nep-agr New Economics Papers
on Agricultural Economics
Issue of 2019‒10‒07
sixteen papers chosen by

  1. Are small farms really more productive than large farms? By Fernando Aragon, Diego Restuccia, Juan Pablo Rud; Diego Restuccia; Juan Pablo Rud
  2. The Effects of Land Markets on Resource Allocation and Agricultural Productivity By Chaoran Chen; Diego Restuccia; Raul Santaeulalia-Llopis
  3. Forests and Conflict in Colombia By Barry REILLY; Rafael Isidro PARRA-PEÑA S.
  4. Carbon emissions, and economic growth in Africa By Olusanya, Olubusoye; Musa, Dasauki
  5. Global alcohol markets: evolving consumption patterns, regulations and industrial organizations By Kym Anderson; Giulia Meloni; Jo Swinnen
  6. The fundamental causes of economic growth: a comparative analysis of the total factor productivity growth of European agriculture, 1950-2005 By Miguel Martín-Retortillo; Vicente Pinilla
  7. Preferences, Uncertainty, and Biases in Land Division: A Bargaining Experiment in the Field By Margarita Gáfaro; César Mantilla
  8. Modelling the health impact of food taxes and subsidies with price elasticities: the case for additional scaling of food consumption using the total food expenditure elasticity By Tony Blakely; Nhung Nghiem; Murat Genc; Anja Mizdrak; Linda Cobiac; Cliona Ni Mhurchu; Boyd Swinburn; Peter Scarborough; Christine Cleghorn
  9. A new year, a new you? Heterogeneity and self-control in food purchases By Laurens Cherchye; Bram De Rock; Rachel Griffith; Martin O'Connell; Kate Smith; Frederic Vermeulen
  10. Toward an Understanding of the Welfare Effects of Nudges: Evidence from a Field Experiment in Uganda By Erwin Bulte; John A. List; Daan Van Soest
  11. Trade and terroir. The political economy of the world's first geographical indications By Giulia Meloni; Jo Swinnen
  12. BMI Mobility and Obesity Transitions Among Children in Ireland By David (David Patrick) Madden
  13. An analysis on land price after land readjustment By Hsiu-Yin Ding
  14. Mission Drift in microcredit and Microfinance Institution Incentives By Sara Biancini; David Ettinger; Baptiste Venet
  15. Depression in the House: The Effects of Household Air Pollution from Solid Fuel Use in China By Liu, Yan; Chen, Xi; Yan, Zhijun
  16. Bailing out environmental liabilities: moral hazard and deforestation in the Brazilian Amazon By André Albuquerque Sant’Anna; Lucas Costa

  1. By: Fernando Aragon, Diego Restuccia, Juan Pablo Rud (Simon Fraser University); Diego Restuccia (University of Toronto and NBER); Juan Pablo Rud (Royal Holloway, University of London and Institute for Fiscal Studies)
    Abstract: We revisit the long-standing empirical evidence of an inverse relationship between farm size and productivity using rich microdata from Uganda. We show that farm size is negatively related to yields (output per hectare), as commonly found in the literature, but positively related to farm productivity (a farm-specific component of total factor productivity). These conflicting results do not arise because of omitted variables such as land quality, measurement error in output or inputs, or specification issues. Instead, we reconcile the findings emphasizing the role of farm-specific distortions and returns to scale in traditional farm production. We exploit unique regional variation in land tenure regimes in Uganda in evaluating the role of farm-specific distortions. Our findings point to the limited value of yields (or land productivity) in establishing the farm size-productivity relationship. More generally, we demonstrate the limitation of using farm size in guiding policy applications.
    Keywords: Farm size, productivity, yields, land markets, distortions, agriculture, policy, regions, technology
    JEL: O4 O5 O11 O12 O13 E02 E13 Q15 Q18 C33 D24
    Date: 2019–09
  2. By: Chaoran Chen; Diego Restuccia; Raul Santaeulalia-Llopis
    Abstract: We assess the effects of land markets on misallocation and productivity by exploiting policy-driven variation in land rentals across time and space arising from a large-scale land certification reform in Ethiopia, where land remains owned by the state. Our main finding from detailed micro panel data is that land rentals substantially reduce misallocation and increase agricultural productivity. Our evidence builds from an empirical difference-in-difference strategy, an instrumental variable approach, and a calibrated quantitative macroeconomic framework with heterogeneous household-farms that replicates, without targeting, the empirical effects. These effects are nonlinear, impacting more farms farther away from efficient operational scale, consistent with our theory. Using our model, we find that more active land markets reduce inequality, an important concern for the design of land policy. We also find that the positive effects of land markets are mainly driven by formal market rentals as opposed to informal rentals. Finally, our analysis also provides evidence that land markets increase the adoption of more advanced technologies such as the use of fertilizers.
    Keywords: Land markets, rentals, effects, misallocation, productivity, inequality, micro data, quantitative macro, informal markets, technology, fertilizers.
    JEL: E02 O10 O11 O13 O43 O55 Q10 Q15 Q18 Q24 D5
    Date: 2019–09–26
  3. By: Barry REILLY; Rafael Isidro PARRA-PEÑA S.
    Abstract: This study offers evidence on the relationship between armed conflict and its environmental impacts. For the case of Colombia, using a unique annual municipality panel dataset (from 2004 to 2012) and an instrumental variable approach to control for possible endogeneity between forest cover and forced displacement, there is evidence that the armed conflict is a force for forest protection and growth. In December 2016, the Colombian government concluded the negotiations with the Revolutionary Armed Forces of Colombia (FARC) to end South America’s longest-running internal conflict. Forest degradation often increases in post-war situations. These findings highlight a need for increased protection of Colombia's forests in the wake of the peace settlement.
    Keywords: forest cover, forest change, reforestation, deforestation, armed conflict, violence, forced displacement, land abandonment, coca crops.
    Date: 2019–07–04
  4. By: Olusanya, Olubusoye; Musa, Dasauki
    Abstract: ABSTRACT: In this study, we applied the recently proposed income elasticity approach to investigate the presence of an inverted U relationship also known as the environmental Kuznets curve (EKC) in 20 African countries. we grouped the countries into three panels not according to any know regions, but according to income such as Low-income African economies, lower- Middle African economies and upper-Middle income African economies. We tested for the presence of an inverted U relationship for both individual-specific countries and for the 3 panels using short-run and long-run income elasticity approach. We conclude the presence of an inverted-U relationship exists when long-run Income elasticity is smaller than short-run income elasticity, meaning that as income increase over time, carbon emissions have reduced. In other words, as these individual African countries experience economic growth over time, their carbon emissions level has declined. This empirical finding is true only for Benin, Malawi, cote div our, south Africa, Botswana, and Libya, representing approximately 30% of the sample. With regards to the panel groups, we found evidence supporting the presence of an inverted U relationship only in the panel of low-income African countries with long-run income elasticity smaller than the short-run income elasticity, thus, the low-income African countries have reduced their carbon emissions level as economic growth is attained.
    Keywords: Keywords: Environmental Kuznets curve, economic growth, Carbon Emissions
    JEL: O1 O13 O14 Q4 Q5 Q53
    Date: 2018–02–06
  5. By: Kym Anderson; Giulia Meloni; Jo Swinnen
    Abstract: For millennia alcoholic drinks have played an important role in food security and health (both positive and negative), but consumption patterns of beer, wine and spirits have altered substantially over the past two centuries. So too have their production technologies and industrial organization. Globalization and economic growth have contributed to considerable convergence in national alcohol consumption patterns. The industrial revolution contributed to excess consumption by stimulating demand and lowering the cost of alcohol. It also led to concentration in some alcohol industries, expecially brewing. In recent years the emergence of craft producers has countered firm concentration and the homogenization of alcoholic beverages. Meanwhile, governments have intervened extensively in alcohol markets to reduce excessive consumption, raise taxes, protect domestic industries and/or ensure competition. These regulations have contributed to, and been affected by, evolving patterns of consumption and changing structures of alcohol industries.
    Keywords: Globalization of preferences, Convergence of national beverage consumption mix, Alcohol and health, Restrictions on alcohol consumption and production, Beverage firm concentration
    Date: 2018–02
  6. By: Miguel Martín-Retortillo (Universidad de Alcalá, Spain); Vicente Pinilla (Universidad de Zaragoza e Instituto Agroalimentario de Aragón, Spain)
    Abstract: In recent decades, the debate on economic growth has largely focused the role-played by institutions, geography, trade, and culture. In line with this concern, this study analyses the underlying causes of agricultural productivity growth in Europe in the second half of the twentieth century. To achieve this objective, a calculation of the Total Factor Productivity growth in European agriculture is made and an econometric model is proposed to determine the importance of these fundamental causes. Our study highlights that inclusive institutions, policies to support agriculture that do not discourage innovation, qualified human capital and a full openness to international trade are key factors for favouring growth of productivity in agriculture.
    Keywords: Agricultural productivity, European agriculture, Fundamental causes of economic growth, Comparative economics
    JEL: N54 O13 O47 P51 Q10
    Date: 2019–09
  7. By: Margarita Gáfaro (Banco de la República de Colombia); César Mantilla
    Abstract: Divisions of rural land in developing countries reduce the possibilities of farmers to profit from agricultural returns to scale. We design and conduct a framed bargaining experiment to study whether land overvaluation (due to affective reasons) and uncertainty in land values are drivers for land division. In our bargaining game, two players with different agricultural productivity jointly inherit a land plot and individually inherit some tokens they can use to agree on a land allocation. The possible set of land allocations and the spread of land returns vary across treatment arms in the game. We conduct this experiment with 256 participants in eight rural municipalities of the Northeast of Colombia. We find that when players are allowed to divide the land plot, 75% of the bargaining interactions yield the most egalitarian, but less efficient, land allocations. Based on the predictions of a Nash bargaining model and the observations from a sample of 120 college students, we rule out land overvaluation as a driver for land divisions in the context of our game. We also find that uncertainty in land yields reduces the efficiency of land allocations when we do not allow land divisions, by increasing the likelihood of the least productive player keeping the entire land plot. Our results are consistent with a bounded rationality rule in which subjects incorporate a behavioral response to uncertainty by first bargaining over land, which is a certain outcome, and then bargaining over a token transfer. **** RESUMEN: Las divisiones de tierras rurales en los países en desarrollo limitan las posibilidades de los agricultores en estos países de aprovechar economías de escala derivadas de la mecanización. Diseñamos y llevamos a cabo un experimento de negociación para explorar si la sobrevaloración de la tierra (debido a razones afectivas) y la incertidumbre sobre el valor de la tierra explican divisiones ineficientes de tierras en contextos agrícolas. En nuestro juego de negociación, dos jugadores con diferentes niveles de productividad agrícola heredan conjuntamente una parcela de tierra e individualmente heredan algunas fichas que pueden usar para acordar una repartición de la parcela. Variamos aleatoriamente, entre grupos de tratamiento en el juego, el conjunto de posibles reparticiones de la parcela y la dispersión de los retornos de la tierra. Llevamos a cabo este experimento con 256 participantes en ocho municipios rurales del nororiente de Colombia. Encontramos que cuando se permite a los jugadores dividir la parcela, el 75% de las interacciones de negociación generan las asignaciones de tierra más igualitarias, pero menos eficientes. Con base en las predicciones de un modelo de negociación de Nash y las observaciones de una muestra de 120 estudiantes universitarios, descartamos la sobrevaluación de la tierra como motor de divisiones de tierra en el contexto de nuestro juego. Por otro lado, encontramos que una mayor incertidumbre en los rendimientos de la tierra reduce la eficiencia en las asignaciones de tierra cuando eliminamos las divisiones igualitarias del conjunto de posibles reparticiones. Nuestros resultados son consistentes con una regla de racionalidad limitada en la cual los sujetos incorporan una respuesta conductual a la incertidumbre, al negociar primero sobre una asignacin de tierra, que es un resultado fijo y determinado, y luego negociar sobre una transferencia de fichas.
    Keywords: Land division, Nash bargaining, affective value of land, nonuse value, División de tierras, negociación de Nash, valor afectivo, valor de no uso
    JEL: C78 C90 O13 Q15
    Date: 2019–09
  8. By: Tony Blakely; Nhung Nghiem; Murat Genc; Anja Mizdrak; Linda Cobiac; Cliona Ni Mhurchu; Boyd Swinburn; Peter Scarborough; Christine Cleghorn
    Abstract: Background Food taxes and subsidies are one intervention to address poor diets. Price elasticity (PE) matrices are commonly used to model the change in food purchasing. Usually a PE matrix is generated in one setting then applied to another setting with differing starting consumption and prices of foods. This violates econometric assumptions resulting in likely misestimation of total food consumption. We illustrate rescaling all consumption after applying a PE matrix using a total food expenditure elasticity (TFEe, the expenditure elasticity for all food combined given the policy induced change in the total price of food). We use case studies of NZ$2 per 100g saturated fat (SAFA) tax, NZ$0.4 per 100g sugar tax, and a 20% fruit and vegetable (F&V) subsidy. Methods We estimated changes in food purchasing using a NZ PE matrix applied conventionally, then with TFEe adjustment. Impacts were quantified for total food expenditure and health adjusted life years (HALYs) for the total NZ population alive in 2011 over the rest of their lifetime using a multistate lifetable model. Results Two NZ studies gave TFEes of 0.68 and 0.83, with international estimates ranging from 0.46 to 0.90. Without TFEe adjustment, total food expenditure decreased with the tax policies and increased with the F&V subsidy, implausible directions of shift given economic theory. After TFEe adjustment, HALY gains reduced by a third to a half for the two taxes and reversed from an apparent health loss to a health gain for the F&V subsidy. With TFEe adjustment, HALY gains (in 1000s) were 1,805 (95% uncertainty interval 1,337 to 2,340) for the SAFA tax, 1,671 (1,220 to 2,269) for the sugar tax, and 953 (453 to 1,308) for the F&V subsidy. Conclusions If PE matrices are applied in settings beyond where they were derived, additional scaling is likely required. We suggest that the TFEe is a useful scalar.
    Date: 2019–09
  9. By: Laurens Cherchye; Bram De Rock; Rachel Griffith; Martin O'Connell; Kate Smith; Frederic Vermeulen
    Abstract: We document considerable within-person (over time) variation in diet quality that is not fully explained by responses to fluctuations in the economic environment. We propose a two-selves model that provides a structural interpretation to this variation, in which food choices are a compromise between a healthy and an unhealthy self, each with well-behaved preferences. We show that the data are consistent with this model using revealed preference methods. The extent of self-control problems is higher among younger and lower income consumers, though this is overstated if we do not control for responses to fluctuations in the economic environment. Our results are intuitively related to stated attitudes on self-control.
    Date: 2017–12
  10. By: Erwin Bulte; John A. List; Daan Van Soest
    Abstract: Social scientists have recently explored how framing of gains and losses affects productivity. We conducted a field experiment in peri-urban Uganda, and compare output levels across 1000 workers over isomorphic tasks and incentives, framed as either losses or gains. We find that loss aversion can be leveraged to increase the productivity of labor. The estimated welfare costs of using the loss contract are quite modest – perhaps because the loss contract is viewed as a (soft) commitment device.
    JEL: C93 D03 J01
    Date: 2019–09
  11. By: Giulia Meloni; Jo Swinnen
    Abstract: The world’s first geographical indications (GIs) were in the wine sector and focused on the delineation of the location of production, the ‘terroir’: the Burgundy wines in the fifteenth century, the Port wines and Chianti wines in the eighteenth century, and the Champagne wines in the early twentieth century. We analyze the causes for the introduction of these GIs (‘terroirs’) and for changes in their delineation (expansion) later on. Our analysis shows that trade played a very important role in the creation of the ‘terroirs’ but not always through the same mechanisms. For the Port and Chianti GIs it was exports to Britain that were crucial; for Burgundy it was domestic trade to Paris; and for the Champagne GI it was not exports but pressure from wine imports and new wine regions that played a crucial role. For the expansions of the GIs later in history, other factors seem to have been equally important. Expansions of the GIs in the years and centuries after their introduction followed major changes in political power; the spread of a new philosophy in liberal and free markets across Europe; and infrastructure investments which opened up markets and made exports cheaper from “new” producers.
    Date: 2018–01
  12. By: David (David Patrick) Madden
    Abstract: This paper examines mobility and changes in Body Mass Index (BMI) for a sample of Irish children across three waves of the longitudinal Growing Up in Ireland dataset. Particular attention is paid to transitions across the key BMI thresholds of overweight and obesity. Analysis is carried out by gender and by maternal education. In general, the degree of mobility appears to be relatively limited although it is greater than for the mothers of the children over the same time period. There is relatively little variation by gender and maternal education apart from some indication of less mobility out of obesity for girls.
    Keywords: Obesity; Mobility; Transitions
    JEL: I12 I14 I39
    Date: 2019–09
  13. By: Hsiu-Yin Ding
    Abstract: Land readjustment is a tool for land assembly so as to provide buildable land and infrastructures for urban development. After land readjustment, it is supposed that lots of land will be supplied to the land market, and this might lead to mitigate the shortage of land supply and speed urban development in peri-urban area. However, most pieces of land are returned to landowners, who decide to supply the land or not. In this paper, if landowners either sell or develop their land after land readjustment immediately is going to be examined. Moreover, how land readjustment affects the land price will be analyzed as well. The case of Tucheng land readjustment project in New Taipei City will be studied for answering these two questions.
    Keywords: Land assembly; land price; Land Readjustment
    JEL: R3
    Date: 2019–01–01
  14. By: Sara Biancini (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR1 - Université de Rennes 1 - UNIV-RENNES - Université de Rennes - CNRS - Centre National de la Recherche Scientifique, THEMA - Théorie économique, modélisation et applications - UCP - Université de Cergy Pontoise - Université Paris-Seine - CNRS - Centre National de la Recherche Scientifique); David Ettinger (CEREMADE - CEntre de REcherches en MAthématiques de la DEcision - Université Paris-Dauphine - CNRS - Centre National de la Recherche Scientifique, LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine); Baptiste Venet (LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine)
    Abstract: We analyze the relationship between Microfinance Institutions (MFIs) and external donors, withthe aim of contributing to the debate on "mission drift" in microfinance. We assume that boththe donor and the MFI are pro-poor, possibly at different extents. Borrowers can be (very) pooror wealthier (but still unbanked). Incentives have to be provided to the MFI to exert costly effortto identify the more valuable projects and to choose the right share of poorer borrowers (theoptimal level of poor outreach). We first concentrate on hidden action. We show thatasymmetric information can distort the share of very poor borrowers reached by loans, thusincreasing mission drift. We then concentrate on hidden types, assuming that MFIs arecharacterized by unobservable heterogeneity on the cost of effort. In this case, asymmetricinformation does not necessarily increase the mission drift. The incentive compatible contractspush efficient MFIs to serve a higher share of poorer borrowers, while less efficient onesdecrease their poor outreach.
    Keywords: microfinance,donors,poverty,screening
    Date: 2019–09–23
  15. By: Liu, Yan; Chen, Xi; Yan, Zhijun
    Abstract: While adverse health effects of ambient air pollution have been well documented, there is scarce evidence on the impact of household air pollution (HAP) on mental health. We investigated the causal link between HAP exposure from the use of solid fuel on depressive symptoms using a nationally representative dataset of middle-aged and older population in China. Employing the propensity match score method (PSM), matching and adjusting for potential confounders, we found significantly higher Center for Epidemiological Studies Depression Scale (CES-D) score and risk of depressive symptoms among solid fuel users than clean fuel users. These associations were especially stronger for older females who were less educated, of lower income, of higher body mass index, or had chronic diseases.
    Keywords: Depression,Household solid fuel use,Household air pollution,Propensity Score Matching,CHARLS
    JEL: I31 Q51 Q53
    Date: 2019
  16. By: André Albuquerque Sant’Anna; Lucas Costa
    Abstract: This paper discusses the emergence of moral hazard behavior in the context of a change in the Brazilian law that governs land use - the Forest Code. The Forest Code revision included benefits which relieved environmental liabilities for a specific group of landowners. We explore the fact that the Forest Code establishes two distinct legal regimes for landowners according to their adherence to the previous law. Basically, those that were not abiding by the former law gained special conditions to regularize the environmental liabilities, whereas those that were in accordance with the law did not receive any benefits. We argue that this latter group engaged in deforestation activities in the hope of also receiving bail outs in the future. We investigate our hypothesis using data on yearly deforestation from 2009 to 2017 by rural private properties in the Brazilian Amazon. Using a difference-indifferences approach, we first show that the new Forest Code has had a significant impact on deforestation. We then extend the analysis in order to demonstrate that hat landholders behave as if the law were non-binding. Moreover, we document increases only in livestock, but not in crop area. Finally, we conduct a counter-factual analysis which reveals that the Forest Code revision led to an additional loss of 533 thousand hectares between 2012 and 2017, which represents a loss of US$ 1.3 billion, taking no more than carbon emissions into consideration.
    Keywords: Land regulation, Deforestation, Amazon
    JEL: O13 Q23 R52
    Date: 2019–09–26

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