Technical efficiency and farmland expansion: Evidence from oil palm smallholders in Indonesia

This study asks whether innovation in smallholder production reduces or accelerates land expansion. Even though innovation in agriculture has reduced land expansion globally, rebound effects can occur locally and often at the expense of vital ecosystem functions. In contrast to other studies that investigate rebound effects in response to technological innovation, our study focuses on technical efficiency, the remaining component of total factor productivity. We use a short panel dataset from smallholder oil palm farmers in Sumatra, Indonesia, and develop a two-stage approach in which we estimate technical efficiency and determine its land expansion effect. Our findings suggest that technical efficiency and in particular land efficiency are low, indicating that 50% of the currently cultivated land could be spared. However, the land-sparing effect of increasing technical efficiency is at risk of being offset by about half due to a rebound effect. To maximize the conservation potential from increasing smallholder efficiency, policies need to simultaneously incentivize well-functioning land markets and stricter protection measures for land with high ecological value to mitigate local rebound effects

svars: An R Package for Data-Driven Identification in Multivariate Time Series Analysis

Structural vector autoregressive (SVAR) models are frequently applied to trace the contemporaneous linkages among (macroeconomic) variables back to an interplay of orthogonal structural shocks. Under Gaussianity the structural parameters are unidentified without additional (often external and not data-based) information. In contrast, the often reasonable assumption of heteroskedastic and/or non-Gaussian model disturbances offers the possibility to identify unique structural shocks. We describe the R package svars which implements statistical identification techniques that can be both heteroskedasticity-based or independence-based. Moreover, it includes a rich variety of analysis tools that are well known in the SVAR literature. Next to a comprehensive review of the theoretical background, we provide a detailed description of the associated R functions. Furthermore, a macroeconomic application serves as a step-by-step guide on how to apply these functions to the identification and interpretation of structural VAR models.Peer reviewe

Impacts of Export Restrictions on Food Price Volatility: Evidence from VAR-X and EGARCH-X Models

While export restrictive policy has long been associated with increasing food price volatility, it has received minimal attention in the empirical literature compared to other potential drivers of international food price fluctuations. This paper aims at closing this gap by firstly quantifying the relevant policies in an indicator of export restrictive policy. Subsequently, the effects of that are tested on estimated realized and GARCH volatility in VAR-X models where various wheat price volatilities are allowed to be endogenously determined. In a second step, the impacts of export controls during times of market turmoil are assessed in asymmetric volatility models. This strategy succinctly reveals the effects of export controls along the policy, frequency, country and time dimensions providing a detailed set of evidence. It is found that, most pronounced effects on wheat price volatility stem from long-term quotas. Similarly, longer term prohibitions of some countries have impacted wheat price fluctuation as well. On the contrary, long term tax strategies are shown to not significantly impact wheat price volatility. However, during times of market turmoil all three considered export restrictions have particularly contributed to wheat price volatility. Strengthened and more binding WTO regulation could have led to significantly less food price volatility, especially in times of food price crisis, such as recently experienced during the 2007/08 and 2010/11 episodes