Economic Effects of a Potential Foodborne Disease: Potential Relationship between Mycobacterium Avium Subs. Paratuberculosis (MAP) in Dairy and Crohn’s in Humans

Welfare costs of a potential food shock were estimated by disseminating information to milk drinkers on the prevalence of Mycobacterium avium sub. paratuberculosis (MAP) in the U.S. milk supply, its potential linkage to Crohn’s disease in humans, and subsequent government intervention to minimize MAP in the milk supply. We found that 19.6% of milk consumers exposed to MAP information would stop milk consumption at current market prices, and that only 5% of those would return to their original milk consumption levels after the government intervention. Societal costs of the food shock after the intervention were estimated at $18.2 billion

Perception and Action in a Conflict Zone: a Study of Rural Economy and Rural Life amidst Narcos in Northeastern Mexico

This paper analyzes the effect of drug cartel violence on farmers in Northeastern Mexico. Using tools from the psychology literature on risk perceptions, dual process theory and behavioral economics, we investigate factors correlating with fear among farmers, and how that fear is affecting rural life and production decisions. Farmers' actions in response to risk can be explained under the dual process approach, and the degree of emotional and deliberative response for each action is estimated. We find evidence that drug related violence in Mexico is affecting rural life and production decisions of small holder farmers

Anticipatory Signals of Changes in Corn Demand

Contemporaneous observations on expected supply and on prices of post-harvest futures contracts for corn are used to estimate expected demand relationships. These equations are used to forecast the prices of the post-harvest contracts based on new supply estimates. Each forecast can be compared with a corresponding futures price, i.e., the market’s forecast. The differences help discern the market’s expectations about the expected demand for the new crop relative to historical experience, which can help support outlook analyses. The discussion also deepens understanding of the term “anticipatory prices,” as used by H. Working (1958)

Socially Responsible Products: What Motivates Consumers to Pay a Premium?

The motivation to pay a premium for socially responsible products is partly an expression of consumer concern for the well-being of those involved in the production process. Thus, choosing to buy a product with a socially responsible label and choosing to donate to a charity are similarly motivated actions. While there is an extensive literature on the economics of charitable giving that examines motivations to donate as well as on the impacts of labeling on consumer demand, there is very little overlap between the two literatures. In this paper we attempt to bridge these two literatures by investigating whether consumers have heterogeneous motivations for paying a premium. We design a lab experiment that auctions coffee with hypothetical socially responsible labels that put different weights on in-kind vs. cash transfers. We find that those consumers who prefer to restrict most of the premium to be an in-kind transfer (and are classified as paternalistic altruists) are willing to pay a 52.5% price premium over standard coffee. Those who prefer that most of the premium is paid as cash to the recipient (strong altruists) are willing to pay a 42.5% premium. Finally, those who are indifferent to how the premium is spent by the recipient (warmglow givers) are willing to pay only a 19.2% premium. We discuss the implications of our results and future research direction