TESTS FOR THE ROLE OF RISK AVERSION ON INPUT USE

Agricultural inputs can create negative externalities. For risk averting agents, risk will alter production decisions while the existence of institutions to insure against adverse states of nature will likely restore decisions toward levels under risk neutrality. In this paper, conditions are identified on a stochastic technology to test that risk averters choose smaller input levels than risk neutral agents, and that an increase in risk aversion reduces input use. A robust statistical method (Klecan, McFadden, and McFadden) to test for dominance is adapted to stochastic production relations. It is found that the first hypothesis is likely true for nitrogen application on Iowa corn. Weaker evidence is found in favor of the second hypothesis.dominance tests, incomplete risk markets, ollution, stochastic technology, Farm Management, Risk and Uncertainty,

AN EQUILIBRIUM ANALYSIS OF THE IMPACT OF ANTIBIOTICS BANS ON INVESTMENT IN APPLE ORCHARDS

The decision to replant a fire blight-susceptible apple orchard is analyzed. Embedding the problem into an equilibrium framework facilitates the welfare analysis of changes in orchard survival probabilities arising from a ban on antibiotics use. We estimate the structural impacts and welfare changes of the ban.antibiotics, apple orchard, dynamics, equilibrium, replanting, resistance, truncated Poisson process, Environmental Economics and Policy, Research and Development/Tech Change/Emerging Technologies,

Cost-Based Model of Seasonal Production, with Application to Milk Policy, A

Milk production is seasonal in many European countries. While quantity seasonality poses capacity management problems for dairy processors, a European Union policy goal is to reduce price seasonality. After developing a model of endogenous seasonality, we study the effects of three E.U. policies on production decisions. These are private storage subsidies, production removals, and production quotas. When cost functions are seasonal in a specified way, then arbitrage opportunities interact with storage subsidies to reduce both price and consumption seasonality. But production seasonality likely increases because storage subsidies promote temporal market integration. Conditions are identified under which product market interventions increase quantity seasonality.efficiency, market intervention, quota, stabilization, storage subsidies.

Testing for the Monotone Likelihood Ratio Assumption

Monotonicity of the likelihood ratio for conditioned densities is a common technical assumption in economic models. But we have found no empirical tests for its plausibility. This paper develops such a test based on the theory of order-restricted inference, which is robust with respect to the correlation structure of the distributions being compared. We apply the test to study the technology revealed by agricultural production experiments. For the data under scrutiny, the results support the assumption of the monotone likelihood ratio. In a second application, we find some support for the assumption of affiliation among bids cast in a multiple-round Vickrey auction for a consumption good. Keywords: affiliation, auction, likelihood ratio, order-restricted inference, stochastic order.

THE DESEASONALIZATION OF ANIMAL PRODUCTION

We document the deseasonalization of animal production in the US and Europe. Hypotheses on causes and consequences of this trend are advanced. They pertain to feed costs, changes in animal productivity and cost fixity of the underlying technology, innovations in genetic control and epidemiology, and the capital intensity of production.Animal Production, Capital Intensity, Dairy, Industrialization, Seasonality, Livestock Production/Industries,

AN EQUILIBRIUM ANALYSIS OF ANTIBIOTICS USE AND REPLANTING DECISIONS IN APPLE PRODUCTION

Antibiotics are used in fruit production to control fire blight, a bacterial disease of fruit trees that causes yield losses and eventually tree death. Fearing the development of widespread antibiotic resistance, scientists and public health officials are becoming increasingly concerned about antibiotics use in agriculture. A framework is developed for assessing the impacts of changes in tree damage risk following a ban on antibiotics use in the apple industry. Allowing for entry and exit, a long-run analysis of replanting dates and equilibrium prices is provided, as well as an estimate of the welfare impacts of a ban on antibiotics.Crop Production/Industries,

Seasonality, capital inflexibility, and the industrialization of animal production

Among prominent recognized features of the industrialization of animal production over the past half century are growth in the stock of inflexible, or use-dedicated capital, as an input in production, and growth in productivity. Less recognized is a trend toward aseasonal production. We record the deseasonalization of animal production in the US and European countries over the past 70 years. We also suggest that A) lower seasonality can precede or Granger-cause increased productivity due to increased capital intensity, and B) productivity improvements can Granger-cause lower seasonality. Process A) should be more likely earlier in the industrialization process. For US dairy production, our empirical tests find some evidence that process A) operated early in the 20th Century while process B) operated in more recent times. --Capital Intensity,Causality,Dairy,Regional Production Systems

CONSUMER DEMAND FOR AND ATTITUDES TOWARD ALTERNATIVE BEEF LABELING STRATEGIES IN FRANCE, GERMANY, AND THE UK

A wide array of food safety scares and breakdowns have led to loss of consumer confidence in the quality and safety of beef products. To counteract such concerns, firms and regulators have the ability to utilize brands or labels to signal quality. Utilizing a mail survey in France, Germany, and the United Kingdom, we analyzed consumer preferences for alternative beef labeling strategies. Using an ordered probit model and a double bounded logit model, we estimate consumer preferences for alternative beef labeling programs. In general, results suggest that consumers have more confidence in government mandated labels as opposed to private brands. French and German consumers place a higher level of importance on brands and labels than do UK consumers. Results also suggest that more than 90% of surveyed consumers desire a mandatory labeling program for beef produced from cattle fed genetically modified crops.Consumer/Household Economics, Demand and Price Analysis,

DEMAND FOR BEEF FROM CATTLE ADMINISTERED GROWTH HORMONES OR FED GENETICALLY MODIFIED CORN: A COMPARISON OF CONSUMERS IN FRANCE, GERMANY, THE UNITED KINGDOM, AND THE UNITED STATES

This study compares consumer valuations of beef steaks from cattle produced without growth hormones or genetically modified corn in France, Germany, the United Kingdom, and the United States. In general, European consumers place a higher value on beef from cattle that have not been administered growth hormones and/or fed genetically modified corn than United States consumers. There is a larger divergence between the two cultures with regard to the issue of biotechnology and genetic engineering than with the issue of growth hormones. Results suggest that liberalizing trade policy for hormone-treated beef may be welfare reducing for the European Union.Consumer/Household Economics, Demand and Price Analysis, Research and Development/Tech Change/Emerging Technologies,