Showing papers in "American Journal of Agricultural Economics in 1995"
TL;DR: The nonlinear parameters are shown to be implicit in the observed land allocation decisions at a regional or farm level and satisfy the Hicksian conditions for competitive firms.
Abstract: A method for calibrating models of agricultural production and resource use using nonlinear yield or cost functions is developed. The nonlinear parameters are shown to be implicit in the observed land allocation decisions at a regional or farm level. The method is implemented in three stages and initiated by a constrained linear program. The procedure automatically calibrates the model in terms of output, input use, objective function values and dual values on model constraints. The resulting nonlinear models show smooth responses to parameterization and satisfy the Hicksian conditions for competitive firms.
1,005 citations
TL;DR: This paper examined the structural and strategic evolution of U.S. farmer cooperatives since the Helmberger and Abrahamsen (H&A) forecasts, and used recent developments in neo-institutional economic (organizational economic) theory to generate hypotheses regarding structural shifts in U. S. agricultural cooperatives.
Abstract: Thirty years ago Helmberger speculated that industrialization of agriculture would lead to the demise of farmer cooperatives (Helmberger 1966, p. 1434). In responding to Helmberger's prediction, Abrahamsen countered by suggesting that as industrialization of agriculture evolved, cooperatives would increasingly become the "farmer's integrating agency" (Abrahamsen, p. 1442). In this paper I examine these two divergent opinions by (a) briefly describing the structural and strategic evolution of U.S. farmer cooperatives since the Helmberger and Abrahamsen (H&A) forecasts, (b) utilizing recent developments in neo-institutional economic (organizational economic) theory to generate hypotheses regarding structural and strategic shifts in U.S. agricultural cooperatives, and (c) further applying neo-institutional economics to speculate what the future might hold for U.S. producerowned and -controlled agricultural cooperatives.
814 citations
TL;DR: The Stone index typically used in estimating linear almost ideal demand systems is not invariant to changes in units of measurement, which may seriously affect the approximation properties of the model as mentioned in this paper.
Abstract: The Stone index typically used in estimating linear almost ideal demand systems is not invariant to changes in units of measurement, which may seriously affect the approximation properties of the model. A modification to the Stone index, or use of a regular price index instead, are both desirable practices in estimating linear AI models.
455 citations
TL;DR: In this article, the main cause of global climate change was identified as anthropogenic emissions of CO2 (Manne and Richels), which are the main causes of global climatic change.
Abstract: Global climatic change may threaten the earth's environment, including the potential loss of species, coastal inundation, and loss of agricultural production potential (Reilly and Anderson). Although several greenhouse gases (GHGs) often play a role, anthropogenic emissions of one of these-carbon dioxide (CO2)are the main cause of global climatic change (Manne and Richels). Governments throughout the world are actively considering policies to reduce their GHG emissions, including regulation, transferable emission permits, GHG offsets, and financial incentives (i.e., taxes, subsidies, etc.). Also included are sectoral policies, particularly those that relate to transportation (e.g., convert vehicles to natural gas), energy (e.g., greater use of nuclear, hydro, wind, and solar power), and forestry. Because CO2 is important for plant growth, and because trees remove CO2 from the atmosphere and store it as carbon in biomass, forests play a significant role in helping the global community mitigate climatic change, at least in the short term (Nordhaus; Richards). When trees are harvested, however, CO2 is released The authors are professor, dean, and graduate student, respectively,
440 citations
TL;DR: This article found that people underestimate the relatively low probabilities of food-borne illness and their willingness to pay decreases as risk increases, suggesting that the perceived quality of new information can affect the weight the individuals place on the information, and pathogen-specific values seem to act as surrogates for general food safety preferences.
Abstract: In this paper, we value food safety in a nonhypothetical setting—experimental auction markets. First, subjects underestimate the relatively low probabilities of food-borne illness. Second, measures of value are within a relatively flat range across a wide range of risks, even with repeated market experience and full information on the objective probability and severity of illness, suggesting subjects rely on prior perceptions. Third, marginal willingness to pay decreases as risk increases, suggesting that the perceived quality of new information can affect the weight the individuals place on the information. Finally, pathogen-specific values seem to act as surrogates for general food safety preferences.
351 citations
TL;DR: The JSTOR Archive is a trusted digital repository providing for long-term preservation and access to leading academic journals and scholarly literature from around the world as discussed by the authors. But it is not suitable for the general public.
Abstract: Stable URL:http://links.jstor.org/sici?sici=0002-9092%28199511%2977%3A4%3C969%3ATIOBAG%3E2.0.CO%3B2-FAmerican Journal of Agricultural Economics is currently published by American Agricultural Economics Association.Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available athttp://www.jstor.org/about/terms.html. JSTOR's Terms and Conditions of Use provides, in part, that unless you have obtainedprior permission, you may not download an entire issue of a journal or multiple copies of articles, and you may use content inthe JSTOR archive only for your personal, non-commercial use.Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained athttp://www.jstor.org/journals/aaea.html.Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printedpage of such transmission.The JSTOR Archive is a trusted digital repository providing for long-term preservation and access to leading academicjournals and scholarly literature from around the world. The Archive is supported by libraries, scholarly societies, publishers,and foundations. It is an initiative of JSTOR, a not-for-profit organization with a mission to help the scholarly community takeadvantage of advances in technology. For more information regarding JSTOR, please contact support@jstor.org.http://www.jstor.orgFri Feb 22 18:03:47 2008
241 citations
TL;DR: In this paper, an empirical analysis focused on Texas producers and propensity to adopt free-stall dairy housing is presented. And the authors discuss the implications of this ex ante paradigm for policy design and implementation.
Abstract: Empirical results demonstrate that uncertainty about costs and requirements for environmental compliance is an important determinant of dairy producers& investment behavior. Ex ante forecasting of how uncertainty and irreversibility are likely to affect producers& responsiveness to agricultural technologies has implications for the design of environmental policies. Simulation modeling methods are described. The empirical analysis focuses on Texas producers& propensity to adopt free-stall dairy housing. Free-stall investments offer advantages for both productivity-augmentation and pollution abatement, yet uncertainty and irreversibility are obstacles to adoption. Implications of this ex ante paradigm for policy design and implementation are discussed.
227 citations
TL;DR: In this article, the overall technical inefficiency is decomposed into a persistent component and a residual component, and a multistep procedure is used to estimate the parameters of the production function as well as persistent and residual technical inefficiencies.
Abstract: This paper introduces a new specification of technical inefficiency in panel data models. First, the overall technical inefficiency is decomposed into a persistent component and a residual component. Second, a multistep procedure is used to estimate the parameters of the production function as well as persistent and residual technical inefficiency. The advantage of this multistep procedure is that the parameter estimates are robust to distributional assumptions on the error components. Distributional assumptions are required in the final stage to estimate the residual component of technical inefficiency. The model is used to examine technical efficiency in Swedish dairy farms during the period 1976 to 1988.
216 citations
TL;DR: In this article, a switching-regression model was developed to assess the impact of soil nitrogen testing on N fertilizer use, crop yields, and net returns in corn growing areas of Nebraska.
Abstract: A simultaneous equations, or "switching-regression," model is developed to assess the impact of soil nitrogen (N) testing on N fertilizer use, crop yields, and net returns in corn growing areas of Nebraska. The results indicate that when there is uncertainty about the quantity of available "carry-over" N, N testing enables farmers to reduce fertilizer use without affecting crop yields. However, the value of information from N tests depends critically on cropping history and soil characteristics. These findings have implications for environmental and technology transfer policies designed to reduce nonpoint source water pollution.
209 citations
TL;DR: In this article, the authors examined vessel efficiency using a stochastic production frontier based on a sample of sea scallop vessels operating in the Mid-Atlantic between 1987 and 1990.
Abstract: Despite the extensive effort to research issues of allocative efficiency in fisheries, little empirical analysis of technical efficiency (TE) in fisheries exists. This study examines vessel efficiency using a stochastic production frontier based on a sample of sea scallop vessels operating in the Mid-Atlantic between 1987 and 1990. Estimates of TE are computed and compared with input usage, resource conditions, economic performance, and recently imposed regulations. The analysis suggests that owners and captains only partially compensate for changes in resource conditions through the use of labor and fishing effort, and recent regulations may improve overall TE in the short run.
207 citations
TL;DR: In this paper, Schmidt and Kumbhakar used a cost function approach and combined the concepts of technical and allocative efficiency in the cost relationship to obtain a farm-specific measure of allocative inefficiency.
Abstract: Farm efficiency, and the question of how to measure it, is an important subject in developing countries' agriculture. There are three distinct approaches to measurement based on cost, profits, and production functions. Farrell developed the concept of technical efficiency based on input and output relationships.' Technical inefficiency arises when actual or observed output from a given input mix is less than the maximum possible; allocative inefficiency arises when the input mix is not consistent with cost minimization. Advances have been made in the frontier cost function literature using flexible functional forms (Bauer; Greene 1980; Forsund, KnoxLovell, and Schmidt; and Schmidt). An approach using systems of equations based on cost, profit, and distance functions was developed to incorporate all available information on multiproduct farms (Kumbhakar; Schmidt; Fare, Grosskopf, and Nelson; Hayes). The present study uses a cost function approach and combines the concepts of technical and allocative efficiency in the cost relationship. Any errors in the production decision translate into higher costs for the producer. At the same time, the stochastic nature of production implies that the theoretical cost function is stochastic.2 Two distinct approaches are used. First, we use the stochastic frontier approach in which translog cost function is specified and estimated without using share equations. The derived measure of inefficiency is then related to socioeconomic, demographic, and farm size variables. Second, we use a behavioral approach in which translog cost function again is estimated, but this time as a function of the shadow prices of the inputs. The cost share equations are estimated jointly with a cost equation incorporating all cross-equation restrictions. Moreover, the input-use inefficiency is introduced through the parameters and these are related to the structural variables. This approach permits us to obtain a farm-specific measure of allocative inefficiency.
TL;DR: In this article, the American Journal of Agricultural Economics, v. 77, no. 4, November 1995 has published a survey of the state of the art in agri-business.
Abstract: Also published in the American Journal of Agricultural Economics, v. 77, no. 4, November 1995
TL;DR: In this article, the authors present an empirical framework for quantifying the extensive margin effects of commodity programs and chemical use taxes on potential groundwater pollution in Wisconsin, emphasizing the role of the joint distribution of crops and site characteristics in determining policy impacts on groundwater contamination.
Abstract: In this paper we present an empirical framework for quantifying the extensive margin effects of commodity programs and chemical‐use taxes on potential groundwater pollution in Wisconsin. The approach emphasizes the role of the joint distribution of crops and site characteristics in determining policy impacts on groundwater contamination. The results indicate that for a given reduction in total polluting acreage an increase in the Acreage Reduction Program rate for corn is well targeted and would reduce high‐polluting acreage more than a chemical‐use tax or a target price policy in the areas where it might be needed most.
TL;DR: In this article, a complete demand system of Chinese rural households was estimated using a two-stage LES-AIDS model and pooled provincial and time-series data from 1982 to 1990.
Abstract: A complete demand system of Chinese rural households is estimated using a two-stage LES-AIDS model and pooled provincial and time-series data from 1982 to 1990. For commodity groups (food, clothing, fuel, housing, and other commodities), demand is price-inelastic. Housing and other commodities are luxury goods, while clothing and food are necessities. Within the food group, price elasticities range from −0.005 to −0.63. Expenditure elasticities are lower for grains and higher for meat, tobacco, and alcohol. The results imply a gap between food demand and supply growth. Therefore, China will face pressure to import food.
TL;DR: In this article, the authors used simulation methods to measure the price and production risk shifted from growers to integrator companies by these contracts and concluded that the bulk of the risk in their sample, which is primarily price risk, is shifted from the growers through the use of production contracts.
Abstract: The contracts used to reward growers of broiler chickens in the United States base pay on a grower's performance relative to other growers. From a panel of data covering seventy-five growers over four years, we use simulation methods to measure the price and production risk shifted from growers to integrator companies by these contracts. We also decompose the risk in broiler production variability. We conclude that the bulk of the risk in our sample, which is primarily price risk, is shifted from growers through the use of production contracts.
TL;DR: In this article, the authors analyze lettuce production on two soils in California's Salinas Valley to consider empirical costs associated with uniform input taxes and regulations, and find that uniform instruments may not be costly relative to an efficient baseline.
Abstract: Because of difficulties in measuring effluent from nonpoint pollution, proposals for regulating agricultural runoff often suggest instruments applied to inputs or management practices. When pollution functions vary across sources, uniform input instruments cannot achieve a least-cost pollution reduction, but efficient instruments may be difficult to administer. In this paper we analyze lettuce production on two soils in California's Salinas Valley to consider empirical costs associated with uniform input taxes and regulations. The results suggest that uniform instruments may not be costly relative to an efficient baseline. Though taxes are more efficient, farmers have higher profits with regulations.
TL;DR: A survey of the trade and environment literature is presented in this paper, where the authors integrate some of the existing literature by using the simple concepts of general equilibrium pollution supply and demand.
Abstract: There is an emerging consensus in the environmentalist community opposing free trade. While some economists view this as simply another outlet for protectionism, recent work has begun to move beyond the rhetoric to probe more deeply into the theoretical and empirical relationships between international trade and environmental quality. The purpose of the present paper is twofold. We first integrate some of the existing literature by using the simple concepts of general equilibrium pollution supply and demand. Our survey of the trade and environment literature is more
TL;DR: A compelling argument can be made for farmer cooperatives in an atomistic setting as mentioned in this paper, and the disappearance of atomism will cause that rationale to vanish with it, and the whole conception of the farmer cooperative and its role in society will need to be reexamined.
Abstract: prise seems to be in jeopardy. Substitutes for farm-produced products and inputs are, to an increasing extent, coming from nonfarm sectors. Vertically integrating relationships shift control to the industrial sectors serving agriculture, and make entrepreneurship of the family-farm obsolete. The rise of farm-product factories, as in eggs and feeder cattle, suggests the feasibility of giant-sized firms organized along the lines of industrial corporations. If traditional agriculture is in the process of eroding away, the whole conception of the farmer cooperative and its role in society will need to be reexamined. If I am not mistaken, a compelling argument can be made for farmer cooperatives in an atomistic setting. Disappearance of atomism will cause that rationale to vanish with it
TL;DR: In this article, a simple Social Cost-Benefit (SCB) ratio is used to measure social profitability in the context of domestic resource cost, which does not distort profitability rankings.
Abstract: The Domestic Resource Cost (DRC) indicator is widely used in developing countries to measure comparative advantage and guide policy reforms. In this paper we demonstrate that the DRC formula is biased against activities that rely heavily on domestic factors (land and labor), and that a simple Social Cost-Benefit (SCB) ratio is a generally superior measure of social profitability. The SCB uses the same data as the DRC in a formula which does not distort profitability rankings. The policy significance of improved measurement is shown using data from Kenya, where the DRC overstates the relative profitability of activities using large amounts of tradable inputs.
TL;DR: Rural development in the United States as mentioned in this paper presents a comprehensive evaluation of the economic, environmental, and political implications of past rural development and a thorough consideration of the directions in which future development efforts should go.
Abstract: "Rural Development in the United States" presents a comprehensive evaluation of the economic, environmental, and political implications of past rural development and a thorough consideration of the directions in which future development efforts should go. The authors have assembled the best of what is being thought and done with regard to rural development in the United States, and place it in a broad theoretical, historical, and geographical context. The book provides: a summary of the key findings in rural development research of the past twenty years an integration of development theory and practical experience a bridge between the related but often isolated disciplines that inform rural development a catalyst for new thinking in the area of rural development analysis of the key economic sectors in rural areas: natural resources, the service sector, elderly services, telecommunications, manufacturing, tourism, and high-technology It includes important information about how national and international trends affect rural communities and development strategies and will help guide rural economic development policy in the United States during the 1990s and beyond.
TL;DR: In this paper, a model using a household production framework to link measures of nonpoint source pollution to fishing quality and a random utility model to describe how that quality influenced sport fishing parties' decisions in North Carolina.
Abstract: In this paper we describe a model using a household production framework to link measures of nonpoint source pollution to fishing quality and a random utility model to describe how that quality influences sport fishing parties' decisions in North Carolina The results provide clear support for using a model that evaluates the effects of pollution on the activities and decisions associated with the fishing activity once a trip is taken Site selection decisions are then conditioned on the anticipated quality of fishing sites The framework also has the advantage of linking the spatial, technical, and economic information required to evaluate the management plans required for estuaries under the National Estuarine Program
TL;DR: In this paper, the authors used Mechanism Design Theory (MDT) to characterize the properties of a least-cost CRP and showed that a 34-million-acre CRP should have cost no more than $1 billion per year.
Abstract: Mechanism design theory is used to characterize the properties of a least-cost CRP. If marginal land rents decrease with acres farmed then a least-cost CRP is a set of nonlinear price schedules. If marginal land rents are independent of acres farmed then an offer system constitutes a least-cost CRP. The least-cost offer system gives a useful estimate of the upper bound of a least-cost CRP. Empirical results suggest that a 34-million-acre CRP should have cost no more than $1 billion per year.
TL;DR: In this article, the authors model the tradeoff between regional oligopsony power and cost efficiency resulting from consolidation in a food processing industry and find that the estimated cost savings necessary to neutralize the anticompetitive effects of consolidation in beef packing are about half the actual cost savings from scale economies.
Abstract: In this paper we model the tradeoff between regional oligopsony power and cost efficiency resulting from consolidation in a food processing industry. The model can be used to calculate the cost reductions necessary to offset the anticompetitive effects of market power and to compare them to actual cost savings achieved through plant scale or multiplant operating economies. For an application, we choose the beef packing industry. For this case, we find that the estimated cost savings necessary to neutralize the anticompetitive effects of consolidation in beef packing are about half the actual cost savings from scale economies.
TL;DR: In this article, the authors developed a mechanism to guide efficient commodity storage and marketing over producing regions through the crop year, and empirically supported by examining storage in the Corn Belt, rates of price growth at various points, and quarterly grain marketings.
Abstract: Borrowing from the theory of optimal resource extraction, we develop the mechanism guiding efficient commodity storage and marketing over producing regions through the crop year. Optimal storage occurs at producing areas, and time in storage varies directly with distance to market. Prices grow with interest rates in locations where storage is efficient but more slowly elsewhere, which explains why market prices (i.e., prices at the market) grow more slowly than interest rates. The model is empirically supported by examining storage in the Corn Belt, rates of price growth at various points, and quarterly grain marketings.
TL;DR: The role of IARC-generated technology in the global system of spring wheat improvement is examined for the period, 1977-90 as discussed by the authors, and an ex post rate of return above 50% is estimated for wheat research investments in developing countries, with the highest returns occurring in the South Asia region and in irrigated and high-rainfall environments.
Abstract: The role of IARC-generated technology in the global system of spring wheat improvement is examined for the period, 1977–90. Nine of the thirty–eight developing countries that produce spring wheat demonstrate the capacity to develop varieties from their own crosses; the other countries focus on screening CIMMYT germplasm for direct release. Over 40% of spring wheat area is sown to "direct transfer" CIMMYT varieties, indicating that CIMMYT research remains an important complement to NARS research. An ex post rate of return above 50% is estimated for wheat research investments in developing countries, with the highest returns occurring in the South Asia region and in irrigated and high-rainfall environments. Future returns above 35% are projected.
TL;DR: The authors reviewed existing findings on the global impacts of climate change on agriculture, identified limitations of these findings, and discussed three issues of interest on the Intergovernmental Panel on Climate Change (IPCC).
Abstract: This paper (a) reviews existing findings on the global impacts of climate change on agriculture, (b) identifies limitations of these findings, and (c) discusses three issues of interest on the Intergovernmental Panel on Climate Change (IPCC). The three issues are as follows: regional effects versus global efficiency: the issue of hunger; climate change, agriculture and economic development; cost and disruption of adaptation to climate change. 45 refs., 3 tabs.
TL;DR: In this paper, a Just-Pope production function is used to estimate the effect of genetic improvement on the first two moments of wheat yield for the period 1950-86, and the model characterizes the green revolution as the culmination of an era in which wheat breeders achieved rapid increases in yield potential accompanied by higher yield variances.
Abstract: A Just-Pope production function is used to estimate the effect of genetic improvement on the first two moments of wheat yield for the period 1950–86. The model characterizes the green revolution as the culmination of an era in which wheat breeders achieved rapid increases in yield potential accompanied by higher yield variances. To date, the post-green revolution has been an era of slower mean yield growth, but of relatively rapid improvement in yield stability. Overall, the analysis indicates steady progress in producing "better" varieties; successive releases have improved either stability, mean yield, or both.
TL;DR: In this article, fixed effects production functions and stochastic production frontiers are estimated and used to decompose dairy farm output growth into technological progress, technical efficiency, and increased input use or the size effect.
Abstract: Fixed effects production functions and stochastic production frontiers are estimated and used to decompose dairy farm output growth into technological progress,
technical efficiency, and increased input use or the size effect. Unbalanced panel data for ninety-six Vermont dairy farmers for the 1971-84 period are utilized. The results
show a 2.5% average annual increase in milk output. About 56% of this growth is attributed to the size effect and the remaining 44% to productivity growth. Technological progress contributed about 94% to total productivity growth, while improvements in technical efficiency accounted for only 6%.
TL;DR: This paper used multivariate gradual switching regression techniques and Bayesian inferential procedures to evaluate structural change in factor demand relationships in the food manufacturing industry and found that the demands for raw food materials and energy have become more elastic while the demand for labor has become less elastic.
Abstract: This analysis utilizes multivariate gradual switching regression techniques and Bayesian inferential procedures to evaluate structural change in factor demand relationships in the food manufacturing industry. Food materials are included as an input into the food manufacturing industry. The results confirm a significant gradual structural change that initiated in 1980. Price elasticities indicate that the demands for raw food materials and energy have become more elastic while the demand for labor has become less elastic. Morishima elasticities of substitution indicate that nearly all factors are substitutes and that the degree of substitutability has significantly increased in recent years.
TL;DR: This study focuses on the second issue raised regar ing the willingness of consumers to purchase products obtained from either the wild fishery or aquaculture, which deals with consumer preferences for fresh finfish and shellfish products purchased for home preparation and consumption in northeastern and MidAtlantic households.
Abstract: The consumption of seafood products, including aquacultural products, significantly increased during the 1970s and 1980s. However, during the late 1980s and early 1990s, per capita seafood consumption declined. The U.S. Department of Agriculture reports that current per capita consumption of seafood products is estimated at around 14.9 pounds, down from a peak of 16.1 pounds in 1987 (USDA). Uncertainty in the seafood supply has contributed to retail seafood prices rising faster than prices for other meat products (Harvey). To reduce the fluctuation in retail seafood prices, there is a need to stabilize production and offer consistency in supplies. However, consistency in the seafood supply can be expected to come primarily from aquaculture because of the problems of overutilization of natural or wild stocks (United Nations). Proponents of aquaculture are advocating its commercial expansion. However, several problems must be resolved before aquaculture's potential can be achieved. The first problem lies in the biological potential of a species to survive in an aquaculture environment. The second factor deals with the consumer's willingness to buy aquaculture products. The stiff competition offered by the beef, pork, poultry, and wild fisheries industries requires the aquaculture industry to use effective marketing strategies. This study focuses on the second issue raised regar ing the willingness of consumers to purchase products obtained from either the wild fishery or aquaculture. In particular, it deals with consumer preferences for fresh finfish and shellfish products purchased for home preparation and consumption in northeastern and MidAtlantic households.