dataset, and conclude that neglecting this leads to biased estimates, especially if aggregated data are used. They therefore use a general spatial model combining a spatial lag and a spatial error model, and find that the price of a specific plot increases by 32 cents/m2 when average sales prices in surrounding areas increase by €1.Research results also confirm the strong influence of land quality, urban pressure and land market structure, and that the involvement of public authorities as seller or buyer increases sales prices. The authors find that the Fischler Reform did not considerably change the market and its determinants.
    Date: 2013–06
  12. By: Sukati, Mphumuzi
    Abstract: This paper investigates maize price volatility in Swaziland as offered by NMC, an organization with a mandate of stabilizing prices in the country. Price volatility is analyzed using ARCH/GARCH modeling techniques. Results show that the organization has not been able to stabilize prices in the past years. This is likely because of exogenous global shocks in maize prices which are transmitted to the local market. These external shocks transmission are mainly because the organization imports a lot of maize to meet local demand. However, although prices have been volatile, the organization has been able to control persistence in volatility. Asymmetric analysis of the prices shows that prices have not reacted unequally to shock increase or decrease in prices. However, increase in maize prices has been seen as fueling volatility, which does not bode well for consumers. This analysis therefore has formed an important contribution to analysis of storage facilities and their role in stabilizing prices. Storage facilities will become important especially for third world countries with increased unpredictability in agricultural production due to climate change.
    Keywords: NMC, Maize Prices, Volatility, ARCH/GARCH, Persistence, Climate Change, Storage Facilities
    JEL: A1 A12 O1 O13 Q1 Q18
    Date: 2013–12–02
  13. By: Maria Aguiar Fontes (CIISA - Faculdade de Medicina Veterinária - Technical University of Lisbon); Eric Giraud-Héraud (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X, Institut National de la Recherche Agronomique - Institut national de la recherche agronomique (INRA)); Alexandra Seabra Pinto (UEIS - SAFSV - National Institute for Agrarian and Veterinarian Research I.P.)
    Abstract: This paper deals with the actual expectations of consumers on food safety and their predictable behaviour in case of foodborne outbreaks. We present an overview of the purchase process for risky products and we show the reason why the consumer has a specific behaviour with respect to the sanitary risk. Moreover, by taking the results of different works that focused these effects in the meat and fruit & vegetables sectors, we show how the real quality signals on the European market (organic production, designation of origin, private retail labels, etc.) could promote consumer confidence.
    Keywords: Food Safety, Consumers' Behaviour, Risk
    Date: 2013–12–02
  14. By: Nipon POAPONSAKORN (Thailand Development Research Institute); Pitsom MEETHOM (Thailand Development Research Institute)
    Abstract: This paper first describes the causes of the major flooding in Thailand in 2011, which include natural events, unregulated land-use patterns and flood mismanagement. It discusses the government’s quick response in drafting a flood management master plan and allocating USD 11,290 million for assistance and compensation for flood victims, restoration of damaged property, and implementation of the master plan. The weakness of the master plan is also pointed out. The study goes on to develop the “difference-in-difference” method to estimate the impact of the flooding on household income and expenditure in 26 flooded provinces. It matches the addresses of flooded households taken from the 2011 Socio-economic Survey, which did not have questions regarding the impact of floods, with the flooded areas from satellite radar images. Quantile regressions are employed to quantify the differential impact of the flood on households with different income levels. The results show that the flooding reduced total household expenditures by 5.7% to 14%. These findings are consistent with the reported negative national GDP growth of 8.9 % in the fourth quarter of 2011 when Thailand was flooded. One interesting finding is that the 2011 floods had a significantly negative impact on the income and expenditure of middle and high income households, but that its impact on poor households was not statistically significant. The study also finds that the 2011 floods had a negative impact on the money and wage incomes of some middle income households living in the flooded areas. All estimated coefficients in the business income regression are not statistically significant. Comparing farmers’ income in the 2011 Socio-economic Survey with that in 2009, the study also finds that the 2011 flooding had a large negative impact on the farm profits of some middle income households in the flooded provinces. Finally, the study discusses some policy implications, particularly weaknesses in the current information system for flood management.
    Keywords: Flood, flood management master plan, impact on household income, expenditures and farm profit, quantile regression, radar satellite images.
    JEL: Q54 Q52 Q12 C21 O53
    Date: 2013–11
  15. By: Kai Nie; Man Yu
    Abstract: In this article, we analyze the application of options contract in special commodity supply chain such as fresh agricultural products. This problem is discussed in the point of the retailer. When spot market and future market are both available, we discuss how the retailer chooses the optimal production. Furthermore, overconfidence is introduced to the supply chain of the fresh agricultural products, which has not happened before. Then,based on the overconfidence of the retailer, we explore how overconfidence affects the supply chain system under different circumstances. At last, we get the conclusion that different overconfidence level has different affection on retailer's optimal ordering quantity and profit.
    Date: 2013–12
  16. By: Blomquist , Johan (AgriFood Economics Centre); Nordin, Martin (Department of Economics, Lund University)
    Abstract: This study evaluates the impact of agricultural subsidies (CAP) on unemployment and employment outside the agricultural sector. For the CAP subsidies to have an effect outside the agricultural sector, the subsidies must have a second-order effect. Thus, the Open Economy Relative Multiplier for Sweden is estimated with aggregate municipality data for the years 2001 to 2009. A side-effect of the decupling reform in 2005 was that Sweden was forced to introduce a grassland support which redistributed the payments among the regions. This exogenous redistribution of the CAP is the identifying assumption in this study. The subsidy creates private jobs at a cost of about $20,000 per job, which is consistent with earlier estimates based on US data.
    Keywords: Government Spending; Multiplier; Employment; Unemployment; CAP; Agricultural Subsidies
    JEL: E24 E62 Q18
    Date: 2013–12–02
  17. By: Geoffrey Heal; Jisung Park
    Abstract: Does temperature affect economic performance? Has temperature always affected social welfare through its impact on physical and cognitive function? While many studies have explored the indirect links between climate and welfare (e.g. agricultural yield, violent conflict, or sea-level rise), few address the possibility of direct impacts operating through human physiology. This paper presents a model of labor supply under thermal stress, building on a longstanding physiological literature linking thermal stress to health and task performance. A key prediction is that effective labor supply – defined as a composite of labor hours, task performance, and effort – is decreasing in temperature deviations from the biological optimum. We use country-level panel data on population-weighted average temperature and income (1950-2005), to illustrate the potential magnitude of the effect. Using a fixed effects estimation strategy, we find that hotter-than-average years are associated with lower output per capita for already hot countries and higher output per capita for cold countries: approximately 3%-4% in both directions. We then use household data on air conditioning and heating expenditures from the US to provide further evidence in support of a physiologically based causal mechanism. This more direct causal link between climate and social welfare has important implications for both the economics of climate change and comparative development.
    JEL: J01 Q54 Q56
    Date: 2013–12
  18. By: Roger Owen
    Abstract: The article uses comparative Indian material from British India and later, the Pakistani Punjab to ask new questions of the standard accounts of Egypt’s post-1890 cotton boom. It also argues for the particular relevance of the rich Punjabi green revolution data to the Egyptian case, and more generally, for the rewards to be obtained from an academic dialog between selected aspects of late nineteenth and of late twentieth century globalization. Topics analyzed include the impact of the various agricultural revolutions on social and regional inequalities, the issue of sustainability, the role of experts and the impact on health of long-term environmental degradation.
  19. By: Ujjayant Chakravorty (Department of Economics, Tufts University); Martino Pelli (Département d'économique, Université de Sherbrooke); Beyza Ural Marchand (Department of Economics, University of Alberta)
    Abstract: This paper estimates the returns to household income due to improved access to electricity in rural India. We examine the effect of connecting a household to the grid and the quality of electricity, defined as hours of daily supply. The analysis is based on two rounds of a representative panel of more than 10,000 households. We use the district-level density of transmission cables as instrument for the electrification status of the household. We find that a grid connection increases non-agricultural incomes of rural households by about 9 percent during the study period (1994- 2005). However, a grid connection and a higher quality of electricity (in terms of fewer outages and more hours per day) increases non-agricultural incomes by about 28.6 percent in the same period.
    Keywords: Electricity Supply, Quality, India, Energy and Development, Infrastructure
    JEL: O12 O18 Q48
    Date: 2013–10
  20. By: Cook, C. Justin
    Abstract: This paper explores the role of two important food sources, potatoes and milk, in explaining the large population growth experienced throughout the Old World in the 18th and 19th centuries. Nunn and Qian (2011) show that the introduction of the potato from the New World has a significant explanatory role for within country population and urbanization growth over this period. We expand on this by considering the role of milk consumption, which is hypothesized to be a complement of potatoes due to a differential composition of essential nutrients. Using a country-level measure for the suitability of milk consumption, the frequency of lactase persistence, we show that the marginal effect of potatoes on post-1700 population and urbanization growth is positively related to milk consumption. As the frequency of milk consumption approaches unity, the marginal effect of potatoes more than doubles in magnitude compared to the baseline estimate of Nunn and Qian.
    Keywords: Historical Growth; Population; Land Productivity; Milk; Potato
    JEL: J1 N1 N5 O13
    Date: 2013
  21. By: Duvvuru, Narasimha Reddy; Motkuri, Venkatanarayana
    Abstract: Strategies and solutions to meet the challenges of GHGs call for new methods and technologies. Potential options for the rice industry sector to contribute to the mitigation of, and adaptation to, climate change by increasing rice production in a physically sustainable manner are attracting growing research interest. One such area of interest is the new method of rice cultivation: the System of Rice Intensification (SRI). SRI is an innovative approach to rice cultivation but not a technology as such. The present papers examines advantages of SRI and its diffusion in India in general Andhra Pradesh in particular.
    Keywords: SRI, Rice Cultivation, Rice, Paddy, New Systems of Cultivation, Andhra Pradesh, Climate Change, Green House GAs, GHG Emission
    JEL: Q01 Q10 Q15 Q16 Q18 Q25 Q54 Q58
    Date: 2013–09
  22. By: Sarah A. Janzen; Michael R. Carter
    Abstract: When natural disasters afflict poor communities that lack buoyant access to financial markets, households face the unsavory choice of reducing consumption in order to protect remaining assets, or selling assets at low prices in order to maintain consumption and nutrition. Both choices are costly and damage future economic potential. Formal insurance markets would seem to offer large private and social returns in these circumstances. This paper studies a drought-induced insurance payout from a pilot project in Kenya to determine whether insurance protects households from asset and consumption destabilization. Average treatment effect estimates show that insurance significantly reduces both kinds of costly coping. A closer examination using threshold estimation methods reveals that insurance has different impacts for different kinds of households. Households with larger asset bases--those shown to be most likely to sell assets in order to cope with a shock--are 64 percentage points less likely to do so when insured. Households with fewer assets--those most likely to decrease food intake as a coping strategy--are 43 percentage points less likely to do so with insurance. These results suggest that insurance can have a large impact on both the productivity of the current generation and the human capital of the next.
    JEL: G22 O12 O16
    Date: 2013–12
  23. By: Alem, Yonas (Department of Economics, School of Business, Economics and Law, Göteborg University); Colmer, Jonathan (the Grantham Research Institute and Dept of Geography and Environment, London School of Economics, UK)
    Abstract: Uncertainty about the future is an important determinant of well-being,especially in developing countries where financial markets and other market failures result in ineffective insurance mechanisms. However, separating the effects of future uncertainty from realised events, and then measuring its impact on utility presents a number of empirical challenges. This paper addresses these issues and shows that increased climate variability (a proxy for future income uncertainty) reduces farmers’ subjective well-being, consistent with the theory of optimal expectations (Brunnermeier & Parker, 2005), using panel data from rural Ethiopia and a new data set containing daily atmospheric parameters. The magnitude of our result indicates that a one standard deviation (7%) increase in climate variability has an equivalent effect on life satisfaction to a two standard deviation (1-2%) decrease in consumption. This effect is one of the largest determinants of life satisfaction in rural Ethiopia.
    Keywords: climate variability; uncertainty; subjective well-being; fixed effects
    JEL: C25 D60 I31
    Date: 2013–12–10
  24. By: LE BAS Christian; POUSSING Nicolas
    Abstract: Despite the increased strategic importance of environmental innovation on the one hand and corporate social responsibility on the other, there are still few studies that show firm voluntary measures create a primary determinant of environmental changes. First, we clarify the meaning of voluntary measures and CSR. Second, we utilize a survey carried out in Luxemburg on firm CSR practices jointly with the Community Innovation Survey 2008 (CIS 2008). We merge them and show through the estimation of a probit model that CSR is an important factor that explains environmental innovation. Thanks to a question from CIS 2008 we can contribute to the literature by developing a new indicator measuring the scale of the positive impacts on the environment coming from the firm technological innovation capacity. A negative binomial regression enables us to estimate a significant and positive effect of CSR and firm value on this scale.
    Keywords: environmental innovation; corporate social responsability; Community Innovation Survey 2008; innovation impacts on the environment
    JEL: D22 H23 L21 O31
    Date: 2013–12
  25. By: Lucas W. Davis
    Abstract: By 2015, global oil consumption will reach 90 million barrels per day. In part, this high level of consumption reflects the fact that many countries provide subsidies for gasoline and diesel. This paper examines global fuel subsidies using the latest available data from the World Bank, finding that road-sector subsidies for gasoline and diesel totaled $110 billion in 2012. Pricing fuels below cost is inefficient because it leads to overconsumption. Under baseline assumptions about supply and demand elasticities, the total annual deadweight loss worldwide is $44 billion. Incorporating external costs increases the economic costs substantially.
    JEL: H23 Q41 Q48 Q51
    Date: 2013–12
  26. By: Christoph Böhringer (Carl von Ossietzky Universität Oldenburg, Institut für Volkswirtschaftslehre & ZenTra)
    Abstract: Climate change ranks high on the policy agenda of the European Union (EU) which considers itself as a leading force in the battle against anthropogenic climate change. The EU is committed to the objective of limiting the rise in global average temperature to no more than 2°C above pre-industrial levels to prevent dangerous anthropogenic interference with the climate system. This article provides a critical appraisal of two decades of EU climate policy. Based on the global nature of climate change, we pre-sent three criteria for sound unilateral action and evaluate current EU climate policy against these criteria. We find that the actual implementation of EU climate policies is likely to make emission abatement much more costly than necessary.
    Keywords: EU climate policy, emission regulation, cost-effectiveness
    JEL: H21 H23 Q58
    Date: 2013–11
  27. By: Evangelina Dardati (Facultad de Economía y Negocios, Universidad Alberto Hurtado)
    Abstract: Most cap-and-trade systems allocate permits for free. However, they differ dependent on whether closing plants and new entrants get free permits. I use a dynamic model with heterogeneous firms and equilibrium conditions in the output and emission market to quantify the effect on exit/entry, investment and welfare of different allocation rules. I calibrate the model with data from the power plants participating in the US SO2 program and quantify the effects of two allocation schemes: The US SO2 case, in which closing plants keep their permits and new entrants do not get any of them; The EU-ETS case, in which plants lose permits upon exit and new entrants get allowances. If the US switched to the EU-ETS allocation scheme, the price of output would be 1:5% lower, the price of permits 7.6% higher, and there would be a distribution of dirtier and less productive plants. Consumers are better off if the US switched to the EU-ETS system (lower price), while producers are better off with the US SO2 system (higher profits).
    Date: 2013–03
  28. By: Dimson, Elroy; Rousseau, Peter L.; Spaenjers, Christophe
    Abstract: We examine the impact of aging on wine prices and the performance of wine as a long-term investment, using a unique historical database for five long-established Bordeaux wines that we construct from auction and dealer prices. We estimate the life-cycle price patterns with a regression model that avoids multicollinearity between age, vintage year, and time by replacing the vintage effects with annual data on production yields and weather quality. In line with the predictions of an illustrative model, we observe the highest rates of appreciation for young high-quality wines that are still maturing. The findings suggest that the non-financial “psychic return” to holding wines that are substantially beyond maturity is at least 1%. Using an arithmetic repeat-sales regression, we estimate an annualized return to wine investments (net of insurance and storage costs) of 4.1%, in real GBP terms, between 1900 and 2012. Wine underperforms equities over this period, but outperforms government bonds, art, and stamps. Wine and equity returns are positively correlated.
    Keywords: alternative investments; luxury goods; price indexes; psychic return; consumption; storage
    JEL: C43 D44 G11 G12 Q11 Z11
    Date: 2013–12–10

This nep-agr issue is ©2013 by Angelo Zago. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.