Showing papers in "American Journal of Agricultural Economics in 2010"
369 citations
TL;DR: The role of agriculture in the broader development process from a macroeconomic and political economy perspective was explored in this article. And the role of technological and institutional change in successful agricultural development was examined.
Abstract: This article strategically surveys the past century’s literature on agricultural development. We organize the discussion around three “grand themes” that reveal the richness of agricultural development as an intellectual endeavor. First, we explore the role of agriculture in the broader development process from a macroeconomic and political economy perspective. We then examine the role of technological and institutional change in successful agricultural development. Finally, the focus turns to a microeconomic perspective on agricultural household decision making and the problems of imperfect and missing markets, asymmetric information, and transactions costs that lead to widespread apparent inefficiency and disequilibrium.
191 citations
TL;DR: In this paper, the authors compare productivity and technical efficiency of organic and conventional dairy farms in the United States and find that the organic dairy technology is approximately 13% less productive than the conventional technology.
Abstract: We compare productivity and technical efficiency of organic and conventional dairy farms in the United States We address self-selection into organic farming by using propensity score matching and explicitly test the hypothesis that organic and conventional farms employ a single, homogeneous technology Utilizing the 2005 Agricultural Resource Management Survey on Dairy Costs and Returns Report (ARMS) data, we reject the homogeneous technology hypothesis and find that the organic dairy technology is approximately 13% less productive However, we find little difference in technical efficiency between organic and conventional farms when technical efficiency is measured against the appropriate technology
191 citations
TL;DR: The authors provide a review of the economics literature over the past 100 years with a focus on this economic transformation of rural places, its implications for rural communities, and key modeling innovations and applications.
Abstract: Rural North America has undergone a major economic transformation over the past century due to labor-saving technological progress, reductions in transport costs, and rising household incomes. The results are greater rural economic diversity, selected rural population decline, increased rural-urban interdependence, emergent exurban areas, and amenity-led rural growth. We summarize key research insights and provide a selected review of the economics literature over the past 100 years with a focus on this economic transformation of rural places, its implications for rural communities, and key modeling innovations and applications. The many important contributions by agricultural economists are highlighted.
183 citations
TL;DR: The authors assesses the effects of a "fat tax" on the nutrients purchased by French households across different income groups by making a preliminary estimation of price elasticities using a complete demand system on household scanner data.
Abstract: This article assesses the effects of a “fat tax” on the nutrients purchased by French households across different income groups. This is done by making a preliminary estimation of price elasticities using a complete demand system on household scanner data, and by calculating nutrient elasticities using estimated price elasticities. We find that a fat tax has small and ambiguous effects on nutrients purchased by French households, and a slight effect on body weight in the short run, with a greater effect in the long run. Such a tax generates substantial tax revenue, but is highly regressive.
177 citations
TL;DR: In this paper, the authors explored the link between gravity and welfare frameworks for measuring the impact of nontariff measures and found that in most cases, a stricter standard leads to an increase in both domestic and international welfare.
Abstract: This article explores the link between gravity and welfare frameworks for measuring the impact of nontariff measures. First, an analytical approach suggests how to combine a gravity equation with a partial equilibrium model to determine the welfare impact of nontariff measures. Second, an empirical application focuses on the effects of a standard that caps antibiotic residues in crustaceans in the United States, the European Union, Canada, and Japan. While the econometric estimation of the gravity equation reports a negative impact on imports, welfare evaluations show that in most cases, a stricter standard leads to an increase in both domestic and international welfare.
151 citations
TL;DR: In this paper, the authors examined the impact that participation in the Food Stamp Program has on household food insecurity using data from the Panel Survey of Income Dynamics and found that program participation lowers food insecurity by at least 18%.
Abstract: This study examines the impact that participation in the Food Stamp Program has on household food insecurity using data from the Panel Survey of Income Dynamics Two strategies are used to identify the causal effect of the program First, endogenous treatment effect models are estimated using state-level errors in payments of benefits as instruments Additionally the impact of losing benefits due to a government decision on the food insecurity of program participants is examined The paper finds that program participation lowers food insecurity by at least 18%
142 citations
TL;DR: In this article, the authors evaluate agricultural trade creation and diversion effects of the most important free trade agreements (FTAs) using a Poisson Pseudo-Maximum-Likelihood (PPML) estimator with various fixed effects to deal with heteroskedasticity and zero trade observations.
Abstract: This paper evaluates agricultural trade creation and diversion effects of the most important free trade agreements (FTAs). Trade creation and diversion effects are estimated using a Poisson Pseudo-Maximum-Likelihood (PPML) estimator with various fixed effects to deal with heteroskedasticity and zero trade observations. The analysis finds that PPML estimation is preferred to OLS and the estimated impacts of FTAs are different if zero trade observations are considered. The ASEAN-China preferential trade agreement, EU-15, EU-25, and Southern African Development Community agreements have generated large increases in agricultural trade among their members.
138 citations
136 citations
TL;DR: This article employed an identification strategy based on county-level variation in the number of fast-food restaurants to investigate the effect of fastfood availability on weight outcomes by geographic location, gender, and race/ethnicity.
Abstract: This paper employs an identification strategy based on county-level variation in the number of fast-food restaurants to investigate the effect of fast-food availability on weight outcomes by geographic location, gender, and race/ethnicity. The number of interstate exits in the county of residence is employed as an instrument for restaurant location. Using the 2004-2006 Behavioral Risk Factor Surveillance System and self-collected data on the number of fast-food restaurants, I find that availability does not affect weight outcomes in rural counties, but does tend to increase body mass index among females and non-Whites in medium-density counties. These results are robust to specification choices.
125 citations
TL;DR: This article used a stated preference experiment to determine consumer preferences for the attribute, but also sought to determine whether the survey-based choices were consistent with people's revealed preferences given by scanner data.
Abstract: The U.S. Food and Drug Administration’s recent announcement that milk from cloned cows is as safe to drink as that from conventionally bred cows prompted interest among farmers, food retailers, and regulators in the market impacts of the introduction of milk from clones. Because milk from cloned animals is not currently labeled in the market, we utilized a stated preference experiment to determine consumer preferences for the attribute, but also sought to determine whether the survey-based choices were consistent with people’s revealed preferences given by scanner data. Our analysis indicates that a pooled model combining stated and revealed preference data exhibits overall better out-of-sample prediction performance than either data set used alone. Results from the pooled model indicate that consumers are willing to pay large premiums to avoid milk from cloned cows—an amount that is over three times that for organic or rBST-free milk. The results are used to calculate the value of a mandatory labeling program.
TL;DR: In this paper, a reflection on the path taken by production economics and farm management over the last century, and the progress made in understanding the economics of the farm is discussed, with the accumulated knowledge has helped refine our assessment of the efficiency of farm management decisions and the evolving role of agriculture in modern society.
Abstract: This article is a reflection on the path taken by production economics and farm management over the last century, and the progress made in understanding the economics of the farm. The accumulated knowledge has helped refine our assessment of the efficiency of farm management decisions and the evolving role of agriculture in modern society.
TL;DR: In this paper, a conceptual framework for jointly analyzing the effect of product, firm, and collective reputations on market price was developed, and the model was estimated via quantile regression with California wine market data.
Abstract: A good can be identified by its region or country of origin, the firm that produces it, and its product name. In other words, names can nest within each other to categorize goods with increasing specificity. This article develops a conceptual framework for jointly analyzing the effect of product, firm, and collective reputations on market price. The model is estimated via quantile regression with California wine market data. The results portray how the structure and relative importance of reputations change as product prices vary. Specifically, reputation premia migrate from collective to specific names as prices increase.
TL;DR: The shift to a focus on consumer welfare began with studies of the role of food and food assistance in standards of living as discussed by the authors, which informed the development of household production theory, hedonic price theory, definitions of poverty thresholds, complete demand systems.
Abstract: Agricultural economists first carried out demand studies in order to understand determinants of farm prices and incomes. The shift to a focus on consumer welfare began with studies of the role of food and food assistance in standards of living. Now the profession is more concerned with how information and quality attributes influence consumer behavior. Agricultural economists’ empirical work in this field has informed the development of household production theory, hedonic price theory, definitions of poverty thresholds, complete demand systems, and survey and experimental techniques to elicit preferences.
TL;DR: In this paper, the authors trace development of agribusiness scholarship over the past century by describing nine types of topics: research and input supply through production, processing, and distribution to retail outlets and the consumer.
Abstract: Agribusiness scholarship emphasizes an integrated view of the food system that extends from research and input supply through production, processing, and distribution to retail outlets and the consumer. This article traces development of agribusiness scholarship over the past century by describing nine
TL;DR: In this article, a meta-analysis is performed to assess the sensitivity of the meat price elasticity to a number of characteristics, including the type of meat, specification of demand, nature of data, estimation method, characteristics of the publication outlet, and location of demand.
Abstract: The price elasticity of meat has been estimated in numerous studies that utilize a variety of disparate modeling procedures. In light of differences in the literature, a meta-analysis is performed to assess the sensitivity of the meat price elasticity to a number of characteristics, including the type of meat, specification of demand, nature of data, estimation method, characteristics of the publication outlet, and location of demand. The results from estimating linear and Box-Cox meta-regressions, coupled with different panel data treatments, reveal that these characteristics have differing influence on the reported price elasticity.
TL;DR: In this paper, partialmoment functions are proposed as a flexible way to characterize and estimate asymmetric effects of inputs on output distributions, and tests for input symmetry and location-scale distributions are presented.
Abstract: Partial-moment functions are proposed as a flexible way to characterize and estimate asymmetric effects of inputs on output distributions. Methods for econometric estimation of partial-moment functions, and tests for input symmetry and location-scale distributions, are presented. A Monte Carlo study demonstrates properties of proposed tests. A study of Ecuadorian potato production illustrates the methods. Hypotheses of input symmetry and location scale are rejected. A risk-value model based on partial moments implies that fertilizer is risk increasing and fungicides and labor are risk reducing in potato production, whereas an expected utility model based on full moments has the opposite implications.
TL;DR: In this paper, the authors examine how equilibrium changes in input use and land allocation decisions respond to market and policy-induced increases in corn ethanol demand, and demonstrate why total cropland area unambiguously increases with increased ethanol demand.
Abstract: The magnitude of land conversion caused by biofuels expansion largely determines whether biofuels reduce net greenhouse gas emissions. To examine this issue, we model how equilibrium changes in input use and land allocation decisions respond to market- and policy-induced increases in corn ethanol demand. We demonstrate why total cropland area unambiguously increases with increased ethanol demand. The impact of ethanol price subsidies and consumption mandates are examined in the context of technical change. If ethanol demand is elastic enough, an exogenous increase in corn yields leads to cropland expansion with price subsidies. Yield increases under consumption mandates reduce land use. Copyright 2010, Oxford University Press.
TL;DR: In this article, an objective drought index that measures the dry and hot conditions adversely affecting crop yields is used in a regression analysis to test whether corn and soybeans have become more drought tolerant.
Abstract: An objective drought index that measures the dry and hot conditions adversely affecting crop yields is used in a regression analysis to test whether corn and soybeans have become more drought tolerant. Results indicate that corn yield losses, whether measured in quantity terms or as a percentage of mean yield, have decreased. The null hypothesis that the absolute level of soybean yield losses due to drought has not changed cannot be rejected. But yield losses in percentage terms have decreased over time. Because drought is the primary cause of yield loss in the U.S. crop insurance program and because U.S. crop insurance rates assume that percentage of yield losses are constant over time, these results indicate that U.S. crop insurance rates in the Corn Belt are too high.
TL;DR: In this article, the authors provide a perspective on major innovations in research on agricultural markets over the past century and review research on market structure and performance, vertical coordination arrangements, and institutions for producer collective action.
Abstract: This article provides a perspective on major innovations in research on agricultural markets over the past century. We review research on market structure and performance, vertical coordination arrangements, and institutions for producer collective action. Contributions to empirical modeling of agricultural price determination and marketing margins are also evaluated, as are innovations in research on spatial market relationships and the role of storage. Finally, we discuss contributions to understanding market information systems and the functioning of market-based mechanisms for agri
TL;DR: The study of international trade in agricultural products has developed rapidly over the pastfifty years as mentioned in this paper, and the disarray in world agriculture caused by domestic price support policies became the focus of analytical studies.
Abstract: The study of international trade in agricultural products has developed rapidly over the pastfifty years In the 1960s the disarray in world agriculture caused by domestic price support policies became the focus of analytical studies There followed attempts to measure the distortions caused by policies also in developing countries and to model their impact on world agricultural marketsTools were advanced to explain the trends and variations in world prices and the implications of market imperfections Challengesforthefutureincludeanalyzingtradebasedonconsumerpreferencesforcertainproduction methods and understanding the impact of climate change mitigation and adaptation on trade
TL;DR: In this paper, the authors revisited the evaluation of the coupling effects passing through the wealth of agricultural households and showed theoretically and through an empirical simulation exercise that once the impact of farm programs on initial wealth is properly accounted for, the measure of coupling effects is not as negligible as found in previous studies.
Abstract: Recent reforms of agricultural policies in developed countries have introduced direct payments as replacements for traditional production-enhancing instruments. Whereas these new instruments can, in principle, influence production through several channels, current empirical studies show no significant impact on production; direct payments mainly increase land values. In this article, we revisit the evaluation of the coupling effects passing through the wealth of agricultural households. The initial wealth of these agents, while mainly being in the form of land asset holding, is always assumed to be fixed. To the contrary, we show theoretically and through an empirical simulation exercise that once the impact of farm programs on initial wealth is properly accounted for, the measure of the coupling effects is not as negligible as found in previous studies. Copyright 2010, Oxford University Press.
TL;DR: The authors found that quantity discounts for a broad range of foods are statistically significant and economically important for low-income households and that the poor pay less than average for the food they purchase.
Abstract: Does food cost more for low-income households? This paper compares two well-known approaches to answering this question. I find that quantity discounts for a broad range of foods are statistically significant and economically important. However quantity discounting does not lead to the poor paying more for food. I find that the poor pay less than average for the food they purchase. This is explained by the poor spending a greater share of their income on foods where quantity discounting occurs. Copyright 2010, Oxford University Press.
TL;DR: In this article, a stochastic dynamic programming (SDP) model is developed to analyze optimal stocking rates in the face of weather uncertainty and potential climate change projections, and the model extends previous work modeling grazing as a predator-prey relationship.
Abstract: A Stochastic Dynamic Programming (SDP) model is developed to analyze optimal stocking rates in the face of weather uncertainty and potential climate change projections. The model extends previous work modeling grazing as a predator-prey relationship. Attention is given to profit maximizing decisions when growing season precipitation is unknown. Comparisons are made across results from a model that utilizes constant growing season precipitation in all years. Results suggest that optimal stocking rates and profitability decrease in climate change scenarios with increased precipitation variability as compared to the historical stochastic weather scenario.
TL;DR: In this paper, the authors investigated the pricing of traits in the U.S. corn seed market under imperfect competition and examined how substitution/complementarity relationships among products can affect pricing.
Abstract: We investigate the pricing of traits in the U.S. corn seed market under imperfect competition. In a multiproduct context, we examine how substitution/complementarity relationships among products can affect pricing. This is used to motivate generalizations of the Herfindahl-Hirschman index capturing cross-market effects of imperfect competition on pricing. The model is applied to pricing of U.S. conventional and biotech seeds from 2000 to 2007. We reject the standard component pricing in biotech traits in favor of subadditive bundle pricing. The econometric estimates show how changes in market structure (as measured by both own- and cross-Herfindahl indexes) affect U.S. corn seed prices.
TL;DR: In this article, the performance of the MM-estimator and OLS was compared in an application of crop yield detrending, assuming symmetric as well as skewed crop yield distributions.
Abstract: Using a Monte Carlo experiment, the performance of the ordinary least squares (OLS) and the MM-estimator, a robust regression technique, is compared in an application of crop yield detrending. Assuming symmetric as well as skewed crop yield distributions, we show that the MM-estimator performs similarly to OLS for uncontaminated time series of crop yield data, and clearly outperforms OLS for outlier-contaminated samples. In contrast to earlier studies, our analysis suggests that robust regression techniques, such as the MM-estimator, should be reconsidered for detrending crop yield data.
TL;DR: The authors investigated the determinants of world demand for U.S. corn seeds with a detailed analysis of trade costs impeding exports flows to various markets, including distance, tariffs, and sanitary-phytosanitary (SPS) regulations imposed by foreign countries.
Abstract: The United States is a large net exporter of corn seeds. Seed trade, including corn, has been expanding but its determinants are not well understood. This paper econometrically investigates the determinants of world demand for U.S. corn seeds with a detailed analysis of trade costs impeding exports flows to various markets. Trade costs include costs associated with distance, tariffs, and sanitary-phytosanitary (SPS) regulations imposed by foreign countries on U.S. corn seed exports. SPS policy information comes from the Excerpt data base of USDA-APHIS. The analysis relies on a gravity-like model based on an explicit specification of derived demand for seed by foreign corn producers. A SPS count variable is incorporated as a shifter in the unit cost of seeds faced by foreign users. We use data from 48 countries and for the years 1989 to 2004. We find that all trade costs matter and have had a negative impact on U.S. corn seed exports. Tariffs matter most; followed by SPS measures and distance. An extensive econometric investigation reveals that qualitative results are robust to specification changes, but that sample selection bias is present in log-linear specifications based on seed export levels and approximating zero trade data with a small positive number.
TL;DR: The authors traces the evolution of our deepening economic understanding of the causes and consequences of agricultural policy over time, through the application of improved models and tools of analysis to more extensive data, and have developed better answers to old questions, and responded to changing policy instruments, market contexts, and policy concerns.
Abstract: Agricultural economists helped develop farm programs to respond to the dire economic situation of the 1920s and 1930s. Some early authors appreciated that such policies created problems in markets for commodities and inputs. Over time, our understanding of agricultural issues and policies has deepened. Through the application of improved models and tools of analysis to more extensive data, we have developed better answers to old questions, and have responded to changing policy instruments, market contexts, and policy concerns. This article traces the evolution of our deepening economic understanding of the causes and consequences of agricultural policy.
TL;DR: The authors examined the impacts of adopting animal identification and tracing systems on the U.S. meat and livestock industry using a multimarket equilibrium displacement model, and found that a modest increase in domestic demand for beef would offset the costs of an animal identification system.
Abstract: We examine the impacts of adopting animal identification and tracing systems on the U.S. meat and livestock industry. Using a multimarket equilibrium displacement model, we find that a modest increase in domestic demand for beef would offset the costs of an animal identification system. Similarly, an increase in beef export demand equivalent to Japan’s beef export market share prior to the 2003 U.S. discovery of bovine spongiform encephalopathy would offset animal identification system costs.