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NEP: New Economics Papers
Agricultural Economics
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Edited by: Angelo Zago
http://ideas.repec.org/e/pza49.html
Universita degli Studi di Verona
Date: 2006-04-08
Papers: 18
This document is in the public domain, feel free to circulate it.
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In this issue we have:
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1. The Relative Importance of Global Agricultural Subsidies and
Market Access
Anderson, Kym; Martin, Will; Valenzuela, Ernesto
2. WTO's Doha Cotton Initiative: A Tale of Two Issues
Anderson, Kym; Valenzuela, Ernesto
3. The poverty impact of rural roads : evidence from Bangladesh
Koolwal, Gayatri B.; Bakht, Zaid; Khandker, Shahidur R.
4. Estimating Heterogeneous Production in Fisheries
Kurt E. Schnier; Christopher M. Anderson; William C. Horrace
5. Estimating Trade Restrictiveness Indices
Kee, Hiau Looi; Nicita, Alessandro; Olarreaga, Marcelo
6. Endogenous Trade Policies in a Developing Economy
N.M. Hung; N.V. Quyen
7. Options and Tradeoffs in Krabi's Coastal Land Use
Tipparat Pongthanapanich
8. The Role of R&D in Productivity Growth: The Case of
Agriculture in New Zealand: 1927 to 2001
Julia Hall; Grant M Scobie
9. Tariff Equivalent of Technical Barriers to Trade with
Imperfect Substitution and Trade Costs
Chengyan Yue; John C. Beghin; Helen H. Jensen
10. GM Cotton Adoption, Recent and Prospective: A Global CGE
Analysis of Economic Impacts
Anderson, Kym; Jackson, Lee Ann; Valenzuela, Ernesto
11. Sugar prices, labor income, and poverty in Brazil
Olarreaga, Marcelo; Krivonos, Ekaterina
12. Quality and Competition: An Empirical Analysis across
Industries
Crespi, John M.; Marette, St?phan
13. Getting Rich and Eating Out: Consumption of Food Away from
Home in Urban China
Ma, Hengyun; Huang, Jikun; Fuller, Frank H.; Rozelle, Scott
14. Allocating Nutrient Load Reduction across a Watershed:
Implications of Different Principles
Feng, Hongli; Jha, Manoj; Gassman, Philip W.
15. Investigating nonlinear speculation in cattle, corn, and hog
futures markets using logistic smooth transition regression
models
Andreas R?thig; Carl Chiarella
16. Identifying Technically Efficient Fishing Vessels: A Non-
Empty, Minimal Subset Approach
Alfonso Flores-Lagunes; William C. Horrace; Kurt E. Schnier
17. Combine Harvester Econometric Model with Forward Speed
Optimization
Isaac, N.E.; Quick, G.R.; Birrell, S.J.; Edwards, William M.
Coers, B.A.
18. Amplifying effects of land-use change on future atmospheric
CO2 levels
Vincent Gitz; Philippe Ciais
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1. The Relative Importance of Global Agricultural Subsidies and
Market Access
Anderson, Kym
Martin, Will
Valenzuela, Ernesto
The claim by global trade modelers that the potential
contribution to global economic welfare of removing agricultural
subsidies is less than one-tenth of that from removing
agricultural tariffs puzzles many observers. To help explain that
result, this paper first compares the OECD and model-based
estimates of the extent of the producer distortions (leaving
aside consumer distortions), and shows that 75 percent of total
support is provided by market access barriers when account is
taken of all forms of support to farmers and to agricultural
processors globally, and only 19 percent to domestic farm
subsidies. We then provide a back-of-the-envelope (BOTE)
calculation of the welfare cost of those distortions. Assuming
unitary supply and demand elasticities, that BOTE analysis
suggests 86 percent of the welfare cost is due to tariffs and
only 6 percent to domestic farm subsidies. When the higher costs
associated with the greater variability of trade measures
relative to domestic support are accounted for, the BOTE estimate
of the latter?s share falls to 4 percent. This is close to the
5 percent generated by the most commonly used global model (GTAP)
and reported in the paper?s final section.
Keywords: agricultural protection; computable general
equilibrium modeling; economic welfare; trade policy
reform
JEL: C68 D58 Q17 Q18
Date: 2006-03
URL: http://d.repec.org
/n?u=RePEc:cpr:ceprdp:5569&r=agr
2. WTO's Doha Cotton Initiative: A Tale of Two Issues
Anderson, Kym
Valenzuela, Ernesto
Four West African nations have demanded the WTO?s Doha
Development Agenda include a Cotton Initiative that involves two
issues: cutting cotton subsidies and tariffs, and assisting farm
productivity growth in Africa. This paper provides estimates of
the potential economic impacts of (a) complete or partial cotton
subsidies and import tariffs globally and (b) cotton productivity
growth through the adoption of genetically modified (GM) cotton
varieties. Use is made of the latest version of the GTAP database
and model. Our results confirm that ? unlike for other
agricultural subsidies and tariffs ? for cotton it is subsidy
reductions rather than tariff cuts that would make by far the
largest impact. For Sub-Saharan Africa the potential gains are
huge relative to the effects on them of reforming other
merchandise trade policies. And they could be more than doubled
if that reform provided the cash for farmers to take advantage of
the biotechnology revolution and adopt GM cotton varieties. But
those potential gains, and the affordability of switching to
costly GM seed, depend crucially on the extent to which high-
income countries are willing to lower domestic support to their
cotton farmers.
Keywords: computable general equilibrium modeling; cotton
biotechnology; economic welfare; GMOs; subsidy and
tariff reform
JEL: D58 F17 Q16 Q17
Date: 2006-03
URL: http://d.repec.org
/n?u=RePEc:cpr:ceprdp:5567&r=agr
3. The poverty impact of rural roads : evidence from Bangladesh
Koolwal, Gayatri B.
Bakht, Zaid
Khandker, Shahidur R.
The rationale for public investment in rural roads is that
households can better exploit agricultural and nonagricultural
opportunities to use labor and capital more efficiently. But
significant knowledge gaps remain as to how opportunities
provided by roads actually filter back into household outcomes
and their distributional consequences. This paper examines the
impacts of rural road projects using household-level panel data
from Bangladesh. Rural road investments are found to reduce
poverty significantly through higher agricultural production,
higher wages, lower input and transportation costs, and higher
output prices. Rural roads also lead to higher girls ' and boys '
schooling. Road investments are pro-poor, meaning the gains are
proportionately higher for the poor than for the non-poor.
Keywords: Transport Economics Policy & Planning,Rural Roads &
Transport,Economic Theory & Research,Rural Transport,
Rural Poverty Reduction
Date: 2006-04-01
URL: http://d.repec.org
/n?u=RePEc:wbk:wbrwps:3875&r=agr
4. Estimating Heterogeneous Production in Fisheries
Kurt E. Schnier (University of Rhode Island, Department of
Environmental and Natural Resource Economics, Coastal
Institute, 1 Greenhouse Road, Suite 212, Kingston, Rhode
Island 02881)
Christopher M. Anderson (Department of Environmental and
Natural Resource Economics, University of Rhode Island)
William C. Horrace (Center for Policy Research, Maxwell
School, Syracuse University, Syracuse NY 13244-1020)
Stochastic production frontier models are used extensively in
the agricultural and resource economics literature to estimate
production functions and technical efficiency, as well as to
guide policy. Traditionally these models assume that each agent's
production can be specified as a representative, homogeneous
function. This paper proposes the synthesis of a latent class
regression and an aagricultural production frontier model to
estimate technical efficiency while allowing for the possibility
of production heterogeneity. We use this model to estimate a
latent class production function and efficiency measures for
vessels in the Northeast Atlantic herring fishery. Our results
suggest that traditional measures of technical efficiency may be
incorrect, if heterogeneity of agricultural production exists.
Keywords: latent class regression, EC algorithm, stochastic
production frontier, technical efficiency
JEL: D24 N52
Date: 2006-03
URL: http://d.repec.org/n
?u=RePEc:max:cprwps:80&r=agr
5. Estimating Trade Restrictiveness Indices
Kee, Hiau Looi
Nicita, Alessandro
Olarreaga, Marcelo
The objective of this paper is to provide indicators of trade
restrictiveness that include both measures of tariff and non-
tariff barriers for 91 developing and developed countries. For
each country, we estimate three trade restrictiveness indices.
The first one captures the extent to which trade policies at home
affect domestic welfare. This follows the work of Anderson and
Neary (1992, 1994 and 1996). The second index captures the impact
of trade distortions on each country?s import bundle. This
follows the work of Anderson and Neary (2003). The last index
focuses on market access and summarizes the trade distortions
imposed by the rest of the world on each country?s export
bundle. All indices are estimated for the broad aggregates of
manufacturing and agriculture products. Results suggest that poor
countries (and those with the highest poverty headcount) tend to
be more restrictive, but they also face the highest trade
barriers on their export bundle. This is partly explained by the
fact that agriculture protection is generally larger than
manufacturing protection. NTBs contribute more than 70 percent on
average to world protection, underlying their importance for any
study on trade protection.
Keywords: trade restrictiveness indices
JEL: F10 F11 F13
Date: 2006-03
URL: http://d.repec.org
/n?u=RePEc:cpr:ceprdp:5576&r=agr
6. Endogenous Trade Policies in a Developing Economy
N.M. Hung
N.V. Quyen
Consider a small developing economy with a manufacturing sector
opened to international trade, and an agricultural sector having
limited, not to say any, access to world markets. We modify the
Grossman and Helpman's influence-driven model of trade policy
formation to allow for an endogenously determined wage rate in a
three-sector economy where the manufacturing sector can lobby
policy makers for favorable policies. Beside protectionist
policies, namely an import tariff or an export subsidy, we show
that the owners of the specific factor in agriculture - a non-
lobby group - have to bear a consumption tax imposed on their
products. This would further strengthen the trade protectionist
measure, and imply possibly undesirable general equilibrium
repercussions: there will be a reallocation of labor to the
manufacturing sector which enjoys an output expansion, an output
contraction in the agricultural sector, and a lower workers'
"real" income.
JEL: F13
Date: 2006
URL: http://d.repec.org
/n?u=RePEc:lvl:laeccr:0602&r=agr
7. Options and Tradeoffs in Krabi's Coastal Land Use
Tipparat Pongthanapanich (Department of Environmental and
Business Economics, University of Southern Denmark)
This paper explores the tradeoff options for optimal coastal
land use in Krabi?s coastal land development zone (CLDZ).
Maximizing the net private benefit and maximizing the net
environmental benefits, subject to the constraints set by land
availability, effluent discharge from shrimp farms, and rice
consumption are optimized via multiobjective programming. It is
found that although the benefit from present land use pattern is
close to the efficient level (Pareto frontier), reallocation of
land use and revision of CLDZ are required in order to achieve an
efficient outcome of planning. Designating aquaculture zones on
the basis of carrying capacity is found to be an important scheme
to control the impacts of shrimp farm discharges. The combined
measures of carrying capacity and green taxation would lead to
economically and environmentally responsible aquaculture.
Compliance with aquaculture effluent standard alone could
potentially lead to the detrimental optimum, and would be
superfluous if aquaculture zones based on carrying capacity were
designated.
Keywords: Coastal management, Pareto frontier, multiobjective
programming, Krabi
JEL: C61 D62 D74 Q24
Date: 2005-12
URL: http://d.repec.org/n
?u=RePEc:sdk:wpaper:66&r=agr
8. The Role of R&D in Productivity Growth: The Case of
Agriculture in New Zealand: 1927 to 2001
Julia Hall
Grant M Scobie (New Zealand Treasury)
Productivity growth is a key determinant of rising living
standards. The agricultural sector has been an important
contributor to the overall growth of productivity in New Zealand.
The average rate of multifactor productivity growth in
agriculture from 1926-27 to 2000-01 was 1.8%. We find evidence
that this rate has been increasing especially since the reforms
of the 1980s. This paper estimates the contribution that R&D has
made to agricultural productivity. It develops a theoretical
framework based on the stock of knowledge available to producers.
This model incorporates foreign stocks of knowledge and the spill-
in effect for New Zealand. The estimation allows for extended lag
effects of research spending on productivity. We find that
foreign knowledge is consistently an important factor in
explaining the growth of productivity. It appears that the
agricultural sector relies heavily on drawing on the foreign
stock of knowledge generated off-shore. The contribution of
domestic knowledge generated by New Zealand?s investment in R&D
is less clear cut. However, there is typically a significant
positive relation between domestic knowledge and the growth of
productivity. We find a wide range of estimates of the return to
domestic R&D. The results are sensitive to the type of model used
and the specification of the variables. Based on our preferred
model we estimate that investment in domestic R&D has generated
an annual rate of return of 17%. The results underscore the
importance of foreign knowledge in a small open economy. The very
existence of foreign knowledge may be a necessary condition for
achieving productivity growth in a small open economy. However in
no way could it be argued that this was sufficient. Having a
domestic capability that can receive and process the spill-ins
from foreign knowledge is vital to capturing the benefits. The
challenge is to be able to isolate those effects from aggregate
data for the agricultural sector. In that task we claim only
modest success.
Keywords: New Zealand; technological change; R&D; productivity;
economics of knowledge; spillovers; rates of return;
agriculture
JEL: O30 O40
Date: 2006-03
URL: http://d.repec.or
g/n?u=RePEc:nzt:nztwps:06/01&r=agr
9. Tariff Equivalent of Technical Barriers to Trade with
Imperfect Substitution and Trade Costs
Chengyan Yue
John C. Beghin (Center for Agricultural and Rural
Development (CARD)) (Food and Agricultural Policy Research
Institute (FAPRI))
Helen H. Jensen (Center for Agricultural and Rural
Development (CARD)) (Midwest Agribusiness Trade Research
and Information Center (MATRIC))
The price-wedge method yields a tariff-equivalent estimate of
technical barriers to trade (TBT). An extension of this method
accounts for imperfect substitution between domestic and imported
goods and incorporates recent findings on trade costs. We explore
the sensitivity of this revamped tariff-equivalent estimate to
its determinants (substitution elasticity, preference for home
good, trade cost, and to the reference data chosen). We use the
approach to investigate the ongoing U.S.-Japan apple trade
dispute and find that removing the Japanese TBT would yield
limited export gains to the United States. We then draw policy
implications of our findings.
Keywords: apple trade, Japan, price wedge, sanitary and
phytosanitary (SPS), tariff equivalent, technical
barriers to trade (TBT), trade cost, trade dispute.
JEL: F1 F18 Q17 Q18
Date: 2005-11
URL: http://d.repec
.org/n?u=RePEc:ias:cpaper:05-wp383&r=agr
10. GM Cotton Adoption, Recent and Prospective: A Global CGE
Analysis of Economic Impacts
Anderson, Kym
Jackson, Lee Ann
Valenzuela, Ernesto
This paper provides estimates of the economic impact of initial
adoption of genetically modified (GM) cotton and of its potential
impacts beyond the few countries where it is currently common.
Use is made of the latest version of the GTAP database and model.
Our results suggest that by following the lead of China and South
Africa, adoption of GM cotton varieties by other developing
countries ? especially in Sub-Saharan Africa ? could provide
even larger proportionate gains to farmer and national welfare
than in those first-adopting countries. Furthermore, those
estimated gains are shown to exceed those from a successful
campaign under the WTO?s Doha Development Agenda to
reduce/remove cotton subsidies and import tariffs globally.
Keywords: computable general equilibrium modeling; cotton
biotechnology; economic welfare; GMOs; subsidy; tariff
reform
JEL: D58 F17 Q16 Q17
Date: 2006-03
URL: http://d.repec.org
/n?u=RePEc:cpr:ceprdp:5568&r=agr
11. Sugar prices, labor income, and poverty in Brazil
Olarreaga, Marcelo
Krivonos, Ekaterina
This paper assesses the impact that a potential liberalization
of sugar regimes in OECD countries could have on household labor
income and poverty in Brazil. The authors first estimate the
extent of price transmission from world markets to 11 Brazilian
states to capture the fact that some local markets may be
relatively more isolated from changes in world prices. They then
simultaneously estimate the impact that changes in domestic sugar
prices have on regional wages and employment depending on worker
characteristics. Finally, they measure the impact on household
income of a 10 percent increase in world sugar prices. Results
suggest that workers in the sugar sector and in sugar-producing
regions have better employment opportunities and experience
larger wage increases. More interestingly, households at the top
of the income distribution experience larger income gains due to
higher wages, whereas households at the bottom of the
distribution experience larger income gains due to movements out
of unemployment.
Keywords: Markets and Market Access,Economic Theory & Research,
Agribusiness & Markets,Ag ricultural Trade,Agricultural
Industry
Date: 2006-04-01
URL: http://d.repec.org
/n?u=RePEc:wbk:wbrwps:3874&r=agr
12. Quality and Competition: An Empirical Analysis across
Industries
Crespi, John M.
Marette, St?phan
This paper empirically explores the link between quality and
concentration in a cross-section of manufactured goods. Using
concentration data and product quality indicators, an ordered
probit estimation explores the impact of concentration on quality
that is defined as an index of quality characteristics. The
results demonstrate that market concentration and quality are
positively correlated across different industries. When industry
concentration increases, the likelihood of the product being
higher quality increases and the likelihood of observing a lower
quality decreases.
Keywords: concentration, market structure, ordered probit,
product differentiation, product quality.
Date: 2006-03-28
URL: http://d.repec.or
g/n?u=RePEc:isu:genres:12555&r=agr
13. Getting Rich and Eating Out: Consumption of Food Away from
Home in Urban China
Ma, Hengyun
Huang, Jikun
Fuller, Frank H.
Rozelle, Scott
The overall goal of this study is to better understand food-away-
from-home (FAFH) consumption in urban China. We use national
statistical sources and our own data to examine the trends in
FAFH during the late reform period and to analyze the
determinants of FAFH demand, examining how different groups of
consumers have participated in this new area of consumption.
Besides the normal Tobit model for total food expenditure away
from home, a system of multivariate Tobit equations was estimated
simultaneously for three categories of foods consumed outside of
the home. The results show that the rapid increase of FAFH demand,
a rise that is fueled by higher incomes, is changing consumption
patterns in China?s post-reform urban economy. We also use our
findings to illustrate how omission of accounting for FAFH trends
by China?s official statisticians has affected the reported
trends in national meat supply and demand statistics.
JEL: D1 Q1 R2
Date: 2006-02-06
URL: http://d.repec.or
g/n?u=RePEc:isu:genres:12499&r=agr
14. Allocating Nutrient Load Reduction across a Watershed:
Implications of Different Principles
Feng, Hongli
Jha, Manoj
Gassman, Philip W.
A watershed based model, the Soil and Water Assessment Tool (
SWAT), along with transfer coefficients is used to assess
alternative principles of allocating nutrient load reduction in
the Raccoon River watershed in central Iowa. Four principles are
examined for their cost-effectiveness and impacts on water
quality: absolute equity, equity based on ability, critical area
targeting, and geographic proximity. Based on SWAT simulation
results, transfer coefficients are calculated for the effects of
nitrogen application reduction. We find both critical area
targeting and downstream focus (an example of geographic
proximity) can be more expensive than equal allocation, a
manifestation of absolute equity. Unless abatement costs are
quite heterogeneous across the subwatersheds, the least-cost
allocation (an application of the principle of equity based on
ability) have a potential of cost savings of about 10% compared
to equal allocation. We also find that the gap between nitrogen
loading estimated from transfer coefficients and nitrogen loading
predicted by SWAT simulation is small (in general less than 5%).
This suggests that transfer coefficients can be a useful tool for
watershed nutrient planning. Sensitivity analyses suggest that
these results are robust with respect to different degrees of
nitrogen reduction and how much other conservation practices are
used.
Keywords: Least-cost allocation, Soil and Water Assessment Tool (
SWAT), Transfer coefficients
JEL: Q5
Date: 2006-03-24
URL: http://d.repec.or
g/n?u=RePEc:isu:genres:12554&r=agr
15. Investigating nonlinear speculation in cattle, corn, and hog
futures markets using logistic smooth transition regression
models
Andreas R?thig (Institut f?r Volkswirtschaftslehre (
Department of Economics), Technische Universit?t Darmstadt
Darmstadt University of Technology))
Carl Chiarella (School of Finance and Economics, University
of Technology, Sydney, Australia)
This article explores nonlinearities in the response of
speculators' trading activity to price changes in live cattle,
corn, and lean hog futures markets. Analyzing weekly data from
March 4, 1997 to December 27, 2005, we reject linearity in all of
these markets. Using smooth transition regression models, we find
a similar structure of nonlinearities with regard to the number
of different regimes, the choice of the transition variable, and
the value at which the transition occurs.
Keywords: Futures markets, speculation, nonlinear dynamics,
smooth transition regression model.
JEL: G10 G11 C22 C53
Date: 2006-02
URL: http://d.repec.org/
n?u=RePEc:tud:ddpiec:167&r=agr
16. Identifying Technically Efficient Fishing Vessels: A Non-
Empty, Minimal Subset Approach
Alfonso Flores-Lagunes (University of Arizona)
William C. Horrace (Center for Policy Research, Maxwell
School, Syracuse University, Syracuse NY 13244-1020)
Kurt E. Schnier (University of Rhode Island)
There is a growing resource economics literature, concerning the
estimation of the technical efficiency of fishing vessels
utilizing the stochastic frontier model. In these models, vessel
output is regressed on a linear function of vessel inputs and a
random composed error. Using parametric assumptions on the
regression residual, estimates of vessel technical efficiency are
calculated as the mean of a truncated normal distribution and are
often reported in a rank statistic as a measure of a captain's
skill and used to estimate excess capacity within fisheries. We
demonstrate analytically that these measures are potentially
flawed, and extend the results of Horrace (2005) to estimate
captain skill for thirty-nine vessels in the Northeast Atlantic
herring fleet, based on homogeneous and heterogeneous production
functions within the fleet. When homogeneous production is
assumed, we find inferential inconsistencies between our methods
and the methods of ranking the means of the technical
inefficiency distributions for each vessel. When production is
allowed to be heterogeneous, these inconsistencies are mitigated.
JEL: C12 C16 D24
Date: 2006-03
URL: http://d.repec.org/n
?u=RePEc:max:cprwps:78&r=agr
17. Combine Harvester Econometric Model with Forward Speed
Optimization
Isaac, N.E.
Quick, G.R.
Birrell, S.J.
Edwards, William M.
Coers, B.A.
A combine harvester econometric simulation model was developed
with the goal of matching the combine forward speed to the
maximum harvested net income per acre. The model considers the
machinery management costs of owning a combine and platform
header for harvesting wwheat.
Keywords: combine harvesters, econometric modeling, machinery
management, yield monitor
JEL: Q1
Date: 2006-03-22
URL: http://d.repec.or
g/n?u=RePEc:isu:genres:12547&r=agr
18. Amplifying effects of land-use change on future atmospheric
CO2 levels
Vincent Gitz (CIRED - Centre International de Recherche sur
l'Environnement et le D?veloppement - http://www.centre-
cired.fr - [CNRS : UMR8568] - [] - [Ecole des Hautes Etudes
en Sciences Sociales][Ecole Nationale du G?nie Rural des
Eaux et des For?ts][Ecole Nationale des Ponts et
Chauss?es])
Philippe Ciais (LSCE - Laboratoire des sciences du climat et
de l'environnement - http://www.lsce.cnrs-gif.fr - [CNRS :
UMR1572][CEA] - [] - [])
We constructed a model to analyze the interactions between land-
use change and atmospheric CO2 during the recent past and for the
future. The primary impact of the conversion of forested lands to
cultivated lands is to increase atmospheric CO2, via losses of
biomass and soil carbon to the atmosphere. This increase is
likely to continue in the next decades, but its magnitude can
vary according to each land-use scenario. We show that this first-
order effect is further amplified by the correlated diminution of
terrestrial sinks, because when croplands replace forests, the
turnover time of excess carbon in the biosphere decreases, and
hence the sink capacity of terrestrial ecosystems decreases. This
effect acts to further increase by up to 100 ppm the CO2 level
reached by 2100, and it is of<br />the same order of magnitude,
although smaller, than climate-carbon feedbacks. Uncertainties on
the magnitude of this land-use induced effect are large, because
of uncertainties in the sink role of terrestrial ecosystems in
the future and because of uncertainties inherent to the modeling
of land-use induced carbon emissions. Such an extra rise in
atmospheric CO2 is however partially offset by the ocean
reservoir and by sinks operating over undisturbed, pristine
ecosystems, suggesting that conserving pristine forests with long
turnover times might be efficient in mitigating the greenhouse
effect
Keywords: land-use change; carbon cycle; future scenarios
Date: 2006-03-30
URL: http
://d.repec.org/n?u=RePEc:hal:papers:halshs-00009826_v1&r=agr
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