nep-agr New Economics Papers
on Agricultural Economics
Issue of 2019‒04‒15
28 papers chosen by

  1. Reinvigorating Cambodian agriculture: Transforming from extensive to intensive agriculture By Nith, Kosal; Ly, Singhong
  2. Urban proximity, demand for land and land prices in Malawi By Tione, Sarah E.; Holden , Stein T.
  3. The Agricultural mechanization in Africa: micro-level analysis of state drivers and effects By Kirui, Oliver Kiptoo
  4. Farm Wage and Rice Price Dynamics in Bangladesh By Hassan, Md. Fuad; Kornher, Lukas
  5. Investing in agriculture when it is worth it. Evidence from rural Uganda. By Olivia Bertelli
  6. Farmers’ preferences for water-saving strategies in brazilian eucalypt plantation By Gabriela Demarchi; Subervie Julie; Fernando Palha Leite; Jean-Paul Laclau
  7. Corporate Social Responsibility and the role of Rural Women in Sustainable Agricultural Development in sub-Saharan Africa: Evidence from the Niger Delta in Nigeria By Uduji, Joseph; Okolo-Obasi, Elda; Asongu, Simplice
  8. Drought intensity, future expectations, and climate-change adaptation By Booth, Pamela; Brown, Philip; Walsh, Patrick
  9. The Impact of Weather on Commodity Prices: A Warning for the Future By Annalisa Marini
  11. Inefficient water pricing and incentives for conservation By Ujjayant Chakravorty; Manzoor H. Dar; Kyle Emerick
  12. Market Heterogeneity and the Distributional Incidence of Soft-drink Taxes: Evidence from France By Fabrice Etilé; Sebastien Lecocq; Christine Boizot-Szantai
  13. UK food prices after Brexit, with implications for poverty and health By Martine J Barons; Willy Aspinall
  14. Heterogeneity, Measurement Error, and Misallocation: Evidence from African Agriculture By Douglas; Udry Gollin, Christopher
  15. Foreign direct investment in the African food and agriculture sector: trends, determinants and impacts By Husmann, Christine; Kubik, Zaneta
  16. Identifying effects of farm subsidies on structural change using neural networks By Storm, Hugo; Heckelei, Thomas; Baylis, Kathy; Mittenzwei, Klaus
  17. Modelling returns and volatility connectedness between food prices and exchange rate in Nigeria By Lateef O. Akanni
  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. Community participation and the quality of rural infrastructure in Ethiopia By Shigute, Z.
  20. An "Image Theory" of RPM By Inderst, Roman
  21. The role of agricultural sector performance on economic growth in Nigeria By Kenny S, Victoria
  22. How Do We Choose Our Identity? A Revealed Preference Approach Using Food Consumption By Atkin, David; Colson-Sihra, Eve; Shayo, Moses
  23. Climate-Smart Agriculture, a Mitigation Framework, and the ETS By Shirley, James
  25. Climate Friendly Goods and Technology Trade: Climate Mitigation Strategy of India By Dinda, Soumyananda
  26. Feasibility of Innovative Sharemilking Arrangements By Schröer-Merker, Eva; Tozer, Peter
  27. An Organizational Capacity model for wine cooperatives By Maria de Fátima Souza; Ana Carvalho
  28. Impact of climate change on agriculture: determination of the existence of a price bias in Ricardian studies By Fabrice Ochou; Philippe Quirion

  1. By: Nith, Kosal; Ly, Singhong
    Abstract: In this paper we analysis to identify the factor constraining on Cambodian agriculture in transforming from extensive to intensive agriculture. The objective of this study was to examine the general situation of Cambodian agriculture by comparing with neighboring countries in Southeast Asia from a period of 22 years (1996 – 2018) through cultivate areas, technical using, technologies using, fertilizer using, agricultural infrastructure system, agricultural production cost, agricultural output, agricultural market and climate change. The results show that the Cambodian agriculture sector is still at a level where there is significant need to improve the capacity of farmers, the new technologies use and the prevention of climate change. However, the production cost is still high cost and agricultural output has been in low prices. It also causes for farmers to lose confidence in farming and they will be stop working in the sector. Moreover, we also have other policies to improve agriculture sector in Cambodia.
    Keywords: Agricultural Development, Agricultural Policy, Agricultural Technology, Intensive Farming, Farmer Education
    JEL: F13 O13 Q13 Q16 Q18
    Date: 2018–11–25
  2. By: Tione, Sarah E. (Centre for Land Tenure Studies, Norwegian University of Life Sciences); Holden , Stein T. (Centre for Land Tenure Studies, Norwegian University of Life Sciences)
    Abstract: We assess the spatial and intertemporal change patterns of farmland prices using per hectare minimum willingness to accept (WTA) sales and rental prices in Malawi. We use three rounds of nationally representative household farm panel data from the Living Standards Measurement Surveys (LSMS), collected in 2010, 2013 and 2016. We study price changes by splitting the sample in quintiles based on distance from the nearest major city, building on the von Thünen theory and urban growth model. Generally, WTA land prices decrease with distance from urban areas. However, WTA land sales prices increased more sharply between 2010 and 2013 in rural areas (+100% vs. +30% in urban proximity). Conversely, by 2016 land sales prices were again, like in 2010, about three times as high in areas near urban centres compared to remote rural areas. Even though sales prices declined in remote rural areas from 2013 to 2016, rental prices remained high. Using farm level population pressure, we show that local population pressure is a driver of WTA land prices, which is an indicator of land scarcity challenges and a growing demand for land. Although a policy focus in the past decade within Africa has been on the new demand for large scale land transfers in rural areas, we see that shadow land prices in smallholder agriculture in Malawi were affected by this sharp increase in demand as well as by increasing population pressure and urbanization. With growing land scarcity, land markets are becoming more important and need to be factored in when formulating development policies that aim to improve access to land and land use efficiency in both peri-urban and rural areas.
    Keywords: Farmland prices; Urban sprawl; von Thünen theory; Hedonic Price Model; Malawi
    JEL: Q12 Q24
    Date: 2019–04–05
  3. By: Kirui, Oliver Kiptoo
    Abstract: This paper examines the state, drivers and, consequently, the impacts of agricultural mechanization in eleven countries in Africa. Using representative multistage stratified household survey data and robust analytical approaches, findings show light hand-held tools and equipment remain the main type of machinery in most countries – about 48% of the sampled households have access to light machinery compared to 35% that have access to animal-powered machinery, and only about 18% that use tractor-powered machinery. Significant drivers of agricultural mechanization include the size of the household, gender of the household head, participation in off-farm economic activities, distance to the input and output markets, farm size, land tenure, type of farming system, access to extension services, and use of fertilizer and pesticides. This study finds that after controlling for socio-economic, demographic, and regional determinants, agricultural mechanization, significantly increases the amount of cropland cultivated (extensification) and is also accompanied by input intensification especially in countries where land expansion is limited. We further find significant but mixed impact of agricultural mechanization on use of household and hired labor. Finally, agricultural mechanization significantly raises the productivity of maize and rice in all cases. These findings point to the importance of developing favorable arrangements that would avail mechanization to small and medium scale farmers. This would involve providing incentives for private sector to scale agricultural mechanization initiatives and targeting and engaging women farmers and the youth by investing in supportive infrastructure and training.
    Keywords: Crop Production/Industries, Demand and Price Analysis, Farm Management, Labor and Human Capital
    Date: 2019–04–08
  4. By: Hassan, Md. Fuad; Kornher, Lukas
    Abstract: Concepts explaining the wage‐price nexus in Bangladesh are diverse and conflicting. A proper understanding of the relationship between food prices and rural wages is essential for planning policies in support of the rural poor. In exploring the link between food prices and rising agricultural wages, this study analyzes the dynamic relations between those two by using monthly data from 1994 to 2014. A standard vector error correction model (VECM) is implemented to determine the short‐run and long‐run relationships between wages and food prices in eight divisions in Bangladesh. In addition, we use autoregressive distributed lag (ARDL) models to estimate the pass‐through coefficients and to compare the short‐run effects of rice price and urban wage shocks on agricultural wages. We find statistical evidence for a structural break between January 2007 and January 2009 in the relationships of the variables in all divisions. After the structural break, in six out of eight divisions, any shock in rice prices does not transmit to the farm wages in the short‐run. Moreover, our findings show that in the long‐run food prices have become less influential in explaining the changes in rural wages while the influence of urban wages has become stronger in some divisions.
    Keywords: Agricultural Finance, Demand and Price Analysis, Labor and Human Capital, Research Methods/ Statistical Methods
    Date: 2019–04–08
  5. By: Olivia Bertelli (PSL, Université Paris-Dauphine, LEDa)
    Abstract: One of the reasons for the persistent low agricultural productivity in Sub-Saharan Africa is the lack of adoption of pro table agricultural technologies. Yet, what is pro table in a controlled experimental setting may not be pro table in a real-world setting. Estimating the returns to a single input is, in fact, challenging as farmers may respond to adoption by re-optimizing the use of other inputs. This paper explores farmers behavioral response to a positive random shock on future productivity by disentangling inputs returns from farmers' response. Using a unique household panel dataset collected in rural Uganda, I proxy a future productivity shock with the birth of a female calf against that of a male calf. Calves have no technical returns, but female calves will become cows producing milk, providing a stable source of income, while bulls and oxen are of little use in this context. The main OLS and di erence-in-di erences results show the existence of a crowd-in e ect. Farmers react to the birth of a female calf by increasing inputs' expenditures. They invest more on their cattle's health, increase hired labor and are more willing to pay for cattle-related investments but not for other activities. This increase in investments leads to an increase in milk production and revenues that lasts over time. Further results show that economies of scale associated with the number of female animals seem to explain this behavioral response.
    Keywords: cattle, investments, Sub-Saharan Africa.
    JEL: C26 C33 D24 O12 O13 O55 Q12
    Date: 2019–03
  6. By: Gabriela Demarchi (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - INRA - Institut National de la Recherche Agronomique - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier); Subervie Julie (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - INRA - Institut National de la Recherche Agronomique - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier); Fernando Palha Leite (CENIBRA - Celulose Nipo-Brasileira SA); Jean-Paul Laclau (UMR Eco&Sols - Ecologie fonctionnelle et biogéochimie des sols et des agro-écosystèmes - IRD - Institut de Recherche pour le Développement - INRA - Institut National de la Recherche Agronomique - Montpellier SupAgro - Centre international d'études supérieures en sciences agronomiques - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement)
    Abstract: In a climate change context, changing temperature and precipitation pattern are expected to have strong impacts on Brazilian eucalyptus plantations. Implementing adaptive water-efficient management practices is thus becoming necessary to maintain high levels of productivity while preserving the water resources. This paper investigates the ability of eucalyptus farmers to modify their current silvicultural practices in order to adapt to drought in the near future. We ran a choice experiment in the state of Minas Gerais, among 80 eucalyptus producers, who were asked to choose from several management options associated with various financial supports. The results show that adaptation by reducing the length of the eucalyptus rotation proves to be by far the preferred option, despite the associated costs. On the contrary, reducing density appears to be the least chosen option by the respondents, which may suggest that they underestimate the benefits of this strategy. We moreover find a clear and relevant segmentation of farmers'choice behavior, the general preference for reducing the length of the eucalyptus rotation being driven by themost vulnerable farmers of the sample.
    Keywords: Brazil,water resources,drought,choice experiment,eucalyptus
    Date: 2019
  7. By: Uduji, Joseph; Okolo-Obasi, Elda; Asongu, Simplice
    Abstract: Low productivity among female farmers when compared with their male counterparts is considered an outcome of limited access to agricultural land and inputs. The objective of this investigation was to assess the impact of multinational oil companies’ (MOCs’) CSR on rural women access to modern agricultural inputs in the Niger Delta, Nigeria. A total of 700 rural female farmers were sampled across the region. Results from the use of a logit model indicated that CSR recorded significant success in agricultural development generally, but has undermined equality. This implies that if a woman’s agricultural productivity is continuously hindered by unequal access to agricultural resources (or opportunities) and widespread inequality will limit poverty reduction efforts in Nigeria. The results also showed that women depended on CSR of MOCs for policy dialogue and advocacy for women’s access to agricultural land and inputs. Supporting agricultural initiatives that focus on empowering women would boost food security in sub-Saharan Africa.
    Keywords: gender equality; agriculture; corporate social responsibility; multinational oil companies; logit model; Nigeria
    JEL: J43 O40 O55 Q10
    Date: 2019–01
  8. By: Booth, Pamela; Brown, Philip; Walsh, Patrick
    Abstract: Using a survey of New Zealand farmers, we explore the effect of drought intensity on future climate expectations and plans for land-use change, focusing on the window of experience farmers use in planning. Results suggest farmers reference the recent past rather than the historical record, indicating farmers routinely update environmental signals. Higher expectations of drought are also positively associated with land-conversion plans. Our findings suggest that while weather shocks may speed adaptation in expectation of climate change, the relatively short period of reference over which farmers compare drought may concurrently decelerate adaptation as drought becomes the “new normal”.
    Keywords: Environmental Economics and Policy, Farm Management
    Date: 2018–08–31
  9. By: Annalisa Marini (University of Exeter)
    Abstract: Drawing on the most recent advances of the panel VAR literature, we investigate the impact of weather on commodity prices. We first test our model against alternative models. Then, we use it to simulate scenarios to study the impact of weather on commodity price transmission. We propose a framework that can be generalized to assess the impact of weather on a variety of commodity markets. The results show that (i) while shocks to temperatures affect commodity prices, precipitations are less relevant; (ii) an increase in temperatures is likely to increase prices; (iii) the impact on prices is not only direct but it spills over to other exporting countries; (iv) simulating a scenario compatible with global warming we find that it is likely to lead to a substantial increase in commodity prices and spillover effects; (v) these effects are amplified if we account for a contemporaneous shock to the economy. We discuss implications for the future, which can be useful for policy implementation.
    Keywords: PVAR, Commodity Price Transmission, Spillovers, Climate Change
    JEL: F00 C3 C5 Q1
    Date: 2019
  10. By: Parminter, Terry; Proctor, Kate; Bowen, Tom
    Abstract: In 2018, the Manawatu Wanganui Regional Council (Horizons) began examining natural resource management in the region in preparation for a plan review. This includes the information provided by dairy farmers as part of their land-use consent applications. In this paper the authors describe the reductions in greenhouse gas emissions (GHG) emissions being achieved by dairy farmers in the Tararua District as a co-benefit from reducing nitrogen losses to water. The sample of 126 dairy farms came from a relatively high rainfall area (1000-2000mm/yr) and mixed soil types (mostly brown and allophanic soils). In 2012-13, the annual losses of nitrogen to water averaged 40 kgN/ha (ranging from 24-60 kgN/ha). The annual GHG emissions averaged 11.2 t/ha (ranging from 10-15 t/ha). There was a very poor relationship between individual farm nitrogen losses to water and their GHG emissions (R2 <0.1). To model the effect of management practices that reduce nitrogen losses to water, the farms were placed into five groups using cluster analysis. Five clusters of farms were modelled in Overseer®, to represent all the dairy farms in the catchment. Management mitigations were introduced sequentially to each cluster farm and the nitrogen losses to water calculated over an expected 20 year timeframe. When the changes in GHG emissions were compared with the expected reductions in nitrogen losses, a possible co-benefit became apparent. Across the representative dairy farms in the catchment, after introducing the management mitigations for improving water quality, the GHG percentage reductions were estimated to be around 64% of the percentage reductions in nitrogen losses to water. From these results, it appears likely that dairy farmers in the Tararua District will achieve significant reductions in GHG emissions from the adoption of management practices designed to reduce nitrate losses to water.
    Keywords: Farm Management
    Date: 2018–08–31
  11. By: Ujjayant Chakravorty; Manzoor H. Dar; Kyle Emerick
    Abstract: We use two randomized controlled trials in Bangladesh to study a simple water conservation technology for rice production called “Alternate Wetting and Drying (AWD)”. Despite proven results in agronomic trials, our first experiment shows that AWD only saves water and increases profits in villages where farmers pay a marginal price for water, but not when they pay fixed seasonal charges. The second RCT randomly distributed debit cards that can be used to pay volumetric prices for irrigation water. This low-cost, scalable intervention causes farmers to place more value on the water-saving technology. Demand for the technology becomes less price-sensitive.
    Date: 2019
  12. By: Fabrice Etilé (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique); Sebastien Lecocq (ALISS - Alimentation et sciences sociales - INRA - Institut National de la Recherche Agronomique); Christine Boizot-Szantai (ALISS - Alimentation et sciences sociales - INRA - Institut National de la Recherche Agronomique)
    Abstract: Market heterogeneity may affect the distributional incidence of soft-drink taxes if households sort by income across markets with different characteristics. We use the Kantar Worldpanel homescan data to analyse the distributional incidence of the 2012 French soda tax on Exact Price Indices (EPIs) that measure consumer welfare from the price, availability and consumption of Sugar-Sweetened Beverages (SSBs) at a local market level. After correcting prices for consumer heterogeneity in preferences, we find that the soda tax had a significant but small national average impact corres- ponding to a pass-through of approximately 40%. Producers and retailers set significantly higher pass-throughs in low-income, less-competitive and smaller markets and for cheaper but less popular brands. Market heterogeneity ultimately has substantial distributional effects, as it accounts for approximately 35% of the difference in welfare variation between low- and high-income consumers.
    Keywords: Soft-drink tax,Nutrition,Tax incidence,Inequality,Market Structure,Consumer Price Index
    Date: 2019–03
  13. By: Martine J Barons; Willy Aspinall
    Abstract: A key driver of household food insecurity is the balance between household disposable income and food prices. In the UK in recent years, many households have relied on charitable food banks in order to eat. The UK exit of the EU (Brexit) is expected to have significant influence across the economy, including on employment, wages and prices. We use structured expert judgement to quantify food prices and associated uncertainties in a principled manner under two scenarios: a Brexit deal broadly similar to the present situation and Brexit without a deal. Here we show that consumer prices index (CPI) food prices will rise faster than previously under both scenarios (6% and 24% respectively) and that the uncertainty is significantly larger under no-deal (a plausible worst-case of 43% compared to 14% ). Under a Brexit deal, a family with two adults and two children, one at pre-school and one at primary school, buying healthy diets will suffer median increases in food costs of {\pounds}6 per week (with a plausible worst case of {\pounds}16 per week). Under a no-deal scenario, this family will suffer a median increase of {\pounds}23 per week (plausible worst-case {\pounds}45 per week). The Lancet reported that poor diet is linked to 20% of all deaths worldwide, though association with disease. Rising food prices in a condition of static UK incomes is likely to add to demand pressure on the NHS. Our results demonstrate that uncertainty analysis associated with expected changes in food costs are vital to inform policies that allow households to afford a food basket that meets their needs.
    Date: 2019–04
  14. By: Douglas; Udry Gollin, Christopher
    Abstract: Standard measures of prouctivity display enormous dispersion across farms in Africa. Crop yields and input intensities appear to vary greatly, seemingly in conflict with a cmodel of efficient allocation across farms. In this paper, we present a theoretical framework for distinguishing between measurement error, unobserved heterogeneity, and potential misallocation. Using rich panel data from farms in Tanzania and uganda, we estimate our model using a flexible specification in which we allow for several kinds of measurement error and heterogeneity. We find that measurement, error and heterogeneity together account for a large fraction - as much as ninety percent - of the dispersion in measured productivity. In contrast to some previous estimates, we suggest that the potential for efficiency gains through reallocation of land across farms and farmers may be relatively modest.
    Date: 2019
  15. By: Husmann, Christine; Kubik, Zaneta
    Abstract: In this paper, we seek to answer three research questions: (1) What is the pattern of foreign direct investment (FDI) in the African food and agriculture sector in the last 15 years? (2) What are the drivers of FDI in the African food and agriculture sector? (3) What is the evidence on the impacts of private-sector investments in the African food and agriculture sector on the product and labor markets, with particular focus on income effects? Our analysis shows that a total of $48.737 billion was invested in the African food and agriculture sector by foreign private-sector investors between 2003 and 2017, with a noticeable peak in FDI inflows observed after the 2008/09 agricultural commodities shocks suggesting that international investors want to capitalize on high food prices. The initiatives such as the New Alliance for Food Security and Nutrition and Grow Africa, which aim to create a conducive environment for investment, might have also contributed to the growth of FDI volumes reported over the last years. Our econometric analysis reveals that market potential is one of the main drivers of FDI in food and agriculture sector in Africa. More specifically, population size consistently has a significant impact on sectoral FDI inflows in Africa, irrespective of the model specification. Among the supply-side factors, the size of agricultural land turns out to be an important predictor of FDI inflows. Agglomeration effects are also observed, with a lagged volume of FDI inflows having a very strong impact on the level of current FDI. Finally, infrastructure or institutional quality play an essential role in attracting investment. These findings give support to various strands of literature that we drew upon in the theoretical framework. Uncovering the impacts that private-sector investment has on the population proved not to be straightforward. Even though the literature is relatively abundant, it is flawed with multiple methodological issues that limit its internal and external validity. Despite these caveats, most of the studies reviewed in our paper seem to suggest positive impacts on farm and labor income. The effects on equality and poverty are not clear, as some investment schemes may be biased towards the better-off households. However, wage-employment opportunities generated by private-sector investment seem to benefit the poorest, especially when they target unskilled labor or women. Finally, there is evidence that private-sector investment might act as a driver of technical innovation. However, many research gaps remain.
    Keywords: Agricultural and Food Policy, International Development, Labor and Human Capital
    Date: 2019–04–12
  16. By: Storm, Hugo; Heckelei, Thomas; Baylis, Kathy; Mittenzwei, Klaus
    Abstract: Farm subsidies are commonly motivated by their promise to help keep families in agriculture and reduce farm structural change. Many of these subsidies are designed to be targeted to smaller farms, and include production caps or more generous funding for smaller levels of activity. Agricultural economists have long studied how such subsidies affect production choices, and resulting farm structure. Traditional econometric models are typically restricted to detecting average effects of subsidies on certain farm types or regions and cannot easily incorporate complex subsidy design or the multi-output, heterogeneous nature of many farming activities. Programming approaches may help address the broad scope of agricultural production but have less empirical measures for behavioral and technological parameters. This paper uses a recurrent neural network and detailed panel data to estimate the effect of subsidies on the structure of Norwegian farming. Specifically, we use the model to determine how the varying marginal subsidies have affected the distribution of Norwegian farms and their range of agricultural activities. We use the predictive capacity of this flexible, multi-output machine learning model to identify the effects of agricultural subsidies on farm activity and structure, as well as their detailed distributional effects.
    Keywords: Agricultural and Food Policy, Farm Management, Land Economics/Use, Research Methods/ Statistical Methods
    Date: 2019–04–10
  17. By: Lateef O. Akanni (Centre for the Study of the Economies of Africa, Abuja, Nigeria Centre for Econometric and Allied Research (CEAR), Department of Economics, University of Ibadan, Ibadan, Nigeria)
    Abstract: This study measures the connectedness between food prices and exchange rate in Nigeria using the Diebold and Yilmaz (2012) approach. Using weekly data from January 2012 to January 2019 on five major food prices – rice, maize, millet gari and sorghum, and naira to dollar exchange rate, the study tests for spillovers transmission between food prices and Nigeria domestic currency against the most traded foreign currency - US dollar. The paper finds evidence of interdependence among the food prices and exchange rate based on the obtained spillover indexes. The study further accounts for the 2016 naira to dollar exchange rate crash. The results show that the huge depreciation in the exchange rate have a greater spillover effects on the food prices with this finding is robust to varying lag structure and VAR lag order.
    Keywords: Naira exchange rate, Food prices, Spillover analysis, Exchange rate crash
    JEL: C32 F31 G01 Q11
    Date: 2019–03
  18. By: Stefano Ramelli (University of Zurich - Department of Banking and Finance); Alexander F. Wagner (University of Zurich - Department of Banking and Finance; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI); Swiss Finance Institute); Richard J. Zeckhauser (Harvard University - Harvard Kennedy School (HKS); National Bureau of Economic Research (NBER)); Alexandre Ziegler (University of Zurich - Department of Banking and Finance)
    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.
    Keywords: Climate change, CSR, election surprise, ESG, event study, stock returns
    JEL: G14 G38
    Date: 2018–09
  19. By: Shigute, Z.
    Abstract: Ethiopia’s Productive Safety Net Program (PSNP) is one of the world’s largest food security programs. The program supports chronically food insecure rural households and at the same time promotes long-term food security through the creation of rural infrastructure. While studies on the PSNP have examined various features of the program, there is limited knowledge on the quality and durability of infrastructure built through the program. Ensuring and maintaining the quality of local public goods built through the PSNP and similar social protection programs is a costly and recurring issue. Motivated by the long-term objective of the program, this paper analyses the role played by a key design feature of the PSNP, that is, its Community Based Participatory Watershed Development approach in influencing a project’s physical condition and its operational status. The paper is based on survey data and technical assessments provided by soil and water conservation engineers covering a sample of 249 Soil and Water Conservation (SWC) projects located in 53 watershed communities. The survey is complemented by qualitative information gathered through interviews and discussions. The location of multiple projects, with differing levels of participation in the same watershed communities permits estimation of the effects of community participation after controlling for community fixed effects. We find that projects in which beneficiaries play a larger role in project monitoring and evaluation are substantially less likely to be damaged and be in better operational condition. These results support the idea that community participation translates into more durable infrastructure.
    Keywords: Productive Safety Net Program, community participation, quality rural infrastructure, Ethiopia
    Date: 2019–03–29
  20. By: Inderst, Roman
    Abstract: We show how a brand manufacturerís control over retail prices can lead to e¢ cien-cies when consumers rely on prices as a signal of quality. For this we first show how higher prices can be associated with both higher quality perception as well as higher actual quality. We next identify a conflict of interest between retailers and manufactures. Retailers do not internalize the ensuing reputation spill-over that higher prices have on demand at all outlets. And they have less incentives to support brand image through higher prices as this erodes their own position in negotiations while increasing that of the manufacturer. Our efficiency defence for RPM thus applies even when retailers need not be incentivized to undertake non-contractible activities, as in our model the key opportunism problem, with respect to quality provision, lies between the manufacturer and consumers.
    Date: 2019–04
  21. By: Kenny S, Victoria
    Abstract: The impact of agriculture in maintaining sustainable economic growth has been a major subject of controversy in the literature for a very long time now and this is presently still on among scholars with no conclusion. However, Agriculture is the bedrock for any growing economy and thus a precondition for industrialization. This study critically examines the role of agricultural sector performance on economic growth in Nigeria. Key findings indicated that there is a significant long run relationship between agricultural domestic production and its explanatory variables (Agricultural Credit Guarantee Scheme Fund, Federal Government current expenditure on agriculture, total employment and effect of trade liberalisation). The VECM result found 35 percent speed of adjustment of the endogenous growth model which includes Agricultural Credit Guarantee Scheme Fund, Federal Government current expenditure, total employment and effect of liberalisation (SAP) on agricultural domestic production implying that Interventions in agriculture will take at least 24 months for one half of its effect to be significant on production in Nigeria. Therefore, Policy consistency and commitment of government is required before such intervention can yield the desired results.
    Keywords: Economic Growth and Government Expenditure
    JEL: Q0
    Date: 2019–04–06
  22. By: Atkin, David; Colson-Sihra, Eve; Shayo, Moses
    Abstract: Are identities fungible? How do people come to identify with specific groups? This paper proposes a revealed preference approach, using food consumption to uncover ethnic and religious identity choices in India. We first show that consumption of identity goods (e.g. beef and pork) responds to forces suggested by social-identity research: group status and group salience, with the latter proxied by inter-group conflict. Moreover, identity choices respond to the cost of following the group's prescribed behaviors. We propose and estimate a modified demand system to quantify the identity changes that followed India's 1991 economic reforms. While social-identity research has focused on status and salience, economic costs appear to play a dominant role.
    Date: 2019–04
  23. By: Shirley, James
    Abstract: This paper explores the potential contribution to climate change mitigation resulting from the adoption of the Climate-Smart Agriculture (CSA) mitigation scheme methodologies. CSA is an internationally recognized approach that helps guide the actions needed to transform and reorient agricultural systems, to effectively support sustainable development and ensure food security in a changing climate. CSA is based on principles developed in conjunction with the Intergovernmental Panel on Climate Change (IPCC), so its Mitigation Scheme framework of differentiated incentivization is readily transferable across IPCC regions, without the need for radical new policy initiatives. This methodology links with an emissions trading scheme (ETS), as an incentive compatible mechanism to improve environmental outcomes. In this case the NZETS trades carbon certificates based on farm systems that effectively measure, report and ultimately verify the land user’s contribution towards the country’s nationally determined contributions (NDCs).
    Keywords: Agricultural and Food Policy, Environmental Economics and Policy
    Date: 2018–08–31
  24. By: Eline D'Haene; Sam Desiere; Marijke D'Haese; Wim Verbeke; Koen Schoors (-)
    Abstract: The impact of religious behaviour on food systems in developing economies has been understated in scholarly studies. With its different Christian, Islamic, and traditional faiths, Ethiopia emerges as a natural experiment to investigate the impact of religious practices on demand. The inclusion of livestock products in Ethiopian diets is extremely low, even by African standards; a phenomenon often explained by supply and marketing problems combined with low income levels. We deviate from this dominant narrative and single out the impact of religion. We show how fasting practices of Orthodox Christians, the largest religious group, affect milk intake decisions and channels through which consumed milk is sourced. Employing countrywide data collected by the Living Standards Measurement Studies, we find, as expected, that the Orthodox fasting adversely affect milk consumption and decreases the share of milk sourced from own production in Orthodox families, an effect we quantify in this paper. Moreover, we observe spillover effects of Orthodox fasting on other religious groups in dominant Orthodox localities. Our findings improve the understanding of the broader societal implication of religiously inspired consumption rituals and underscore the challenges resulting from religion-induced demand cycles to design policies that aim at developing the livestock sector.
    Date: 2019–04
  25. By: Dinda, Soumyananda
    Abstract: This study focuses on India’s climate change mitigation strategy through trade and how India gradually moves forward towards the goal of sustainable development path. The paper highlights trade performances of climate friendly goods and technology (CFGT) in India during 2002-20017 and suggests possible solution through trade channels that might mitigate climate change through disseminating and exchanging the low carbon and clean technologies, which improve energy efficiency and minimizes environmental impacts. The products associated with clean technologies which have relatively less adverse impact on the environment. This paper attempts to realize India’s CFGT export and import, and quantify trade opportunities of CFGT in India. With these it also identifies constrains and helps to widen capacity and strengthen its capability in the advancement of capturing new opportunities in production and trade in CFGT. India should adopt few policies to improve and raise CFGT production while trade ensures availability of technologies
    Keywords: Climate Change, Climate Mitigation, Energy Efficiency, India, CFGT, Trade, Climate Friendly Goods and Technology, Export and Import
    JEL: C21 C51 C54 O3 O53 Q27 Q37 Q5 Q52 Q56
    Date: 2018
  26. By: Schröer-Merker, Eva; Tozer, Peter
    Abstract: Sharemilking is an entry point for new dairy producers in the New Zealand industry, but growing milk price volatility increases the business risks for sharemilkers. We tested the hypothesis that flexible sharemilking arrangements will reduce the income variability of sharemilkers. The results illustrated the feasibility of a flexible model which shifts some of the risk from the sharemilker to the farm owner, while still allowing both to generate a positive ROA and a positive net profit with high probability.
    Keywords: Farm Management
    Date: 2018–08–31
  27. By: Maria de Fátima Souza (Federal University of Tocantins and NIPE); Ana Carvalho (University of Minho and NIPE)
    Abstract: We propose a model of Organizational Capacity for wine cooperatives. Cooperatives are organizations with distinct characteristics, in particular, they have a dual nature: they are simultaneously a business and non-profit driven organizations owned by their members. This poses specific challenges to cooperative management. Organizational Capacity is a construct developed for nonprofit organizations, but it has not been applied to cooperatives. Based on a qualitative study with 19 wine cooperatives in Portugal, we developed an organizational capacity model that accounts for the social and the economic dimensions of cooperatives and the peculiarities of their identity. The model comprises seven interdependent capacity elements: infrastructure, financial, strategic planning, marketing, human resources, relationship with members, and management capacity. We explore each of these capacities and how they relate to each other, highlighting their specific relevance in cooperatives.
    Keywords: organizational capacity, cooperatives, wine cooperatives, PortugaL
    Date: 2018
  28. By: Fabrice Ochou (Université Félix Houphouët-Boigny d’Abidjan-Cocody - Université Félix Houphouët-Boigny d’Abidjan-Cocody - Université Félix Houphouët-Boigny d’Abidjan-Cocody); Philippe Quirion (UMR CIRED - Centre International de Recherche sur l'Environnement et le Développement - AgroParisTech - EHESS - École des hautes études en sciences sociales - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)
    Date: 2019–03–26

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.