Showing papers in "Applied Economic Perspectives and Policy in 2018"
TL;DR: This work suggests examining the distribution of food insecurity within households, the impact of the food distribution system on food insecurity, the coping mechanisms of low-income food secure families, food insecurity among American Indians, the effects of charitable food assistance, the causal relationship between food insecurity and health outcomes, and the declining age gradient in food security among Seniors.
Abstract: Food insecurity is now recognized as a major health crisis in the United States. This is due to the size of the problem—more than 42 million persons were food insecure in 2015—as well as the multiple negative health outcomes and higher health care costs attributable to food insecurity. An extensive body of literature from multiple fields has examined the causes and consequences of food insecurity and the efficacy of food assistance programs—especially the Supplemental Nutrition Assistance Program. We review this literature and provide suggestions for future research directions. We suggest examining the distribution of food insecurity within households, the impact of the food distribution system on food insecurity, the coping mechanisms of low-income food secure families, food insecurity among American Indians, the effects of charitable food assistance, the causal relationship between food insecurity and health outcomes, the declining age gradient in food insecurity among Seniors, the effects of labor force participation and the Great Recession on food insecurity, and the long-term consequences of food insecurity. In addition, the impact of two recent policy recommendations on food insecurity – the minimum wage and the Affordable Care – Act should be considered.
175 citations
TL;DR: In this article, the challenge and opportunities of Big Data are examined and the authors conclude that these technologies will lead to relevant analysis at every stage of the agricultural value chain, particularly, the volume, velocity, variety, and veracity of the data.
Abstract: This article examines the challenge and opportunities of Big Data, and concludes that these technologies will lead to relevant analysis at every stage of the agricultural value chain. Big Data is defined by several characteristics beyond size, particularly, the volume, velocity, variety, and veracity of the data. We discuss a set of analytical techniques that are increasingly relevant to our profession as one addresses these issues. Ultimately, we resolve that agricultural and applied economists are uniquely positioned to contribute to the research and outreach agenda on Big Data. We believe there are relevant policy, farm management, supply chain, consumer demand, and sustainability issues where our profession can make major contributions. The authors are thankful to the anonymous reviewers and editor Craig Gundersen for helpful comments. Support was provided by the Mississippi Agricultural and Forestry Experiment Station Special Research Initiative.
172 citations
TL;DR: In this article, the authors synthesize findings from more than 40 studies on how R&D investments affect agricultural total factor productivity (TFP) in various parts of the world.
Abstract: Increasing the world’s food supply has depended heavily on increasing agricultural productivity, which in turn depends on investments in research and development (R&D). This article synthesizes findings from more than 40 studies on how R&D investments affect agricultural total factor productivity (TFP) in various parts of the world. The article breaks out the relative contributions to TFP growth of R&D by public institutions, private companies, and the CGIAR (a consortium of international agricultural research centers), including international technology spillovers. Major differences emerge between global regions in sources and efficiency of R&D capital. Developed countries appear to have benefitted more from private and international R&D spillovers than developing countries.
83 citations
TL;DR: In this paper, the authors identify several key challenges for the future, including issues related to dietary-related diseases and the efficacy of policies designed to improve dietary choices, trust in the food system, acceptance of new food and farm technologies, environmental impacts of food consumption, preferences for increased food quality, and issue related to food safety.
Abstract: The food consumer plays an increasingly prominent role in shaping the food and farming system. A better understanding of how public policies affect consumer choice and how those choices impact health, environment, and food security outcomes is needed. This paper addresses several key challenges we see for the future, including issues related to dietary-related diseases and the efficacy of policies designed to improve dietary choices, trust in the food system, acceptance of new food and farm technologies, environmental impacts of food consumption, preferences for increased food quality, and issues related to food safety. We also identify some research challenges and barriers that exist when studying these issues, including data quality and availability, uncertainty in the underlying biological and physical sciences, and the challenges to welfare economics that are presented by behavioral economics. We also identify the unique role that economists can play in helping address these key societal challenges.
69 citations
TL;DR: In this paper, the authors show that policies and incentives that correct market failure can attain sustainable development through enhancing conservation, recycling, the use of renewable resources, and development of the bioeconomy.
Abstract: Sustainable development can be attained by policies that are derived by analyses that integrate biophysical considerations into economic models. We show that policies and incentives that correct market failure can attain sustainable development through enhancing conservation, recycling, the use of renewable resources, and development of the bioeconomy, which relies on biological processes and feedstock to produce renewable products. The design of sustainable development policies and analysis of the bioeconomy pose new challenges to applied economists, who are uniquely qualified to integrate economic analysis with biophysical considerations.
61 citations
TL;DR: In this paper, the authors describe how the institution of contract farming varies in cross-sectional data covering 1,200 households across six regions of Madagascar, half of which are growers in contract farming agreements covering a dozen different crops.
Abstract: Contract farming, wherein a processor contracts out the production of an agricultural commodity to a grower, is the first step toward more vertically coordinated—and thus more modern—agricultural value chains. As such, in principle contract farming is a necessary condition for the structural transformation of developing economies to occur. Yet contract farming is far from monolithic, and the institution takes on a variety of forms. In this article, we describe how the institution of contract farming varies in cross-sectional data covering 1,200 households across six regions of Madagascar, half of which are growers in contract farming agreements covering a dozen different crops. In this setting, participation in contract farming has been associated with increases in income, improvements in food security, and reductions in income variability. Given those presumed effects in this setting of participation in contract farming, we then look at the correlates in our data of participation in contract farming. as well as one’s willingness to pay to participate in contract farming as a grower in an attempt to better target policies aimed at encouraging participation in contract farming.
50 citations
TL;DR: In this article, the authors assess the impact of small-holders' perceived production risks on the adoption of contract farming and the impact on small-holder food security and its impact on employment generation.
Abstract: This article reviews the literature on contract farming (CF) in India and assesses the impact of smallholders’ perceived production risks on the adoption of CF; the impact of CF on smallholders’ food security; and its impact on employment generation in their farming enterprises. We also show the impact of the outcome variables by risk preference of smallholders. Using farm-level data and endogenous switching regression methods, this study presents three key findings. First, the perception of weather and pest risk, access to irrigation facilities, extension visits, and access to institutional credit are the main drivers of CF adoption. Second, CF adoption increases food security and varies with the revealed risk preference of smallholders, and risk-seeking smallholders tend to gain higher food security. Third, regardless of revealed risk preferences, smallholders who did not adopt CF benefit from adoption by reducing their labor requirements, with no significant losses in yield.
50 citations
TL;DR: In this article, the authors review the current economic conditions of rural America and the current literature to set the stage for future research aimed at developing public policies that support economic prosperity in rural areas.
Abstract: To set the stage for future research aimed at developing public policies that support economic prosperity in rural areas, we review the current economic conditions of rural America and the current literature. Rural America is often characterized as a uniform, distressed place where agriculture dominates. In fact, rural America is diverse, with many regions doing well economically. In some areas, labor-saving technologies have reduced the workforce in manufacturing and resource-dependent industries. However, integration with urban areas has weakened the economic divide between urban and some rural areas, while natural amenities have boosted the fortunes of others. There is also evidence that homegrown enterprises can support growth even in the most remote, distressed regions. To support economic growth, policies should recognize the unique features of each place or region and balance the farm sector with the larger nonfarm rural economy. Economists are well-positioned to provide research-based evidence of what works, as well as rigorous evaluation of new polices.
47 citations
TL;DR: The authors found that food waste is a function of consumers' demographic characteristics, and that decisions to discard food vary with contextual factors, such as safety, price, and opportunity costs, in a large survey of U.S. food consumers using both within-and between-subject designs.
Abstract: Although food waste is increasingly recognized as an environmental and food security problem, there remains uncertainty over its primary contributors. Some food waste analyses seem to treat household food waste as a “mistake” or careless decision; however, consumer decisions to waste also likely reflect trade-offs and economic incentives. These issues were explored in large surveys of U.S. food consumers using both within- and between-subject designs, where we study consumers’ decisions to discard food in different scenarios that vary safety, price, and opportunity costs. We find that food waste is a function of consumers’ demographic characteristics, and that decisions to discard food vary with contextual factors.
47 citations
TL;DR: An overview of the eye-tracking literature can be found in this article, where an overview of eye tracking and its application in agricultural and food economics is presented, and insights on how to measure visual attention and choice are provided.
Abstract: When buying a product, consumers are confronted with a host of information presented to them However, this information can only affect shoppers' choices if they pay attention to it Eye tracking can measure visual attention to information Most recently, agricultural and food economics research has combined eye tracking and valuation methods to give insight into the relation between visual attention, preferences, and choices We present an overview of the eye-tracking literature, and discuss theory and applications Also, insights on how to measure visual attention and choice are provided While eye tracking has its challenges, there are interesting future research avenues that can be explored by agricultural and food economists using eye tracking
44 citations
TL;DR: In this article, eye movements in decision making are reviewed and it is shown that decision makers are subject to several visual biases such as the size, salience, position, emotional valence, predictability, and number of information elements.
Abstract: We review research on eye movements in decision making and show that decision makers are subject to several visual biases such as the size, salience, position, emotional valence, predictability, and number of information elements These biases lead decision makers to allocate their attention in ways that are arbitrary to their goals and sometimes bias their choices We show that while some visual biases can be minimized, others are unavoidable Consequently, it is impossible to present information in a completely neutral way Any presentation format will bias decision makers to attend or ignore different information and thereby influence their choices
TL;DR: In this article, the authors used an online choice experiment to determine consumer willingness to pay for steak labeled as natural, while half of the sample was provided with the definition of natural and half was not.
Abstract: A petition to the USDA claims that natural labeling misleads consumers. We investigate this claim using an online choice experiment to determine consumer willingness to pay for steak labeled as natural. Half of the sample was provided with the definition of natural, while half was not. The absence of the definition resulted in consumers placing a premium on “natural” steak, while those provided with the definition were not willing to pay a premium. Similarly, participants who consider themselves familiar with the natural definition did not place a premium on “natural” steak. Results indicate that consumers may misinterpret the natural label.
TL;DR: Analysis of the existing literature on consumers’ marginal willingness to pay (MWTP) for health benefits in food products indicates that the presence of a health claim does not only increase MWTP for health services but also reduces heterogeneity among MWTP estimates.
Abstract: This article analyzes the existing literature on consumers’ marginal willingness to pay (MWTP) for health benefits in food products. Results indicate that the presence of a health claim does not only increase MWTP for health benefits in foods but also reduces heterogeneity among MWTP estimates. Hypothetical methods significantly positively affect MWTP. The most popular product category “dairy” negatively influences MWTP. The popular health claim of “lowering cholesterol” has a significantly positive influence on MWTP. In addition, our review highlights that existing studies significantly differ in their setup, which renders the inference of clear-cut conclusions rather problematic.
TL;DR: A hedonic analysis of land values suggests that improved incentives for farming, urbanization and rising population density, and improved tenure security are possible drivers of rising land prices.
Abstract: Land markets are developing rapidly in Africa, though there remains a dearth of analysis regarding the direction and correlates of land prices and their implications for public policy in the region. This paper examines trends in land values and the factors influencing these trends in Tanzania. Real land prices rose significantly between 2009 and 2013 by 5.67% per year. A hedonic analysis of land values suggests that improved incentives for farming, urbanization and rising population density, and improved tenure security are possible drivers of rising land prices. We conclude by considering the potential policy implications arising from this work.
TL;DR: In this article, an instrumental variable approach with distance to local advisory office and a policy change chosen as instruments for extension participation was applied to investigate the impact of agricultural extension on farm income.
Abstract: Agricultural extension is an important policy instrument utilized to diffuse knowledge and increase profitability among farmers. However, analyses on impact are subject to endogeneity concerns, causing multiple biases. Failure to combat endogeneity can lead to false inferences on impact. This article addresses this issue by applying an instrumental variable approach with distance to local advisory office and a policy change chosen as instruments for extension participation. The results show that participation significantly increased farm income and that OLS estimates underestimated the impact. Therefore, a superior estimate of impact is achieved which can be leveraged to better support accurate policy making.
TL;DR: It is found that a text disclosing the presence of GM material lowers WTP relative to a QR code disclosure that must be scanned, and participants perceive Non-GMO Project verified and organic as substitutes; WTP premiums for a product with both Non- GMO Projectverified and organic labels is about the same as the WTP premium when either label is present in isolation.
Abstract: After much debate, the United States recently adopted a law that will require mandatory labeling of genetically modified (GM) food. We elicit willingness-to-pay (WTP) for manufactured and fresh foods that communicate the presence or absence of GM material. We find that a text disclosing the presence of GM material lowers WTP relative to a QR code disclosure that must be scanned. Furthermore, participants perceive Non-GMO Project verified and organic as substitutes; WTP premiums for a product with both Non-GMO Project verified and organic labels is about the same as the WTP premium when either label is present in isolation.
TL;DR: In this paper, the authors review the impacts, adaptation, and mitigation literature, identifying issues, summarizing main findings, commenting on methods, and pointing out research needs, with a special focus on what agricultural/applied economists have to offer.
Abstract: Climate change is not just a topic for the future—it is already producing real consequences. Economically, the issue has three principal dimensions: impacts, that is, how vulnerable are we; adaptation, that is, what can we do to reduce the impacts by altering operations; and mitigation, that is, what can we do to reduce the drivers causing climate change and thus the long-term extent of climate change? All of these issues have economic dimensions, including appraising damages and the value of effects reducing actions, as well as the formulation of efficient policies. Thus, it is not surprising that this is both an active agricultural economic research area and one with many more research possibilities. We review the impacts, adaptation, and mitigation literature, identifying issues, summarizing main findings, commenting on methods, and pointing out research needs, with a special focus on what agricultural/applied economists have to offer.
TL;DR: In this article, the gravity model and geospatial production data have been used to understand the driving forces for world agricultural markets, in trade policy, and in ensuring food security.
Abstract: International trade is likely to be a hugely important and interesting area for research by agricultural and applied economists in the next decade. While the questions for research are likely to change—with less emphasis on large-scale international negotiations and more on national reforms and regional agreements—there will be important challenges in understanding the driving forces for world agricultural markets, in trade policy, and in ensuring food security. New analytical techniques built on the gravity model and geospatial production data create many opportunities for innovative applications and expand the range of questions to which researchers in this field can effectively respond.
TL;DR: In this paper, the authors suggest directions for future research in nine key dimensions that can fill important gaps in the existing literature and build on new research methods and policy needs, as well as inform strategies for sustainable growth of agriculture.
Abstract: U.S. agriculture is vital to meeting a growing global population’s demand for food, fiber, feed, and fuel. Smart technologies, big data, and improvements in crop genetics present producers with promising new opportunities for meeting these needs. However, a changing climate and an expanding global population impose challenges to increasing crop and livestock production while sustaining the natural resource base and protecting environmental quality. Sustainable agricultural development will call for systems approaches to allocate land among competing uses, coupled with the adoption of conservation technologies incentivized by cost-effective policies that have been based on evidence from sound economic, behavioral, biological, and technological research. This paper suggests directions for future research in nine key dimensions that can fill important gaps in the existing literature and build on new research methods and policy needs, as well as inform strategies for sustainable growth of agriculture.
TL;DR: In this article, the authors use an equilibrium-displacement framework incorporating stochastic food-borne illness outbreaks to simulate long-run market effects of FSMA using the North American fresh-tomato industry as a case study.
Abstract: The Food Safety Modernization Act (FSMA) substantially expands the authority of the U.S. Food and Drug Administration to regulate fresh produce marketed in the United States. This article uses an equilibrium-displacement framework incorporating stochastic food-borne illness outbreaks to simulate long-run market effects of FSMA using the North American fresh-tomato industry as a case study. We demonstrate how, under FSMA, certain categories of suppliers will gain advantage over others. Growers and suppliers within the United States, and their buyers, are likely to gain relative to foreign producers and importers because FSMA imposes specific requirements for importers. Among fully regulated growers, large growers will benefit relative to small growers. Many producers have already adopted food-safety standards that closely resemble the FSMA rules, and the cost of implementing the FSMA requirements for these producers will be much lower than for other producers.
TL;DR: In this article, a choice experiment with a random sample of farmers in the State of Indiana, United States, revealed that farmers who have not previously adopted reduced tillage practices on any of their land require a $40 per acre increase in net revenue to switch from conventional tillage to no-till.
Abstract: The sizable technical potential to sequester atmospheric carbon in soils to mitigate climate change will only be realized where and when there is also economic potential. A choice experiment conducted with a random sample of farmers in the State of Indiana, United States, revealed that farmers who have not previously adopted reduced tillage practices on any of their land require a $40 per acre increase in net revenue to switch from conventional tillage to no-till. We estimate that farmers have a $10.57/acre option value of not signing a multi-year sequestration contract, and find that government payments are preferred to carbon markets.
TL;DR: In this paper, the authors investigate the supply response for main staple food crops in Sub-Saharan Africa over the period 2005−2013 using an innovative dataset recently developed by FAO's “Monitoring and Analysing Food and Agricultural Policies” (MAFAP) programme.
Abstract: We investigate the supply response for main staple food crops in Sub-Saharan Africa over the period 2005−2013 using an innovative dataset recently developed by FAO’s “Monitoring and Analysing Food and Agricultural Policies” (MAFAP) programme. Relying on dynamic panel techniques, we observe that acreage, production and yields respond to price signals, even if with a limited intensity. Moreover, we find that direct price incentives arising from border protection, government interventions in domestic markets, and price shocks at the border stimulate farmers’ supply. We also show that omitting transaction costs from the analysis leads to underestimation of the price elasticity of supply. Conversely, using wholesale instead of farm gate prices as proxy for producer prices leads to overestimation of this price elasticity.
TL;DR: This paper studied the impact of missing government crop data on agricultural commodity markets and found that derivatives markets for corn and soybeans did not display characteristic short run patterns in terms of uncertainty resolution and price changes that are normally observed around scheduled USDA release times.
Abstract: Government crop data have been shown to contribute to the efficient operation of agricultural commodity markets. In 2013, the USDA curtailed its crop report publication for the first time in decades due to an appropriations lapse, thereby offering the chance to study the impact on markets of missing government data. As expected, derivatives markets for corn and soybeans did not display characteristic short-run patterns in terms of uncertainty resolution and price changes that are normally observed around scheduled USDA release times. We are unable to detect evidence of a prolonged period of heightened uncertainty, realized volatility around the missing report, or abnormal pricing errors in the absence of government data. However, an unsurprisingly large 2013 corn and soybean crop could confound that attempt.
TL;DR: This article investigated the relationship between store format and the healthfulness of consumers' grocery shopping and found that healthier food choices are generally associated with higher food expenditure shares at supermarkets and supercenters and lower shares at drug stores and convenience stores.
Abstract: A growing literature in health and nutrition suggests that healthy foods are less available and more expensive at nontraditional store formats such as supercenters, convenience stores, and drug stores. We use Nielsen Homescan data to investigate the relationship between store format and the healthfulness of consumers’ grocery shopping. Accounting for a rich set of controls, as well as food retail market structure, we simultaneously estimate the healthfulness of consumers’ food purchases and the shares of food expenditure at traditional and nontraditional store formations. We find that healthier food choices are generally associated with higher food expenditure shares at supermarkets and supercenters and lower shares at drug stores and convenience stores. In addition, market concentration has a negative effect on shopping healthfulness.
TL;DR: In this article, a choice experiment was conducted to examine producer preferences for contracts to produce a risky bioenergy crop, and the authors developed a framework accounting for subjective risk preferences and perceptions, and heterogeneous status-quo alternatives.
Abstract: We employ a choice experiment to examine producer preferences for contracts to produce a risky bioenergy crop. We develop a framework accounting for subjective risk preferences and perceptions, and heterogeneous status-quo alternatives. Results indicate that price, biorefinery harvest, and establishment cost-share have significant positive effects, whereas contract length has a negative effect. We also find evidence of significant heterogeneity in preferences for biorefinery harvest, yield insurance, and contract length. Incorporating subjective risk perception and risk preference information, as well as accounting for heterogeneous status quo alternatives improves overall model performance.
TL;DR: This paper conducted an econometric analysis to examine the effects of reference prices on the dynamics of tomato price and farm revenue, and found that the suspension agreements have resulted in significant adjustments in the U.S. and Mexican tomato prices, and that the two prices are now more interdependent under the 2013 agreement.
Abstract: Since 1996 there have been several suspension agreements between the United States and Mexico that set reference prices for imported Mexican tomatoes. The 2013 suspension agreement raised the reference prices of Mexican tomatoes by 43%. This study conducts an econometric analysis to examine the effects of reference prices on the dynamics of tomato price and farm revenue. Findings indicate that the suspension agreements have resulted in significant adjustments in the U.S. and Mexican tomato prices, and that the two prices are now more interdependent under the 2013 agreement. Although the 2013 suspension agreement has boosted the prices of U.S. tomatoes, simulation analysis shows that the Mexican industry reaps most of the benefits from increased prices under the 2013 suspension agreement. The findings in this study could inform future trade negotiations.
TL;DR: In this article, the authors provide unbiased objective analysis to policymakers with regard to commodity programs, insurance markets, agricultural credit, and the production of bioenergy in the U.S. farm economy.
Abstract: Research priorities for the U.S. farm economy include increasing the productivity and cost efficiency on current land resources while understanding production agriculture across the globe. Providing unbiased objective analysis to policymakers with regard to commodity programs, insurance markets, agricultural credit, and the production of bioenergy are important issues that directly affect not only the U.S. farm economy but other agricultural regions. The ability to manage risk, the increasing complexity of farm operations, the ability of the U.S. farm sector to be nimble to changes in individual and societal preferences, and the efficient discovery of information through efficient markets offer a wealth of research opportunities.
TL;DR: This article investigated the economic impacts of the 2015 HPAI outbreak on turkey producers in Minnesota and the United States using a partial equilibrium model of the meat and poultry industry and found that the cost of the outbreak to U.S turkey producers was $225 million; $207 million of which were due to the loss in exports.
Abstract: We investigate the economic impacts of the 2015 HPAI outbreak on turkey producers in Minnesota and the United States. Using a partial equilibrium model of the meat and poultry industry we find that the cost of the outbreak to U.S turkey producers was $225 million; $207 million of which were due to the loss in exports. However, it could have been worse if not for implementation of regional bans by trading partners who have negotiated free trade agreements with the United States. Our results show that for every percentage point of additional exports, U.S. turkey producers avoided a loss of about $6 million.
TL;DR: The authors used a newly created panel dataset drawn from the 1997 to 2013 Agricultural Resource Management Survey (ARMS) to provide the first national estimates of income volatility for commercial farm households in the United States.
Abstract: This study uses a newly created panel dataset drawn from the 1997 to 2013 Agricultural Resource Management Survey to provide the first national estimates of income volatility for commercial farm households in the United States. Results show that the income of commercial farm households is substantially more volatile than that of all U.S. households—though the volatility of farm income is not more volatile than income from nonfarm self-employment. Using a regression analysis, we identify operator, operation, and regional characteristics associated with higher income volatility, providing information that could improve targeting of risk-mitigating programs. We find that farm income volatility has declined for farms specializing in program crops in recent decades, supporting the hypothesis that the expansion of the federal crop insurance program helped reduce farm income risk.
TL;DR: This paper examined whether the repeal of alcohol sales on Sunday in Georgia had an impact on teenage drinking, which is linked to a multitude of risky behaviors, and found no effect of repeal on underage drinking.
Abstract: Current Blue laws are primarily concerned with limiting the sale of alcohol on Sunday. This presumably decreases adverse outcomes related to alcohol consumption. We examine whether the repeal of alcohol sales on Sunday in Georgia had an impact on teenage drinking, which is linked to a multitude of risky behaviors. We exploit the heterogeneous repeal across counties and municipalities. To account for potential endogeneity, we employ an instrumental variable approach. Across several model specifications, we find no effect of repeal on underage drinking. Concerns that repeal might contribute to increases in underage drinking appear to be unfounded in this case.