95 research outputs found
Energy Efficiency and CO2 Emissions in the Greenhouse Industry: Evidence From Michigan
Resource /Energy Economics and Policy,
The Volatility Spillover Effects and Optimal Hedging Strategy in the Corn Market
This article examines the volatility spillovers from energy market to corn market. Using a volatility spillover model from the finance literature, we found significant spillovers from energy market to corn cash and futures markets, and the spillover effects are time-varying. The business cycle proxied by crude oil prices is shown to affect the magnitude of spillover effects over time. Based on the strong informational linkage between energy market and corn market, a cross hedge strategy is proposed and its performance studied. The simulation outcomes show that compared to alternative strategies of no hedge, constant hedge, and GARCH hedge, the cross hedge does not yield superior risk-reduction performance.Volatility Spillover, GARCH, Optimal Hedge Ratio, Energy Price, Corn Price, Risk and Uncertainty,
Farm Capital Structure Choice under Credit Constraint: Theory and Application
This study proposed a theoretical framework for analyzing farm capital structure choice. The theoretical model recognizes that the costs of debt are endogenously determined which in turn reflect the degree of credit constraint faced by individual borrowers. Based on the proposed model, we derived the impacts of different determinants on capital structure choice analytically. The theoretical inferences are further tested with empirical data. Methodologically, we proposed a fixed-effect quantile regression procedure to estimate the impacts of determinants at different ranges of leverage. The effects of determinants are discussed in the empirical application.Capital Structure, Cost of Debt, Credit Constraint, Quantile Regression, Agricultural Finance,
Supporting Cellulosic Ethanol Biomass Production and its Impact on Land Use Conversion
One of the problems facing the cellulosic ethanol industry is the cellulose material supply. The U.S. forestlands have considerable potential to become one of the main sources of biomass to meet the 2022 renewable fuel target. Focusing on the land exiting the Conservation Reserve Program (CRP), the article finds that few landowners are willing to convert their land to forestland after the CRP contract is expired. Our econometric estimates show the choice decision is responsive to net returns of land use alternatives, especially cropland. Two policy initiatives are suggested to provide direct incentives for land use change. The nested logit estimates are used to simulate landowners‘ responses to policy mechanism. The results show that subsidies can substantially increase forestland, although a spillover effect exists.Cellulosic Ethanol, Biomass, Land Use, the CRP, Forestland, Environmental Economics and Policy,
Formal and Informal Credit Markets and Rural Credit Demand in China
Credit markets are an essential economic institution. In developing countries, particularly in countries undergoing rapid social and economic transition, it is important to identify emerging credit demand and institute credit supply in a timely manner to facilitate economic transformation. This research focuses on the evolving rural credit market in China, where borrowing from the social network has been common but the recent economic transition has made this informal credit market inadequate in addressing rural credit needs. This research is aimed at identifying the social and economic factors that explain the farmers’ credit constraint and influence farmers’ decisions to switch from informal to formal credit markets. Using data from a household survey, we estimated both binary choice probit models and a multinomial probit model to explore the determinants of credit market choice and credit constraints. We found that the credit demand is significantly affected by household’s production capacity as supported by the fact that household size, land size, head’s education all significantly increase household’s probability to borrow, but the impact of these factors varies considerably by credit market. Transaction costs have a significant, negative effect on formal credit demand. The credit constraints analysis suggest that off-farm employment, land size and the cost of the credit are the three most important factors that increase the probability of being constrained.Formal Credit, Informal Credit, Credit Markets, Rural Credit, China, Agricultural Finance, Farm Management,
Evaluating Pest Management Strategies: A Robust Method and its Application to Strawberry Disease Management
Farmers use pesticides to reduce yield losses. The efficacies of pesticide
treatments are often evaluated by analyzing the average treatment effects and
risks. The stochastic efficiency with respect to a function is often employed
in such evaluations through ranking the certainty equivalents of each
treatment. The main challenge of using this method is gathering an adequate
number of observations to produce results with statistical power. However, in
many cases, only a limited number of trials are replicated in field
experiments, leaving an inadequate number of observations. In addition, this
method focuses only on the farmer's profit without incorporating the impact of
disease pressure on yield and profit. The objective of our study is to propose
a methodology to address the issue of an insufficient number of observations
using simulations and take into account the effect of disease pressure on yield
through a quantile regression model. We apply this method to the case of
strawberry disease management in Florida.Comment: Selected Paper prepared for presentation at the 2019 Agricultural &
Applied Economics Association Annual Meeting, Atlanta, GA, July 21-23.
Copyright 2019 by Soto-Caro, Wu, Guan. All rights reserved. Readers may make
verbatim copies of this document for non-commercial purposes by any means,
provided that this copyright notice appears on all such copie
Specification and estimation of heterogeneous risk preference
In this paper we specify and estimate producers’ risk preference using farm data. We allow heterogeneous risk preference across individuals and propose a specification to model the heterogeneity. We base farmers’ decision making on a utility maximization framework and incorporate both market and production risk in farmers’ decision making. We do not assume any specific utility function or distribution of risk. The empirical application to farm level production data shows that risk preference does vary among individuals; demographic and institutional factors have significant effect on producers’ risk attitude
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