nep-agr New Economics Papers
on Agricultural Economics
Issue of 2018‒05‒07
sixteen papers chosen by

  1. The Demand for Global and Local Environmental Protection - Experimental Evidence from Climate Change Mitigation in Beijing By Andreas Löschel; Jiansuo Pei; Bodo Sturm; Ran Wang; Wolfgang Buchholz; Zhongxiu Zhao
  2. Identifying factor productivity from micro-data: The case of EU agriculture By Petrick, Martin; Kloss, Mathias
  3. Virtual Water Trade: The Implications of Capital Scarcity By Mohamad Afkhami; Thomas Bassetti; Hamed Ghoddusi; Filippo Pavesi
  4. Does A Higher Population Growth Cause Deforestation? : A Study of Malawi's Rapid Deforestation By Annie Mwai Mapulanga and Hisahiro Naito
  5. Sustainable diets: are nutritional objectives and low-carbon-emission objectives compatible? By Doro, Erica; Réquillart, Vincent
  6. Non-Cooperative and Cooperative Climate Policies with Anticipated Breakthrough Technology By Niko Jaakkola; Rick van der Ploeg
  7. The Effect of Deforestation on the Access to Clean Drinking Water: A Study of Malawi's Deforestation By Annie Mwai Mapulanga and Hisahiro Naito
  8. Land pricing on extension of leases in public leasehold systems By Willem Korthals Altes
  9. Threshold policy effects and directed technical change in Energy Innovation By Lionel Nesta; Elena Verdolini; Francesco Vona
  10. Valuing Visual Accessibility of Scenic Landscapes in a Single Family Housing Market: A Spatial Hedonic Approach By Jay Mittal
  11. Demand versus Supply Side Climate Policies with a Carbon Dioxide Ceiling By Thomas Eichner; Gilbert Kollenbach; Mark Schopf
  12. Imperfect Information and Participation in Insurance Markets: Evidence from Italy By Santeramo, Fabio Gaetano
  13. Is a peaceful cohabitation between living species possible? An empirical analysis on the drivers of threatened species. By Laté Ayao Lawson; Phu Nguyen-Van
  14. Global Biodiversity Costs of Climate Change. Improving the damage assessment of species loss in Integrated Assessment Models By Kaushal, Kevin R.; Navrud, Ståle
  15. Decomposition of changes in the consumption of macronutrients in Vietnam between 2004 and 2014 By Simioni, Michel; Thomas-Agnan, Christine; Trinh, Thi-Huong

  1. By: Andreas Löschel; Jiansuo Pei; Bodo Sturm; Ran Wang; Wolfgang Buchholz; Zhongxiu Zhao
    Abstract: In this study, the real demand for global and local environmental protection in Beijing, China, is elicited and investigated. Participants from Beijing were offered the opportunity to contribute to voluntary climate change mitigation by purchasing permits from two Chinese CO2 emissions trading schemes (ETS). Purchased permits were withdrawn from the ETS. Since CO2 emissions mitigation is inevitably linked to other local benefits like the reduction in emissions of air pollutants, the aim of our study is to establish the demand for local and global environmental protection. To this end, Beijing and Shenzhen ETS permits were offered. The result is that at low prices the demand for Beijing ETS permits is significantly higher than for Shenzhen ETS permits indicating that a substantial part of the revealed demand for voluntary climate change mitigation in Beijing is driven by concerns for local co-benefits of CO2 emissions reduction. Our research identifies the important role of private benefits in the voluntary provision of the global public good climate change mitigation and provides first experimental evidence for China.
    Keywords: demand for environmental protection, experimental economics, willingness to pay, voluntary climate change mitigation, cobenefits
    JEL: C93 Q51 Q54
    Date: 2018
  2. By: Petrick, Martin; Kloss, Mathias
    Abstract: We examine the plausibility of four established and innovative identification strategies for agricultural production functions using farm-level panel datasets from five EU countries. Newly suggested proxy and dynamic panel approaches provide attractive conceptual improvements over received Within and duality models. Even so, empirical implementation of such advancements does not always live up to expectations. This is particularly true for the dynamic panel estimator, which mostly failed to identify reasonable elasticities for the (quasi-) fixed factors. Less demanding proxy approaches represent an interesting alternative for agricultural applications. In our EU sample, high production elasticities for materials prevail. Hence, improving the availability of working capital is the most promising way to increase agricultural productivity.
    Keywords: agricultural factor productivity,production function estimation,EU,Farm Accountancy Data Network,Landwirtschaftliche Faktorproduktivität,Schätzung von Produktionsfunktionen,Testbetriebsnetz
    JEL: C13 C23 D24 Q12
    Date: 2018
  3. By: Mohamad Afkhami (Stevens Institute of Technology); Thomas Bassetti (University of Padova); Hamed Ghoddusi (Stevens Institute of Technology); Filippo Pavesi (Department of Economics (University of Verona))
    Abstract: The original idea behind the virtual water (VW) concept is that water-abundant countries will become producers of water-intensive goods and consequently net exporters of water, and this will alleviate the initial unequal distribution of hydric resources. We criticize this optimistic view by introducing empirical evidence that is consistent with the Heckscher-Ohlin model of international trade. We find that, though virtual water exports are increasing in the combined availability of water and arable land when comparing countries with a similar level of available water-land resources, those with higher (lower) levels of physical-human capital tend to be net importers (exporters) of water. This result relies on the intuition that high levels of capital accumulation lead water to become a relatively scarce factor in developed countries. Thus, while more developed countries shift away from agriculture, less developed countries that lack sufficient capital do not have this option and end up using water resources even if they are not abundant. Such a trade pattern could create immediate economic benefits for less developed countries, but also exerts pressure on their water resources. Therefore, prioritizing economic development in countries that have limited water availability, may be crucial to avoid excessive usage and depletion of global water resources.
    Keywords: Virtual Water, International Trade, Global Water Trade, Economic Devel- opment, Heckscher-Ohlin
    JEL: F14 F18 O13 Q25 Q27 Q56
    Date: 2018–05
  4. By: Annie Mwai Mapulanga and Hisahiro Naito
    Abstract: Using Malawi's satellite images of land use/land cover change, weather data and population data at each cluster and Population Housing Census (PHC) data, this paper estimates the causal effect of the growth of population of local residents on deforestation in Malawi. We use the average number of births in the census ten years ago as the instrumental variable to control the endogeneity of population growth. The results illustrate strong empirical evidence that high population growth of local residents increases deforestation through expansion of agricultural land. The results show that a 1 percent increase in population growth increases the deforestation rate by 2.7 percent through the increase in agricultural land. In terms of land use changes, a one hectare gain in agriculture land results in a 0.57 hectare loss in forest land cover.
    Date: 2018–03
  5. By: Doro, Erica; Réquillart, Vincent
    Abstract: Food systems in developed countries face one major challenge, namely the promotion of diets that are both healthy and generate less greenhouse gas emissions (GHGE). In this article, we review papers evaluating the impact of a change in diets on both health and GHGE. We address the following questions: How big are the health and environmental impacts that could be induced by a switch to healthier diets? What is, in monetary value, the relative importance of the health impact and the environmental impact? Is it possible to design an economic policy that increases global welfare taking into account externalities on both health and the environment? Since the way the change in diet is modeled is a key issue, we classify papers according to the methodology used for simulating diet changes: ad-hoc scenarios, optimized diets and economic modelling. We find that it is possible to design economic policies that have positive impacts on both dimensions. Because the substitutions / complementarities between food products are complex, it is not granted that a policy targeting one dimension will generate positive effects on the other dimensions. However, given the diversity of substitution and complementarity possibilities between products, it is possible to design a policy that does improve both dimensions. A carbon-based policy that targets the products with a high GHG content (e.g. meat products) and reinvests the revenues collected with the tax to subsidize the consumption of fruits and vegetables is likely to have positive effects on both dimensions.
    Keywords: food; consumer; diets; nutritional policy; health; climate change;greenhouse gas; environmental policy
    JEL: I18 Q18 Q54
    Date: 2018–04
  6. By: Niko Jaakkola; Rick van der Ploeg
    Abstract: Global warming can be curbed by pricing carbon emissions and thus substituting fossil fuel with renewable energy consumption. Breakthrough technologies (e.g., fusion energy) can reduce the cost of such policies. However, the chance of such a technology coming to market depends on investment. We model breakthroughs as an irreversible tipping point in a multi-country world, with different degrees of international cooperation. We show that international spill-over effects of R&D in carbon-free technologies lead to double free-riding, strategic over-pollution and underinvestment in green R&D, thus making climate change mitigation more difficult. We also show how the demand structure determines whether carbon pricing and R&D policies are substitutes or complements.
    Keywords: climate policy with breakthrough technology
    JEL: D62 D90 H23 Q38 Q54 Q58
    Date: 2018
  7. By: Annie Mwai Mapulanga and Hisahiro Naito
    Abstract: Using Malawi's satellite images of land use and cover, weather data and population data at each cluster and two waves of the Demographic Health Survey (DHS), this paper estimates the causal effect of deforestation on access to clean drinking water. The previous literature of forest science have examined the effect of deforestation of water flow and mixed results. This paper, instead, directly examines the causal effect of deforestation on households' access to clean drinking water by using two Staged Least Square (2SLS) estimation. The results illustrate strong empirical evidence that deforestation decreases the access to clean water. Falsification tests show that a possibility of our instrumental variable picking up an unobserved time trend is very unlikely. We find that a one percentage point increase in deforestation decreases access to clean water by 1.0-1.3 percentage points.
    Date: 2018–03
  8. By: Willem Korthals Altes
    Abstract: Public leasehold systems are highly contested when it comes to the extension of leases. Public leasehold systems often aim to capture land value gains, but this tends to be more difficult in practice than foreseen. Value capture by authorities, as intended by the system, results in counter movements of lessees that often gain public support to set lower leases. These political processes may even result in an end to these public land leasing systems. Based on a review of scientific literature on international experiences with extension of leases, a reflection is taken on the Dutch experience of lease extensions in Amsterdam and on the Wadden Islands. This reflection will be based on the use of the classical supply curve, which indicates that suppliers are willing to supply a higher volume of goods if the prices are higher. This willingness to supply by a potential supplier depends ideal typically on the supplier’s cost of producing the good. Supply of land in a public leasehold system in the case that leases are extended works a little different from this ideal type. Here it is the public owner that is the sole provider of leasehold land. In cases like this there may be a gap between the lease proposed by the technical advisors of a public landlord, which is based on the residual value of the land, and the lease that is considered to be acceptable in the political context in which a public leaseholder operates. Property markets anticipate on this gap by transaction prices of leasehold properties that do not fully take into account the extension lease as based on residual value in mind. The analysis of this paper is relevant for leasehold systems and other systems of temporary land use, including the land use rights in China, for which an extension may be due. It is also relevant for studying pricing in markets in which the public authority operates and may be informed by public aims in its setting of prices.
    Keywords: Ground lease; implicit tax; land price; Netherlands; political process
    JEL: R3
    Date: 2017–07–01
  9. By: Lionel Nesta (Observatoire français des conjonctures économiques); Elena Verdolini; Francesco Vona (Observatoire français des conjonctures économiques)
    Abstract: This paper analyzes the effect of environmental policies on the direction of energy innovation across countries over the period 1990-2012. Our novelty is to use threshold regression models to allow for discontinuities in policy effectiveness depending on a country's relative competencies in renewable and fossil fuel technologies. We show that the dynamic incentives of environmental policies become effective just above the median level of relative competencies. In this critical second regime, market-based policies are moderately effective in promoting renewable innovation, while commandand-control policies depress fossil based innovation. Finally, market-based policies are more effective to consolidate a green comparative advantage in the last regime. We illustrate how our approach can be used for policy design in laggard countries.
    Keywords: Directed technical change; Threshold models; Environmental policies; Policy mix
    JEL: Q58 Q55 Q42 Q48 O34
    Date: 2018–01
  10. By: Jay Mittal
    Abstract: This article uses a hedonic modelling approach to assess the effect of visual accessibility of scenic lands on housing price. It estimates households’ implicit willingness to pay for the visual accessibility of privately owned voluntarily protected scenic lands in a single family housing market. These lands are protected in perpetuity for natural, historic, and scenic characteristics. The premium price effect was captured using the visual accessibility variable, a combined weighted measure of visibility and proximity. This is named as Gravity Inspired Visibility Index (GIVI). A comprehensive review of eight environmental amenity from multidisciplinary sources provides basis on significance of ‘proximity’ and ‘view.’ A detailed methodology on developing spatial interaction variable using 3D GIS and viewshed1 technology is provided. This variable was used to estimate the capitalized premium from the preserved lands. Both global (adjusted R2= 0.52, AICc= 29828) and geographically weighted regression (GWR) models (adjusted R2= 0.59, AICc= 29729) estimated the marginal price effect. The results indicate an average 3.4% price premium on mean home value from the GWR model. The article offers a useful framework for evaluating effects of land protection for planning and real estate scholars. It also offers useful insight to conservation agencies, local governments, professional planners, and real estate professionals for prioritizing land sites with scenic views and for property development.
    Keywords: Geographically Weighted Regression; GIS; Land Conservation; Spatial Hedonic Model; Viewshed analysis
    JEL: R3
    Date: 2017–07–01
  11. By: Thomas Eichner; Gilbert Kollenbach; Mark Schopf
    Keywords: Demand Side Policy, Supply Side Policy, Climate Change, Deposit, Fossil Fuel
    JEL: F55 H23 Q54 Q58
    Date: 2018
  12. By: Santeramo, Fabio Gaetano
    Abstract: Participation in crop insurance programs is lowered by imperfect knowledge resulting in adverse selection and moral hazard problems. We aim at investigating how experience in insurance contracts may influence participation in the Italian crop insurance market. From Italian farm-level data we estimate a dynamic discrete choice model of participation to investigate the role of experience. The methodology, coupled with exploratory analysis of the data, allows one to compare the relevance of different sources of experience in the crop insurance decision making process. We found that experience tend to be a catalyst for insurance participation. Policy implications are discussed: in particular we discuss on the importance of bolstering uptake to exploit the advantages of the inertia and spillover effects that emerge from experience. To the best of our knowledge, the role of experience has been underinvestigated. Our analysis has the specific contribution of modeling the potential role of experience (exploited after buying an insurance contract) on uptake in crop insurance programs.
    Keywords: Asymmetric information; Dynamic model; Familiarity; Imperfect Knowledge; Uptake
    JEL: G22 Q12 Q18
    Date: 2017–11
  13. By: Laté Ayao Lawson; Phu Nguyen-Van
    Abstract: Some scientific views argue that human population and economic activities might be expanding at the cost of other biological species. Hence, this paper proposes an empirical analysis on the case of threatened animal and plant species, exploiting an international panel dataset to test whether there is a peaceful cohabitation with human activities. Applying count data regression techniques we show, on the one hand, that human population growth and agricultural production harm animal and plant species. On the other hand, our results indicate that the number of threatened animal and plant species depicts an inverted U-shaped curve with income per capita. Our analysis further suggests that the more biological species-rich a region is, the more threatened species it holds, other things being equal. Globally compared to developing countries, developed countries definitely appear to be threatening fewer animal and plant species, suggesting a possible peaceful cohabitation between living species.
    Keywords: Biodiversity loss, threatened species, income, population, control function approach.
    JEL: C23 C29 Q57
    Date: 2018
  14. By: Kaushal, Kevin R. (School of Economics and Business, Norwegian University of Life Sciences); Navrud, Ståle (School of Economics and Business, Norwegian University of Life Sciences)
    Abstract: Climate change will have a major impact on global biodiversity. However, these changes – and their economic value– is inadequately captured in the existing Integrated Assessment Models (IAMs). We provide improved damage cost estimates based on a recent biophysical assessment of impact on species loss from increased global mean temperature, and value transfer from a recent global Delphi Contingent Valuation (CV) study of households´ willingness-to-pay (WTP) to avoid species loss due to deforestation of the Amazon rainforest. This is implemented in the FUND (Climate Framework for Uncertainty, Negotiation and Distribution) IAM. The numerical simulations suggest that the global species loss is lower than the original FUND model predicted. However, the economic valuation of the species loss is larger, resulting in higher aggregate biodiversity damage cost. Moreover, depending on the assumed marginal utility of consumption in the regions and discount rate used, the global Social Cost of Carbon Dioxide (SCCO2) could be more than seven times higher than in the original FUND 3.9 IAM. This indicate that IAMs with incomplete assessment and valuation of species loss could greatly underestimate SC-CO2; and thus lead to underinvestment in greenhouse gas mitigation measures.
    Keywords: Integrated Assessment Models; Climate change; Ecosystem services; Species loss; Social Costs of Carbon Dioxide
    JEL: Q54
    Date: 2018–04–23
  15. By: Simioni, Michel; Thomas-Agnan, Christine; Trinh, Thi-Huong
    Abstract: Vietnam is undergoing a nutritional transition like many middle-income countries. This paper proposes to highlight the socio-demographic drivers of this transition over the period 2004-2014. We implement a method of decomposition of between-year differences in economic outcomes recently proposed in the literature. This method allows decomposing the composition effect on the distribution of the outcome under study, which is due to the differences in covariates across years, into direct contributions of each covariate and effects of their interactions. This method is applied to VHLSS data. The results show the importance of between-year changes in the distributions of covariates on between-year changes in the distributions of total calorie intake and calorie intakes from proteins and fat. This effect is more contrasted in case of calorie intake from carbohydrates. Food expenditure and household size appear to be the main drivers of the observed evolutions in macronutrients consumption. On the contrary, the urbanization of the population has a negative effect on these evolutions, except on fat consumption. The effect of urbanization is, nevertheless, less important than the positive effects of the previous two variables.
    Keywords: Macronutrient consumption; Nutritional transition; Decomposition method; Copulas; Vietnam
    JEL: C02 C14 C51 O15 Q18
    Date: 2018–04
    Date: 2018

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