Showing papers in "American Journal of Agricultural Economics in 1988"
TL;DR: In this article, the authors investigated whether consumers allocate expendi- tures among meats by animal origin or by product type, and did disaggregation of meat into products in a meat demand model give insight into the causes of structural change.
Abstract: Several studies have indicated that the recent shift from beef to poultry in consumption is not entirely caused by changes in rela tive prices or income (Braschler, Chavas, Dahlgran, Hudson and Vertin, Moschini and Meilke, Frank, Thurman). Most studies of structural change have focused on red meat consumption; only Thurman has looked closely at the poultry market, and no one has considered poultry products. Yet, the mix of chicken products marketed changed dramat ically during the last twenty years and should have influenced aggregate meat demand. The share of broiler slaughter marketed as whole birds declined from 74% in 1965 to 28% in 1985, while cut-up parts and processed chick en products increased from 26% to 72%. Whole birds are inferior goods, and cut-up parts and processed chicken are normal goods (Haidacher et al.). The shift in chicken prod uct mix away from whole birds should have increased the preference for total chicken. In this article two related questions are ad dressed. First, do consumers allocate expendi tures among meats by animal origin or by product type? Second, does disaggregation of meat into products in a meat demand model give insight into the causes of structural
434 citations
TL;DR: In this paper, an extension of the tobit estimation approach, handling both censored observations of the dependent variable and measurement error for the non-limit observations, was used to improve conservation behavior models with a merger of concepts and approaches from social psychology and economics.
Abstract: Conservation behavior is influenced by the attitudes of farmers and by context variables, like income and farm terrain. Important attitudes were selected by using the theory that fundamental value ranks or weights affect attitudes and that only certain values are important to the conservation decision. An extension of the tobit estimation approach, handling both censored observations of the dependent variable and measurement error for the nonlimit observations, was used. Conservation behavior models can be improved with a merger of concepts and approaches from social psychology and economics.
300 citations
TL;DR: The authors compared three commonly used techniques of asking contingent valuation questions: iterative bidding, payment cards, and dichotomous choice, and revealed that no single contingent valuation technique is neutral in the elicitation of hicksian surplus and each technique has its strengths and weaknesses.
Abstract: Three commonly used techniques of asking contingent valuation questions are compared: iterative bidding, payment cards, and dichotomous choice. The results reveal that no single contingent valuation technique is neutral in the elicitation of hicksian surplus and each technique has its strengths and weaknesses. The iterative bidding estimates contain a starting point bias, while the payment card and dichotomous choice estimates were influenced by the interviewers soliciting the contingent values. Finally, the analysis of dichotomous choice responses involves unresolved issues that warrant further investigation. On the other hand, dichotomous choice is the easiest technique to administer in a survey setting.
253 citations
TL;DR: In this paper, the authors present a procedure for estimating sales loss following a food contamination incident with application to the case of heptachlor contamination of fresh fluid milk in Oahu, Hawaii, in 1982.
Abstract: This article presents a procedure for estimating sales loss following a food contamination incident with application to the case of heptachlor contamination of fresh fluid milk in Oahu, Hawaii, in 1982. A major finding is that media coverage following the incident had a significant impact on milk purchases and that negative coverage had a larger effect than positive coverage. This conclusion implies that public statements by producers or government to assure the public of safe food supplies may be ineffective in restoring consumer confidence following the discovery of a food safety problem.
247 citations
TL;DR: In this paper, a simulation of the outcomes for a fully enrolled reserve under alternative implementation schemes indicates that future performance can be improved by manipulating key control variables to directly target preferences, while simultaneously increasing the extent to which erosion and supply control objectives were met.
Abstract: Performance of the Conservation Reserve Program (CRP) in meeting the political preferences of its administrators is highly sensitive to the choice of eligibility, bid solicitation, and bid selection criteria used in making program implementation decisions. Decisions made in the first year of CRP implementation led to suboptimal results; net government cost could have been reduced while simultaneously increasing the extent to which erosion and supply control objectives were met. Simulation of the outcomes for a fully enrolled reserve under alternative implementation schemes indicates that future performance can be improved by manipulating key control variables to directly target preferences.
196 citations
TL;DR: In this paper, the authors present a methodology for estimating nonconsumptive benefits associated with the existence of an endangered species using a dichotomous choice form of contingent valuation, which is applied to quantify individuals' economic surplus associated with preservation of the whooping crane resource.
Abstract: Market prices for endangered wildlife species rarely exist. When prices do exist, they arc not likely to reflect accurately individual preferences. Both consumptive uses, such as hunting, fishing, and trapping (Boyle and Bishop 1985; StoU and Johnson; Brookshire, Eubanks, and Randall) and more esoteric benefits, such 'as viewing and existence values must be considered. This article is addressed to the valuation of whooping cranes (Grus Americana), a prominent endangered species. The purpose of this article is to present a methodology for estimating nonconsumptive benefits associated with the existence of an endangered species. A dichotomous choice form of contingent valuation is applied to quantify individuals' economic surplus associated with preservation of the whooping crane resource. Specific issues and limitations of the empirical approach are discussed, some of which have been previously examined by Bishop and Heberlein (1979) and Hanemann. The present paper expands upon earlier work in several ways. Fit, in addition to discussing the above issues, a unique application of the approach to an endangered species is presented. Second. three model specifications are examined, two of which arc consistent with utility theory and one which is not (Hanemann). Ti, again following Hanemann, economic surplus is estimated at the sample median as well as the mean. The dii cussion of the last two issues sheds Sit on their implications for estimation of economic surplus. Throughout the article, the suitability of alternative estimation techniques for dichom mous choice (or referendum style) data is examined. The methodological and empirical results are relevant to a number of cumnt issues regarding model specification, choice of binary response model, and choice of estimator for equivalent surplus (Hanemann; Boyle and Bishop 1984; Sellar, Chavas, and Stoll).
191 citations
TL;DR: In this paper, a survey of Tulare County, California, farmers was used to examine computer and application ownership patterns in agriculture, and the analysis indicated that the size of the farming operation, education level, age level, and ownership of a farm-related non-farming business significantly influenced the probability of computer ownership; however, the type of farm products used on the farm does not.
Abstract: Logit analysis using data from a survey of Tulare County, California, farmers is used to examine computer and application ownership patterns in agriculture. The analysis indicates that the size of the farming operation, education level, age level, and the ownership of a farm-related nonfarming business significantly influence the probability of computer ownership; however, the type of farm products used on the farm does not. The type of application software owned is influenced primarily by the type of farm products produced, the size of the farming operation, ownership of a farm-related business, and the education level of the farmer.
184 citations
TL;DR: In this article, the suitability of tobit analysis of food consumption patterns by comparing results generated by a tobit model and a modification with a two-step decision process was evaluated.
Abstract: This article evaluates the suitability of tobit analysis of food consumption patterns by comparing results generated by a tobit model and a modification with a two-step decision process. Two samples of adult women were selected from the 1977-78 Nationwide Food Consumption Survey and the 1985 Continuing Survey of Food Intakes by Individuals. Results show strong statistical evidence for questioning tobit analysis in examining food consumption decisions. Determinants of the decision to consume food within a particular food group often differ from the determinants of how much to consume, particularly for more highly defined food groupings. Analysis of U.S. food consumption patterns and their dietary aspects with respect to consumer behavior has a long history. Traditionally, ordinary least squares (OLS) or some variant has been used. In many studies where OLS was not appropriate, the tobit method was applied. Tobit allows for a discrete mass point for observations as well as a continuous range of values for the dependent variable. This nonlinear method has yielded good results in a variety of studies (e.g., McCracken and Brandt, Lane, and Devaney and Fraker). This article examines the suitability of the tobit method for analysis of food consumption patterns. The tobit method assumes that the decision to consume a given food item is the same as the decision about the amount of the food to consume. Ignoring the two-step nature of the decision process may hamper understanding of true behavioral patterns, lead to erroneous conclusions, and generate incorrect policy recommendations. This article compares results generated by a tobit model and a modification with a two-step decision process. In the next section, the statistical methods used to test whether food consumption is a one- or two-step decision process are described. The following sections discuss the variables and data, present the results, and consider the conclusions.
176 citations
TL;DR: In this article, the authors analyzed household expenditures for at-home consumption on three species of shellfish and five species of finfish and found that fishery products were more sensitive to changes in household size rather than to change in household income, while cross-price effects of red meat and poultry were not statistically significant.
Abstract: Household expenditures for at-home consumption on three species of shellfish and five species of finfish were analyzed. Factors explaining the variation of expenditures on seafood commodities were own price, household income, coupon value, household size, geographic region, urbanization, race, and seasonality. Own-price elasticities ranged from −0.45 (flounder/sole) to −1.13 (oysters). Expenditures on fishery products were more sensitive to changes in household size than to changes in household income. Cross-price effects of red meat and poultry were not statistically significant. For comparison purposes, estimates of own-price, income, and household size elasticities from the literature were made with this set of elasticities.
168 citations
TL;DR: In this paper, the authors argue that not only is there a need to base food security and structural adjustment policies more firmly on empirical information, but that the process by which the information is obtained is as important as the information itself.
Abstract: Discussions of economic and agricultural development in Africa have focused heavily in recent years on structural adjustment, i.e., basic policy changes aimed at allowing international and domestic markets to play a greater role in coordinating national economic activities. Often these structural adjustments and accompanying policies aimed at improving economic performance have been based on several implicit assumptions about how African food systems operate. Yet, for many countries little empirical information has been available to test these assumptions. Hence, designing policies too often becomes an exercise in planning without facts. This paper argues that not only is there a need to base food security and structural adjustment policies more firmly on empirical information, but that the process by which the information is obtained is as important as the information itself. Agricultural economists and other social scientists can, and increasingly should, design policy research in Africa in ways that simultaneously increase effective demand for empirical information as an input into the ongoing policy process and augment African capacity continually to inform policy deliberations. We illustrate the payoffs to such an approach by drawing on selected experience in several African countries (Weber).
148 citations
TL;DR: In this paper, the effects of suburban population density and land speculation on agricultural production choices, prices, and profits are investigated. And the authors show that vegetable production is the only subsector to benefit from suburbanization, while livestock is the most adversely affected.
Abstract: This article conceptualizes the effects of suburban population density and land speculation on agricultural production choices, prices, and profits. A dual profit function model and a system of reduced-form price equations are used to estimate these effects for New Jersey. Results show that vegetable production is the only subsector to benefit from suburbanization, while livestock is the most adversely affected. Suburbanization reduces responsiveness to agricultural prices and discourages capital and land use. The overall impact on profits is positive when capital gains on land are included. Policy implications for farmland preservation and "right to farm" legislation are discussed.
TL;DR: In this paper, the authors present an analysis of the demand for dairy products using the Household Food Consumption Survey (HFS) data, under the assumption of a two-stage budgeting procedure, a complete demand system for food incorporating demographic effects is estimated.
Abstract: This article presents an analysis of the demand for dairy products. First, the structure of dairy product demand is estimated using the Household Food Consumption Survey data. Under the assumption of a two-stage budgeting procedure, a complete demand system for food incorporating demographic effects is estimated. Next, using the demand relations estimated from cross-section data, prediction interval tests utilizing time-series data are performed for milk and butter. Last, factors affecting consumption are classified into economic and demographic effects and a decomposition of the causes of changes in demand over time is performed.
TL;DR: In this paper, a restricted profit function is used to model multiproduct supply response in agriculture and tests key assumptions traditionally maintained in supply response studies, including the existence of output price and quantity indexes that satisfy the adding-up property.
Abstract: The paper models multiproduct supply response in agriculture and tests key assumptions traditionally maintained in supply response studies. The technology is approximated by a restricted profit function. The properties of the restricted profit function are imposed during estimation. The hypothesis that maintains the existence of output price and quantity indexes that satisfy the adding-up property is rejected. The existence of individual production functions for each output is also rejected. Unless joint production is permitted, the estimates of responsiveness of a particular commodity to changes in own price or prices of competing outputs are likely to be considerably understated.
TL;DR: In this article, a generalization of the dual, non-frontier profit function approach to evaluate allocative efficiency is developed that allows for training (human capital) variables to influence the efficiency level directly.
Abstract: A generalization of the dual, non-frontier profit function approach to evaluating allocative efficiency is developed that allows for training (human capital) variables to influence the efficiency level directly. An application to Pennsylvania dairy indicates that education and experience are substitutes and play a significant role in the level of efficiency. While these operators are not allocating their variable inputs in an absolutely efficient manner, relative efficiency can be achieved for four of six possible input combinations for prescribed levels of education and experience. Furthermore, the estimates of the efficiency measures suggest that these operators are maximizing production rather than short-run profits.
TL;DR: In this paper, the opportunity cost of time for husbands and wives can affect the intra-household distribution of food in a developing country and the relative allocation of calories within households were estimated for husbands, wives, and children with data for the rural Philippines.
Abstract: This study shows that the opportunity cost of time for husbands and wives can affect the intrahousehold distribution of food in a developing country. Equations which explain the relative allocation of calories within households were estimated for husbands, wives, and children with data for the rural Philippines. The estimating equation is derivable from both a joint household utility function and a bargaining model. Because the same households were included in the four survey rounds, the various observations for a given individual were averaged for each variable in the estimation procedure. Wages were estimated using the Heckman approach.
TL;DR: In this article, U.S. agricultural technology and technical change are analyzed nonparametrically under cost minimization and profit maximization, based on annual data for 1948-83, various separability hypotheses concerning the aggregate production function for agriculture are investigated.
Abstract: U.S. agricultural technology and technical change are analyzed nonparametrically under cost minimization and profit maximization. Based on annual data for 1948–83, various separability hypotheses concerning the aggregate production function for U.S. agriculture are investigated. The proposed nonparametric approach also provides some insights into the nature of technical change.
TL;DR: In this paper, the authors present a methodology for estimating net social welfare costs and their distribution using only information on price, quantities, elasticities of supply and demand, and estimates of cost and/or yield effects of policies provided by natural scientists.
Abstract: We present a methodology for estimating net social welfare costs and their distribution using only information on price, quantities, elasticities of supply and demand, and estimates of cost and/or yield effects of policies provided by natural scientists. An application to a case of pesticide regulation demonstrates the importance of equity effects. Simulations show that redistribution of income among producers becomes the dominant effect of pesticide policies when supply elasticities are higher and demand elasticities are lower, with changes in supply elasticity having a greater impact than changes in demand elasticity. For crops with significant export markets, foreign consumers are shown to bear much of the short-run cost. Many cases now exist of legislation and executive orders mandating the use of benefit-cost criteria in policy choice. To be useful in policy assessments, welfare methodologies must meet certain requirements. First, they must provide estimates of the efficiency impacts of alternative policies, measured by changes in net social surplus. Second, estimates of the
TL;DR: In this paper, a collection of eighteen original essays evaluates the use and misuse of common-property resources, taking as its starting point ecologist Garret Hardin's assertion in "The Tragedy of the Commons" that common property is doomed to overexploitation in any society.
Abstract: This collection of eighteen original essays evaluates the use and misuse of common-property resources, taking as its starting point ecologist Garret Hardin's assertion in "The Tragedy of the Commons" that common property is doomed to overexploitation in any society. This book represents the first cross-cultural test of Hardin's argument and argues that, while tragedies of the commons do occur under some circumstances, local institutions have proven resilient and responsive to the problems of communal resource use.
TL;DR: In this article, the effects of a food-for-work (FFW) project in rural Kenya are assessed using a peasant-household-firm model which incorporates a linear programming model and an almost ideal demand system.
Abstract: Assessing the potential role of food aid in economic development requires that analytical attention be given to both household production and consumption consequences of food aid projects. Effects of a food-for-work (FFW) project in rural Kenya are assessed using a peasant-household-firm model which incorporates a linear programming model and an almost ideal demand system. The results indicate that program participants have net returns 52 percent higher than nonparticipants, most of which is due to induced effects of capital formation on own-farm production. Greater capital formation increases the opportunity cost of participants' time, encouraging a transition over time from FFW activities to greater own-farm production. FFW increases food demand, employment, and marketable surplus.
TL;DR: In this article, the production structure of the Canadian agricultural sector is modeled by an output-constrained multiproduct profit function to account for the existence of supply management policies.
Abstract: The production structure of the Canadian agricultural sector is modeled by an output-constrained multiproduct profit function to account for the existence of supply management policies. The le Chatelier effects of supply constraints are illustrated, and the comparative statics of supply management is shown to depend, under input normality, on the type of jointness. Convexity is tested and accepted, and nonjointness is rejected by the estimated normalized quadratic profit function. The results support the hypothesis of nonjointness due to allocatable fixed factors. Decreasing the supply of managed commodities will increase the supply of unrestricted commodities, while total input use is reduced.
TL;DR: Cassava, brought from South America 300 years ago free of its pests, became a major subsistence crop in Africa and a mealybug was mistakenly introduced in the early 1970s, indicating that biological control can play an important role in pest management.
Abstract: Cassava, brought from South America 300 years ago free of its pests, became a major subsistence crop in Africa. A mealybug was mistakenly introduced in the early 1970s. By the 1980s the mealybug was a major pest. The International Institute of Tropical Agriculture found a parasitic wasp in South America and reared and released it in Africa. Conservatively estimated, the benefit‐cost ratio for this program is 149 to 1. This success indicates that biological control can play an important role in pest management.
TL;DR: In this article, the authors compare five methods for estimating travel cost demand models with micro-data and find that the differences in the demand and in the benefit estimates raised by treating the problem with either single (Heckman) or double selection (Catsiapis and Robinson, Ham, Poirier) effects are small.
Abstract: Increased use of on-site and user-group surveys to estimate travel cost demand models (e.g., Caulkins, Bishop, and Bowes; Smith and Desvousges) has raised inevitable questions about the significance of relying on demand estimates derived solely from surveys of users. Many of the questions relate to selection effects, that is, the potential for specification errors (and bias) caused by an inability to reflect the decisions of nonusers with these types of surveys. This issue has received some attention in the recreation literature (Brown et al., Bockstael and McConnell), but specific empirical evidence on the implications of alternative approaches for estimating demand models from on-site surveys does not exist. This article reports the first such evidence, using a data set based on a general population sample to compare five methods for estimating travel cost demand models with microdata. The findings suggest that the differences in the demand and in the benefit estimates raised by treating the problem using models with either single (Heckman) or double selection (Catsiapis and Robinson, Ham, Poirier) effects are small. However, the effects of using alternative estimators for site demands are not. These findings are limited because they apply to only one site. Nonetheless, they do highlight the importance of the assumptions used to consider the behavior of nonusers. Consequently, they provide direct motivation for more detailed conceptual and empirical work on the choice processes underlying recreation decisions.
TL;DR: In this article, a dual model is used to examine the dynamic structure of the U.S. dairy industry and two quasi-fixed inputs, labor and herd size, are tested and not rejected.
Abstract: A dual model is used to examine the dynamic structure of the U.S. dairy industry. Properties implied by the theory of the competitive firm and independent adjustment of two quasi-fixed inputs, labor and herd size, are tested and not rejected. Instantaneous adjustment, however, is soundly rejected for each quasi-fixed input. Input adjustment to optimal levels is estimated to take about two years for labor and ten for cows. Quality adjustments of the labor and cow series do not fully embody the technological change that has occurred in this industry over the study period.
TL;DR: In this article, the benefits from cost-reducing research and their distribution under a range of price policies are compared with those that would arise in the absence of the policies, and the implications for decisions on price policies and for distortions in incentives for the allocation of resources to research are raised.
Abstract: The benefits from cost-reducing research and their distribution under a range of price policies are compared with those that would arise in the absence of the policies. While any price policy affects the distribution of research benefits, the net national or world benefits may be reduced, lef unchanged, or increased, depending on the nature of the policy and the significance of the country in the world market for the commodity. Some implications for decisions on price policies and for distortions in incentives for the allocation of resources to research are raised.
TL;DR: In this paper, a dynamic programming model of east-central Illinois corn production is utilized to determine the value of seasonal climate forecasts, and it is shown that a trade-off between forecast accuracy and lead time exists.
Abstract: A dynamic programming model of east-central Illinois corn production is utilized to determine the value of seasonal climate forecasts. Results indicate that the value of climate forecasts is sensitive to economic conditions as well as forecast characteristics. A trade-off between forecast accuracy and lead time exists. A less accurate forecast received earlier in the production process may be more valuable than a more accurate forecast received later. Additional characteristics evaluated include forecast periods of greatest importance, prior knowledge assumptions, and interactions between forecasting adjacent periods.
TL;DR: Stochastic dominance analysis for tillage systems in the semiarid conditions of the central Great Plains indicates that risk-averse managers would prefer conservation tillage system for wheat and grain sorghum with and without the use of crop insurance instead of the traditional conventional dryland wheat-fallow cropping system as mentioned in this paper.
Abstract: Stochastic dominance analysis for tillage systems in the semiarid conditions of the central Great Plains indicates that risk-averse managers would prefer conservation tillage systems for wheat and grain sorghum with and without the use of crop insurance instead of the traditional conventional dryland wheat-fallow cropping system. Higher yields in conjunction with reduced fuel, labor, and repair costs more than offset increased chemical costs of the conservation systems. Increased yields generally are attributed to the soil moisture conservation characteristic of the conservation tillage systems.
TL;DR: In this article, the degree to which the use of debt is increased in response to risk-reducing and income-augmenting farm policies is studied theoretically, and the effects of policies on the cumulative probability of earning very low rates of return on equity are examined.
Abstract: The degree to which the use of debt is increased in response to risk-reducing and income-augmenting farm policies is studied theoretically. A mean-variance model is used to determine the optimal leverage adjustment, then the effects of policies on the cumulative probability of earning very low rates of return on equity are examined. The evidence suggests that farm policies induce a large enough increase in financial leverage to increase the probability of farmers having negative returns to equity.
TL;DR: Time-series evidence from the United States indicates unidirectional causality from eggs to chickens.
Abstract: Granger's seminal paper entitled "Investigating Causal Relations" has spawned a vast and influential literature. In macroeconomics, for example, the causal relationship between money and income has been investigated time (Sims) and again '(Barth and Bennett; Williams, Goodhart, and Gowland; Ciccolo; Feige and Pearce; Hsiao). Some authors have taken exception to Granger's definition of causality qua causality (Zellner; Jacobs, Learner, and Ward; Conway et al.), and even Granger has suggested "a better term might be temporally related" (Granger and Newbold, p. 225). We find ourselves in agreement with the temporal ordering interpretation of Granger causality. In fact, we believe that the most natural application of tests for Granger causality (temporal ordering) has until now been overlooked. We refer, of course, to: "Which came first, the chicken or the egg?" Our purpose in this study is to provide an empirical answer to this venerable question, which theory alone has not resolved.
TL;DR: This book brings together the best of current thinking on food policy--by specialists in agriculture, nutrition, management, public health, education, development, and other related fields, within the broad framework of food policy.
Abstract: In many developing countries the persistent problem of hunger calls for policies that encompass not only the production of food but also its distribution and its use by consumers. This book brings together the best of current thinking on food policy--by specialists in agriculture, nutrition, management, public health, education, development, and other related fields. The editors place the individual contributions within the broad framework of food policy. Topics discussed include world food policy; the outcome and effects of programs to increase production; trade and food aid; domestic marketing, price, and subsidy policies; nutrition, growth, and disease; and food and nutrition policy in the context of existing institutions and competing national priorities. Experience with food policy in China and in sub-Saharan Africa is reviewed. Throughout, the contribution of women to the household food budget and the impact on women of technological change and agricultural programs receive particular attention. This interdisciplinary collection will be of interest both to specialists in the areas covered and to persons interested in development issues and food security.