Showing papers in "American Journal of Agricultural Economics in 1979"
TL;DR: In this paper, the authors proposed a hypothetical valuation (HV) approach to elicit willingness to pay for or willingness to accept compensation for a recreational or other extramarket good (or bad).
Abstract: The well known travel cost method (TC)has been widely applied to outdoor recreation. A second approach has been referred to in the past as the Davis method, the questionnaire approach, and contingent valuation. It will here be termed hypothetical valuation (HV), since it involves creating a hypothetical situation designed to elicit willingness to pay for or willingness to accept compensation for a recreational or other extramarket good (or bad). TC and HV are termed "indirect methods", since they do not depend on the direct information about prices and quantities that economists would prefer to use where available to value goods and services.
1,240 citations
TL;DR: In this paper, a more general stochastic specification is proposed, free of these a priori restrictions, and the proposed functional form estimation is discussed and demonstrated with nitrogen response data and common log-linear production functions.
Abstract: There has been considerable interest in estimations of input effects on the probability distribution of output. Most empirical and theoretical analyses utilize multiplicative stochastic specifications which are analyzed and found unduly restrictive, particularly since inputs that marginally reduce risk are not allowed. A more general stochastic specification is proposed, free of these a priori restrictions. The proposed functional form estimation is discussed and demonstrated with nitrogen‐response data and common log‐linear production functions. Though nitrogen is risk‐increasing, the marginal variance contribution is smaller when compared to estimates based upon multiplicative specification. Finally, stochastic specification error effects are analyzed.
573 citations
TL;DR: In this article, the authors examined the magnitude and causes of asset appreciation and showed that, contrary to popular impression, the current return to farm assets has grown rapidly over the past twenty-five years, even when measured in constant dollars.
Abstract: years since the Great Depression, mainly because of rising farm real estate prices. After 1970, annual increases in asset values have each year exceeded annual net farm income (including landlords' net rent), often by wide margins. This paper examines the magnitude and causes of asset appreciation. It first notes that asset appreciation should be adjusted for general price inflation before it is compared with income. The comparable series, known as real capital gains, has been roughly equal to net farm income during this decade. Next, the primary origin of these significant real capital gains is traced to the fact that, contrary to the popular impression, the current return to farm assets has grown rapidly over the past twenty-five years, even when measured in constant dollars. It is then shown that, according to asset-pricing theory, a farm economy characterized by rapid growth in the real current return to assets will tend to experience large annual real capital gains and a low rate of current return to assets-which corresponds to actual experience in most years since the mid-1950s. This inescapable tendency has serious and paradoxical implications for the structure of agriculture and for farm policy, which are briefly sketched in the concluding remarks.
253 citations
TL;DR: Nerlove as discussed by the authors argued that shadow prices and opportunity costs are crucial determinants of agricultural supply, and that responses to changing "prices" for outputs and inputs, whether made visible by markets, must be a key element in our attempt to understand the agricultural production and food supply problems in low income and developing economies, as well as in the highly efficient and productive agricultural sectors of the developed and high income countries of the world.
Abstract: Kellogg 50th Anniversary Lecture. Marc Nerlove is a professor in the Department of Economics at Northwestern University. This lecture was written during Nerlove's tenure as a scholarin-residence at the Bellagio Study and Conference Center of the Rockefeller Foundation and while a Fellow of the John Simon Guggenheim Memorial Foundation. The author is indebted to Rockefeller and Guggenheim Foundations for the environment in which, and the werewithal with which, to pursue this endeavor. Neither foundation is, of course, responsible for the opinions expressed. The author also gratefully acknowledges many helpful conversations with colleagues at the Bellagio Center, John W. Mellor, and Uma Lele. The discussion of perennial crops at the end of sect. 3 draws on correspondence with M. J. Hartley of the World Bank. The author's deepest intellectual debt is to T. W. Schultz and D. Gale Johnson who have, over the years since his initial work on the subject, continued to shape and influence his ideas concerning agricultural supply response. The author's errors are his own. He also should like to take this opportunity to thank B. F. Stanton and the Executive Board of the American Agricultural Economics Association for the honor and opportunity offered to him in their invitation to present this lecture. Often costs and returns which individual farmers confront are expressible in terms of market prices, although the risks they face are usually not so easily quantifiable. Whether such market forces, however, impinge directly and visibly on individual farm entrepreneurs, it will nonetheless be true, if we accept the presupposition of optimizing behavior, that shadow prices and opportunity costs are crucial determinants of agricultural supply. It follows that responses to changing "prices" for outputs and inputs, whether made visible by markets, must be a key element in our attempt to understand the agricultural production and food supply problems in low income and developing economies, as well as in the highly efficient and productive agricultural sectors of the developed and high income countries of the world In what follows I examine what has been
183 citations
TL;DR: The impact of uncertainty on decisions made by risk averse farmers regarding pesticide use and the way it affects reactions to various changes were investigated in this paper, where a pesticide crop model was presented to examine farmers' behavior.
Abstract: The impact of uncertainty on decisions made by risk averse farmers regarding pesticide use and the way it affects reactions to various changes were investigated. A pesticide crop model is presented to examine farmers' behavior. At any given time there are a number of pests, which cause damage to the crop in an amount related to their number, present on the farm. The farmer can affect the number of pests by applying pesticides in various volumes at varying costs. The impact of pesticides on pests is reflected through a kill function that includes a random element to reflect such factors as weather, temperature, and wind. Additional inputs that are related to pest management include the adoption of specific planting patterns, pest resistant varieties of plants, timing, and quantity of water and fertilizer applications. The use of these pest management techniques is viewed as a factor reducing the mean of the distribution of the damage level, while the cost is of a fixed nature. Thus, the model determines the profits that would have been realized if no pests were present, the number of pests surviving after pesticide application, and the total cost of pesticide application.
180 citations
TL;DR: In this paper, the authors consider government policies that insulate domestic producers and consumers from external price fluctuations, and study the effect of these policies on the elasticity of export demand.
Abstract: Johnson and Tweeten (1967, 1977) have provided estimates of the elasticity of export demand for specific agricultural commodities and aggregate agricultural exports. These estimates indicate the aggregate export demand for U.S. agricultural commodities is very elastic with respect to price, and the estimated elasticity is somewhat greater than 6.0 in both cases. The elasticities of export demand for specific commodities are also very large, ranging from -2.8 for soybeans to 10.18 for feed grains (Johnson). Theoretically, the elasticity of export demand may be quite large. However, the Johnson-Tweeten estimates do not consider government policies which insulate domestic producers and consumers from external price fluctuations. In order to study the effect of these policies on the elasticity of export demand, we (a) examine the formulation of the elasticity of export demand and the implication of price insulation policies, (b) review the trade policies of major importers and competing exporters, and (c) calculate the export demand elasticities for major agricultural commodities which incorporate price insulation policies. These export demand elasticities are much smaller than those of Johnson and
173 citations
TL;DR: In this article, a conceptual framework is presented and illustrated with data from Cajamarca in Peru to assist in the design and analysis of the many empirical studies currently conducted on peasants and their changing status in third world countries.
Abstract: To assist in the design and analysis of the many empirical studies currently conducted on peasants and their changing status in third world countries, a conceptual framework is presented and illustrated with data from Cajamarca in Peru. The framework identifies the key variables to be measured and processes to be analyzed at three levels: the organization of the peasant household in terms of production, circulation, and reproduction; the mechanisms of surplus extraction; and the class position and differentiation of groups of peasants within particular social formations.
155 citations
TL;DR: In this paper, a matrix of price and income elasticities that must be incomestrata-specific is obtained for disaggregated income classes, which is only possible with restrictive assumptions about the separability of the impact of price changes for one commodity class on changes in demand for other commodity groups.
Abstract: Food policy analysis links nutrition objectives to macroeconomic policies and performance. At the heart of the analysis is a matrix of price and income elasticities that must be incomestrata-specific. Obtaining this matrix for aggregated income classes requires a blend of complex theory and sophisticated econometric analysis that is only possible with restrictive assumptions about the separability of the impact of price changes for one commodity class on changes in demand for other commodity groups. The separability assumptions are not overly restrictive in the context of such highly aggregated commodities as food, housing, or clothing. But when important nutritional effects occur due to substitution of one quality of wheat for another, or the substitution of cassava for rice, then the level of commodity detail needed to reproduce accurately the impact of relative price changes forecloses the "econometric" approach even for combined income classes. Obtaining the full matrix for disaggregated income classes requires a new approach and this paper reports one attempt.
147 citations
TL;DR: In this article, the role of exchange rates in agricultural prices and trade is reviewed and alternative specifications of the exchange rate in excess demand functions are considered, and the specification most common in recent theoretical and empirical work is unnecessarily restrictive and may bias the resulting analysis.
Abstract: The recent theoretical and empirical literature on the role of exchange rates in agricultural prices and trade is reviewed. Specifically, alternative specifications of the exchange rate in excess demand functions are considered. Results show that the specification most common in recent theoretical and empirical work is unnecessarily restrictive and may bias the resulting analysis. Several less restrictive specifications for empirical research are suggested.
143 citations
TL;DR: The contention that cattle are held as a store of wealth in Swaziland is supported by a regression analysis of slaughter against price and rainfall, and by an examination of the Swazi herd structure as mentioned in this paper.
Abstract: The contention that cattle are held as a store of wealth in Swaziland is supported by a regression analysis of slaughter against price and rainfall, and by an examination of the Swazi herd structure. The failure to recognize that cattle directly satisfy both wealth and income motives in traditional societies has led to the implementation of production-oriented livestock development programs, which may worsen the serious overgrazing problem in Swaziland. Observations elsewhere indicate that there are lessons to be learned for livestock developemnt in other overgrazed parts of eastern and southern Africa. 17 references.
139 citations
TL;DR: In this paper, the authors review and critically evaluate the current state of knowledge on risk preference measurement methods and empirical results for individual agricultural producers and suggest directions for future research and extension applications requiring information on risk preferences of individual producers.
Abstract: The specific objectives of this paper are: (1) to review and critically evaluate the current state of knowledge on risk preference measurement methods and empirical results for individual agricultural producers and (2) to suggest directions for future research and extension applications requiring information on risk preferences of individual producers. The Implications of aggregate (industry) risk preferences as in risk supply response studies will not be included in this review.
TL;DR: In this article, the structural equations, forecasting properties, dynamic characteristics, and economic policy implications of a quarterly econometric model of U.S. livestock and feedgrain markets are discussed.
Abstract: This paper discusses the structural equations, forecasting properties, dynamic characteristics, and economic policy implications of a quarterly econometric model of U.S. livestock and feedgrain markets. Quarterly, semi-annual, and annual endogenous variables are incorporated by allowing individual structural equations to be estimated and to enter into the solution of the model with different periodicities. Commodity prices are determined by market equilibrium conditions rather than by autoregressive and other time-series techniques. Dynamic multipliers give the effect of changes in corn exports, beef imports, government grain stocks, corn yield, consumer income, and the support price for corn on producer and retail prices and acreage planted.
TL;DR: The evidence suggests that real prices received by farmers in less-developed countries (LDCs) have been substantially lower than farm prices in the developed nations as mentioned in this paper, and that agricultural output in a group of twenty-seven LDCs could have been 40% to 60% greater than it was and the national income of the group increased by more than 3% annually.
Abstract: The evidence suggests that real prices received by farmers in the less-developed countries (LDCs) have been substantially lower than farm prices in the developed nations. Estimates of a long-run aggregate agricultural supply elasticity from cross-section data reveal that it is relatively elastic, in the range of 1.25 to 1.66. It is estimated also that, with more-favorable farm prices, agricultural output in a group of twenty-seven LDCs could have been 40% to 60% greater than it was and the national income of the group increased by more than 3% annually. 13 references.
TL;DR: In this paper, an econometric forecasting model is constructed to serve as a norm against which to test futures market forward-pricing abilities, and results demonstrate that the live-hog futures market cannot be relied upon to reflect accurately and consistently subsequent cash prices; hence, it is inefficient.
Abstract: Forward pricing is a primary role of livestock futures markets. A semi-strong form test of efficiency examines whether or not the prices in a market reflect all publicly available information. An econometric forecasting model is constructed to serve as a norm against which to test futures market forward-pricing abilities. Utilizing alternative methods of evaluation, results demonstrate that the live-hog futures market cannot be relied upon to reflect accurately and consistently subsequent cash prices; hence, it is inefficient.
TL;DR: A theoretical analysis of price formation in the world wheat market has been presented by McCalla; Taplin; and Alaouze, Watson, and Sturgess in this article.
Abstract: A theoretical analysis of price formation in the world wheat market has been presented by McCalla; Taplin; and Alaouze, Watson, and Sturgess. McCalla and Taplin based their models on a duopoly arrangement between the United States and Canada. These models were extended by Alaouze, Watson, and Sturgess to include Australia, and a theoretical model of triopoly pricing in the world wheat market was developed. Canada is assumed to act as a price leader in the triopoly, and it is concluded that producer prices in wheatexporting countries will be higher under triopoly as opposed to duopoly pricing. The major thrust of these papers is that price formation in the world wheat market is largely determined by the major exporters. The purpose of this paper is to suggest and empirically test an alternative hypothesis; namely, that world wheat prices are essentially determined by the major wheat importers. Two major importers-Japan and the European Economic Community (EEC)-are used as the focal point for the analysis. The authors believe the world wheat market is usually a buyer's rather than a seller's market. By arguing the market is usually dominated by buyers, it is recognized that there are periodical exceptions to the argument over time, the major one being the commodity boom period of 1973-74. It is well known that the major importers are restricting trade in wheat. This paper suggests that the restrictive policies of the importers (whether consciously or not) are likely to result in a welfare gain to importing nations greater than that under free trade. This suggests that perhaps importing countries are using tariffs in an optimal sense (where all sectors of society are taken into account) rather than merely using them to protect domestic producers from low-priced competitive imports. This is not to argue that a duopoly or triopoly structure does not exist among the United States, Canada, and Australia but rather that the effect of such arrangements is minor relative to the buying power exerted by importers. Although this paper focuses on the world wheat market, the framework of analysis has application to other agricultural markets as well.
TL;DR: The failure of markets to solve the major environmental quality problems has been well documented as discussed by the authors, and generally can be attributed to externalities imposed by use of the environment and the public goods nature of many natural resources.
Abstract: The past decade has seen a phenomenal increase in public awareness and concern over environmental quality. The desire to consume larger amounts of environmental quality has been difficult to satisfy because many of the natural resources involved do not lend themselves to market allocation. This failure of markets to solve the major environmental quality problems has been well documented (Bator, Mishan, Samuelson, Turvey), and generally can be attributed to externalities imposed by use of the environment and the public goods nature of many natural resources. The failure of markets to perform the allocation function to the satisfaction of most people has caused us to turn to other institutions for solutions.
TL;DR: In this article, a model of trading behavior emphasizing the problems with that standard methodology is presented, which can be used in the analysis of nonagricultural markets, as well as when government intervention in international trade is present.
Abstract: ticularly the existence of large grain stocks and the potential for oligopolistic behavior on the part of the major exporters, these methodologies in conjunction with educated guesses on the part of the analyst could be used to project short-run behavior as well. Under those market conditions, accurate estimation of the behavior of the smaller traders was not important, because fluctuations in international prices were relatively small. Because the depletion of grain stocks in the hands of the major exporters during the early and mid1970s placed severe restrictions on their behavior, estimation of the behavior of the smaller traders becomes considerably more important if short-run shifts in international grain prices and trade flows are to be predicted. Explicit attention must be paid to the behavior of governments with respect to grain markets and to the imperfections in those markets, in order to make such predictions. A model of trading behavior emphasizing the problems with that standard methodology will, therefore, be presented. That model will allow interpretation of parameter estimates in net trade models in the light of domestic market behavior and government intervention. It might also be used to suggest respecification of the models utilized in the standard approach. The approach used here could be useful in the analysis of nonagricultural markets, as well, when government intervention in international trade is present.
TL;DR: The author discusses the role of residential preferences and the search for a better quality of life as determinants of urban-rural migration in the United States.
Abstract: The author discusses the role of residential preferences and the search for a better quality of life as determinants of urban-rural migration in the United States (ANNOTATION)
TL;DR: In this article, the authors discuss the demands of developing countries for an international buffer fund to stabilize major export commodities such as corn, soybeans, and sugar beet, which are often of major significance.
Abstract: Price instability has been an issue of long concern to economists and recently has received increased attention, mainly because of economic events taking place in the world during the 1970s. Much of the discussion has occurred in relation to agricultural commodities where random prices, reflecting stochastic fluctuations in supply and demand, are often of major significance. At different phases of price fluctuations, different groups become more vocal and more concerned about price movements-rising prices affect consumers and importing nations, whereas falling prices are of vital interest to producers and exporting countries. It is, perhaps, from such interactions and competing interests that the demands of developing countries for an international buffer fund to stabilize major export commodities have arisen.
TL;DR: In this paper, the authors collected price information for major Ottawa supermarkets over a twenty-eight-week period and published in daily newspapers during a five-week test period in response to the information, the dispersion of prices across stores and chains narrowed, the average level of prices of the market dropped and consumer satisfaction increased relative to the control market.
Abstract: Comparative price information for major Ottawa supermarkets was collected over a twenty-eight-week period and published in daily newspapers during a five-week test period In response to the information, the dispersion of prices across stores and chains narrowed, the average level of prices of the market dropped, and consumer satisfaction increased relative to the control market Consumers transferred patronage to the lower priced stores Consumers indicated a willingness to pay 34¢ per week on average for the price comparison information Estimated consumer benefits far exceeded the cost of the program
TL;DR: The economic of tractors in South Asia: An analytical review as mentioned in this paper, The economic of tractor in south Asia: an analytical review, An analysis review of the tractors of South Asia.
Abstract: The economic of tractors in South Asia: An analytical review , The economic of tractors in South Asia: An analytical review , مرکز فناوری اطلاعات و اطلاع رسانی کشاورزی
TL;DR: The authors discusses developments in portfolio theory, reviews its application to farmer and lender behavior, considers its limitations, and suggests several extensions to account for asset liquidity, liquidity risk, and portfolio adjustments.
Abstract: Randomness of commodity output and prices in agriculture are well-known phenomena that have plagued both farmers and their lenders as they develop plans and financial programs for the coming year. The same phenomena have plagued researchers who attempt to model the farmer-lender relationships for improved explanations of farmer and lender behavior. Early decision models of resource allocation under risk sought to maximize expected returns. However, in the early 1700s, Bernoulli demonstrated the irrationality of this criterion in explaining gambling behavior. More recently, portfolio theory, as developed by Markowitz and Tobin with extensions by Sharpe and Lintner, has improved our ability to analyze farmer and lender behavior under risk by considering variance as well as the expected value of returns. This paper discusses developments in portfolio theory, reviews its application to farmer and lender behavior, considers its limitations, and suggests several extensions to account for asset liquidity, liquidity risk, and portfolio adjustments. We conclude with recommendations for future application of portfolio theory to farmer and lender behavior.
TL;DR: In March of this year land values in the United States averaged 3 times their 1970 level as discussed by the authors, which was the largest increase in the last 50 years. But land owners have generally benefited from the sharp growth in their wealth position.
Abstract: In March of this year land values in the United States averaged 3 times their 1970 level. The increases in this decade sarpassed even those following World Wars I and II. It is not surprising that this Association should once again inquire into both the causes of land value changes and the implications of these changes for the future of Agriculture. Increasing land values are viewed by some with elation and by others with concern. To some the old saying that "farmers live poor and die rich" has been verified. Land owners have generally benefited from the sharp growth in their wealth position. But they dislike the higher real estate taxes that follow land appreciation. And they foresee difficulty in expanding their farms or in transferring ownership to younger farmers.
TL;DR: In this article, a more nearly optimal rate of future investment in publicly supported agricultural production research and extension (R) was determined, based on past investment in R and the expected rates of return on alternative future levels of investment.
Abstract: Publicly supported investments in nonconventional inputs, principally agricultural production research and extension (R), contributed significantly to gains in productivity and have been a low-cost source of additional output. Several studies (Peterson; Tweeten, 1970, chap. 5) reveal rates of return clustering around 50% on public R investment. Ironically, this rate of return implies economic inefficiency-the nation has foregone production from greater use of low-cost sources of farm output. In competitive equilibrium, an efficient allocation entails an equal rate of return among alternative investments, given appropriate adjustment for risk. For economic efficiency, more investment is called for in agricultural research and extension to drive the rate of return down to levels consistent with returns on alternative uses for limited funds. Previous studies show only the historic rate of return on R investment. Such estimates are of limited use in judging appropriate future levels of R. The purpose of this study is to determine a more nearly optimal rate of future investment in publicly supported agricultural production research and extension. Specific objectives include: (a) Updating previous estimates of rates of return on past investments in R; (b) Estimating expected rates of return on alternative future levels of investment in R, showing investments required to reduce the rate of return to a more nearly optimal level; (c) Examining the impact on future farm prices, income, and usage of conventional production inputs associated with alternative rates of growth in farm productivity; and (d) Inferring tentative conclusions regarding optimal growth in R consistent with equilibrium rates of return in (b) and the ability of the farming industry to adjust to productivity gains as determined in (c).
TL;DR: In this paper, the authors distinguish between the spatial distribution of prices of a given product and relative prices of similar products in a common geographical market (e.g., price of U.S. wheat in the United Kingdom and the price of Canadian wheat in Canada).
Abstract: Why do prices differ? Although trade tends to equalize prices, some important differences persist. What is the source of the differences? For certain purposes, it may be important to distinguish two sets of prices: (a) the spatial distribution of prices of a given product (e.g., the prices of U.S. wheat in the United States and in the United Kingdom) and (b) relative prices of similar products in a common geographical market (e.g., price of U.S. wheat in the United Kingdom and the price of Canadian wheat in the United Kingdom).
TL;DR: In this paper, the authors used the Lau-Yotopoulos model to derive values of technical and price efficiency parameters in order to identify and isolate possible differences between large and small farms.
Abstract: Many agricultural policy decisions in underdeveloped countries are affected by the belief that the price of increased equity is reduced growth. An important argument used frequently against land reforms, for example, is that large farms are more efficient than small farms. If true, land reforms cannot achieve the dual goals of equity and efficiency. The relative efficiency of large farms, however, may be an illusion if national policies have consistently favored these farms in such a way that their apparent relative efficiency is due to market imperfections in which specific public policies have played a crucial role (Berry and Cline, Griffin). It is evident that better information on the true relative efficiency of large farms would provide a better indication of how agrarian structures affect resource use and thereby of the likelihood of being able to achieve both growth and equity. This paper provides such information for Pakistan. The concept of efficiency has been interpreted in various ways. An operational concept of economic efficiency has been developed by Lau and Yotopoulos (1971, 1972) and Yotopoulos and Lau, to measure and compare performance of farm firms. Differences in economic efficiency among groups of farms (say large and small) may result from variations in technical efficiency (larger output with equal amounts of inputs) and price efficiency (higher profits). Profit maximization is implied if the value of marginal product of each variable input is equal to its price. Thus we can test relative economic efficiency of large versus small farms by comparing their actual profit functions. Although the question of relative economic efficiency of large farms is central to a discussion of land reform in underdeveloped countries, there is little empirical research due to lack of adequate disaggregated data. Some evidence for India has been presented by Yotopoulos and Lau (1973), indicating that small farms are more efficient than large farms. However, in studies by Sidhu for wheat in the Indian Punjab and by Khan and Maki for wheat and rice in Pakistan, there was no difference in efficiency by farm size. In this paper, the Lau-Yotopoulos model is used to derive values of technical and price efficiency parameters in order to identify and isolate possible differences between large and small farms. These estimates are based on farm-level data collected from a sample of 728 farms in the Punjab and Sind provinces of Pakistan. Because there are wide differences between these provinces in their agrarian structures, any conclusi ns drawn from the overall sample would be of dubious value. We, therefore, present estimation re ults for the provincial samples separately.
TL;DR: The distribution of income among sociodemographic subgroups of the population has almost certainly changed considerably as mentioned in this paper, and little attention has been given to the possible impact of demographic shifts, and even less to that of income distribution.
Abstract: The sociodemographic structure of the American population has been changing rapidly in recent years. In addition, although the income distribution based on income groupings has remained fairly constant, the distribution of income among sociodemographic subgroups of the population has almost certainly changed considerably. Little attention has been given to the possible impact of demographic shifts, and even less to that of income distribution
TL;DR: In this paper, the authors report the results of an analysis of the relationship between the market structure in which food chains operate and their profit and price performance, which was made possible because of an unusually rich body of data collected by the Joint Economic Committee (JEC) of the U.S. Congress.
Abstract: The net profits and grocery prices of large food chains were found to be positively and significantly related to market concentration and a chain's relative market share. The results refute the notion that higher profits for dominant firms in concentrated markets are due to efficiency and lower costs. Increased profits in noncompetitively structured markets accounted for about one-third of the increase in prices. Higher retailer costs in noncompetitive markets appear to stem from inefficiencies and cost increasing forms of competition. This paper reports the results of an analysis of the relationships between the market structure in which food chains operate and their profit and price performance. The analysis was made possible because of an unusually rich body of data collected by the Joint Economic Committee (JEC) of the U.S. Congress. The then chairman of the JEC, the late Senator Hubert H. Humphrey, requested that the authors analyze these data for the committee. This paper reports the major findings of the study, including some results not included in the original analysis and clarifications of several questions raised by some reviewers of the JEC report.'
TL;DR: In this paper, the Von Thunen model is dropped and characteristics of the space hypothesized to affect land prices are incorporated, and results are presented for three different areas for which land transactions data have been collected.
Abstract: This paper presents results of an application of a transcendental function in the analysis of land market behavior. The assumption of featureless space in the Von Thunen model is dropped and characteristics of the space hypothesized to affect land prices are incorporated (Hushak 1977, Sadr). Results are presented for three different areas for which land transactions data have been collected. The availability of three separate data sets allows examination of alternative mathematical specifications across, as well as within, data sets. Based on pretest estimation criteria discussed by Wallace, the ability to cross-test alternative models on different data sets provides stronger criteria for model selection.
TL;DR: In this paper, a restricted profit function is used to estimate jointly the profit and factor demand functions from farm-level, cross-sectional data for Mexican wheat varieties in the Indian Punjab.
Abstract: A restricted profit function is used to estimate jointly the profit and factor demand functions from farm-level, cross-sectional data for Mexican wheat varieties in the Indian Punjab. The main focus is analysis of fertilizer demand. The results indicate that output price is a more powerful policy instrument than fertilizer price to influence fertilizer use, output supply, and returns to fixed farm resources, that producers attain allocative efficiency, that education of the farm people contributes significantly to agricultural production, and that profit function is a suitable concept for empirical analysis and interpretation.