Mark Petry, Philip L. Paarlberg, and John G. Lee
Author Affiliations: Mark Petry is a former graduate student and Philip
L. Paarlberg and John G. Lee are associate professors, Department of Agricultural
Economics, Purdue University, West Lafayette, Indiana.
Contact:
Philip L. Paarlberg
Agricultural Economics
1145 Krannert Building
Purdue University
West Lafayette, IN 47907
Phone: (765) 494-4251
Fax: (765) 494-9176
e-mail: paarlberg@agecon.purdue.edu
Abstract: The partial equilibrium model links the infection risk from imported products to a premium, which compensates the importing country for the risk incurred by allowing imports from infected countries. The model is applied to the Porcine Reproductive and Respiratory Syndrome (PRRS) and Mexican live swine imports. The premium is sensitive to the expected loss from a PRRS outbreak and to the magnitude of the risk. As the risk or severity of PRRS rises, so does the level of the barrier. If swine imports are categorized and appropriate restrictions applied, an acceptable level of disease protection can be achieved while improving national welfare.
Key Words: livestock health risk (I18), PRRS, trade barriers.
Bernard K.N. Armah, Jr., Timothy Park, and C.A. Knox Lovell
Author Affiliations: Bernard K.N. Armah, Jr. is a graduate student
and Timothy A. Park is associate professor, Department of Agricultural and
Applied Economics, and C.A. Knox Lovell is professor in the Department of
Economics, all at the University of Georgia, Athens, Georgia.
Contact:
Timothy Park
Agricultural and Applied Economics
316 Conner Hall
University of Georgia
Athens, GA 30602
Phone: (706) 542-0856
Fax: (706) 542-0739
e-mail: tpark@agecon.uga.edu
Abstract: We evaluate agricultural bank management performance, focusing on the impacts of interstate banking laws on productivity change. The generalized Malmquist productivity index decomposes productivity change into technological change, technical efficiency change, and change in scale economies. While managerial productivity rose from 1982 to 1991, states that adopted the most liberal interstate banking laws experienced the greatest improvement in productivity. Large agricultural banks were more efficient in states that had more liberalized interstate banking laws while small agricultural banks fared better in states with more restrictive laws.
Key Words: generalized Malmquist index, interstate banking, productivity
change.
Steven D. Hanson, Robert J. Myers, and James H. Hilker
Author Affiliations: Steven D. Hanson is associate professor and Robert J. Myers and James H. Hilker are professors, Department of Agaricultural Economics, Michigan State University, East Lansing, Michigan.
Contact:
Steven Hanson
Agricultural Economics
213C Agriculture Hall
Michigan State University
East Lansing, MI 48824
Phone: (517) 353-1870
Fax: (517) 432-1800
e-mail: hansons@msu.edu
Abstract: Many agricultural producers face cash price distributions that are effectively truncated at a lower limit through participation in farm programs designed to support farm prices and incomes. For example, the 1996 Federal Agricultural Improvement Act (FAIR) makes many producers eligible to obtain marketing loans which truncate their cash price realization at the loan rate, while allowing market prices to freely equilibrate supply and demand. This paper studies the effects of truncated cash price distributions on the optimal use of futures and options. The results show that truncation in the cash price distribution facing an individual producer provides incentives to trade options as well as futures. We derive optimal futures and options trading rules under a range of different truncation scenarios. Empirical results highlight the impacts of basis risk and yield risk on the optimal futures and options portfolio.
Key Words: farm programs, futures, hedging, options, truncation.
Darren L. Frechette
Author Affiliations: Darren L. Frechette is assistant professor, Department of Agricultural Economics and Rural Sociology, Pennsylvania State University, University Park, Pennsylvania.
Contact:
Darren L. Frechette
Agricultural Economics & Rural Sociology
208-C Armsby Building
Pennsylvania State University
University Park, PA 16802
Phone: (814) 863-8636
Fax: (814) 865-3746
e-mail: frechette@psu.edu
Abstract: Expected prices for storable commodities often lie below
spot prices plus interest and marginal storage charges. Recently this gap
has been explained as the value of a call option held by a representative
storer whenever a positive probability exists that stocks could dwindle to
zero. However, the probability of an aggregate stock-out is effectively zero
in most markets most of the time. This paper presents an alternative model
that explains the gap as an equilibrium between fundamentals traders and
noise traders. Applications of the model suggest that rational agents make
up 84 percent of the U.S. copper market, and more than 95 percent of the
corn and wheat markets.
Key Words: storage, heterogeneous, expectations, noise, traders.
Christopher F. Dumas and Rachel E. Goodhue
Author Affiliations: Christopher F. Dumas is assistant professor, Department of Economics and Finance, University of North Carolina, Wilmington, North Carolina, and Rachael E. Goodhue is assistant professor, Department of Agricultural and Resource Economics, University of California, Davis, California.
Contact:
Rachael E. Goodhue
Agricultural and Resource Economics
One Shields Avenue
University of California at Davis
Davis, CA 95616
Phone: (916) 754-7812
Fax: (530) 752-5614
e-mail: goodhue@primal.ucdavis.edu
Abstract: The success of the Boll Weevil Eradication (BWE) Program is believed to be one factor underlying the recent increase in cotton acreage in the Southeast. We find weak evidence that the initial, eradication phase of the BWE program decreases cotton acreage, and strong evidence that the second, maintenance phase of the program increases acreage. The full benefits associated with a BWE program may not become apparent until acreage adjustments occur, four to five years after program initiation. Our results indicate that for a representative sample county neglecting acreage effects may lead to underestimation of BWE program net benefits by 9 percent-12 percent.
Key Words: acreage effects and policy evaluation, boll weevil eradication
program, cotton, integrated pest management (IPM).
Camille M. Tribble, Christopher S. McIntosh, and Michael E. Wetzstein
Author Affiliations: Camille M. Tribble is a graduate student, Department of Agricultural and Resource Economics, University of California, Davis. Christopher S. McIntosh is associate professor, Department of Agricultural Economics and Rural Sociology, University of Idaho. Michael E. Wetzstein is professor, Department of Agricultural and Applied Economics, The University of Georgia. Research presented in this article was undertaken while Camille Tribble was an undergraduate attending The University of Georgia.
Contact:
Michael Wetzstein
Agricultural & Applied Economics
University of Georgia
Athens, GA 30602
Phone: (706) 542-0758
Fax: (706) 542-0739
e-mail: mwetzstein@agecon.uga.eud
Abstract: An adaptive regression model is employed for estimating pre- and post-boll weevil eradication cotton-acreage response. Results indicate cotton acreage becoming more inelastic to own- and cross-price changes. As a result of this shift in acreage response and yield increases from eradication, net producer benefits on average are $88.73 per acre.
Key Words: adaptive regression, pest eradication, producer surplus.
Jack E. Houston, Christopher S. McIntosh, Paul A. Stavriotis, and Steve C. Turner
Author Affiliations: Paul A. Stavriotis is a former graduate student, and Jack E. Houston, Christopher S. McIntosh, and Steve C. Turner are associate professors, Department of Agricultural and Applied Economics, University of Georgia, Athens, Georgia.
Contact:
Jack E. Houston
Agricultural & Applied Economics
312 Conner Hall
University of Georgia
Athens, GA 30602
Phone: (705) 542-0755
Fax: (705) 542-0739
e-mail: jhouston@agecon.uga.eud
Abstract: Resurgent cotton production compels better acreage forecasts for planning seed, chemical, and other input requirements. Structural models describe leading acreage response indicators, and forecasts are compared to time-series models. Cotton price, loan rate, deficiency payments, lagged corn acreage, the PIK program, and previous cotton yield significantly influence cotton acreage response.
Key Words: cotton acreage, resurgent cotton production.
Thomas O. Knight and Keith H. Coble
Author Affiliations: Thomas O. Knight is associate professor, Department of Agricultural Economics, Texas A&M University, College Station, Texas, and Keith H. Coble is assistant professor, Department of Agricultural Economics, Mississippi State University, Mississippi State, Mississippi.
Contact:
Thomas Knight
Agricultural Economics
Texas A&M University
College Station, TX 77845
Phone: (409) 845-1192
Fax: (409) 862-1563
e-mail: knight@tamu.edu
Abstract: This paper examines the effects of optimal subdivision on APHP losses for wheat, corn, and soybeans. Thirty-seven state/crop programs are analyzed and the implications of the results are discussed in relation to newly developed crop and revenue insurance programs. The authors' results illustrate the importance of incorporating actuarial experience into the premium rate structure and contract provisions of an insurance program.
Key Words: Actual Production History Program (APHP), crop insurance
programs.
Bruce L. Dixon and Kathleen Segerson
Author Affiliations: Bruce L. Dixon is professor of agricultural economics and economics at the University of Arkansas at Fayetteville and Kathleen Segerson is professor of economics at the University of Connecticut at Storrs.
Contact:
Bruce L. Dixon
Agricultural Economics
221 Agricultural Building
University of Arkansas
Fayetteville, AR 72701
Phone: (501) 575-2276
Fax: (501) 575-5306
e-mail: ja27213@uafsysb.uark.edu
Abstract: Approximate profit functions are estimated using time-series, cross-sectional, county level data for 12 midwest states. Measures of climate variability are included in the profit functions. Simulated impacts of climate changes on profits are derived. Results show that inclusion of measures of climate variation are important for measuring the impact of changes in mean temperature and precipitation levels. Failure to account for the impact of differences in variability leads to an overestimate of damages. If global warming increases diurnal variation, such increases would have negative impacts on the profitability of midwest agriculture.
Key Words: climate change, climate variability, midwest, profit function.
Jorge Fernandez-Cornejo and Jennifer Ferraioli
Author Affiliations: Jorge Fernandez-Cornejo and Jennifer Ferraioli are with the Economic Research Service, U.S. Department of Agriculture, 1800 M Street, Room 4052, Washington, DC 20036-5831.
Contact:
Jorge Fernandez-Cornejo
USDA / ERS
1800 M Street, Room 4052
Washington, DC 20036-5831
Phone: (202) 694-5537
Fax: (202) 694-5775
e-mail: jorgef@econ.ag.gov
Abstract: The impact of adopting integrated pest management (IPM) techniques is examined for peach producers in eight states accounting for most of the U.S. production. The method accounts for self- selectivity, simultaneity, and the pesticide demand equations are theoretically consistent with a restricted-profit function. Biological pest management techniques tend to reduce pesticide use and pesticide toxicity substantially, while pesticide-efficiency techniques (using scouting and economic thresholds) have an increasing effect on pesticide use and toxicity, and cultural techniques have an insignificant effect on pesticide use and toxicity.
Key Words: biological techniques, cultural techniques, integrated
pest management, peach production, pesticide use, self-selection, toxicity.
Adesoji O. Adelaja and Keith Friedman
Author Affiliations: Adesoji Adelaja is professor and chair and Keith Friedman is former graduate student, Department of Agricultural, food and Resource Economics, Rutgers University, New Brunswick, New Jersey. This article is New Jersey Agricultural Experiment Station Publication No. P-02529-99-4.
Contact:
Adesoji O. Adelaja
Agricultural, Food & Resource Economics
Cook Office Bldg, Room 105, Cook College
Rutgers, The State University of New Jersey
Post Office Box 231
New Brunswick, NJ 08903
Phone: (908) 932-9155 x24
Fax: (908) 932-8887
e-mail: adelaja@aesop.rutgers.edu
Abstract: This paper investigate the motivations for local right-to-farm protection ordinances by estimating a logit model relating the adoption these ordinances to various political, economic and demographic factors previously found to affect the likelihood of passage of farmland preservation policies. Results suggest that the probability of adopting right-to-farm policies increases with the size and political clout of the farm public and with state incentives to promote right-to-farm. Adoption is not enhanced by environmental concerns, nor by factors known to encourage adoption of farmland preservation policies. These findings raise serious concerns about the long-run viability of protections afforded agriculture in urbanizing areas.
Key Words: nuisance litigation, open space, political economy, restrictive
ordinances, right-to-farm.
J. Shannon Neibergs and Richard Thalheimer
Author Affiliations: The authors are assistant professor and associate professor, respectively, with the Equine Industry Program, College of Business and Public Administration, University of Louisville, Louisville, Kentucky
Contact:
J. Shannon Neibergs
Equine Industry Program
Department of Equine Business
College of Business
University of Louisville
Louisville, KY 40292
Phone: (852) 852-4854
Fax: (852) 852-7672
e-mail: neibergs.shannon@louisville.edu
Abstract: Thoroughbred incentive programs are subsidy policies funded from state parimutuel tax revenue designed to promote regional race horse breeding and ownership. At issue is an ongoing debate concerning the effectiveness of alternative policies. Empirical results indicate that incentive programs have a positive economic effect, but gains to Thoroughbred breeders can be obtained by reallocating tax revenue to non-restricted purses. A policy allocating tax revenue to non-restricted purses shifts yearling demand and increases prices, while breeder subsidies shift only the supply function and therefore lower prices. Consequently, breeder revenues increase in response to a policy that favors non-restricted purses over subsidies.
Key Words: incentive programs, parimutuel horse racing, subsidy, tax,
Thoroughbred.
Michael L. Walden and Mark R. Sisak
Author Affiliations: Michael L. Walden is professor, Department of Agricultural and Resource Economics, and Mark R. Sisak is professor, Department of Economics, North Carolina State University, Raleigh, North Carolina.
Contact:
Michael L. Walden
Agricultural and Resource Economics
Box 8109
North Carolina State University
Raleigh, NC 27695
Phone: (919) 515-4671
Fax: (919) 515-1824
e-mail: michael_walden@ncsu.edu
Abstract: The relationship between student achievement and school inputs has long been a subject of academic research. The general conclusion of past research is that school inputs, such as the number of teachers relative to pupils, has little impact on student academic outcomes. This paper provides a fresh look at this issue. Seventeen alternative measures of student performance in North Carolina school districts are related to a wide array of school policy inputs and socioeconomic characteristics of students and their families. Both static and dynamic analyses are performed. The key findings are (1) the school policy inputs significantly related to student achievement vary by the measure of student achievement used, (2) the joint contribution of school policy inputs to student achievement is relatively small, and (3) the results differ between the static and dynamic analyses; in particular, changes in the number of teachers relative to the number of pupils in the district have a much stronger association with student achievement in the dynamic analysis.
Key Words: public education, student achievement.
Rhonda Skaggs and Soumen Ghosh
Author Affiliations: Rhonda Skaggs is associate professor, Department of Agricultural Economics and Agricultural Business, and Soumen Ghosh is associate professor, Department of Economics and International Business, New Mexico State University, Las Cruces, New Mexico.
Contact:
Rhonda Skaggs
Agricultural Economics
MSC 3169
New Mexico State University
Las Cruces, NM 88003
Phone: (505) 646-2401
Fax: (505) 646-3808
e-mail: rskaggs@nmsu.edu
Abstract: Markov chain analysis (one-step and long-run) is applied to the National Resources Inventory (NRI) database to evaluate changes in wind-based soil erosion rates over time. The research compares changes in soil erosion rates between NRI sample sites with and without applied conservation practices for a random sample of Great Plains counties. No significant differences between sites are found for half of the counties evaluated. The effectiveness and efficiency of conservation policies are thus questioned in light of these research results.
Key Words: conservation, Markov, National Resources Inventory, policy,
soil erosion.
Ashok K. Mishra, Hisham S. El-Osta, and James D. Johnson
Author Affiliations: The authors are agricultural economists, Economic Research Service, U.S. Department of Agriculture, Washington, DC.
Contact:
Ashok K. Mishra
USDA / ERS
FSP Branch, RED
1800 M Street NW, Room N4119
Washington, DC 20036-5831
Phone: (202) 694-5580
Fax: (202) 694-5778
e-mail: amishra@econ.ag.gov
Abstract: The objective of this study was to identify factors which contribute to the earnings' success of cash grain farms in the United States. The study analyzes three measures of success including net farm income per dollar of asset, operators' returns to labor and management, and operators' management income. Logit regression analysis shows that controlling variable costs, ownership, management ability, technology adoption, and diversification are important factors that influence success.
Key Words: cash grains, diversification, earnings success, logit
regression.
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