nep-agr New Economics Papers
on Agricultural Economics
Issue of 2019‒10‒14
29 papers chosen by

  1. Trade-offs between carbon sequestration, landscape aesthetics and biodiversity in a cost-benefit analysis of land use options in Norway By Endre Kildal Iversen; Kristine Grimsrud; Henrik Lindhjem; Jette Bredahl Jacobsen
  2. Farm diversification and climate change: implications for food security in Northern Namibia By Chalmers Mulwa; Martine Visser
  3. Modelling Food and Nonfood Production in India: The Effects of Oil Price using Bayer-Hanck Combined Cointegration Approach By Olanipekun, Ifedolapo O.; Usman, Ojonugwa
  4. Measuring Prefectural Price Differences of Agricultural Products – Location and Product Quality (Japanese) By TOKUI Joji; MIZUTA Takeshi
  5. Poverty, Seasonal Scarcity and Exchange Asymmetries By Dietmar Fehr; Günther Fink; Kelsey Jack
  6. Market Integration and Convergence in Consumption Patterns By Jose de Sousa; Eve Sihra; Thierry Mayer
  7. Sanctioned Quotas vs Information Provisioning for Community Wildlife Conservation in Zimbabwe: A Framed Field Experiment Approach By Herbert Ntuli; Anne-Sophie Crépin; Caroline Schill; Edwin Muchapondwa
  8. Seawalls and Stilts: A Quantitative Macro Study of Climate Adaptation By Stephie Fried
  9. Land distribution, income generation & inequality in India's agricultural sector By Sanjoy Chakravorty; S Chandrasekhar; Karthikeya Naraparaju
  10. Can local communities afford full control over wildlife conservation? The Case of CAMPFIRE in Zimbabwe By Herbert Ntuli; Edwin Muchapondwa; Boscow Okumu
  11. How Social Enterprises Contribute to Alternative Food Systems By Anastasia COSTANTINI; Gianluca PASTORELLI; Alessia SEBILLO
  12. Asymmetric Effects of Renewable Energy Consumption, Trade Openness and Economic Growth on Environmental Quality in Nigeria and South Africa By Iorember, Paul Terhemba; Usman, Ojonugwa; Jelilov, Gylych
  13. Forecasting Realized Volatility of Agricultural Commodities By Degiannakis, Stavros; Filis, George; Klein, Tony; Walther, Thomas
  14. Young farmers as innovation enablers in rural areas: the role of the EU’s support in a Portuguese peripheric region, Trás-os-Montes By Ana Isabel Guerra; João Carlos Lopes
  15. Risk Preferences and the Impact of Credit and Insurance on Farm Technology Uptake By Martine Visser; Hafsah Jumare; Kerri Brick
  16. The role of supermarket chains in developing food, other fast-moving consumer goods and consumer goods suppliers in regional markets By das Nair Reena; Landani Namhla
  17. IFAD RESEARCH SERIES 40 - Local-economy impacts of cash crop promotion By Taylor, J. Edward; Whitney, Edward; Zhu, Heng
  18. Migration, Income Pooling and Food Deprivation in Zimbabwe By Gift Dafuleya
  19. Markups and market structure in South Africa: What can be learnt from new administrative data? By Budlender Joshua
  20. Technology Treaties and Climate Change By Gersbach, Hans; Riekhof, Marie-Catherine
  21. Domestic versus export-led agricultural transformation: Evidence from Uganda’s dairy value chain By Bjorn Van Campenhout, Bart Minten, and Johan Swinnen
  22. Linking Southern Africa into South Africa’s global value chains By Banga Karishma; Balchin Neil
  23. Transaction costs and land rental market participation in Malawi By Tione, Sarah E.; Holden , Stein T.
  24. The rise and persistence of illegal crops: Evidence from a naive policy announcement By Daniel Mejía; Mounu Prem; Juan F. Vargas
  25. Communal Property Rights and Deforestation By Romero, M; Saavedra, S
  26. The famine that wasn't? 1799-1801 in Ireland By Kennedy, Liam; Solar, Peter M.
  27. Technology adoption and pro-social preference By Raphaël Soubeyran
  28. Trade tax reforms and poverty in developing countries: Why do some countries benefit and others lose? By Kouwoaye Amèvi
  29. Efficient and sustainable bioenergy production in Swedish forests – a network DEA approach By Zhou, Wenchao; Bostian, Moriah; Färe, Rolf; Grosskopf, Shawna; Lundgren, Tommy

  1. By: Endre Kildal Iversen; Kristine Grimsrud (Statistics Norway); Henrik Lindhjem; Jette Bredahl Jacobsen
    Abstract: Norway is considering a national afforestation program for greenhouse gas (GHG) sequestration on recently abandoned semi-natural pastureland. However, the program may have negative impacts on landscape aesthetics and biodiversity. We conducted a national choice experiment survey to estimate non-market benefits of the afforestation program, compared to an alternative program of recovering pastures and the status quo of natural reforestation. Combining the preference data with secondary data on costs, we derive the social net return on land use alternatives. We find that restoring half of the abandoned pastures for grazing yields the highest net present value. Rural households closer to abandoned pastures are the largest beneficiaries of this policy due to the value they place on pastures and their disutility of natural reforestation. Their willingness to pay (WTP) for recovering pastures is more than three times that of urban households, while non-use values derived from carbon sequestration and biodiversity seem more constant across space. The net present value of all land use alternatives are still positive when limiting the aggregation of WTP to rural households, and when allowing for the presence of substantial hypothetical bias in benefit estimates and for cost increases. Results indicate that landscape and biodiversity values are substantial and should be considered when designing agricultural and climate policies.
    Keywords: climate forest; biodiversity; pastures; discrete choice experiment; nonuse values; costbenefit analysis
    JEL: Q18 Q15 Q51 Q54 Q57
    Date: 2019–09
  2. By: Chalmers Mulwa; Martine Visser
    Abstract: Limited non-farm opportunities in the rural areas of the developing world, coupled with population growth, means agriculture will continue to play a dominant role as a source of livelihood in these areas. Thus, while rural transformation has dominated recent literature as a way of improving welfare through diversifying into non-farm sectors, improving productivity and resilience to shocks in smallholder agricultural production cannot be downplayed. This is especially so given the changing climatic conditions affecting agricultural production, and thus threatening many livelihoods in rural areas. Farm diversification is an important strategy for creating resilience against climatic shocks in farm production. Using cross-sectional data from northern Namibia, the study assesses the barriers and success factors related to effective crop and livestock enterprises diversification and the effect of these on food security outcomes. A Seemingly Unrelated Regression model is used to assess the joint factors explaining total farm diversification, while a step-wise error correction model is used to evaluate the conditional effect of diversification in each of the two farm enterprises on two measures of food security: food expenditure and dietary diversity. We find that past exposure to climate shocks informs current diversification levels and that access to climate information is a key success factor for both livestock and crop diversification. In terms of food security, greater diversification in either crop or livestock production leads to higher food security outcomes, with neither crop nor livestock diversification showing dominance in affecting food security outcomes. However, an overall higher level of diversification in both livestock and crop enterprises is dominant in explaining food security outcomes.
    Keywords: climate change, Agriculture, Namibia
    Date: 2019–10
  3. By: Olanipekun, Ifedolapo O.; Usman, Ojonugwa
    Abstract: This study investigates the role of oil price in agricultural productivity for India by incorporating land, employment, gross capital formation and inflation using annual time series data for the period 1985 to 2017. Having applied the recently developed cointegration technique by Bayer and Hanck (2013), which combines four major cointegration tests, significant long-run relationships are confirmed among the investigated variables. The long-run results show that the effect of oil price on both food and non-food agricultural production is insignificant but there is a short-run and long-run positive effect of gross capital formation on agricultural production. The inflation has a negative effect on agricultural production only in the short-run. Our finding suggests that capital formation drives the agricultural sector in India, and not oil input. The VECM Granger causality result shows that there is no causal relationship between oil price and agricultural production but bi-directional causality runs between gross capital formation and agricultural production. In addition, oil price has causal effect on capital formation. The study, therefore, implies that agricultural sector will cope in the case of oil price crises because its productivity is independent of oil price changes.
    Keywords: Cointegration; Food production; Non-food production; Oil price; Real sector; VECM Granger causality
    JEL: O11 O13 Q15 Q18
    Date: 2019
  4. By: TOKUI Joji; MIZUTA Takeshi
    Abstract: For a long period Japan's agricultural policy emphasized improving quantitative productivity. This policy stance changed only recently, when the Food, Agriculture and Rural Areas Basic Act was enacted in 1999 to address the 1993 Uruguay Round Agreements. The act stated the importance of enhancing product quality in revitalizing Japanese agriculture. Many agricultural specialists also point out that competitiveness in quality is the only means of survival for Japanese agriculture in global competition. In recent years, therefore, the way to increase income per unit of output has been both recommended and attempted. But, although there are many previous studies on quantitative productivity in Japanese agriculture, we cannot find any research that has a focus on unit price of overall agricultural products and makes comparisons between regions. In this paper we propose the Tornqvist-type index that measures prefectural price differences of agricultural products, which is derived from the revenue function. We collected data on farm shipping prices for many agricultural products in each prefecture from the Agricultural Product Price Statistics Survey. Calculation of the index is done in two steps. First, we estimate prefectural price differences in six major classifications of agricultural products by applying the Country-Product-Dummy method to farm shipping prices. Second, we calculate the index using the shipment value of each major classification for each prefecture as a weight. We conduct regression whose explained variable is the item-wise price at the Fruit and Vegetable Wholesale Market in Tokyo and we find that both estimated price differences in major classifications in producing prefectures and the distance from production area to Tokyo have positive and significant coefficients. We also check the correlation between estimated price differences of grain and the Rice Taste Index. The Tornqvist-type index is decomposed into six major classifications to show that grain and vegetable are two major classifications that produce prefectural price differences in agricultural products. We also confirm that there is a weak correlation between prefectural price differences and agricultural shipment value per unit of farmland.
    Date: 2019–08
  5. By: Dietmar Fehr; Günther Fink; Kelsey Jack
    Abstract: A growing literature associates poverty with biases in decision-making. We investigate this link in a sample of over 3,000 small-scale farmers in Zambia, who participated in a series of experiments involving the opportunity to exchange randomly assigned household items for alternative items of similar value. Analyzing a total of 5,842 trading decisions over a range of household items, we show that exchange asymmetries are sizable and remarkably robust across items and experimental procedures. Using cross sectional, seasonal and randomized variation in financial resource availability, we show that exchange asymmetries decrease in magnitude when subjects are more constrained. Consistent with the interpretation that financial constraints increase decision stakes, we also show that trading probabilities increase when the value of the items involved is exogenously increased.
    JEL: D14 D90
    Date: 2019–10
  6. By: Jose de Sousa (University Paris Sud, RITM and CREST); Eve Sihra (The Hebrew University of Jerusalem); Thierry Mayer (Sciences Po)
    Abstract: This paper explores the evolution of consumption patterns across French departements in a context of deep market integration. Using a structural demand system and household survey data on food consumption in France from 1974 to 2005, we find that (1) France is characterized by strong localized tastes in food consumption, which (2) converge over time, and (3) not only due to changes in price and income. In short, France becomes ``flatter'', culturally more homogenized.
    Date: 2019
  7. By: Herbert Ntuli; Anne-Sophie Crépin; Caroline Schill; Edwin Muchapondwa
    Abstract: We investigate the behavioural responses of resource users to policy interventions like sanctioned quotas and information provisioning. We do so in a context when multiple resources (pastures and wild animal stocks) are connected and could substantially and drastically deteriorate as a result of management. We perform an experimental study among communities that are managing common pool wildlife in Zimbabwe. We find that user groups manage these resource systems more efficiently when faced with either a policy intervention, or the possibility of a drastic drop in stocks or combination of both, compared to groups facing a standard resource growth without possibility of drastic drop. Although a sanctioned quota performs better than information under some circumstances, information can be a good substitute in situations when a quota is either suboptimal or expensive as is the case in most developing countries. However, the combination of both interventions is better than either quota or information in managing complex ecosystems. Our main innovation is applicability of the experimental design, including complexities associated with linked resource systems. Our study also provides pragmatic evidence of the role of carrot and stick institutions versus information provisioning in governing common-pool wildlife in Southern Africa. These results can inform policymakers and development practitioners. If they aim to avoid a drastic drop in linked resources, they can either use a policy intervention with sanctioned quota or information. The combination of both types of interventions might be most appropriate.
    Keywords: Collective action, common pool resources, laboratory experiments, regime shift, social ecological system, threshold
    JEL: C93 D01 D02 Q57 Q58
    Date: 2019–01
  8. By: Stephie Fried (Arizona State University)
    Abstract: Investment in adaptation capital reduces the damage from extreme weather, mitigating the welfare cost of climate change. Federal aid for disaster relief reduces the net costs to localities that experience extreme weather, decreasing their incentives to invest in adaptation capital. I develop a heterogenous-agent macro model to quantify the relationship between adaptation capital, federal disaster policy, and climate change. I find that federal aid for disaster relief substantially reduces adaptation investment. However, the federal subsidy for adaptation more than offsets this moral hazard effect. I introduce climate change into the model as a permanent, increase in the severity of extreme weather. I find that adaptation reduces the welfare cost of this climate change by 15-20 percent.
    Date: 2019
  9. By: Sanjoy Chakravorty (Temple University); S Chandrasekhar (Indira Gandhi Institute of Development Research); Karthikeya Naraparaju (Indian Institute of Management, Indore)
    Abstract: This paper is a contribution to understanding income generation and inequality in India's agricultural sector. We analyse the National Sample Surveys of agriculture in 2003 and 2013 using descriptive and regression based methods, and estimate income inequality in the agricultural sector at the scale of the nation and its 17 largest states. We show that: (a) there are significant state-level differences in the structures/patterns of income generation from agriculture, (b) there is a negative relationship between the amount of land owned by the household and share of wages in total income, (c) income inequality in India's agricultural sector is very high (Gini Coefficient of around 0.6 during the period), and (d) about half of the income inequality is explained by the household-level variance in income from cultivation, which in turn is primarily dependent on variance in landownership.
    Keywords: Agricultural Households, Sources of Income, Income Inequality, India
    JEL: D1 D63
    Date: 2019–06
  10. By: Herbert Ntuli; Edwin Muchapondwa; Boscow Okumu
    Abstract: Wildlife is widely becoming an important vehicle for rural development in most third-world countries across the globe. Policymakers are usually not informed about the needs and wants of poor rural households and roll out programmes that are not tailor made to suit their desires, which often result in policy failure. We use a survey-based choice experiment in this paper to investigate household preferences for various attributes of a wildlife management scheme. The survey was administered in CAMPFIRE communities around the Gonarezhou National Park in Zimbabwe. Respondents showed great willingness to move from the status quo to a regime that gives them full control over wildlife. Thus, our results speak to increased devolution of wildlife management from the rural district councils into the hands of sub-district producer communities. The WTP for the new regime is more than twice the WTP for the old regime. Furthermore, our results support the idea that government programmes and development projects should not be imposed on local communities, but should be informed by programme beneficiaries through research in order to capture their needs and wants. Finally, our results demonstrate that poachers and those who are generally good in extracting resources from the environment will oppose change.
    Keywords: willingness-to-pay, CAMPFIRE, local communities, wildlife conservation
    JEL: Q28 Q56 Q57 Q58
    Date: 2018–10
  11. By: Anastasia COSTANTINI (Diesis (Belgium)); Gianluca PASTORELLI (Diesis (Belgium)); Alessia SEBILLO (Diesis (Belgium))
    Abstract: The dominant trend is an increasing separation between the land and the food products, as well as the extension of the food chain: the increasing distance between places of production and places of consumption breaks the links with nature and culture. Social economy enterprises are able to develop innovative solutions that increase productivity while delivering better services in social, health, and education services. Their contribution to economic development and well-being has been confirmed by the recent economic crisis, which has highlighted the resilience of social economy and social enterprises as well as their capacity to generate new employment and preserve existing jobs. What does it mean for a social economy enterprise to take food into account? The paper contributes to this branch of studies with the aim of understanding how social enterprises are able to generate alternative food systems to promote food sovereignty and sustainability. Firstly, a review of the relevant literature is presented, with the aim of showing an overview of the relationship between social economy enterprises and sustainable development with a specific focus on sustainable food. Following this, after a description of the methodology employed, the experiences of a number of social enterprises of food sector among Europe that have implemented innovative projects involving sustainability and counteracting the desertification of rural areas, women’s employment, migrant integration, decent job conditions and work integration. This leads to a discussion of the results, the interpretation of the new roles of social enterprises, and the identification of the main implications. The main thing that links all these cases is five key elements, which are present in all the experiences we analysed: inclusion, equity, respect, responsibility and opportunity. These elements can be seen as keywords and important aspects for a transition towards more sustainable food systems through social economy enterprises.
    Keywords: Social Economy, Social Enterprise, Sustainable Food, Social Innovation, Sustainable Development, Resilience, Food Sovereignty, Rural development
    JEL: L31 P13 Q01 Q13 Q02
    Date: 2019
  12. By: Iorember, Paul Terhemba; Usman, Ojonugwa; Jelilov, Gylych
    Abstract: The study investigates the asymmetric effects of renewable energy consumption (REC), trade openness (TOP) and GDP per capita (GDP) on environmental quality in Nigeria and South Africa using the Non-linear Autoregressive Distributed Lag (NARDL) model from 1990Q1-2014Q4. To ensure this, the Zivot-Andrews unit root test and nonlinear ARDL cointegration tests are employed. The empirical results based on the NARDL found that REC, TOP and GDP have asymmetric effects on environmental quality in Nigeria and South Africa in the long-run and the short-run dynamics. Specifically, the long-run effect of a negative change in REC and GDP is stronger than that of a positive change of the same magnitude. Similarly, the effect of a positive change in TOP is stronger than the negative change. The results of the short run for Nigeria indicates that the effect of a negative change in REC and GDP is stronger than that of the positive change, while the effect of a positive change in TOP is stronger than its negative change. For South Africa, the positive change in REC and GDP is stronger than the negative change while for TOP the negative change is stronger than the positive change. The policy implications of the findings are carefully discussed in the text.
    Keywords: Renewable energy consumption; Trade openness; Economic Growth; Environmental quality; Asymmetric effects
    JEL: Q2 Q4 Q43 Q5 Q56
    Date: 2019
  13. By: Degiannakis, Stavros; Filis, George; Klein, Tony; Walther, Thomas
    Abstract: We forecast the realized and median realized volatility of agricultural commodities using variants of the Heterogeneous AutoRegressive (HAR) model. We obtain tick-by-tick data for five widely traded agricultural commodities (Corn, Rough Rice, Soybeans, Sugar, and Wheat) from the CME/ICE. Real out-of-sample forecasts are produced for 1- up to 66-days ahead. Our in-sample analysis shows that the variants of the HAR model which decompose volatility measures into their continuous path and jump components and incorporate leverage effects offer better fitting in the predictive regressions. However, we convincingly demonstrate that such HAR extensions do not offer any superior predictive ability in the out-of-sample results, since none of these extensions produce significantly better forecasts compared to the simple HAR model. Our results remain robust even when we evaluate them in a Value-at-Risk framework. Thus, there is no benefit by adding more complexity, related to volatility decomposition or relative transformations of volatility, in the forecasting models.
    Keywords: Agricultural Commodities, Realized Volatility, Median Realized Volatility, Heterogeneous Autoregressive model, Forecast.
    JEL: C22 C53 Q02 Q17
    Date: 2019
  14. By: Ana Isabel Guerra; João Carlos Lopes
    Abstract: The European Union has suggested several approaches to decrease regional asymmetries and develop rural areas around member states. The main purpose of this paper is to study one of these policies,the Young Farmers Program, in a rural and peripheric region of Portugal, Trás-os-Montes. Since severe depopulation and ageing are some of this region’s biggest threats, initiatives like the Young Farmers Program might represent a gradual reversion of such phenomenon and contribute to the attractiveness of the rural lifestyle tothe younger generations. But do these farmers truly bring innovation and modernization to Trás-os-Montes? Do they have a significant environmental and sustainability awareness? Is the digital usage already a reality? Are the associative leaders encouraging the sustainable development of the region? Is this new generation aware of the meaning and potentialities of the circular economy? Does it intend to adopt its innovative and modern practices? A tentative answer to these questions is searched by means of a detailed survey by questionnaire to a representative sample of young farmers in the region and by directly interviewing their main associative leaders.
    Keywords: Rural development; Agricultural policy; Young farmers; Portugal
    Date: 2019–09
  15. By: Martine Visser; Hafsah Jumare; Kerri Brick
    Abstract: We use a series of credit and insurance simulation games to test the role of access to credit and insurance on magnitude and timing of farm technology uptake with small-scale farmers in South Africa. Using Cumulative Prospect Theory, we assess how insurance impacts technology uptake given risk preferences. Our findings suggest that risk aversion is linked to lower uptake of the insured technology. while loss averse farmers are more likely to adopt technology bundled with insurance. Higher weighting of small probability events leads to later uptake of the uninsured technology option. We further find that wealth is critical in uptake of technology, with cumulative experimental income and real household income stifling investment in insured and uninsured technology options even when real wealth is not at stake. Overall, we find that insurance is not sufficient to counter the behavioural factors linked to asset constraints and risk preferences that suppress modern farm technology uptake.
    Keywords: Risk Preference, Poverty-Trap, Insurance, Farm, Technology, experiment
    JEL: D9 D2 D8 C6 C9 O1 Q1
    Date: 2019–03
  16. By: das Nair Reena; Landani Namhla
    Abstract: Supermarkets are strong catalysts to stimulate the growth and development of producers and suppliers of processed food and manufactured products in Southern Africa.This paper assesses the role of supermarkets and governments in developing supplier capabilities through supplier development programmes. In South Africa, a shift is evident in recent approaches by supermarkets away from mere compliance as part of black economic empowerment or social responsibility objectives, to more mutually beneficial, commercially oriented and long-term investments to develop supplier capabilities.There is still considerable scope to replicate, broaden and deepen these programmes, including extending them to the region. The paper draws lessons from the Namibian Retail Sector Charter of 2016 as the first and only sector-wide intervention in the region that combines a voluntary code of conduct and supplier development commitments.The paper further highlights interventions internationally through codes of conduct as a useful way to reduce possible abuses of supermarket buyer power.
    Keywords: Supermarkets,Supplier upgrading,Buyer power,Retail trade,Industrialization
    Date: 2019
  17. By: Taylor, J. Edward; Whitney, Edward; Zhu, Heng
    Abstract: A number of studies have examined the direct impacts of cash crop production on producer households. This is the first to quantify the general equilibrium impacts of introducing a new cash crop into a poor isolated economy, including impacts on environmentally sensitive fishing activities. We find that the introduction of oil palm production explains the striking growth in income in Uganda’s Ssese Islands, including large-scale production spillovers to non-palm sectors, as well as a significant reduction in pressure on the Lake Victoria fishery. It appears that oil palm development, via a project that connected a commercial aggregator with small-scale farmers, enabled an economy at a low-level equilibrium to transition to a higher equilibrium state, with positive spillovers across households as well as across production sectors. Econometric evidence confirms results from simulations using an island-wide general equilibrium model parameterized from new micro survey data.
    Keywords: Crop Production/Industries, Food Security and Poverty
    Date: 2019
  18. By: Gift Dafuleya
    Abstract: Income pooling in the context of geographically stretched households, that is, households with migrants who maintain close relations and economic ties with household members left behind, is examined in this article. Focus is also directed at evaluating whether migration assists in reducing food deprivation in the household of origin. A model to generalise the relationship between the migrant and the family left behind is presented and then applied to Bulawayo, the second largest city of Zimbabwe. The analysis is tripartite. First, the determinants of migrant remittances are established; second, tests of income pooling between migrant remittances and income of the household at origin are conducted; and third, the impact of migration on family left behind is examined in the context of food deprivation. Results show that gender is not a determinant of remittances, but it matters for income pooling of remittances with income at the household of origin on frequent and low-cost purchases. The evidence provided challenges the idea that a household is a separate and independent unit composed of co-residents eating from the same pot.
    Keywords: migration, Remittances, income pooling, geographically stretched household, food deprivation
    JEL: D13 D64 F24
    Date: 2019–07
  19. By: Budlender Joshua
    Abstract: The South African economy is generally understood to be characterised by high levels‚ of product market concentration and high firm markups. This paper reviews the existing literature‚ and discusses what can be learnt from new administrative firm-level panel data. I present new‚ evidence on South African markups, industrial concentration, and the firm-size distribution, for‚ sectors across the South African economy.I find that conclusions on whether markups are ¢â‚¬Ëœhigh¢â‚¬â„¢‚ or ¢â‚¬Ëœlow¢â‚¬â„¢ are heavily dependent on the method used, and I show that this is consistent with the‚ prior literature. There is however preliminary evidence that markups have generally declined over‚ the 2010¢â‚¬â€œ14 period. I argue that it is difficult to make strong conclusions about industrial‚ concentration using cross-industry study, and that high and growing concentration across the‚ South African economy is yet to be conclusively shown. I also investigate how firm-level markups‚ are related to industry-level concentration and firm-level market share. While some patterns‚ emerge, I argue that their economic meaning is unclear.
    Keywords: firm-size distribution,Market design,markups,Panel data analysis
    Date: 2019
  20. By: Gersbach, Hans; Riekhof, Marie-Catherine
    Abstract: We introduce an international technology treaty ("Tech Treaty") that couples the funding of research for a more advanced abatement technology with an international emissions permit market. While each country decides on domestic permit issuance, a fraction of these permits is auctioned by an international agency. Auction revenues scale up license revenues for the innovators of abatement technologies. We show that such a treaty increases innovations and decreases emissions under plausible conditions compared to an emissions trading system without additional technology agreement. Finally, we discuss how a Tech Treaty may inspire next steps in existing technology programs.
    Keywords: Climate Change Mitigation - Technology Promotion - R&D - International Emissions Permit Markets - International Treaty - Externalities
    JEL: H23 O31 Q54
    Date: 2019–10
  21. By: Bjorn Van Campenhout, Bart Minten, and Johan Swinnen
    Abstract: Driven by increased demand from both local and export markets and facilitated by far-reaching liberalization and privatization policies, the dairy sub-sector in Uganda has undergone significant changes in the last decade. With a comparative advantage in milk production, the southwest of Uganda has started to attract considerable Foreign Direct Investment (FDI) in processing capacity, mainly targeting the export market. As a result, processing capacity increased five-fold and dairy became Uganda’s third most important export product, coming from negligible amounts a decade earlier. In this study, we use observational data collected at different nodes within the value chain to compare the structure of the chain and the roles and economic activities of different actors between export-led value chains and value chains that cater for the local market. Doing so allows us to identify the technological and institutional innovations that both result from the emergence of export-led dairy value chains and at the same time drive further upgrading. Our analysis underscores the importance of milk collection centers, which often take the form of farmer cooperatives, in providing many of the support services that enable other actors in the value chain to produce sufficient milk, and maintain milk sanitation levels necessary for an export sector to emerge.
    Date: 2019
  22. By: Banga Karishma; Balchin Neil
    Abstract: This study explores the potential for South Africa to become an engine for intra- regional trade and industrial development by linking other Southern African countries to its global value chains and, in the process, improving its global trade competitiveness.The study identifies ¢â‚¬Ëœlead products¢â‚¬â„¢ exported by South Africa, and then uses revealed comparative advantage and unit cost analysis to identify intermediate inputs in which Southern African countries have competitiveness to export that is currently untapped due to a lack of supply capacity or other factors. Such products are potential areas where regional investments could lead to the successful creation of regional value chains.The study also identifies ¢â‚¬Ëœnew markets¢â‚¬â„¢ for agricultural lead products exported by South Africa, which could open new opportunities for Southern Africa to supply intermediate agricultural inputs.
    Keywords: Regional integration,Regional value chains,Global value chains
    Date: 2019
  23. 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 extent of access and degree of participation by smallholder tenants in the land rental market in Malawi. Our study is based on three rounds of nationally representative Living Standards Measurement Surveys collected in 2010, 2013 and 2016, from which we construct a balanced panel. We apply the transaction cost theory, which suggests transaction costs to be non-linear and depend on resource as well as socioeconomic characteristics within the customary tenure system that determines who hold, use and transfer land. Controlling for unobserved heterogeneity, the dynamic random effects probit and Tobit models show that transaction costs in the rental market (on the tenant side) are non-linear, high and lead to state dependency in the market. This implies that past land rental experience, social capital and networks, trust and reputation significantly reduce transaction costs and facilitate entry and extent of participation in the rental market. The results point towards the need for land tenure reforms that can reduce these high transaction costs. Access to information through social network could be one way that can improve land access for land-poor and potential tenants, thereby enhancing both equity and efficiency effects of land rental markets.
    Keywords: Land rental markets; Transaction costs; Dynamic random effects models; Malawi
    JEL: Q12 Q15
    Date: 2019–09–30
  24. By: Daniel Mejía; Mounu Prem; Juan F. Vargas
    Abstract: Well-intended policies often have negative unintended consequences if they fail to foresee the different ways in which individuals may respond to the new set of incentives. When widespread and persistent, these may lead to a net reduction of social welfare. Focusing on the case of anti-drug policies, in this paper we show that the recent unprecedented surge in the growing of illicit coca crops in Colombia was the result of a naive and untimely policy announcement during peace negotiations between the government and the FARC guerrillas. On May 2014, the parties’ peace delegations issued a press release announcing that coca-growing farmers would receive material incentives for voluntary crop substitution once a final agreement had been reached. To evaluate the anticipation effect of this announcement we exploit the cross sectional variation on both the cost advantage of growing coca (using an ecological measure of coca suitability) and the expected benefits of doing so (using a predicted measure of where the material benefits would have been targeted). Coca plantations levels remained high even after the implementation of the announced incentives’ scheme. We explain this persistence by documenting that the surge in coca growing is differentially higher in areas with presence illegal armed groups, that benefited financially from availability of a key input in the drug trade.
    Keywords: Coca growing, Drug war, Anticipation effects, Policy announcement, Colombia
    JEL: K42 D78
    Date: 2019–10–10
  25. By: Romero, M; Saavedra, S
    Abstract: Almost a third of world’s forest area is under communal management. In principle, this arrangement could lead to a “tragedy of the commons” and therefore more deforestation. But monitoring outsider’s deforestation may be easier if the owner is a community rather than an individual. We study the effect of communal titling on deforestation in Colombia using a difference-in-discontinuities strategy that compares areas just outside and inside a title, before and after titling. We find that deforestation decreased in communal areas after titling. Interestingly, we find evidence of positive spillovers of reduced deforestation in nearby areas.
    Keywords: Deforestation; Communal Land; Tragedy of the Commons
    JEL: P32 Q23
    Date: 2019–10–01
  26. By: Kennedy, Liam; Solar, Peter M.
    Abstract: Strange Times. There were back-to-back harvest failures in 1799-1800, coming fast on the heels of the insurrections of 1798. The result was massive and sustained inflation in food prices. The conundrum is why there was so little excess mortality. Our approach is to begin by discussing the harvest failures of 1799 and 1800, drawing some implications from the price movements of foodstuffs in Ireland and Britain. We then present evidence from our limited sample of parish registers that suggests that excess mortality was probably quite limited, as was the check to births. A further striking feature of the period, and hardly unrelated, was the role of the state. Though heavily absorbed with the "high politics" of the Union, politicians and policy makers took swift and determined action to stave off distress and public disorder. The range and effectiveness of these measures are assessed. We draw attention to a variety of local initiatives to grapple with problems of food scarcity and lack of purchasing power and offer an analytical sketch as to how the relationship between farmers and labourers might have shaped the outcome of the crisis in the countryside. The concluding section reflects on methods of calculating the impact of state-sponsored famine relief - the lives saved in a sense - and argues that a dynamic rather than a static approach is what is required. And second, the limitations of inflated food prices as indicators of famine conditions, at least under certain forms of peasant agriculture, are laid bare. These two sets of argument help unlock the conundrum as to why excess mortality did not give rise to mass mortality under environmental conditions as unpropitious as those of 1800- 01. There may be implications here for the understanding of food crises in rural societies with large subsistence sectors elsewhere in the pre-industrial world.
    JEL: N33 N54 N94
    Date: 2019
  27. By: Raphaël Soubeyran (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)
    Abstract: In this paper, I study the design of least cost technology adoption subsidy schemes when the individuals' decisions are affected by peer effects and pro-social motivations. I show that pro-social preferences lead to lower individual subsidies whether peer effects are positive or negative. However, the form of the optimal scheme strongly depends on the type of peer effects. When peer effects are positive pro-social preferences lead to an increase in objective inequality -the difference between individual material payoffs- while they lead to a decrease in subjective inequality -the difference between individual utility levels. When peer effects are negative, the optimal subsidy scheme is uniform, that is all the individuals receive the same subsidy. The model delivers insights for the design of a large range of intervention programs supporting the adoption of new technologies, both in contexts where peer effects are positive (as has been shown in the case of malaria prevention technologies and modern agricultural inputs) and in contexts where peer effects are negative (as has been shown in the case of deworming pills).
    Keywords: pro-social preferences.,incentives,inequality,externality,principal,agents
    Date: 2019
  28. By: Kouwoaye Amèvi
    Abstract: This paper studies the relationship between trade tax and domestic tax reforms and poverty in developing countries, and explores whether the role of public goods provision matters in this relationship.Using a sample of 91 developing countries for the 1980¢â‚¬â€œ2016 period, I model the trade tax reforms¢â‚¬â€œpoverty nexus as heterogeneous across countries with cross-sectionally dependent errors. I find that a shift from taxes on international trade towards domestic taxes under revenue-neutrality reduces poverty in the countries that have consolidated, on average, over time their comparative advantage in agriculture, while it increases poverty in countries that moved from being net exporters to net importers of agricultural products.Public goods, however, do not play a significant role in the relationship.
    Keywords: Government spending policy,Common factor models,Taxation,Poverty alleviation,Tax reforms
    Date: 2019
  29. By: Zhou, Wenchao (CERE - the Center for Environmental and Resource Economics); Bostian, Moriah (Lewis & Clark College, USA); Färe, Rolf (Department of Economics, Oregon State University); Grosskopf, Shawna (CERE - the Center for Environmental and Resource Economics); Lundgren, Tommy (CERE - the Center for Environmental and Resource Economics)
    Abstract: Forest fuel defined as branches and tops (GROT) of harvested trees represents a large share of forest biomass and is increasingly viewed as a potential energy source. This study assesses the economic potentials of forest bioenergy production in Swedish forests, using a network data envelopment analysis (DEA) model to estimate the technology for biofuel and other forest products. We consider that forests are managed to use multiple inputs to produce multiple outputs. Outputs include sawtimber, pulpwood, fuelwood, and bioenergy in terms of GROT. Our model also considers environmental concerns over biodiversity and CO2 emissions from burning biomass. We apply the network DEA model to measure the revenue efficiency of forest production of Swedish forests using a panel consisting of 20 counties and covering the years from 2008 to 2014. Our results show that there exist persistent economic inefficiencies of forest production in some counties, reducing the overall efficiency of Sweden’s forest and wood products industry. In addition, we also estimate the potential increase in bioenergy, deadwood and CO2 emissions reduction from combustion of bioenergy and by-products from sawtimber and pulpwood.
    Keywords: Climate; Bioenergy; Efficiency; Environment; Forests; Network
    JEL: D20 D21 D22 D24
    Date: 2019–10–03

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.