nep-agr New Economics Papers
on Agricultural Economics
Issue of 2018‒12‒24
23 papers chosen by

  1. Agro-food trade, GVCs and agricultural development in ASEAN By Jared Greenville; Kentaro Kawasaki
  2. Tranformation of Indian agriculture: Growth, iclusiveness and sustainability By S. Mahendra Dev
  3. Assessing the Productivity Consequences of Agri-Environmental Practices When Adoption Is Endogenous By Bostian, AJ A.; Bostian, Moriah B.; Laukkanen, Marita; Simola, Antti
  4. The effects of non-tariff measures on agri-food trade: a review and meta-analysis of empirical evidence By Santeramo, Fabio Gaetano; Lamonaca, Emilia
  5. The Impact of Regime Type on Food Consumption in Low Income Countries By Kolleen Rask; Norman Rask
  6. ASEAN rice market integration: findings from a feasibility study By Jared Greenville
  7. On the Evolution of Trade and of Sanitary and Phytosanitary Standards: The Role of Trade Agreements By Santeramo, Fabio Gaetano; Guerrieri, Valentina; Lamonaca, Emilia
  8. Short-run and long-run food import elasticities with persistent trading habits By Niemi, Janne
  9. Climatic Roots of Loss Aversion By Galor, Oded; Savitskiy, Viacheslav
  10. Looking beyond the farm and household: Determinants of on-farm diversification in India By Varun Kumar Das
  11. Dynamic Panel Modeling of Climate Change By Peter C.B. Phillips
  12. Parallel tracks towards a global treaty on carbon pricing By Jeroen C.J.M. van den Bergh; Arild Angelsen; Andrea Baranzini; W.J. Wouter Botzen; Stefano Carattini; Stefan Drews; Tessa Dunlop; Eric Galbraith; Elisabeth Gsottbauer; Richard B. Howarth; Emilio Padilla; Jordi Roca; Robert Schmidt
  13. Economic impacts of El Niño Southern Oscillation: evidence from the Colombian coffee market By Bastianin, Andrea; Lanza, Alessandro; Manera, Matteo
  14. Realizing the Benefits of ICT in the Climate Crisis: The Deployment Gap and Legal Impediments in Smart Agriculture and Water By Pearl, M. Alexander
  15. Nutrition Services Program Participation and the Diet Quality of Older Adults By Elizabeth Gearan; James Mabli; Katherine Niland
  16. We Are What We Eat: Obesity, Income, and Social Comparisons By Nathalie Mathieu-Bolh; Ronald Wendner
  17. An Axiomatic Foundation of the Ecological Footprint By Thomas Kuhn; Radomir Pestow; Anja Zenker
  18. Stock Price Rewards to Climate Saints and Sinners: Evidence from the Trump Election By Stefano Ramelli; Alexander F. Wagner; Richard J. Zeckhauser; Alexandre Ziegler
  19. Adaptation in an Uncertain World - Detection and Attribution of Climate Change Trends and Extreme Possibilities By Xiyue Li; Gary Yohe
  20. Farm Labor Markets in the United States and Mexico Pose Challenges for U.S. Agriculture By Zahniser, Steven; Taylor, J. Edward; Hertz, Thomas; Charlton, Diane
  21. Child Malnutrition in India By Borooah, Vani
  22. Do Standards Improve the Quality of Traded Products? By Anne-Célia Disdier; Carl Gaigné; Cristina Herghelegiu
  23. Dynamic Panel Modeling of Climate Change By Offer Lieberman; Peter C.B. Phillips

  1. By: Jared Greenville (OECD); Kentaro Kawasaki (OECD)
    Abstract: The countries that compromise the Association of Southeast Asian Nations (ASEAN) have expanded their involvement in global agro-food trade through strong regional production growth and increasing consumer demands from population growth and higher incomes. Regional and international agro-food markets have thus become an important source of income and food for the regions producers and consumers. However, growth in trade has lessened in recent years with projections suggesting a further slowing over the medium term. This study explores the role that agro-food trade and participation in agro-food global value chains (GVC) has had on regional agro-food sectors and current barriers that are holding the region back from unlocking the full benefits of further integration into regional and global agro-food markets. It finds that although GVC engagement has increased regional agro-food growth between 2004 and 2014, gaps remain in the level of regional integration. Results from the analysis suggest that reducing the remaining tariff and non tariff barriers, and creating an enabling environment to allow agricultural producers to better access service inputs, will help spur sector growth and agricultural incomes.
    Keywords: agricultural trade, Agriculture, ASEAN, regional integration
    JEL: F14 F15 Q17 Q18
    Date: 2018–12–17
  2. By: S. Mahendra Dev (Indira Gandhi Institute of Development Research)
    Abstract: There are three goals of agricultural development in India. These are: (a) achieving high growth by raising productivity; (b) inclusiveness by focusing on lagging regions, small farmers and women; and (c) sustainability of agriculture. In this paper, we will address two questions: (a) How far India progressed in the three goals of agriculture in recent decades? (b) What are the policies and reforms needed to transform Indian agriculture in the next decade? This paper provides 10 conclusions on the policies needed to achieve three goals of agricultural development in India. These are : (1) There is a need for change in the narrative in the new context; (2) Global trends and macro policies are equally important for Indian agriculture; (3) We have to walk on two legs both agriculture and non-agriculture. There is a need to shift from cereal based agriculture to non-cereal based crops and allied activities; (4) Doubling farm income also has to focus non-farm sector, look at different size classes and environmental considerations; (5) Remunerative prices and market reforms can enhances farmers' incomes; (6) The country has to go beyond harvest and give freedom for farmers on markets and exports; (7) Do not foreget basics like water and technology; (8) Inclusiveness is needed for board based growth and equity. Focus on small and maginal farmers, women, youth, rainfed areas, Eastern and other lagging regions, social groups like SC and ST farmers; (9) Measures have to be taken to take care of impacs of climate change and improving resilience in agriculture and sustainability; (10) Strengthening institutions and governance is crucial for achieving growth, equality and sustainability of agriculture.
    Keywords: Agricultural growth, inclusiveness, sustainability, prices, water, technology, small farmers, nutrition and climate change
    Date: 2018–12
  3. By: Bostian, AJ A.; Bostian, Moriah B.; Laukkanen, Marita; Simola, Antti
    Abstract: We address the general problem of selection bias, endemic to analyzing the effects of any policy where adoption is voluntary, with empirical application to environmental policies for agriculture. Many voluntary practices for mitigating the environmental impacts of agriculture provide external benefits while lowering productivity. Policy analysis of the productivity consequences is complicated by the fact that decision-makers can choose their own policy levers, an action that ruins any notion of random assignment. We introduce an identification strategy to correct this kind of endogeneity, combining classic methods from stochastic frontier analysis and selection models. Applying it to micro-level data from Finnish grain farms, we find that more efficient producers are more likely to enroll in subsidized practices. And, because these practices tend to reduce yield, frontier analysis without the endogeneity correction greatly understates productivity losses. In other words, naively basing the frontier estimator on the subset of less productive farms leads to downward bias in the resulting frontier estimates. In fact, average inefficiency more than doubles after the correction in this case. An outlier investigation also suggests that the lowest decile of farms are responsible for most of the selection bias in the uncorrected model.
    Keywords: productivity, stochastic frontier analysis, endogeneity, selection model, agri-environmental policy, Environment, energy and climate policy, Q53, Q58, Q18, Q12, D24, C54, C34, C36,
    Date: 2018
  4. By: Santeramo, Fabio Gaetano; Lamonaca, Emilia
    Abstract: The increasing policy interests and the vivid academic debate on non-tariff measures (NTMs) has stimulated a growing literature on how NTMs affect agri-food trade. The empirical literature provides contrasting and heterogeneous evidence, with some studies supporting the ‘standards as catalysts’ view, and others favouring the ‘standards as barriers’ explanation. To the extent that NTMs can influence trade, understanding the prevailing effect, and the motivations behind one effect or the other, is a pressing issue. We review a large body of empirical evidence on the effect of NTMs on agri-food trade and conduct a meta-analysis to disentangle potential determinants of heterogeneity in estimates. Our findings show the role played by the publication process and by study-specific assumptions. Some characteristics of the studies are correlated with positive significant estimates, others covary with negative significant estimates. Overall, we found that the effects of NTMs vary across types of NTMs, proxy for NTMs, and levels of details of studies. Not negligible is the influence of methodological issues and publication process.
    Keywords: Non-tariff measures; Trade barriers; Trade standards; Meta-analysis
    JEL: F13 F14 Q17 Q18
    Date: 2018–09
  5. By: Kolleen Rask (Department of Economics and Accounting, College of the Holy Cross); Norman Rask (Department of Agricultural Economics, The Ohio State University)
    Abstract: Competing studies use food consumption to measure the impact of political regime on the welfare of the poor. Democracies may outperform autocracies by using growth to hide redistribution, improving caloric consumption and currying favor. Alternatively, autocracies may have greater incentives to lower food prices to quell urban unrest. We test these competing theories using a more detailed, continuous, nuanced measure of food consumption quality – cereal equivalent values. We find evidence to support the second hypothesis, that autocracies outperform democracies at low incomes. For higher incomes, democracies perform significantly better. Segregated by growth, autocracies again outperform democracies at low incomes.
    Keywords: food consumption, food cost, political regime, cereal equivalents
    JEL: O20 P51 Q18
    Date: 2017–12
  6. By: Jared Greenville (OECD)
    Abstract: This study explores feasibility of regional rice market integration by examining the impacts on production and trade, with a specific focus on the adjustment impacts for rice producers. It seeks to set out policy measures required to better integrate the rice markets of Association of Southeast Nations (ASEAN) countries and the role that trade policy can play to help the agricultural sector adjust to pressures created from freer trade in rice within this region. While regional rice market integration can deliver more rice at lower prices to the regions consumers, this study finds significant adjustments to the rice sectors will be required in Indonesia, Malaysia, and the Philippines. However, opportunities through lowering tariff barriers with existing key trading partners of free trade agreements has the scope to create more employment and value adding opportunities in all agricultural sectors to offset the losses from regional rice market integration. The study suggests a number of measures are necessary to build trust in regional markets to allow rice market integration to take place. This includes an agreement to ban export restrictions. Furthermore, while broader trade reforms will help create new opportunities for agricultural sectors across the ASEAN region, flanking policies and investments in the enabling environment are still required for the sectors to take full advantage of these opportunities.
    Keywords: agricultural trade, Agriculture, regional integration
    JEL: F14 F15 Q17 Q18
    Date: 2018–12–17
  7. By: Santeramo, Fabio Gaetano; Guerrieri, Valentina; Lamonaca, Emilia
    Abstract: Trade agreements and trade measures are policy instruments aimed at favouring trade by providing a degree of harmonisation among members. We analyse how the agri-food trade and the incidence of Sanitary and Phytosanitary Standards (SPSs) have evolved for countries sharing agreements. We examine, through a regression discontinuity design, whether the approval of agreements affects the evolution of trade and SPSs and quantify the trade effects of SPSs. We also highlight the differences in trade flows due to the introduction of agreements. Findings show that trade agreements tend to increase trade and to reduce the number of policy measures among countries. Regulation inequalities exist across trade agreements covering different geo-economic areas: after the approval of agreements, the existence and the importance of SPSs become relevant among developing countries, whereas the pervasiveness of SPSs becomes less stringed between developed and developing countries. Our analyses prove that trade agreements and trade measures are trade-enhancing, with the cereals sector benefitting the most.
    Keywords: Agri-food trade; Non-tariff measure; Regional trade agreement; Policy.
    JEL: F13 F14 Q17 Q18
    Date: 2018–10
  8. By: Niemi, Janne
    Abstract: This paper provides estimates and explores the role of own price import demand (Armington) elasticities between different source countries for five agricultural commodities in a framework that incorporates temporal dimension formulated as trading habit persistence. The estimations employ FAO’s bilateral food commodity trade database, complemented with importer and exporter country characteristics from other data. The results support the hypothesis that trade patterns are persistent the adjustment following price changes takes effect with delays. Apart from the evidence for the presence of habit persistence and hence different short and long-term elasticities in general, significant differences between countries are also evidenced, in particular between high- and low-income countries and between main geographic areas. Consistently with the barriers for market entry considerations we also observe higher persistence downwards than upwards.
    Keywords: Armington elasticity, Trade, Habit persistence, Agricultural commodities, Business regulation and international economics, E71, F14, O19, Q17,
    Date: 2018
  9. By: Galor, Oded; Savitskiy, Viacheslav
    Abstract: This research explores the origins of loss aversion and the variation in its prevalence across regions, nations and ethnic group. It advances the hypothesis and establishes empirically that the evolution of loss aversion in the course of human history can be traced to the adaptation of humans to the asymmetric effects of climatic shocks on reproductive success during the epoch in which subsistence consumption was a binding constraint. Exploiting regional variations in the vulnerability to climatic shocks and their exogenous changes in the course of the Columbian Exchange, the research establishes that consistent with the predictions of the theory, individuals and ethnic groups that are originated in regions marked by greater climatic volatility have higher predisposition towards loss-neutrality, while descendants of regions in which climatic conditions tended to be spatially correlated, and thus shocks were aggregate in nature, are characterized by greater intensity of loss aversion.
    JEL: D81 D91 O10 O40 Z10
    Date: 2018–11
  10. By: Varun Kumar Das (Indira Gandhi Institute of Development Research)
    Abstract: This paper analyses the factors affecting on-farm diversification decision. Notwithstanding the influence of farm and household conditions, studies have also highlighted the role of external pull factors on farm diversification. Though appraised in scholarship, this aspect has eluded an empirical scrutiny in literature. Taking India as a case, this study shows that apart from farm and household factors, there is a broader agro-ecological and structural feature which impacts on-farm diversification decision. Correcting for endogeneity in a seemingly unrelated system of ordered probit models, a "three-stage" residual inclusion model is estimated. The findings show that proximity to social infrastructure such as schools, colleges, and access to public transport matters for diversification. Results also show that though urbanization may increase demand for variety of products, it might as well impinge upon farm labor supply as non-farm opportunities also rises with urbanization. Thus, the underlying structure of the local economy also merits attention while understanding on-farm diversification process.
    Keywords: Farm diversification; Pull factors; External conditions; Residual inclusion; Economies of density; Agro-ecology; Urbanization; Structural transformation
    JEL: Q12 Q18 R23 R53
    Date: 2018–11
  11. By: Peter C.B. Phillips (Cowles Foundation, Yale University)
    Abstract: We discuss some conceptual and practical issues that arise from the presence of global energy balance effects on station level adjustment mechanisms in dynamic panel regressions with climate data. The paper provides asymptotic analyses, observational data computations, and Monte Carlo simulations to assess the use of various estimation methodologies, including standard dynamic panel regression and cointegration techniques that have been used in earlier research. The findings reveal massive bias in system GMM estimation of the dynamic panel regression parameters, which arise from fixed effect heterogeneity across individual station level observations. Difference GMM and Within Group (WG) estimation have little bias and WG estimation is recommended for practical implementation of dynamic panel regression with highly disaggregated climate data. Intriguingly from an econometric perspective and importantly for global policy analysis, it is shown that despite the substantial differences between the estimates of the regression model parameters, estimates of global transient climate sensitivity (of temperature to a doubling of atmospheric CO {2}) are robust to the estimation method employed and to the specific nature of the trending mechanism in global temperature, radiation, and CO {2}.
    Keywords: Climate modeling, Cointegration, Difference GMM, Dynamic panel, Spatio-temporal modeling, System GMM, Transient climate sensitivity, Within group estimation
    JEL: C32 C33
    Date: 2018–12
  12. By: Jeroen C.J.M. van den Bergh (Universitat Autònoma de Barcelona, ICREA & VU University Amsterdam); Arild Angelsen (Norwegian University of Life Sciences); Andrea Baranzini (University of Applied Sciences Western Switzerland); W.J. Wouter Botzen (VU University Amsterdam & Utrecht University); Stefano Carattini (Yale School of Forestry & Environmental Studies, Grantham Research Institute & London School of Economics and Political Science); Stefan Drews (Universitat Autònoma de Barcelona); Tessa Dunlop (Universitat Autònoma de Barcelona); Eric Galbraith (Universitat Autònoma de Barcelona & ICREA); Elisabeth Gsottbauer (University of Innsbruck); Richard B. Howarth (Dartmouth College); Emilio Padilla (Universitat Autònoma de Barcelona); Jordi Roca (Universitat de Barcelona); Robert Schmidt (University of Kaiserslautern)
    Abstract: We argue that a global carbon price is the only way to effectively tackle free riding in international climate policy, required to substantially reduce greenhouse gas emissions. We briefly review the main reasons behind the essential role of carbon pricing, address common misunderstandings and scepticism, and identify key complementary policy instruments. Negotiating global carbon pricing is argued to be much easier than negotiating binding country-level targets, especially if it includes equitable revenue recycling. Moreover, a global carbon price can be more readily adapted to new data and insights of climate science. We propose a political strategy towards a global carbon price that consists of two tracks. The first entails assembly of a carbon-pricing club, a specific case of a climate club, to gradually move towards a full participatory agreement on carbon pricing. The second track involves putting time and energy into re-focusing UNFCCC negotiations on a carbon-pricing agreement. The two tracks reinforce one another, increasing the likelihood of a successful outcome.
    Keywords: Carbon Tax, Carbon Market, Cap-and-Trade, Tradable Permits, Equity, Climate Agreement, Climate Club
    JEL: Q54 Q58 Q48
    Date: 2018
  13. By: Bastianin, Andrea; Lanza, Alessandro; Manera, Matteo
    Abstract: El Niño Southern Oscillation (ENSO) is a naturally occurring phenomenon that affects weather around the world. Past ENSO episodes have had severe impacts on the economy of Colombia. We study the influence of ENSO on Colombian coffee production, exports, and price. Our structural econometric specification is consistent with an economic model of the market for Colombian coffee which, in the short run, is characterized by a downward-sloping demand curve and by a vertical supply curve. We show that El Niño (i.e., positive shocks to ENSO) is beneficial for Colombian production and exports and decreases the real price of Colombian coffee. On the contrary, La Niña (i.e., negative shocks to ENSO) depresses Colombian coffee production and exports and increases price. However, the overall impact of ENSO shocks is small. Both in the short run and in the long run, shocks to international demand for Colombian coffee are more relevant than supply-side shocks in Colombia in explaining the dynamics of the price of Colombian coffee. Our results suggest that a given coffee price shock can have beneficial, detrimental, or negligible effects on the Colombian economy, depending on its underlying cause. As a consequence, policy responses to coffee price shocks should be designed by looking at the causes of the shocks.
    Keywords: Coffee; Colombia; El Niño; ENSO; La Niña; Structural VAR
    JEL: C32 O13 Q02 Q11 Q54
    Date: 2018
  14. By: Pearl, M. Alexander
    Date: 2018
  15. By: Elizabeth Gearan; James Mabli; Katherine Niland
    Abstract: Congregate and home-delivered meals provided through the Title III-C Nutrition Services Program (NSP) can be an important source of nutrition for older adults.
    Keywords: Nutrition, diet quality, older adults
    JEL: I0 I1
  16. By: Nathalie Mathieu-Bolh (University of Vermont, USA); Ronald Wendner (University of Graz, Austria)
    Abstract: The empirical evidence of a non-monotone relation between income and obesity is not well explained. We build a theoretical model combining income inequality and social comparisons to explain the link between income and obesity and study tax policy implications for fighting obesity. We assume that differences in food consumption patterns between poor and wealthy households partly reflect positionality, which is the concern for social status. Our key assumption is that positionality for low-calorie food consumption is positively related to a country’s wealth. In this framework, body weight outcomes reflect competing income and positionality effects, yielding the following results. We explain the link between average obesity rates, and standards of living and suggest the existence of a Kuznets curve for obesity. For cross sections of the population, we explain the observed correlation between income and obesity, which is positive in poor countries, and negative rich countries. We find that increasing the relative cost of high-calorie food is less effective at decreasing the relative weight of poor individuals in rich countries than in poor countries.
    Keywords: Obesity; Status; Consumption Reference Points; Kuznets Curve; Tax Policy
    JEL: D11 D30 H31 I15 O41
    Date: 2018–12
  17. By: Thomas Kuhn (Department of Economics, Chemnitz University of Technology); Radomir Pestow (Department of Economics, Chemnitz University of Technology); Anja Zenker (Department of Economics, Chemnitz University of Technology)
    Abstract: The objective of this paper is to provide an axiomatic foundation to the ecological footprint developed and refined by the authors in the Global Footprint Network, among others. For this purpose, five axioms are proposed which represent general properties any ecological footprint measure should fulfill. We show that an index exists which is unique up to a coefficient to be chosen arbitrarily. As an implication, footprints have to be measured on a ratio scale. This result supports the conventional unit of measurement (land area) which itself is represented by a ratio scale. In this respect, our index differs from the compound-based ecological footprint index in which the norm is missing and, therefore, it is implicitly set equal to one. Apart from that we find, as the most important result, that the ad-hoc design of the commonly applied ecological footprint index has been given an axiomatic foundation.
    Keywords: Ecological Footprint Index, Axiomatic Foundation, Measurement Theory, Overshoot Day, Sustainable Welfare
    JEL: Q13 Q41 Q43 C43
    Date: 2018–10
  18. By: Stefano Ramelli; Alexander F. Wagner; Richard J. Zeckhauser; Alexandre Ziegler
    Abstract: Donald Trump's 2016 election and the subsequent nomination of Scott Pruitt, a climate skeptic, to lead the Environmental Protection Agency drastically downshifted expectations on US climate change policy. Firms' stock-price reactions to these events reveal whether their climate strategies affected their valuations. As widely reported, firms in industries with high carbon intensity benefited, at least briefly. It might be expected that companies with "responsible" strategies on climate change would also have lost value, since they were paying for actions that seemed less urgent. In fact, investors actually rewarded such firms. The analysis shows that this observed climate responsibility premium results, at least in part, from the strategic behavior of long-horizon investors who looked into the future to assess the valuation of corporations.
    JEL: G14 G38
    Date: 2018–11
  19. By: Xiyue Li (The Brattle Group); Gary Yohe (Department of Economics, Wesleyan University)
    Abstract: We offer results from an artificial simulation exercise that was designed to answer three fundamental questions that lie at the heart of anticipatory adaptation. First, how can confidence in projected vulnerabilities and impacts be greater than the confidence in attributing what has heretofore been observed? Second, are there characteristics of recent historical data series that do or do not portend our achieving high confidence in attribution to climate change in support of framing adaptation decisions sometime in an uncertain future? And finally, what can analysis of confidence in attribution tell us about ranges of “not-implausible” extreme futures vis a vis projections based at least implicitly on an assumption that the climate system is static? An extension of the IPCC method of assessing our confidence in attribution to anthropogenic sources of detected warming allows us to offer an answer to the first question. We can also identify characteristics that support an affirmative answer to the second. Finally, we offer some insight into the significance of our attribution methodology in informing attempts to frame considerations of potential extremes and how to respond.
    Keywords: adaptation, detection, attribution, uncertain, climate change
    Date: 2018–08
  20. By: Zahniser, Steven; Taylor, J. Edward; Hertz, Thomas; Charlton, Diane
    Abstract: The U.S. farm labor market shows many signs of tightening, including producer reports of labor shortages, increases in farm wages, more employment of guest workers through the H-2A Temporary Agricultural Program, and a shrinking supply of farm labor from rural Mexico—the source of most foreign-born farm workers in the United States. Mexico’s farm labor market has also faced labor constraints over the past several decades. Although Mexican agricultural output continues to grow, rural Mexicans are less likely to work as farm workers either in Mexico or in the United States, as the Mexican economy transitions toward more focus on the service sector. This report reviews evidence showing that rising educational levels and increased nonfarm employment in Mexico are among the leading drivers of farm labor supply changes in that country. Several options by which U.S. agricultural employers could respond to a tighter labor market are explored, including raising wages, further mechanization, greater employment of guest workers, and switching to less labor-intensive crops.
    Keywords: Agricultural and Food Policy
  21. By: Borooah, Vani
    Abstract: This chapter examines child malnutrition in India. Even though the incidence of malnutrition in India has declined greatly since Independence, the prevalence of malnutrition in India remains extremely high, even relative to other poor countries. It is, however, difficult to arrive at a universally acceptable explanation for why this should be so. The contribution of this chapter is to examine the relative strengths of the determinants of child malnutrition in India, paying attention to household characteristics (social group, consumption level, education, location) and the characteristics of the households’ dwellings (presence of toilets, separate kitchen, vent in the cooking area). The analysis also examines the importance of anganwadis in combating child malnutrition through growth monitoring, health checks, and the provision of supplementary food. In addition, a unique characteristic of this chapter is that it draws attention to the importance of personal hygiene, through washing hands with soap and water after defecation, as a prophylactic against diarrhoeal disease.
    Keywords: Children, malnutrition, India, social groups
    JEL: I14 I15 I31
    Date: 2018–05
  22. By: Anne-Célia Disdier; Carl Gaigné; Cristina Herghelegiu
    Abstract: Quality-focused non-tariff measures are increasingly adopted by policy makers to address market failures. This paper tests for their selection and quality effects in a context of information asymmetry regarding product attributes. Our theory reveals that the enforcement of quality standards (QSs) induces the exit of lowquality firms but also that of some high-quality ones. The overall quality effect is therefore ambiguous. Using French firm data, we find that the QSs imposed by destination countries increase the probability, volume and value of exports of high-productivity medium-quality firms at the expense of low-productivity highquality firms. QSs improve the average quality of exported consumption goods.
    Keywords: Firm exports; quality standards; information asymmetry; product quality
    Date: 2018–12
  23. By: Offer Lieberman (Bar-Ilan University); Peter C.B. Phillips (Cowles Foundation, Yale University)
    Abstract: Indices of financial returns typically display sample kurtosis that declines towards the Gaussian value 3 as the sampling interval increases. This paper uses stochastic unit root (STUR) and continuous time analysis to explain the phenomenon. Limit theory for the sample kurtosis reveals that STUR specifications provide two sources of excess kurtosis, both of which decline with the sampling interval. Limiting kurtosis is shown to be random and is a functional of the limiting price process. Using a continuous time version of the model under no-drift, local drift, and drift inclusions, we suggest a new continuous time kurtosis measure for financial returns that assists in reconciling these models with the empirical kurtosis characteristics of returns. Simulations are reported and applications to several financial indices demonstrate the usefulness of this approach.
    Keywords: Autoregression, Diffusion, Kurtosis, Stochastic unit root, Time-varying coefficients
    JEL: C22
    Date: 2018–06

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