Steven S. Vickner and Stephen P. Davies
Author Affiliations: Steven Vickner is assistant professor in the Department of Agricultural Economics at the University of Kentucky. Stephen Davies is professor in the Department of Agricultural and Resource Economics at Colorado State University.
Abstract: This paper develops a simultaneous-equations panel data econometric model to obtain point estimates of market power and pricing conduct in a representative product-differentiated, oligopolistic food market. The importance of this class of markets is recognized given its prevalence in the food and fiber system, especially for final consumer food products. The $1.3 billion domestic spaghetti sauce industry is featured. Although the results indicated firms exert limited market power, a portion of this power is derived from tacit price collusion. A higher degree of price collusion was found among brands within a market segment than between segments.
Key Words: market power, oligopoly, pricing conduct, product
differentiation.
Timothy J. Richards, X.M. Gao, and Paul M. Patterson
Author Affiliations: Timothy J. Richards is assistant professor, Morrison School of Agribusiness and Resource Management (MSABR), Arizona State University. X.M.Gao is Senior Econometrician, AT&T, Jacksonville, FL; and Paul M. Patterson is assistant professor, MSABR-ASU.
Abstract: "Commodity promotion" consists of many activities, each designed to contribute to a consumer's product knowledge or influence tastes. However, both knowledge and tastes are unobservable, or latent, variables influencing demand. This paper specifies a dynamic structural model of fresh fruit demand that treats promotion and other socioeconomic variables as "causal" variables influencing these latent variables. Estimating this state-space model using a Kalman filter approach provides estimates of both the system parameters and a latent variable series. The results show that these latent effects contribute positively to apple and other fruit consumption, while reducing banana consumption.
Key Words: commodity promotion, demand system, DYMIMIC, fresh fruit,
Kalman filter, LA/AIDS, latent variables.
Timothy A. Park and Wojciech J. Florkowski
Author Affiliations: Timothy A. Park is an associate professor in the Department of Agricultural and Applied Economics, University of Georgia, Athens, Georgia. Wojciech J. Florkowski is an associate professor in the Department of Agricultural and Applied Economics, University of Georgia, Griffin, Georgia.
Abstract: A generalized Heckman model of purchase decisions incorporating perceived consumer quality attributes, ease of purchase, and familiarity with marketing outlets as factors influencing pecan purchases is estimated. Marketing efforts that encourage consumers to expand expenditures on nut products increase both the probability of pecan purchases and the amount purchased. Consumers who use all types of nuts in a wider variety of foods tend to purchase pecans more frequently. A diverse set of marketing outlets provides consumers with convenient sources for purchasing pecans and has a significant influence on the probability of pecan purchases but not the amount of pecans purchased.
Key Words: generalized Heckman model, pecan purchases, Tobit.
Kevin C. Dhuyvetter and Terry L. Kastens
Author Affiliations: The authors are Extension Agricultural Economists and assistant professor, respectively, Department of Agricultural Economics, Kansas State University.
Abstract: The impact pre-harvest hedging and crop insurance strategies have on expected revenue and associated risk as well as how producers' risk attitudes affect optimal strategies was analyzed for Kansas wheat farms. No insurance, Catastrophic (CAT), Actual Production History (APH), and Crop Revenue Coverage (CRC) were considered. Average revenue was similar across alternatives, but APH and CRC results in the least income variability. Risk reduction effects of hedging were small and the advantage of CRC over APH decreases as hedging increases. This historical study provides useful information; however, if future market conditions differ significantly from the past, optimal strategies may change.
Key Words: crop insurance, hedging, revenue insurance, risk
management.
Dana L. Hoag, James C. Ascough II, and W. Marshall Fraiser
Author Affiliations: Dana Hoag and W. Marshall Frasier are professor and assistant professor, respectively, in the Department of Agricultural and Resource Economics, Colorado State University, Fort Collins. James Ascough II is a research scientist in the USDA-Agricultural Research Service, Fort Collins, Colorado.
Abstract: Computers change rapidly, yet the last survey on computer use in agriculture was in 1991. We surveyed Great Plains producers in 1995 and used logit analysis to characterize adopters and non-adopters. About 37% of these producers use computers which is consistent with the general population. We confirmed previous surveys emphasizing the importance of education, age/experience, and other farm characteristics on adoption. However, we also found that education and experience may no longer be a significant influence. Future research and education could focus on when and where computers are most needed, and therefore when adoption is most appropriate.
Key Words: adoption, agriculture, computers, farmers, Great Plains,
logit.
Robert D. Funk, James W. Mjelde, Frank M. Hons, and Vince A. Saladino
Author Affiliations: All of the authors are from Texas A&M University, College Station, Texas. Robert Funk is a graduate research associate and James Mjelde is a professor, both in the Department of Agriculture Economics. Frank Hons is a professor and Vince Saladino is a research tech II, both of the Department of Soil and Crop Sciences.
Abstract: Eight input combinations of commercial fertilizer, insecticides, and herbicides on a corn-soybean crop rotation in the Brazos River Bottom of Texas are evaluated. Input combinations which do not fully utilize all three inputs are consistently ranked higher by all criteria as the preferred input strategy for the corn-soybean rotation system. These results, which indicated limited input crop rotations tat fall somewhere between the extremes of conventional agricultural production and organic agriculture, deserve further attention as a possible production alternative.
Key Words: corn, limited input, soybean.
Michael A. Boland, Kenneth A. Foster, and Paul V. Preckel
Author Affiliations: Michael Boland is an assistant professor in the Department of Agricultural Economics at Kansas State University. Ken Foster and Paul Preckel are associate professor and professor, respectively, in the Department of Agricultural Economics at Purdue University.
Abstract: Current methods of formulating animal rations lead to excess nutrient excretion which can potentially lead to excess manure nutrients and an increase in economic costs. These methods do not recognize the impact of diminishing returns. The objectives is to simultaneously optimize feed ration composition and replacement. The results, when compared against results from a survey of feed companies, indicate that using a profit maximization rather than live weight growth maximization criterion targets nutrients to an animal's actual needs and, hence, fewer nutrients are excreted and higher returns for producers are obtained.
Key Words: nonlinear growth modeling, pigs, replacement, swine.
Michael P. Popp, Merle D. Faminow, and Lucas D. Parsch
Author Affiliations: Michael P. Popp and Merle D. Faminow are assistant professor and professor, respectively, in the Department of Agricultural Economics and Farm Management, University of Manitoba. Lucas D. Parsch is associate professor in the Department of Agricultural Economics and Agribusiness at the University of Arkansas.
Abstract: Factors that affect the decision to feed or sell calves at weaning are analyzed for Arkansas cow-calf operators. A discrete choice logit model is used to analyze the adoption of value-added cattle production. Farm size, human capital, perception of risk/returns and enterprise diversification are hypothesized to explain this decision. Regional factors and land quality are also accounted for. Operator perceptions towards risk, profitability and facilities were important. Production control and attention to marketing were also significant, but farm size and scale of cattle production had a minimal impact. Effects of human capital and off-farm labor opportunities need further investigation.
Key Words: backgrounding, cow-calf production, production control
vs. marketing, risk/return relationship, technology adoption.
Michael P. Novak and Eddy LaDue
Author Affiliations: Michael P. Novak is Manager of Agricultural Finance; Federal Agricultural Mortgage Corporation; Washington, DC. Eddy LaDue is W.I. Myers Professor of Agricultural Finance; Department of Agricultural, Resource, and Managerial Economics; Cornell University; Ithaca, NY.
Abstract: Recursive Partitioning Algorithm (RPA) is introduced as a technique for credit scoring analysis, which allows direct incorporation of misclassification costs. This study corroborates nonagricultural credit studies, which indicate that RPA outperforms logistic regression based on within-sample observations. However, validation based on more appropriate out-of-sample observations indicates that logistic regression is superior under some conditions. Incorporation of misclassification costs can influence the creditworthiness decision.
Key Words: finance, credit scoring, misclassification, recursive
partitioning algorithm.
Diane Hite, D. Lynn Forster, and Jon Rausch
Author Affiliations: Diane Hite is an assistant professor, Department of Agricultural Economics, Mississippi State University, D. Lynn Forster is a professor, Department of Agricultural, Environmental, and Development Economics, The Ohio State University. Jon Rausch is an extension specialist, Department of Agricultural Economics, The Ohio State University.
Abstract: Federal legislation mandates substantial reduction of air pollution emissions from electric utilities. Utilities in Appalachia that use locally mined high-sulfur coal must choose among abatement options such as fuel mixing and smokestack scrubbing technologies. Wet scrubbers are the most frequently adopted abatement technology in Ohio. This paper investigates beneficial reuses of by-product from wet scrubbers. By-product is most often disposed of in landfills, resulting in large external costs. We combine social cost and benefit transfers with a linear optimization model to investigate potential benefits of by-product recycling. Results suggest that significant incentives exist to find beneficial uses for by-product.
Key Words: by-product recycling, environmental economics, flue gas
desulfurization technology, social costs, and benefits.
Keith O. Fuglie
Author Affiliations: Keith O. Fuglie is an agricultural economist with the Economic Research Service, United States Department of Agriculture, Washington, DC.
Abstract: Adoption of conservation tillage can lead to substantial environmental benefits from reduced soil erosion. But benefits may be partially offset if adoption increases reliance on agricultural chemicals. Using area study data from the Cornbelt, this study examines factors affecting adoption of no-till and other conservation tillage systems and their effect on chemical use and corn yield. The results find no evidence that herbicide or fertilizer application rates are higher on fields with conservation tillage systems compared with conventional tillage. However, insecticide use may increase somewhat and yield may be lower. Current demographic trends in U.S. agriculture favor continued diffusion of conservation.
Key Words: conservation tillage, multinomial logit model, pesticides,
technology adoption.
Laura S. VanDyke, Darrell J. Bosch, and James W. Pease
Author Affiliations: Laura S. VanDyke is a former graduate research assistant and Darrell J. Bosch and James W. Pease are associate professors, Department of Agricultural and Applied Economics, Virginia Polytechnic Institute and State University, Blacksburg, VA 24061.
Abstract: The effects of considering variable within-farm soil runoff and leaching potential on costs of reducing nitrogen losses are analyzed for a Virginia dairy. Manure applications may cause nitrogen losses through runoff and leaching because of factors such as uncertain nitrogen mineralization. Farmers can reduce nitrogen control costs by applying manure on soils with less nitrogen loss potential. Ignoring within-in farm soil variability may result in overstating the farm's costs of reducing nitrogen losses.
Key Words: economic costs, linear programming, manure, nitrogen, nutrient
management, simulation, soil variability.
Zeyuan Qiu and Tony Prato
Author Affiliations: Zeyuan Qiu is research assistant professor and Tony Prato is professor of resource economics and management, and director, Center for Agricultural, Resource and Environmental System (CARES), Department of Agricultural Economics, University of Missouri-Columbia.
Abstract: This study evaluates three agricultural nonpoint pollution abatement policies: regulating the spatial pattern of agricultural activities, ambient tax, and abatement tax/subsidy. All three policies incorporate spatial characteristics of agricultural emission loading and movement for an agricultural watershed in the Midwest. The effects of spatial variation in natural conditions and landscape features on agricultural emissions and crop yield are evaluated using a newly developed biophysical simulation model and experimental data. While the policies are equally cost effective in reducing agricultural nonpoint source pollution, their implementation feasibility is quite different.
Key Words: atrazine, environmental policy, nonpoint pollution, simulation,
watershed management, water quality.
Terrance M. Hurley, Daniel Otto, and Janice Holtkamp
Author Affiliations: Terrance M. Hurley is an assistant professor at the University of Rhode Island, Daniel Otto is a professor at Iowa State University, and Janice Holtkamp is a visiting professor at Iowa State University.
Abstract: This paper investigates rural residents' perceptions of the risk to water quality from large confinement facilities and their willingness to pay to delay nitrate contamination from these facilities. Rural residents are concerned about the environmental impact of confinement facilities are willing to pay as much as $82 annually to delay nitrate contamination in their water for 20 years. These contingent valuation results are consistent with the result obtained in similar studies that used hedonic valuation methods.
Key Words: contingent valuation, livestock production, nitrate contamination, rural development, water quality.
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