nep-agr New Economics Papers
on Agricultural Economics
Issue of 2014‒11‒07
thirty-two papers chosen by
Angelo Zago
Università degli Studi di Verona

  1. Agriculture-Based Economic Development in NYS: Assessing the Inter-industry Linkages in the Agricultural and Food System By Schmit, Todd M.; Boisvert, Richard N.
  2. Running with the red queen: an integrated assessment of agricultural land expansion and global biodiversity decline By Bruno Lanz; Simon Dietz; Tim Swanson
  3. Agriculture-Based Economic Development in NYS: The Contribution of Agriculture to the New York Economy By Schmit, Todd M.
  4. The land certification program and off-farm employment in Ethiopia By Mintewab Bezabih; Andrea Mannberg; Eyerusalem Siba
  5. The agrarian reform experiment in Chile: History, impact, and implications: By Valdés, Alberto; Foster, William E.
  6. The Effects of China’s Sloping Land Conversion Program on Agricultural Households By Zhen Liu; Arne Henningsen
  7. Dynamic Discrete Choice Estimation of Agricultural Land Use By Scott, Paul
  8. Characteristics and Production Costs of U.S. Corn Farms, Including Organic, 2010 Including Organic, 2010 By Foreman, Linda
  9. Indirect Land Use Effects of Conservation: Disaggregate Slippage in the U.S. Conservation Reserve Program By Uchida, Shinsuke
  10. Variable returns to fertilizer use and its relationship to poverty: Experimental and simulation evidence from Malawi: By Harou, Aurélie; Liu, Yanyan; Barrett, Christopher B.; You, Liangzhi
  11. Resilience Programming among Nongovernmental Organizations: Lessons for Policymakers By Frankenberger, Timothy R.; Constas, Mark A.; Nelson, Suzanne; Starr, Laurie
  12. Agricultural policies and trade paths in Turkey By Larson, Donald F.; Martin, Will; Sahin, Sebnem; Tsigas, Marino
  13. The economywide effects of teff, wheat, and maize production increases in Ethiopia: Results of economywide modeling: By Benson, Todd; Engida, Ermias; Thurlow, James
  14. Growth, deforestation and the efficiency of the REDD mechanism By Helene Ollivier
  15. Regional Inequality and Polarization in the Context of Concurrent Extreme Weather and Economic Shocks By Silva, Julie A.; Matyas, Corene J.; Cunguara, Benedito
  16. Resistance to the Regulation of Common Resources in Rural Tunisia By Xiaoying Liu; Mare Sarr; Timothy Swanson
  17. Strategies to control aflatoxin in groundnut value chains: By Florkowski, Wojciech J.; Kolavalli, Shashidhara
  18. Identifying agricultural expenditures within the public financial accounts and coding system in Ghana: Is the ten percent government agriculture expenditure overestimated?: By Benin, Samuel
  19. Measuring agricultural knowledge and adoption By Kondylis, Florence; Mueller, Valerie; Zhu, Siyao Jessica
  20. Local poverty reduction in Chile and Mexico: The role of food manufacturing growth By Isidro Soloaga; Chiara Cazzuffi; Mariana Pereira
  21. Is Choice Experiment Becoming more Popular than Contingent Valuation? A Systematic Review in Agriculture, Environment and Health By Pierre-Alexandre Mahieu; Henrik Andersson; Olivier Beaumais; Romain Crastes; François-Charles Wolff
  22. Dairy Farm Business Summary: New York Small Herd Farms, 120 Cows or Fewer 2012 By Knoblauch, Wayne A.; Dymond, Cathryn; Karszes, Jason; Kiraly, Mariane
  23. We are what we eat: An economic tool for tracing the origins of nutrients. FOODSECURE working paper no. 28 By Martine Rutten; Andrzej Tabeau; Frans Godeschalk
  24. Index-based weather insurance for developing countries: A review of evidence and a set of propositions for up-scaling By Michael R. CARTER; Alain de JANVRY; Elisabeth SADOULET; Alexandros SARRIS
  25. Growth Poles: Agricultural Shocks and Riots: A Disaggregated Analysis By Christian Almer; Jérémy Laurent-Lucchetti; Manuel Oechslin
  26. Groundwater Economics without Equations By James Roumasset; Christopher Wada
  27. What dimensions of women’s empowerment in agriculture matter for nutrition-related practices and outcomes in Ghana?: By Malapit, Hazel J.; Quisumbing, Agnes R.
  29. Saving for a (not so) Rainy Day: A Ramdomized Evaluation of Savings Groups in Mali By Lori Beaman; Dean Karlan; Bram Thuysbaert
  30. Incorrectly accounting for preference heterogeneity in choice experiments: what are the implications for welfare measurement? By Catalina M. Torres; Sergio Colombo; Nick Hanley
  31. Water quality, brawn, and education: the rural drinking water program in China By Xu, Lixin Colin; Zhang, Jing
  32. The Tasting Room Experience and Winery Customer Satisfaction By Gomez, Miguel

  1. By: Schmit, Todd M.; Boisvert, Richard N.
    Keywords: Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety, Production Economics,
    Date: 2014–03
  2. By: Bruno Lanz; Simon Dietz; Tim Swanson
    Abstract: Modern agriculture relies on a small number of highly productive crops and the continued expansion of agricultural land area has led to a significant loss of biodiversity. In this paper we consider the macroeconomic consequences of a continued expansion of modern agriculture from the perspective of agricultural productivity and food production: as the genetic material supporting agriculture declines, pests and pathogens become more likely to adapt to crops and proliferate, increasing crop losses due to biological hazards. To evaluate the macroeconomic consequences of a reduction in agricultural productivity associated with the expansion of agriculture, we employ a quantitative, structurally estimated model of the global economy in which economic growth, population and food demand, agricultural innovations, and the process of land conversion are jointly determined. We show that even a small impact of global biodiversity on agricultural productivity calls for both a halt in agricultural land conversion and increased agricultural R&D in order to maintain food production associated with population and income growth.
    Date: 2014–09
  3. By: Schmit, Todd M.
    Keywords: Agricultural and Food Policy, Production Economics,
    Date: 2014–05
  4. By: Mintewab Bezabih; Andrea Mannberg; Eyerusalem Siba
    Abstract: Land tenure security has long been touted as key to increased performance of the agricultural sector in developing countries. This paper utilizes household level panel data to analyse the impact of a land certification program on farmers’ off-farm participation and activity choices in the Central Highlands of Ethiopia. Identification of the program’s impact relies on the sequential nature of its implementation and application of the difference-in-differences strategy. Our results suggest that certification is a significant determinant of participation in off-farm employment. However, the impact differs substantially between different types of off-farm activities. While land certification is associated with an increased probability of participation in non-agricultural activities requiring unskilled labor, it reduces the probability to engage in work on others’ farms. In addition, the effect of the program depends on the size of landholdings. The differentials in the responsiveness of different off farm activities to both certification and farm size indicate the need to recognize the complex relationships between land tenure enhancing reform policies and the non agricultural sub-sector in rural areas. In light of similar previous studies, the major contributions of the paper are twofold: assessment of the effects of enhanced land tenure security on activities outside agriculture and the role of farm size in determining off-farm participation.
    Date: 2014–09
  5. By: Valdés, Alberto; Foster, William E.
    Abstract: This paper presents what is known about the role of agrarian reform and the subsequent counter reform in producing a successful dynamic evolution of Chilean agriculture.
    Keywords: Agricultural policies, Land tenure, Farm structure, Agrarian reform, Incentives, collective farms, asentamientos,
    Date: 2014
  6. By: Zhen Liu (Department of Food and Resource Economics, University of Copenhagen); Arne Henningsen (Department of Food and Resource Economics, University of Copenhagen)
    Abstract: In the late 1990s, China aimed to mitigate environmental degradation from agricultural production activities by introducing the world’s largest ’Payments for Environmental Services’ (PES) program ― the Sloping Land Conversion Program (SLCP). In order to analyze its effects on agricultural households, we develop a microeconomic Agricultural Household Model (AHM), which can model the production, consumption, and non-farm labor supply decisions of agricultural households in rural China in a theoretically consistent fashion. Based on this theoretical model, we derive an empirical specification that we use to econometrically estimate the effects of the SLCP and other exogenous factors. Using a large longitudinal farm household survey data set, we estimate the empirical model with the Hausman-Taylor estimation method. The empirical results are generally consistent with the results of our theoretical comparative static analysis, e.g. that the SLCP significantly decreases agricultural production. While the SLCP increases non-farm labor supply and total consumption in the Yellow River basin, these effects could not be observed in the Yangtze River basin. The recent reduction of the SLCP compensation payment rates has had some notable, but generally small effects.
    Keywords: Sloping Land Conversion Program; Agricultural household model; Household behavior; Hausman-Taylor Estimator; China
    JEL: H31 Q12 R38
    Date: 2014–10
  7. By: Scott, Paul
    Abstract: I develop a new framework for analyzing land use change with dynamically optimizing landowners. My empirical approach allows for unobservable heterogeneity and avoids the burden of explicitly modeling the evolution of market-level state variables like input and output prices. Using a rich new data set on land use in the United States, I estimate a relatively large long-run cropland-price elasticity of 0.3. Compared to static estimates using the same data, my dynamic estimates suggest that biofuels production leads to dramatically more land use change and substantially smaller price increases in the long run.
    Keywords: agricultural supply estimation, dynamic discrete choice, land use change, biofuels policy
    Date: 2014–05
  8. By: Foreman, Linda
    Abstract: Data from the 2010 Agricultural Resource Management Survey (ARMS) and ERS cost of production accounts present a snapshot of the production costs, production practices, and characteristics related to U.S. corn production in 2010. This study found considerable variation in the operating and ownership costs for corn, ranging from an average of $1.74 per bushel for low-cost producers to $3.88 per bushel for high-cost producers. In 2010, high corn prices meant that most producers covered their corn production costs from harvest-month prices. The Heartland continues to be the major corn production region with the lowest operating and ownership costs per bushel, mainly because of the region’s high corn yields. The operating and ownership costs per bushel did not vary significantly by enterprise size where size is measured by the number of planted corn acres per farm. However, these costs per planted acre were lowest for farms with the smallest corn enterprises and highest for farms with the largest corn enterprises. Production value less operating and ownership costs per acre from organic corn production was higher than that from conventional corn production because higher prices more than offset lower yields for organic corn.
    Keywords: corn, operator characteristics, production costs, production practices, cost variation, organic corn, Agricultural Resource Management Survey (ARMS), Crop Production/Industries, Farm Management, Production Economics,
    Date: 2014–09
  9. By: Uchida, Shinsuke
    Abstract: A cropland retirement policy contributes to the reduction of environmental externalities from agricultural production such as soil erosion, nutrient runoff and loss of wildlife habitat. On the other hand, participant's potential adverse behavior could undermine the environmental benefits of the policy. Several sources of such an unintended effect, known as “slippage", have been conceptually identified, but their empirical evidence has been scarce. This article tests one source of slippage caused by in-farm land substitution from noncropland to cropland as a result of farmland retirement in the U.S. Conservation Reserve Program (CRP). With the farm-level longitudinal data I can utilize cross-sectional and time variation of detailed individual farm characteristics to identify the causal relationship of CRP participation and subsequent slippage through in-farm land substitution. An identified assumption of the slippage estimate is verified by farm fixed effects, time-varying county fixed effects, and selection-on-observables. These could eliminate effects of unobservables that are potentially correlated with both the program participation and subsequent farmland reallocation decisions. Overall, slippage seems evident and fairly robust among specifications. It is found that an average program participant converts 14% of noncropland to cropping activities after enrollment. Results further show that participants with a larger share of uncropped land contribute more to slippage, indicating that farms with the excess capacity of conversion are more exible in the land allocation decision and thus likely to give rise to slippage. This suggests that additional restrictions on the rest of land use for participants and/or introduction of penalty points reecting the share of noncropland in the current auction mechanism can hinder such a backward incentive offsetting the program benefits.
    Keywords: Agricultural and Food Policy, Land Economics/Use, Q15, Q18, Q24, Q58,
    Date: 2014–07
  10. By: Harou, Aurélie; Liu, Yanyan; Barrett, Christopher B.; You, Liangzhi
    Abstract: Despite the rise of targeted input subsidy programs in Africa over the last decade, several questions remain as to whether low and variable soil fertility, frequent drought, and high fertilizer prices render fertilizer unprofitable for large subpopulations of African farmers. To examine these questions, we use large-scale, panel experimental data from maize field trials throughout Malawi to estimate the expected physical returns to fertilizer use conditional on a range of agronomic factors and weather conditions. Using these estimated returns and historical price and weather data, we simulate the expected profitability of fertilizer application over space and time. We find that the fertilizer bundles distributed under Malawi’s subsidy program are almost always profitable in expectation, although our results may be reasonably interpreted as upper-bound estimates among more skilled farmers given that the experimental subjects were not randomly selected.
    Keywords: Fertilizers, subsidies, Agricultural development, productivity, farm inputs, poverty alleviation,
    Date: 2014
  11. By: Frankenberger, Timothy R.; Constas, Mark A.; Nelson, Suzanne; Starr, Laurie
    Abstract: This food policy report reviews resilience processes, activities, and outcomes by examining a number of case studies of initiatives by nongovernmental organizations (NGOs) to enhance resilience capacity, and draws implications for policymakers and other stakeholders looking to strengthen resilience.
    Keywords: nongovernmental organizations (NGO's), economic development, agricultural development, food security, poverty, hunger, agricultural policies, livelihoods, households, smallholders, indicators, risk, monitoring, climate change, governance, sustainability, resilience, shocks, safety nets
    Date: 2014
  12. By: Larson, Donald F.; Martin, Will; Sahin, Sebnem; Tsigas, Marino
    Abstract: In 1959, shortly after the European Economic Community was founded under the 1957 Treaty of Rome, Turkey applied for Associate Membership in the then six-member common market. By 1963, a path for integrating the economies of Turkey and the eventual European Union had been mapped. As with many trade agreements, agriculture posed difficult political hurdles, which were never fully cleared, even as trade barriers to other sectors were eventually removed and a Customs Union formed. This essay traces the influences the Turkey-European Union economic institutions have had on agricultural policies and the agriculture sector. An applied general equilibrium framework is used to provide estimates of what including agriculture under the Customs Union would mean for the sector and the economy. The paper also discusses the implications of fully aligning Turkey's agricultural policies with the European Union's Common Agricultural Policy, as would be required under full membership.
    Keywords: Food&Beverage Industry,Crops and Crop Management Systems,Trade Policy,Economic Theory&Research,Trade Law
    Date: 2014–10–01
  13. By: Benson, Todd; Engida, Ermias; Thurlow, James
    Abstract: The government of Ethiopia is investing significant public resources to increase overall national production of teff, wheat, and maize. To better understand the likely economywide effects of increases of between 12 and 14 percent in the national production of these cereals, a set of production increase scenarios for each crop were run using a computable general equilibrium model of the Ethiopian economy. The analyses were extended to also consider the effects of several international wheat price and wheat import scenarios, a wheat subsidy program, and maize exports. Among the effects considered are changes in economic growth, prices, total household consumption, cereal and calorie consumption levels, and poverty measures.
    Keywords: cereals, economic modeling, Teff, Wheats, maize, economic growth, Agricultural growth, cereal sector,
    Date: 2014
  14. By: Helene Ollivier (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)
    Abstract: This paper assesses the long term impacts of an international transfer called the Reduced Emissions from Deforestation and Degradation (REDD) mechanism, which aims at preserving tropical forests of the recipient economy. This two-sector economy faces a dilemma between economic growth and deforestation. The rural sector can substitute reproducible capital for agricultural land whereas the manufacturing sector only requires capital. The model shows that the REDD mechanism has a non-monotonic effect on steady state welfares. For low transfer schemes, the agricultural output increases with the transfer even though less land is under cultivation. For high transfer schemes, the increase in the transfer may not offset the decrease in the agricultural output. The open-loop symmetric Nash equilibrium in a dynamic deforestation game predicts that redistributing the transfer among a finite number of producers is less efficient in reducing deforestation than in the social optimum.
    Keywords: Avoided deforestation; Growth; Aid efficiency
    Date: 2012–11
  15. By: Silva, Julie A.; Matyas, Corene J.; Cunguara, Benedito
    Abstract: This study examines how extreme weather in the context of on-going economic shocks influence regional inequality and polarization within Mozambique. Utilizing satellite-based estimates of rainfall that we spatially analyze within a GIS, we establish a 16-year rainfall climatology and calculate monthly rainfall anomalies for 674 villages. We approximate storm-total rainfall from all tropical cyclones entering the Mozambique Channel, as well as the extent of damaging winds for those making landfall, between 2005 and 2008.
    Keywords: Weather, Mozambique, Agricultural and Food Policy, Financial Economics, Food Security and Poverty,
    Date: 2014–09
  16. By: Xiaoying Liu; Mare Sarr; Timothy Swanson (School of Economics, University of Cape Town, South Africa)
    Abstract: We examine the effect of the introduction of uniform water-charging for aquifer management and provide evidence using a survey-based choice experiment of agricultural water users in rural Tunisia. Theoretically, we show that the implementation of the proposed second-best regulation would result both in efficiency gains and in distributional effects in favour of small landholders. Empirically, we find that resistance to the introduction of an effective water-charging regime is greatest amongst the largest landholders. Resistance to the regulation of common resources may be rooted in the manner in which heterogeneity might determine the distributional impact of different management regimes.
    Date: 2014–09–29
  17. By: Florkowski, Wojciech J.; Kolavalli, Shashidhara
    Abstract: Groundnuts, which are widely consumed in West Africa, are prone to contamination by aflatoxin during production and storage. Although aflatoxin plays a role in many of the important health risks in developing countries, individuals and governments ignore the risks because their health effects are not immediate. In the developed world strong regulations remove contaminated kernels and their products from the food systems. The objective of this paper is to examine production and marketing practices, particularly grading methods, in Ghana’s groundnut value chain to obtain a clear understanding of the sources and levels of aflatoxin contamination in the crop and how such contamination can be sharply reduced.
    Keywords: aflatoxins, Mycotoxins, Groundnuts, Quality, Grading, Regulation, Biosafety, Food safety, value chains,
    Date: 2014
  18. By: Benin, Samuel
    Abstract: This paper is part of four country case studies that take a detailed look at public expenditures in agriculture, and at how the data on expenditures are captured in government financial and budget accounts. The objective of these studies is to unpack the black box of public expenditure statistics reported in various cross-country datasets, and ultimately to enable the use of existing government accounts to identify levels and compositions of government agriculture expenditures, with better understanding of what these data are in fact accounting for.
    Keywords: public expenditure, Public investment, Agricultural development, Public policy, Maputo Declaration, public financial management,
    Date: 2014
  19. By: Kondylis, Florence; Mueller, Valerie; Zhu, Siyao Jessica
    Abstract: Understanding the trade-offs in improving the precision of agricultural measures through survey design is crucial. Yet, standard indicators used to determine program effectiveness may be flawed and at a differential rate for men and women. The authors use a household survey from Mozambique to estimate the measurement error from male and female self-reports of their adoption and knowledge of three practices: intercropping, mulching, and strip tillage. Despite clear differences in human and physical capital, there are no obvious differences in the knowledge, adoption, and error in self-reporting between men and women. Having received training unanimously lowers knowledge misreports and increases adoption misreports. Other determinants of reporting error differ by gender. Misreporting is positively associated with a greater number of plots for men. Recall decay on measures of knowledge appears prominent among men but not women. Findings from regression and cost-effectiveness analyses always favor the collection of objective measures of knowledge. Given the lowest rate of accuracy for adoption was around 80 percent, costlier objective adoption measures are recommended for a subsample in regions with heterogeneous farm sizes.
    Keywords: Agricultural Knowledge and Information Systems,Population Policies,Rural Development Knowledge&Information Systems,Crops and Crop Management Systems,Primary Education
    Date: 2014–10–01
  20. By: Isidro Soloaga (Department of Economics, Universidad Iberoamericana, Mexico City. Mexico); Chiara Cazzuffi; Mariana Pereira
    Abstract: This paper analyses the relationship between local poverty and food manufacture growth in Chile and Mexico using propensity score matching, differences in differences and spatial econometrics methods. We focus on food manufacture as a sector with a number of characteristics that make it potentially pro-poor, and whose incentives for spatial distribution may either strengthen or dampen its poverty reduction potential. The overall results indicate that i) geographically, food manufacture locates in relatively poor areas, but not in the poorest; ii) food manufacture tends to locate in municipalities with more availability of labor and raw materials and with better infrastructure; iii) controlling for other factors, food manufacture growth contributes to local poverty reduction both in terms of magnitude and speed.
    Date: 2014
  21. By: Pierre-Alexandre Mahieu (LEMNA, Université de Nantes); Henrik Andersson (LERNA, Toulouse of School of Economics); Olivier Beaumais (LISA, University of Corsica Pasquale Paoli, Corte); Romain Crastes (ESITPA, AGRI’TERR, Rouen); François-Charles Wolff (LEMNA, Université de Nantes)
    Abstract: This paper provides a systematic review based on a large sample of articles published between 2004 and 2013 in economic journals and listed in ISI Web of Science. Results from descriptive statistics and regression models show that choice experiment (CE) is becoming more popular than contingent valuation (CV) in terms of number of publications and citations. Also, journals related to health economics and agricultural economics are more CE oriented than journals related to environmental economics. Finally, divergences across economic journals are found when comparing recent CE articles in terms of questionnaire design, econometric procedure, administration of questionnaire and type of participants. In particular, it is more standard to allow for unobserved taste heterogeneity in environmental journals than in health or agricultural journals.
    Keywords: Contingent valuation, Choice Experiment, Systematic Review, Environment, Health.
    JEL: Q18 Q51 I10
    Date: 2014–10
  22. By: Knoblauch, Wayne A.; Dymond, Cathryn; Karszes, Jason; Kiraly, Mariane
    Keywords: Farm Management, Livestock Production/Industries, Production Economics,
    Date: 2013–07
  23. By: Martine Rutten; Andrzej Tabeau; Frans Godeschalk
    Abstract: We develop a methodology for incorporating nutrition impacts in economy-wide analyses, providing entry points for where, when and how to act. It accounts for three channels of consumption, directly via primary commodities and indirectly via processed foods and food-related services, and produces indicators showing content by nutrient (currently calories, proteins, fats and carbohydrates), channel, source region and sector. The paper applies the framework in a CGE model (MAGNET) and uses FAO data to project nutritional outcomes resulting from the global food system over time. The analysis confirms that developing regions catch up with developed regions, with the USA at the high-end of nutrient consumption, whilst Southern Africa lags behind. In the USA the processed food channel dominates, whereas in Southern Africa the direct channel dominates. In the USA, and similar regions, fat taxes (thin subsidies) on unhealthy (healthy) processed foods, technologies reducing bad ingredients (e.g. trans fats, salt), improved food labelling, information and marketing campaigns, and/or targeted cash transfers may be worthwhile to investigate. In Southern Africa, and regions alike, technological advances increasing nutrient availability via primary agriculture and/or cash transfers enabling access may be more pertinent. The relative fixedness of sectoral origins shows that consumption habits change slowly and are visible only in the long term. For certain regions, including Southern Africa and USA, nutrient import dependency increases with substantial variations in regional sourcing. This implies that concerted action across the globe is crucial to reach diet, nutrition and health goals, and should include upcoming Asian economies, Africa (excl. Southern Africa) and the Middle East. Heterogeneity of results necessitates future ex-ante quantitative policy analyses on a more detailed and context-specific basis.
    JEL: C68 D12 C68 D12 I10 Q17 Q18
  24. By: Michael R. CARTER (Université du Wisconsin); Alain de JANVRY (Université de Californie à Berkeley); Elisabeth SADOULET (Université de Californie à Berkeley); Alexandros SARRIS (Université d'Athènes)
    Abstract: Index-based weather insurance is a major institutional innovation that could revolutionize access to formal insurance for millions of smallholder farmers and related individuals. It has been introduced in pilot or experimental form in many countries at the individual or institutional level. Significant efforts have been made in research to assess its impacts on shock coping and risk management, and to contribute to improvements in design and implementation. While impacts have typically been positive where uptake has occurred, uptake has generally been low and in most cases under conditions that were not sustainable. This paper addresses the reasons for this current discrepancy between promise and reality. We conclude on perspectives for improvements in product design, complementary interventions to boost uptake, and strategies for sustainable scaling up of uptake. Specific recommendations include: (1) The first-order importance of reducing basis risk, pursuing for this multiple technological, contractual, and institutional innovations. (2) The need to use risk layering, combining the use of insurance, credit, savings, and risk-reducing investments to optimally address different categories of risk. For this, these various financial products should be offered in a coordinated fashion. (3) Calling on a role for state intervention on two fronts. One is the implementation of public certification standards for maximum basis risk of insurance contracts; the other is “smart” subsidies for learning, data accumulation, initial re-insurance, and catastrophic risks. (4) Using twin-track institutional-level index insurance contracts combined with intra-institution distribution of payouts to reduce basis risk and improve the quality of insurance. For this, credible intra-institutional rules for idiosyncratic transfers must be carefully designed. Finally (5), the need for further research on the determinants of behavior toward risk and insurance, the design of index-based insurance products combined with others risk handling financial instruments, and rigorous impact analyses of on-going programs and experiments.
    JEL: O16 Q12 Q14
    Date: 2014–09
  25. By: Christian Almer; Jérémy Laurent-Lucchetti; Manuel Oechslin
    Abstract: Every year, riots cause a substantial number of fatalities in less-advanced countries. This paper explores the role of agricultural output shocks in explaining riots. Our theory predicts a negative relationship between the level of rioting and the deviation of the actual output from the average one. Relying on monthly data at the cell level (0:5 x 0:5 degrees), and using a drought index to proxy for output shocks, our empirical analysis confirms such a negative relationship for Sub-Saharan Africa: A one-standard-deviation decrease in the drought index rises the likelihood of a riot in a given cell and month by 8:4 percent. The use of highly disaggregated data accounts for the fact that riots are temporally and geographically confined events.
    Keywords: Conflict, social unrest, economic shocks, disaggregated data
    Date: 2014–09
  26. By: James Roumasset (University of Hawai‘i at Manoa, UHERO); Christopher Wada (UHERO, University of Hawai‘i at Manoa)
    Abstract: In many parts of the world, irrigation and groundwater consumption are largely dependent on groundwater. Minimizing the adverse effects of water scarcity requires optimal as well as sustainable groundwater management. A common recommendation is to limit groundwater extraction to maximum sustainable yield (MSY). Although the optimal welfare-maximizing path of groundwater extraction converges to MSY in some cases, MSY generates waste in the short and medium term due to ambiguity regarding the transition to the desired long-run stock level and failure to account for the full costs of the resource. However, the price that incentivizes optimal consumption often exceeds the physical costs of extracting and distributing groundwater, which poses a problem for public utilities facing zero excess-revenue constraints. We discuss how the optimal price can be implemented in a revenue-neutral fashion using an increasing block pricing structure. The exposition is non-technical. More advanced references on groundwater resource management are also provided.
    Keywords: Watershed management, natural capital, invasive species, groundwater economics
    Date: 2014–05
  27. By: Malapit, Hazel J.; Quisumbing, Agnes R.
    Abstract: This paper investigates linkages between women’s empowerment in agriculture and the nutritional status of women and children using 2012 baseline data from the Feed the Future population-based survey in Ghana. The sample consists of 3,344 children and 3,640 women and is statistically representative of the northernmost regions of Ghana where the Feed the Future programs are operating.
    Keywords: Gender, Women, Nutrition, Empowerment, Agriculture, Indicators,
    Date: 2014
  28. By: Michela Faccioli (Universitat de les Illes Balears); Antoni Riera Font (Universitat de les Illes Balears); Catalina M. Torres (Universitat de les Illes Balears)
    Abstract: Climate change will further exacerbate wetland deterioration, especially in the Mediterranean region. On the one side, it will accelerate the decline in the populations and species of plants and animals, this resulting in an impoverishment of biological abundance. On the other one, it will also promote biotic homogenization, resulting in a loss of species’ diversity. In this context, different climate change adaptation policies can be designed: those oriented to recovering species’ abundance and those aimed at restoring species’ diversity. Based on the awareness that knowledge about visitors’ preferences is crucial to better inform policy makers and secure wetlands’ public use and conservation, this paper assesses the recreational benefits of different adaptation options through a choice experiment study carried out in S’Albufera wetland (Mallorca). Results show that visitors display positive preferences for an increase in both species’ abundance and diversity, although they assign a higher value to the latter, thus suggesting a higher social acceptability of policies pursuing wetlands’ differentiation. This finding acquires special relevance not only for adaptation management in wetlands but also for tourism planning, as most visitors to S’Albufera are tourists. Thus, given the growing competition to attract visitors and the increasing demand for high environmental quality and unique experiences, promoting wetlands’ differentiation could be a good strategy to gain competitive advantage over other wetland areas and tourism destinations.
    Keywords: climate change, wetland adaptation, species’ diversity, species’ abundance, recreational benefits, choice experiment.
    JEL: D6 Q51 Q54 Q57
    Date: 2014
  29. By: Lori Beaman (Northwestern University); Dean Karlan (Economic Growth Center, Yale University); Bram Thuysbaert (Ghent University)
    Abstract: High transaction and contracting costs are often thought to create credit and savings market failures in developing countries. The microfinance movement grew largely out of business process innovations and subsidies that reduced these costs. We examine an alternative approach, one that infuses no external capital and introduces no change to formal contracts: an improved “technology” for managing informal, collaborative village-based savings groups. Such groups allow, in theory, for more efficient and lower-cost loans and informal savings, and in practice have been scaled up by international non-profit organizations to millions of members. Individuals save together and then lend the accumulated funds back out to themselves. In a randomized evaluation in Mali, we find improvements in food security, consumption smoothing, and buffer stock savings. Although we do find suggestive evidence of higher agricultural output, we do not find overall higher income or expenditure. We also do not find downstream impacts on health, education, social capital, and female decision-making power.Could this have happened before, without any external intervention? Yes. That is what makes the result striking, that indeed there were no resources provided nor legal institutional changes, yet the NGO-guided, improved informal processes led to important changes for households.
    Keywords: Micro-savings, Savings groups impact
    JEL: O12 D12 D91
    Date: 2014–10
  30. By: Catalina M. Torres (Universitat de les Illes Balears); Sergio Colombo (Instituto de Investigación y Formación Agraria y Pesquera (IFAPA)); Nick Hanley (University of St. Andrews)
    Abstract: Gains from the incorporation of monetary values for changes in environmental goods and services within cost-benefit analysis depend on how well researchers can estimate these values. One key problem in both stated and revealed preference approaches is how best to model preference heterogeneity. Researchers have implemented several approaches to represent this heterogeneity, and have shown that the choice of approach can have an effect on welfare estimates. However, the question as to the degree of error in welfare measurement from an inappropriate choice of approach has not been addressed. We use Monte Carlo analysis to investigate this issue in the context of choice modelling of coastal water quality changes, when the researcher chooses between a random parameters and latent class model for representing heterogeneity. This allows us to quantify the errors that emerge from using the wrong model in estimating the benefits of water quality improvements. Our overall conclusion is smaller welfare errors are likely to come from use of a latent class model.
    Keywords: choice experiments; cost-benefit analysis; Monte Carlo analysis; non-market goods; preference heterogeneity; welfare measurement
    JEL: C15 C52 Q51
    Date: 2014
  31. By: Xu, Lixin Colin; Zhang, Jing
    Abstract: Although previous research has demonstrated the health benefits of water treatment programs, relatively little is known about the effect of water treatment on education. This paper examines the educational benefits to rural youth in China of a major drinking water treatment program started in the 1980s, perhaps the largest of such programs in the world. By employing a cross-sectional data set (constructed from a longitudinal data set covering two decades) with more than 4,700 individuals between 18 and 25 years old, the analysis finds that this health program has improved the individuals'education substantially, increasing the grades of education completed by 1.08 years. The qualitative results hold when the analysis controls for local educational policies and resources, village dummies, and distance of villages to schools, and by instrumenting the water treatment dummy with villages'topographic features, among others. Moreover, three findings render support to the brawn theory of gender division of labor: girls benefit much more from water treatment than boys in schooling attainment; youth with an older brother benefit more than youth with an older sister; and boys gain more body mass than girls do from having access to treated water. The program can account for the gender gap in educational attainment in rural China in the sample period. Young people that had access to treated plant water in early childhood (0-2 years of age) experienced significantly higher gains in education than those who were exposed to treated water after early childhood. The estimates suggest that this program is highly cost-effective.
    Keywords: Health Monitoring&Evaluation,Town Water Supply and Sanitation,Water and Industry,Water Supply and Sanitation Governance and Institutions,Water Conservation
    Date: 2014–10–01
  32. By: Gomez, Miguel
    Keywords: Consumer/Household Economics, Crop Production/Industries,
    Date: 2013–03

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