EXCISE TAXES AND COMMODITY PROMOTION: BAYESIAN RETRIEVAL OF THE OPTIMUM

This article shows how the solution to the promotion problem--—the problem of locating the optimal level of advertising in a downstream market--—can be derived simply, empirically, and robustly through the application of some simple calculus and Bayesian econometrics. We derive the complete distribution of the level of promotion that maximizes producer surplus and generate recommendations about patterns as well as levels of expenditure that increase net returns. The theory and methods are applied to quarterly series (1978:2S1988:4) on red meats promotion by the Australian Meat and Live-Stock Corporation. A slightly different pattern of expenditure would have profited lamb producers.Bayesian estimation, commodity promotion as an experiment, distribution of the optimum, Taylor-series expansion, Livestock Production/Industries, Marketing,

On the environmental valuation of catastrophe: revisiting mining disasters in the United Kingdom, 1851-1962

In the context of environmental valuation of natural disasters, an important component of the evaluation procedure lies in determining the periodicity of events. This paper explores alternative methodologies for determining such periodicity, illustrating the advantages and the disadvantages of the separate methods and their comparative predictions. The procedures employ Bayesian inference and explore recent advances in computational aspects of mixtures methodology. The procedures are applied to the classic data set of Maguire et al (Biometrika, 1952) which was subsequently updated by Jarrett (Biometrika, 1979) and which comprise the seminal investigations examining the periodicity of mining disasters within the United Kingdom, 1851-1962

Natural disaster accounting bias and its equivalence across genetic resource stocks

Two sources of bias arise in conventional loss predictions in the wake of natural disasters. One source of bias stems from neglect of accounting for animal genetic resource loss. A second source of bias stems from failure to identify, in addition to the direct effects of such loss, the indirect effects arising from implications impacting animal-human interactions. We argue that, in some contexts, the magnitude of bias imputed by neglecting animal genetic resource stocks is substantial. We show, in addition, and contrary to popular belief, that the biases attributable to losses in distinct genetic resource stocks are very likely to be the same. We derive the formal equivalence across the distinct resource stocks by deriving an envelope result in a model that forms the mainstay of enquiry in subsistence farming and we validate the theory, empirically, in a World-Society-for-the-Protection-of-Animals applicatio

Evaluation of cumulative externality: environmental economics, oligopoly and the private provision of public goods

This paper evaluates environmental externality when the structure of the externality is cumulative. The evaluation exercise is based on the assumption that the agents in question form conjectural variations. A number of environments are encompassed within this classification and have received due attention in the literature. Each of these heterogeneous environments, however, possesses considerable analytical homogeneity and permit subscription to a general model treatment. These environments include environmental externality, oligopoly and the analysis of the private provision of public goods. We highlight the general analytical approach by focusing on this latter context, in which debate centers around four issues: the existence of free-riding, the extent to which contributions are matched equally across individuals, the nature of conjectures consistent with equilibrium, and the allocative inefficiency of alternative regimes. This paper resolves each of these issues, with the following conclusions: A consistent-conjectures equilibrium exists in the private provision of public goods. It is the monopolistic-conjectures equilibrium. Agents act identically, contributing positive amounts of the public good in an efficient allocation of resources. There is complete matching of contributions among agents, no free-riding, and the allocation is independent of the number of members within the community. Thus the Olson conjecture—that inefficiency is exacerbated by community size—has no foundation in a consistent-conjectures, cumulative-externality, context (212 words)

Adoption of Certified Organic Production: Evidence from Mexico

Adoption of organic production and subsequent entry into the organic market is examined using Mexican avocado producers as a case study. Probit analysis of a sample of 183 small-scale (<15ha) producers from Michoacán suggests that adoption is positively influenced by management and economic factors (e.g. production costs per hectare and making inputs), but also by social factors (e.g. membership of a producers’ association). Experience in agriculture has a significant but negative effect. Effective policy design must be therefore be aware of both the economic and social complexities surrounding adoption decisions

Organic farming policies and the growth of the organic sector in Denmark and the UK: a comparative analysis

There has been little systematic analysis of the extent to which organic farming policies have influenced growth in the organic sector. Analyses of organic farming policy instruments, for the most part, provide extensive and detailed reviews of instruments applied either in a single country or across countries. Hence, there is a great need to examine systematically whether there is a relationship between the introduction of organic farming policies and the growth of the organic food sector, and whether particular designs of organic farming policies are more effective than others. In this paper, we take the first step in the endeavour of analysing the effects of organic farming by undertaking an econometric analysis of the relationship between organic farming policies in Denmark and the UK and their effects on the number of farmers and growers converting to organic production

Sustainable land use pathway ranking and selection

This paper presents methodology for ranking and selecting sustainable ‘land-use pathways,’ arguing that the methodology is central to sustainable-land-use-policy prescriptions, providing essential innovation to assessments hitherto devoid of probabilistic foundation. Demonstrating routine implementation of Markov-Chain, Monte-Carlo procedure, ranking-and-selection enactment is widely disseminable and potentially valuable to land-use policy prescription. Application to a sample of Ethiopian-highlands, land-dependent households highlights empirical gains compared to conventional methodology. Applications and extensions that profit future land-use sustainability are discussed (68 words)

Structure, conduct and the stochastic volatility of food markets: theory and empirics

The relationship between price volatility and competition is examined. Atheoretic, vector auto regressions on farm prices of wheat and retail prices of derivatives (flour, bread, pasta, bulgur and cookies) are compared to results from a dynamic, simultaneous-equations model with theory-based farm-to-retail linkages. Analytical results yield insights about numbers of firms and their impacts on demand- and supply-side multipliers, but the applications to Turkish time series (1988:1-1996:12) yield mixed results

An Empirical Analysis of the Effects of Plant Variety Protection Legislation on Innovation and Transferability

Under the TRIPs Agreement, all member-countries of the World Trade Organization are required to provide an "effective" system of plant variety protection within a specific time frame. In many developing countries this has led to a divisive debate about the fundamental desirability of extending intellectual property rights to agriculture. But empirical studies on the economic impacts of PVP, especially its ability to generate large private sector investments in plant breeding and facilitate the transfer of technology, have been very limited. This paper examines two aspects of the international experience of PVP legislation thus far (i) The relationship between legislation, R&D expenditures and PVP grants, i.e., the innovation effect, and (ii) The role of PVP in facilitating the flow of varieties across countries, i.e., the transferability effect.Plant variety protection, biotechnology, technology transfer, Crop Production/Industries,

New Results On Censored Regression with Applications to Transactions Costs, Household Decisions and Food Purchases

We generalize the Tobit censored regression to permit unique unobserved censoring thresholds conditioned by covariates and a set of common response coefficients. This situation , we argue, is one arising frequently in applications of censored regression and we provide three diverse examples to motivate the theory. We derive a robust estimation algorithm with three noteworthy features. First, by augmenting the observed-data likelihood with the censored observations, the estimation strategy is the same as Chib (1992) who derives Bayes estimates of the conventional censored regression. Second, by virtue of its generality, the model is applicable to a much broader set of circumstances than the conventional Tobit regression, which is nested as a special case of the more general framework. Third, despite its generality and wide applicability, the estimation algorithm is very simple, evidencing routine application of Markov chain Monte Carlo methods (MCMC)-Gibbs sampling in particular- and requiring only modest extensions of the basic algorithm in Chib (1992). The model and procedures are illustrated empirically in three applications that we use to motivate the theory, namely problems in transactions-costs economics, household decision-making and food-consumption.conditionally censored Tobit regression, Bayes inference, Food Consumption/Nutrition/Food Safety, O11, C34, O13,