SABIIA - Sistema Aberto e Integrado de Informação em Agricultura (Sabiia)

Mason, Charles F.; Plantinga, Andrew J..

Governments contracting with private agents for the provision of an impure public good must contend with agents who would potentially supply the good absent any payments. This additionality problem is centrally important in the use of carbon offsets as part of climate change mitigation. Analyzing optimal contracts for forest carbon sequestration, an important offset category, we conduct a national-scale simulation using results from an econometric model of land-use change. The results indicate that for an increase in forest area of 50 million acres, annual government expenditures with optimal contracts are about $4 billion lower compared than under a uniform subsidy.

Profit Sharing under the Threat of Nationalization

Palavras-chave: Carbon Sequestration; Incentive Contracting; Offsets; Additionality; Environmental Economics and Policy; Q2; D8; L15.

Ano: 2011

URL: http://purl.umn.edu/101290

Di Corato, Luca.

A multinational corporation engages in foreign direct investment for the extraction of a natural resource in a developing country. The corporation bears the initial investment and earns as a return a share of the profits. The host country provides access and guarantees conditions of operation. Since the investment is totally sunk, the corporation must account in its plan not only for uncertainty in market conditions but also for the threat of nationalization. In a real options framework, where the government holds an American call option on nationalization, we show under which conditions a Nash bargaining leads to a profit distribution maximizing the joint venture surplus. We find that the threat of nationalization does not affect the investment threshold...

Using Experimental Economics to Measure Social Capital and Predict Financial Decisions

Palavras-chave: Real Options; Nash Bargaining; Expropriation; Natural Resources; Foreign Direct Investment; International Relations/Trade; Resource /Energy Economics and Policy; C7; D8; K3; F2; O1.

Ano: 2010

URL: http://purl.umn.edu/58292

Karlan, Dean S..

Questions remain as to whether results from experimental economics games are generalizable to real decisions in non-laboratory settings. Furthermore, important questions persist about whether social capital can help solve seemingly missing credit markets. I conduct two experiments, a Trust game and a Public Goods game, and a survey to measure social capital. I then examine whether behavior in the games predicts repayment of loans to a Peruvian group lending microfinance program. Since the structure of these loans relies heavily on social capital to enforce repayment, this is a relevant and important test of the games, as well as of other measures of social capital. I find that individuals identified as "trustworthy" by the Trust game are in fact less...

Risk Valuation in the Presence of Risky Substitutes: An Application to Demand for Seafood

Palavras-chave: Trust game; Experimental economics; Microfinance; Institutional and Behavioral Economics; B4; C9; D8; O1.

Ano: 2005

URL: http://purl.umn.edu/28429

Huang, Ju-Chin; Haab, Timothy C.; Whitehead, John C..

We attempt to value health risks by combining traditional demand impact analysis with direct elicitation of individuals’ risk perceptions of food safety. We examine the impact of multiple risks of related goods on consumption of a risky good. We argue that the consumption of a risky good depends on both its absolute risk level and its relative risks to other risky goods. Seafood consumption in eastern North Carolina was studied. We elicited, in a survey, individual perceived risks as reference points to derive the economic value of reducing health risk in seafood consumption. Revealed and stated data were combined to trace out demand changes in response to absolute and relative risk reductions. Our results show that seafood consumption is affected by the...

Tipo: Journal Article

Palavras-chave: Absolute and Relative Risks; Food Borne Health Risk; Revealed and Stated Data; Risk Substitutes; D1; D8; I12; Q21.

Ano: 2004

URL: http://purl.umn.edu/42938

Determining Project-Based Emissions Baselines with Incomplete Information

Fischer, Carolyn.

Project-based mechanisms for emissions reductions credits, like the Clean Development Mechanism, pose important challenges for policy design because of several inherent characteristics. Participation is voluntary. Evaluating reductions requires assigning a baseline for a counterfactual that cannot be measured. Some investments have both economic and environmental benefits and might occur anyway. Uncertainty surrounds both emissions and investment returns. Parties to the project are likely to have more information than the certifying authority. The certifying agent is limited in its ability to design a contract that would reveal investment intentions. As a result, rules for baseline determination may be systematically biased to overallocate, and they also...

Nutrient Best Management Practice Insurance and Farmer Perceptions of Adoption Risk

Palavras-chave: Climate policy; Clean Development Mechanism; Baseline emissions; Asymmetric information; Environmental Economics and Policy; D8; Q4.

Ano: 2002

URL: http://purl.umn.edu/10520

Credit Accessibility, Risk Attitude, and Social Learning: Investment Decisions of Aquaculture in Rural Indonesia

Mitchell, Paul D..

This paper explores the effect farmer perceptions concerning how best management practice (BMP) adoption changes the profit distribution have on BMP adoption incentives and the potential for insurance to increase these incentives. Adoption indifference curves illustrate the effect of farmer perceptions on BMP adoption incentives and the potential for insurance to expand the set of perceptions consistent with adoption. Empirical analysis quantifies these conceptual results for nutrient BMP insurance, a new policy available to corn farmers as part of a USDA-Risk Management Agency pilot program in four states. Results indicate that nutrient BMP insurance can have economically relevant effects on farmer adoption incentives.

Tipo: Journal Article

Palavras-chave: Adoption indifference curves; Crop insurance; Fertilizer; Green insurance; D8; Q12; Q16; Q21.

Ano: 2004

URL: http://purl.umn.edu/43460

Miyata, Sachiko; Sawada, Yasuyuki.

This study examines the factors that influenced poor Indonesian farmers to invest in floating net aquaculture after being relocated due to a reservoir construction project. To compare three primary decision factors, credit accessibility, risk attitudes, and social learning, (i.e., learning effects from others experience), we analyze 16 years of socio-economic retrospective data collected in the field interviews exclusively for this study. Our analysis reveals that credit accessibility and risk attitudes are the most important factors that influence the rate of aquaculture investment. Social learning as well as household education also influences the investment decision significantly. Our results suggest that developmen t projects that involve voluntary...

A Cost Approach to Economic Analysis under Production Uncertainty

Palavras-chave: Household investment decision; Credit constraints; Risk attitudes; Social learning; Panel data; Farm Management; D1; D8; D12; Q22.

Ano: 2006

URL: http://purl.umn.edu/25669

Chavas, Jean-Paul.

This paper explores the economics of input decision by a firm facing production uncertainty. It relies on a state-contingent approach to production uncertainty. First, the paper develops a methodology to specify and estimate cost-minimizing input decisions under a state-contingent technology. Second, the analysis is applied to time series data on US agriculture. It finds strong empirical evidence that, in the analysis of input choices, expected output alone does not provide an appropriate representation of production uncertainty. The results provide empirical support for an output-cubical technology. This indicates that an ex post analysis of stochastic technology (as commonly found in previous research) appears appropriate. The analysis also provides...

When Should Uncertain Nonpoint Emissions be Penalized in a Trading Program?

Palavras-chave: Production uncertainty; State contingent; Cost; Cubical technology.; Research Methods/ Statistical Methods; C3; D21; D8.

Ano: 2006

URL: http://purl.umn.edu/21081

Hennessy, David A.; Feng, Hongli.

When nonpoint source pollution is stochastic and the damage function is convex, intuition might suggest it is more important to control a nonpoint pollution source than a point source. Earlier research has provided sufficient conditions such that the permit price for a unit of ex-ante expected emissions should be higher than the permit price for a unit of certain emissions. Herein we provide a set of necessary and sufficient conditions such that this is the case. An approach to testing for the validity of the condition set is available, and has been applied to a related problem.

Taxes Versus Quantities for a Stock Pollutant with Endogenous Abatement Costs and Asymmetric Information

Palavras-chave: Agricultural pollution; Multiple inputs; Permit trading; Social optimality; Trading ratio; Water quality; Environmental Economics and Policy; Q1; Q2; D2; D8.

Ano: 2007

URL: http://purl.umn.edu/9805

Karp, Larry S.; Zhang, Jiangfeng.

Non-strategic firms with rational expectations make investment and emissions decisions. The investment rule depends on firms’ beliefs about future emissions policies. We compare emissions taxes and quotas when the (strategic) regulator and (nonstrategic) firms have asymmetric information about abatement costs, and all agents use Markov Perfect decision rules. Emissions taxes create a secondary distortion at the investment stage, unless a particular condition holds; emissions quotas do not create a secondary distortion. We solve a linear-quadratic model calibrated to represent the problem of controlling greenhouse gasses. The endogeneity of abatement capital favors taxes, and it increases abatement.

Tipo: Thesis or Dissertation

Palavras-chave: Pollution control; Investment; Asymmetric information; Rational expectations; Choice of instruments; Resource /Energy Economics and Policy; C61; D8; H21; Q28.

Ano: 2008

URL: http://purl.umn.edu/42877

Weather Derivatives as an Instrument to Hedge Against the Risk of High Energy Cost in Greenhouse Production

Berg, Ernst; Schmitz, Bernhard; Starp, Michael.

In many areas agriculture is exposed to weather related risks. Weather derivatives that get more and more in the focus of interest can reduce these risks. In this study we develop a temperature based weather derivative and analyse how it can reduce the weather-related energy cost risk in greenhouse production. We base this study on a temperature index whose stochastic characteristics are analysed. Finally we simulate the heating demand for energy of a horticultural firm.

The question of “evidence” in the emergence of evidence-based or evidence-aware policies in agriculture

Palavras-chave: Environmental Economics and Policy; Risk and Uncertainty; C22; D8; Q14.

Ano: 2006

URL: http://purl.umn.edu/25629

Laurent, Catherine E.; Trouve, Aurelie.

Evidence-based or evidence-aware policy approaches are used in many different sectors (health, education, etc.). These approaches are less common in agriculture but are gradually emerging. Analysis of debates surrounding this trend sheds light on the particular nature of the difficulties faced by public decision-makers who are willing to use available scientific knowledge. After examining certain misunderstandings which arise in the international debate over evidence-based policy approaches, this paper addresses two specific issues: (i) the problems of competing evidence for using knowledge in the design of public policies and (ii) the potential role of rationalization tools in a possible "depoliticisation" of public decision-making.

Coordinating to Eradicate Animal Disease, and the Role of Insurance Markets

Palavras-chave: Knowledge; Agriculture; Policy; Evidence; Agricultural and Food Policy; B29; D8; Q01; O3.

Ano: 2011

URL: http://purl.umn.edu/99833

Hennessy, David A..

Farmed animal production has traditionally been a dispersed sector. Biosecurity actions relevant to eradicating infectious diseases are generally non-contractible, and might involve inordinately high transactions costs if they were contractible. If an endemic disease is to be eradicated within a region, synchronized actions need to be taken to reduce incidence below a critical mass so that spread can be contained. Using a global game model of coordination under public and private information concerning the critical mass required, this paper characterizes the success probability in an eradication campaign. As is standard in global games, heterogeneity in private signals can support a unique equilibrium. Partly because of strategic interactions, concentrated...

Pourquoi et comment l’instabilité est-elle une caractéristique structurelle des marchés agricoles?

Palavras-chave: Biosecurity; Coordination failure; Disease insurance; Endemic disease; Global games; Market access; Public information; Veterinary public health; Livestock Production/Industries; D8; H4; Q1.

Ano: 2007

URL: http://purl.umn.edu/7702

Boussard, Jean-Marc.

Agricultural price volatility is "bad". But where does it come from? Remedies are completely different for "endogenous" or "exogenous" fluctuations. The recent crisis seems to indicate that exogenous remedies have been applied to endogenous fluctuations.

A Theory of Strategic Diffusion

Palavras-chave: Instability; Agricultural policy; Development; Fluctuations; Quotas; Cobweb; Insurance.; Agricultural and Food Policy; Industrial Organization; Political Economy; Production Economics; Public Economics; B5; D4; D6; D8; N5; O1..

Ano: 2007

URL: http://purl.umn.edu/44424

Goyal, Sanjeev; Galeotti, Andrea.

The important role of friends, neighbors and colleagues in shaping individual choices has been brought out in a number of studies over the years. The presence of significant local influence in shaping individual behavior suggests that firms, governments and developmental agencies should explicitly incorporate it in the design of their marketing and developmental strategies. This paper develops a framework for the study of optimal strategies in the presence of social interaction. We focus on the case of a single player who exerts costly effort to get a set of individuals engaged in social interaction to choose a certain action. Our formulation allows for different types of social interaction (ranging from sharing of information to direct adoption...

Auctioning Conservation Payments using Environmental Indices

Palavras-chave: Social Interaction; Seeding the Network; Word of Mouth Communication; Diffusion Strategy; Institutional and Behavioral Economics; D8; L15.

Ano: 2007

URL: http://purl.umn.edu/9096

Cattaneo, Andrea.

A framework for analyzing conservation programs that rank applications using environmental indices is presented. We derive the optimal bid from the farmer's perspective for both land retirement and working lands agri-environmental payment programs and we analyze how these solutions depend on program design parameters. The distinction is made between environmental objectives based on whether the farmer exercises control or not over the level proposed in a bid to participate in a program. The optimization model is solved analytically for two cases - a land retirement and a working lands program - highlighting the differences in the results. For land retirement programs we conclude that, for the cases considered, the exogenous environmental performance does...

Experimental Evidence of Risk Aversion in Consumer Markets: The Case of Beef Tenderness

Palavras-chave: Environmental payments; Program design; Participation incentives; D8; H5; Q28; Environmental Economics and Policy.

Ano: 2006

URL: http://purl.umn.edu/25438

Alfnes, Frode; Rickertsen, Kyrre; Ueland, Oydis.

Consistency of quality is important for brand loyalty and market share in consumer markets. Among consumers of beef, tenderness is the primary quality attribute. We use an experimental auction market to investigate how inconsistency in tenderness affects consumers willingness to pay (WTP) for beef. We find that both the level and the spread of tenderness affect consumers WTP for beef. Categorization the beef into various classes of tenderness increased the total value of the beef by 8%, which suggests that improved tenderness labeling may be a profitable strategy.

DEVELOPMENT OF A MARKET BENCHMARK PRICE FOR AGMAS PERFORMANCE EVALUATIONS

Palavras-chave: Beef tenderness; Consumer demand; Experimental auction; Marketing; Risk aversion; Consumer/Household Economics; C91; D12; D8; Q13.

Ano: 2005

URL: http://purl.umn.edu/24553

Good, Darrel L.; Irwin, Scott H.; Jackson, Thomas E..

The purpose of this research report is to identify the appropriate market benchmark price to use to evaluate the pricing performance of market advisory services that are included in the annual AgMAS pricing performance evaluations. Five desirable properties of market benchmark prices are identified. Three potential specifications of the market benchmark price are considered: the average price received by Illinois farmers, the harvest cash price, and the average cash price over a two-year crop marketing window. The average cash price meets all of the desired properties, except that it would not be easily implementable by producers. It can be shown, though, that the price realized via a more manageable strategy of "spreading" sales during the marketing...

Riesgo y rentabilidad en empresas ganaderas.

Palavras-chave: Advisory services; Evaluating the pricing performance; Market benchmark price; C8; C0; D4; D8; L1; M3; Q0; Z0; Marketing.

Ano: 1998

URL: http://purl.umn.edu/14783

Helguera, Lorenzo; Lanfranco, Bruno A..

La producción agropecuaria está muy expuesta a los posibles efectos negativos de una serie de factores que presentan un muy alto grado de variabilidad. Factores climáticos, biológicos, institucionales, humanos y de mercados, afectan rendimientos y precios de productos e insumos. Estos factores son responsables del riesgo económico al que toda empresa está expuesta – cualquiera sea la forma en que se financie – y que puede originar grandes pérdidas en poco tiempo. Por otro lado, el riesgo financiero refiere a la posibilidad, incierta muchas veces, que el productor no pueda hacer frente a sus obligaciones financieras (pago de intereses y amortización de deudas), lo cual puede afectar la misma viabilidad de la empresa. Ambos riesgos están íntimamente ligados,...

Tipo: Book

Palavras-chave: Breakeven point; Leverage; Farm management; Agribusiness; Agricultural Finance; Farm Management; D8; M1; Q14.

Ano: 2006

URL: http://purl.umn.edu/121687

Irreversibility, Uncertainty and the Adoption of Transgenic Crops: the Case of BT-Maize in France

Scatasta, Sara; Wesseler, Justus; Demont, Matty.

This study applies a real option approach to quantify, ex-ante, the maximum incremental social tolerable irreversible costs that would justify immediate adoption of Bt maize in France. Based on field trials, we find that incremental private reversible benefits in the agricultural sector are -18 million euro yearly for maize for animal feed and 1 million euro yearly for maize for human consumption. Incremental social irreversible benefits from reduced insecticide use are negligible. The maximum incremental social tolerable irreversible costs are -28 million euro yearly for maize for animal feed and 0.4 million Euro yearly for maize for human consumption.