nep-agr New Economics Papers
on Agricultural Economics
Issue of 2016‒02‒17
nineteen papers chosen by
Angelo Zago
Università degli Studi di Verona

  1. Price signals and supply responses for staple food crops in SSA countries By Magrini, Emiliano; Balié, Jean; Morales Opazo, Cristian
  2. The Economic Impacts of Global Warming on US Agriculture: the Role of Adaptation By Kaixing Huang
  3. A Land Tenure Module for LSMS By Holden, Stein T.; Ali, Daniel; Deininger, Klaus; Hilhorst, Thea
  4. Willingness-to-pay for microinsurance and flexibility: Evidence from an agricultural investment lab-in-the-field experiment in Senegal By Czura, Kristina; Dequiedt, Vianney
  5. Pay little, get little; pay more, get a little more: A framed forest experiment in Tanzania By Nystad Handberg , Øyvind; Angelsen, Arild
  6. Productivity Shocks, International Trade and Import Prices: Evidence from Agriculture By Ferguson, Shon; Gars, Johan
  7. Impact of Weather Insurance on Small Scale Farmers: A Natural Experiment By Ibanez, Marcela; Dietrich, Stephan
  8. Unfair Incentives: A Behavioral Note on Sharecropping By Schumacher, Heiner; Kemper, Niels
  9. Awareness of Climate Change in a Diverse World By Wiesmeth, Hans; Weber, Shlomo
  10. The Aggregation Dilemma in Climate Change Policy Evaluation By Schumacher, Ingmar
  11. Deforestation, Land Taxes and Development By Kalkuhl, Matthias; Edenhofer, Ottmar
  12. Unlock the lock-in! Balance of rights in relation to betterment and compensation in Poland By Havel, Magorzata Barbara
  13. Investigating the Carbon Leakage Effect on the Environmental Kuznets Curve Using Luminosity Data By Steinkraus, Arne
  14. On the relevance of ideology and environmental values for climate change beliefs, climate policy support, and climate protection activities: An empirical cross country analysis By Ziegler, Andreas
  15. When too much punishment decreases legality. The case of coca-reducing policies in Colombia By Vasquez Escallon, Juanita
  16. Determinants of drinking water treatment and hygiene habits in provincial towns in Yemen By Rieckmann, Johannes
  17. Does A Child Quantity-Quality Trade-Off Exist? Evidence from the One-Child Policy in China By Huang, Yue
  18. Weather Variability, Agricultural Revenues and Internal Migration: Evidence from Pakistan By Heman D. Lohano
  19. Remittances and Expenditure Patterns of the Left Behinds in Rural China By Démurger, Sylvie; Wang, Xiaoqian

  1. By: Magrini, Emiliano; Balié, Jean; Morales Opazo, Cristian
    Abstract: Several studies have focused on estimating the supply response of farmers in Sub Saharan Africa.This literature has used a variety of approaches and has generally concluded that price elasticities of supply were low or very low. However, only a few analyses have gone beyond estimating the aggregate supply response for the sector as whole or the specific case of cash crops. In most cases, data scarcity especially on producer prices has been the main limiting factor. In this paper, we revisit this question focusing on the supply response of main staple food crops in selected Sub Saharan African (SSA) countries. We use an innovative dataset recently developed by FAO's "Monitoring and Analysing Food and Agricultural Policies" (MAFAP) programme which provides prices at the producer, wholesale, and border levels for selected value chains. Using dynamic panel techniques, we are able to test how acreage, production and yields respond to price signals and other non-price factors over the recent food price crises (2005-2013).We observe that farmers producing staple food crops react to real price signals, even if with a limited intensity. Moreover, our results suggest that direct price incentives arising from border protection and government intervention in domestic markets and price shocks at the border are more important than macroeconomic policies in influencing farmers' decisions. We also show that omitting marketing costs from the supply response function leads to underestimation of the price elasticity. Conversely, using wholesale instead of farm gate prices as proxy for producer prices leads to overestimation of the price elasticity.
    Keywords: supply responses,price incentives,agriculture commodities,dynamic panel data
    JEL: Q11 Q18 C33 O55
    Date: 2016
  2. By: Kaixing Huang (School of Economics, University of Adelaide)
    Abstract: Studies of climate change impacts on agricultural profits using panel data typically do not take account of adaptations over time by farmers, and those that do tend to use the standard hedonic approach which is potentially biased. As an alternative, this paper develops a panel framework that includes farmer adaptation. When tested with United States data, this study finds that the negative impact of expected climate change on farm profits by 2100 is only one-third as large once likely adaptation by farmers is taken into account.
    JEL: Q15 Q51 Q54
    Date: 2016–02
  3. By: Holden, Stein T. (Centre for Land Tenure Studies, Norwegian University of Life Sciences); Ali, Daniel (Development Research Group, The World Bank); Deininger, Klaus (Development Research Group, The World Bank); Hilhorst, Thea (Development Research Group, The World Bank)
    Abstract: This paper proposes to fill the important gap in reliable and nationally representative land tenure data by including a Land Tenure Module (LTM) to be linked to multi-purpose household surveys such as the Living Standard Measurement Surveys (LSMS). Developing survey standards to generate globally comparable land data is important for generating data to be used in global and regional land governance monitoring initiatives (SDGs; LPI – UNECA; GLTN/ GLII; VGGT). The LTM can be a cost-effective way to provide data for evidence-based analyses that will help identify the areas where policy action can have the most significant and/or immediate impact, and help in sequencing and prioritizing policy interventions. The paper illustrates important issues that may be analyzed based on such a module in order to motivate its implementation and where the current state of knowledge is constrained by limited data access. To facilitate this integration, a generic LTM is proposed based on an assessment of existing tenure modules and lessons learned from surveys on land tenure. It introduces a basic structure including: (i) ownership and use of agricultural and non-agricultural land and immobile assets on the land, (ii) sources of land acquisition including inheritance, (iii) land transactions, (iv) formal and informal property rights, (v) investments on the land, (vi) land conflicts, (vii) legal knowledge, (viii) gender and property rights, (ix) perceptions of tenure security and (x) trust in land-related institutions.
    Keywords: Land Tenure Module (LTM); Living Standard Measurement Surveys (LSMS); generic questionnaire
    JEL: Q15 R33
    Date: 2016–01–29
  4. By: Czura, Kristina; Dequiedt, Vianney
    Abstract: Agricultural insurance does not only affect investment decisions in agriculture but also in a secondary, unrelated income earning activity that can serve as a risk mitigation and risk coping strategy, such as livestock farming. The value of insurance may depend on the market environment in the investment market for livestock: with complete livestock markets, agricultural insurance may be less valuable; with seasonal livestock markets and non-flexible decision making environments, agricultural insurance becomes more valuable. Using data from a lab-in-the-field experiment with agricultural decision makers in rural Senegal we study the effects of agricultural insurance on investments in livestock with complete and seasonal livestock markets. In general, insurance increases investment in livestock farming. There is a widespread willingness to pay for insurance but it does not react to the size of the insurance coverage. The value of insurance is higher in inflexible investment decisions indicating that insurance is more valuable in non-flexible decision making environments, such as incomplete and seasonal markets.
    JEL: C93 O16 O12
    Date: 2015
  5. By: Nystad Handberg , Øyvind (School of Economics and Business, Norwegian University of Life Sciences); Angelsen, Arild (School of Economics and Business, Norwegian University of Life Sciences)
    Abstract: How do different levels of individual payments for environmental services (PES) affect intrinsic and social motivations for forest conservation? Does introducing low levels of PES crowd out these motivations? This paper presents findings from framed field experiments (FFE) conducted with local forest users in Tanzania. The payoff structure represents a common-pool resource situation; participants’ payoffs depend on the number of trees harvested, and aggregate over-harvesting can harm future harvest. Four levels of individual PES are tested in a between-group design: no (0%), low (20%), medium (60%) and full (100%) PES, where the level is relative to the harvest value. We observe lower than theoretically predicted harvest rates at no, low and medium PES, while the opposite is true at full PES. Low PES has a weak negative effect on harvest rates among certain subgroups, while medium and full PES give strong reductions in harvest rates (c. -43% and -75%). The results suggest that low PES has little impact on local forest use in Tanzania and has on aggregate a neutral effect on intrinsic and social motivations. Increasing payments has a negative, but diminishing effect on harvest rates.
    Keywords: Field experiment; PES; REDD; crowding-out; forest management; Tanzania
    JEL: C93 Q23
    Date: 2016–01–12
  6. By: Ferguson, Shon (Research Institute of Industrial Economics (IFN)); Gars, Johan (GEDB)
    Abstract: The purpose of this study is to measure the sensitivity of trade volumes and unit values to agricultural productivity shocks at home and abroad. We find that the unit values of trade flows vary systematically with production shocks using both aggregate data on a large sample of countries and detailed firm-level imports to Sweden. We find that import prices increase (and import volumes fall) when importer production increases. This result is likely driven by a change in the quality composition of imports or by economies of scale in international trade. This beneficial terms-of-trade effect that we find may thus be an important coping mechanism for food net-importing countries that experience negative production shocks. Our results also suggest that trade volumes are relatively insensitive to changes in production. The results suggest that trade frictions, product differentiation and storage limit the role of international trade as way of coping with production volatility.
    Keywords: Climate shocks; Pass-through; Quality sorting; Agricultural trade
    JEL: F14 F18 Q11 Q17 Q18
    Date: 2016–02–03
  7. By: Ibanez, Marcela; Dietrich, Stephan
    Abstract: This paper explores the impacts of traditional agricultural insurance that offers protection against climatic shocks on small-scale tobacco farmers in Colombia after a period of substantial crop failures. Our identi cation strategy bene ts from a natural experimental setup of the form in which the insurance was launched. We fnd that tobacco producers with access to the insurance program were less likely to acquire informal loans, were less likely to use loans to repay debts, and had access to loans with lower interest rates and longer maturation periods. Moreover, access to this program was positively associated with increased savings and accumulation of liquid assets.
    JEL: G22 O13 O12
    Date: 2015
  8. By: Schumacher, Heiner; Kemper, Niels
    Abstract: We conducted a field experiment with real-life tenants in Ethiopia to test the incentive effects of fixed-wage, sharecropping, fixed-rent, and ownership contracts. The experimental task resembles a common process in agricultural production. The sharecropping contract is essentially a piece-rate scheme framed as a profit sharing agreement. The sharecropping output was about 11 percent smaller than the fixed-rent output. Surprisingly, it is statistically indistinguishable from the fixed-wage output, despite substantial piece rates. This effect is driven by real-life sharecroppers. Their sharecropping output was significantly smaller than that of non-sharecroppers, and in one region, it was even 10 percent lower than sharecroppers fixed-wage output. Based on qualitative interviews and historical accounts, we argue that our subjects dislike sharecropping contracts because of the unfair profit sharing and the controversial allocation of the land. The contractual performance may therefore depend on the perceived fairness of the incentive scheme.
    JEL: C93 J30 N50
    Date: 2015
  9. By: Wiesmeth, Hans; Weber, Shlomo
    Abstract: "Awareness" for a public good is necessary to stimulate voluntary contributions towards the provision of this commodity. This applies in particular to the global reduction of greenhouse gases and its relevance for mitigation of climate change. The success of the new climate agreement to be concluded in Paris in 2015 thus depends on sufficient "awareness" for climate change, but also on the extent of diversity among the participating countries. This papers develops a formal model with diverse countries mitigating climate change. Diversity thereby refers to awareness for global warming, population, GDP per capita and costs of renewable energy sources. The Nash mechanism coordinates individual decisions, and the effect of diversity on equilibrium contributions can be investigated in various ways. The second part of the paper provides rankings of signatories of the Kyoto Protocol regarding awareness for climate change. In these empirical investigations, estimates for awareness are derived from observable data. Some results on the "Environmental Kuznets Curve" and some final remarks conclude the paper.
    JEL: H41 Q54 H87
    Date: 2015
  10. By: Schumacher, Ingmar
    Abstract: The results in this paper show that a policy maker who ignores regional data and instead relies on aggregated integrated assessment models will strongly underestimate the carbon price and thus the required climate policy. Using a stylized theoretical model we show that, under the mild and widely-accepted assumptions of asymmetric climate change impacts and declining marginal utility, an Aggregation Dilemma may arise that dwarfs most other policy-relevant aspects in the climate change cost-benefit analysis. Estimates based on the RICE model Nordhaus (2000) suggest that aggregation leads to around 26% higher total world emissions than those from a regional model. The backstop energy use would be zero in aggregated versions of the model, while it is roughly 1.3% of Gross World Product in the regionally-disaggregated models. Though the policy recommendations from fully aggregated models like the DICE model are always used as a benchmark for policy making, the results here suggest that this should be done with the reservations raised by the Aggregation Dilemma in mind.
    JEL: Q54 Q58 Q50
    Date: 2015
  11. By: Kalkuhl, Matthias; Edenhofer, Ottmar
    Abstract: This paper combines neoclassical growth theory with the von Th nen approach of land conversion to model deforestation and land allocation decisions in an intertemporal general equilibrium context suitable for developing countries. Analyzing the impact of several forest conservation policies, including international transfers under a REDD+ scheme, emphasized the role of taxes on non-forest land as effective and powerful policy that has been largely neglected so far.The findings of our equilibrium analysis are in stark contrast to the conventional economic wisdom that taxes on land are allocation neutral. As we model deforestation as one investment decision besides investment into physical capital stocks, land taxes may not only increase forest conservation levels but also overall capital stocks and output. We identify the conditions that lead to this double-dividend effect and apply them to data for a set of countries, concluding that forest conservation, e.g. implemented by land taxes, can have this positive effect for many developing countries. Additionally, we reassess Borlaug s hypothesis and Jevons paradox in a general-equilibrium context and design a land tax scheme that is robust to agricultural yield increases.
    JEL: D90 H23 O13
    Date: 2015
  12. By: Havel, Magorzata Barbara (Department of Landscape Architecture and Spatial Planning, NMBU)
    Abstract: Many Polish cities are faced with a dilemma: to enact their local land-use plans and be exposed to the immediate financial consequences of their adoption, or to protect their budgets against these costs and give up control of the development of the cities. There are very broad compensation rights for value decline due to planning regulations and for areas designated in plans for public roads. At the same time, current planning system policies and instruments in Poland largely neglect how the costs of providing urban infrastructure and services are socialized and how the benefits of development processes are privatized. The use of value capture instruments is very limited. This paper discusses the distribution of rights and liabilities in relation to the two main sides of the property-values effect caused by land-use planning regulations and public works in Poland, in the background of the new planning system and property-rights approach adopted in the country. The article presents the current situation, initially explores a possible ways forward based on varied international experiences, discusses the institutional design of land markets, and indicates the need for planning by Law and property rights.
    Keywords: Betterment and compensation; delineation of property rights; planning system; Poland
    JEL: O18 P25 R52
    Date: 2016–01–29
  13. By: Steinkraus, Arne
    Abstract: This paper studies the effect of carbon leakage on the environmental Kuznets curve (EKC) using satellite nighttime light data. I show that nighttime lighting is an important variable for estimating carbon dioxide emissions that is superior to other existing indicators and covers all countries in the world. I find evidence of an inverted-U shaped relationship between light and, thus, greenhouse gas emissions and income, with a turning point at approximately US $50,000. However, the relationship is primarily driven by changes in the structure of international trade, implying strong carbon leakage effects. Consequently, environmental regulations that become operative in only one part of the world may fail without global coordination.
    Keywords: Carbon Leakage,Environmental Kuznets Curve,Nighttime Lighting
    JEL: F18 Q50
    Date: 2016
  14. By: Ziegler, Andreas
    Abstract: Based on unique data from representative computer-based surveys among more than 3400 citizens, this paper empirically examines the determinants of climate change beliefs, climate policy support, and climate protection activities in three countries which are key players in international climate policy, namely the USA, Germany (as largest country in the European Union), and China. Our econometric analysis focuses on the effect of ideological and political identification and especially considers the interrelationship between a right-wing or a left-wing orientation and environmental values. Our estimation results imply that environmental awareness is in all three countries the major factor for attitudes and activities towards climate change. In Germany, citizens with a conservative, but not social or green orientation significantly less often support climate policy and particularly have a significantly lower willingness to pay a price premium for climate-friendly products, whereas ideological differences are negligible for climate change beliefs. In contrast, a right-wing orientation has significantly negative effects on all attitudes and activities towards climate change in the USA. Furthermore, an increasing environmental awareness decreases ideological differences in the support of climate policy in Germany and the USA and especially in general climate change beliefs and beliefs in anthropogenic climate change in the USA. Our estimation results suggest alternative strategies such as specific communication campaigns in order to reduce the climate change skepticism in conservative and right-wing circles in the USA and to increase the support of climate policy among such population groups.
    JEL: Q54 Q58 A13
    Date: 2015
  15. By: Vasquez Escallon, Juanita
    Abstract: States want their people to follow the law. They can either persuade them, sanction law-breakers, or both. But sanctions do not only alter people s perception of risks and costs; they also affect how people view their state and its legitimacy, unleashing a series of non-economic factors that determine compliance with the law. In fact, when a sanction is perceived as unjust it may be inefficient in reducing law violations and could crowd-out legality in other aspects of life. Law scholars warn against violating the principle of proportionality by exerting extreme punishment in comparison with the magnitude of the crime, as it may result in the loss of citizen cooperation with the law. I take one of Colombia s drug-reducing policies, aerial spraying of coca crops and study the effect of its disproportionate use on legal crops. My results point to a non-linear effect of punishment on legality: spraying shocks or extreme spraying in relation to the amount of illegal crops found reduce engagement in legal crops, where as proportional levels of spraying induce legality. I use four different sources of data to test this relationship: macro data on all coca growing municipalities in Colombia, and micro data of three very different sets of farmers, namely coca growers surveyed by the UNODC, farmers that are beneficiaries of Colombia s biggest alternative development Program (Forest Warden Families) and coffee growers in municipalities that have had coca. I find the same results in all four samples and conclude that when the state overdoes its coercive actions, these can backfire and crowd out legality.
    JEL: D78 K42 Q12
    Date: 2015
  16. By: Rieckmann, Johannes
    Abstract: Development projects focusing mainly on the supply side of infrastructure repeatedly turn out to yield poor impact when being rigorously evaluated. This is also the case for an intervention connecting urban households in Yemen to piped water and improved sewerage networks. This study investigates the determinants of drinking water handling and hygiene behaviour. It aims at helping to improve retroactively outcomes, and to avoid pitfalls in the design of future projects. I use multivariate regression to identify the drivers of drinking water treatment and four hygiene habit measures. Connection of households is one of those drivers; however not the most influential one. Conducive water handling and hygiene behaviour appear to be responsive especially to training, access to information and communication technology (ICT), and school education. This paper contributes to the literature by a case study showing the importance of demand side aspects of infrastructure provision. Pipe and sewer grid construction must be flanked with enhancing point-of-use maintenance or restoration of drinking water safety. Future impact evaluations of programmes promoting good water handling and hygiene practices will be particularly useful when intervention assignments can be randomized, and baseline surveys provided for.
    JEL: Q53 I38 I12
    Date: 2015
  17. By: Huang, Yue
    Abstract: Evidence on the existence of a trade-off between child quantity and child quality, as suggested by Gary S. Becker, is still inconclusive. This also holds true for empirical studies on China that exploit for identification the country s One-Child Policy (OCP) as an exogenous source of variation in the number of offspring. However, this body of literature suffers from a number of shortcomings, in particular measurement error in the key policy variable (a household s coverage by OCP) and in the outcome variable of interest (schooling choices, i.e. child quality). Using census data for China and a continuous OCP variable that can address these shortcomings, the results provide evidence for the existence of a sizeable quantity-quality trade-off within households with mothers who are Han and have agricultural Hukou.
    JEL: J13 J18 I20
    Date: 2015
  18. By: Heman D. Lohano
    Abstract: Migration is a widely used adaptation response to climate and weather variability. In this paper, we investigate how variability in weather affects migration through the agricultural channel. We estimate an instrumental variables regression model that allows us to isolate the impacts of weather from other drivers of migration and analyze the impact of weather-driven changes in the crop revenue per hectare on the in-migration rate. We use panel data for 50 districts of Pakistanand four time periods, 1971-76, 1976-81, 1988-93, and 1993-98, and estimate a two-way error components model, controlling for unobserved district-specific and time-specific effects. Results show that temperature has a nonlinear effect, i.e., as temperature increases, the crop revenue per hectare initially increases and then declines. Furthermore, a 1 ËšC increase in the variability (standard deviation) of temperature reduces expected crop revenue per hectare by around 7.5 percent. The instrumental variables regression results show that a 1 percent weather-driven decrease in the crop revenue per hectare induces, on average, a 2 to 3 percent decrease in the in-migration rate into a district. Predicted increases in temperature and its variability during 2016-2035 (relative to 1971-1998) are likely to decrease crop revenues in relatively warm districts and increase them in cooler districts. These effects would decrease the in-migration rate in 18- 32 districts (36-64 percent) and increase the rate in the remaining 18-32 districts. Thus, the extent and scope of the impacts of weather variability on migration in Pakistan depend on a district's geographic location and the variability of temperature in the future.
    Keywords: Migration, weather variability, climate change, agriculture, panel data model, instrumental variables regression, Pakistan
  19. By: Démurger, Sylvie (CNRS, GATE); Wang, Xiaoqian (GATE, University of Lyon)
    Abstract: This paper investigates how private transfers from internal migration in China affect the expenditure behaviour of families left behind in rural areas. Using data from the Rural-Urban Migration in China (RUMiC) survey, we assess the impact of remittances sent to rural households on consumption-type and investment-type expenditures. We apply propensity score matching to account for the selection of households into receiving remittances, and estimate average treatment effects on the treated. We find that remittances supplement income in rural China and lead to increased consumption rather than increased investment. Moreover, we find evidence of a strong negative impact on education expenditures, which could be detrimental to sustaining investment in human capital in poor rural areas in China.
    Keywords: remittances, labour migration, expenditure behaviour, left-behind, China, propensity score matching
    JEL: O15 J22 R23 D13 O53
    Date: 2016–01

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