Risk Preferences, Perceptions and Systematic Biases

Replaced with revised version of paper 07/21/06.Risk and Uncertainty,

ECONOMIC AND ENVIRONMENTAL EFFECTS ASSOCIATED WITH REDUCING THE USE OF ATRAZINE: AN EXAMPLE OF CROSS-DISCIPLINARY RESEARCH

Restricting or eliminating the use of atrazine in the Midwest would have important economic consequences for farmers, consumers, and the environment. These consequences can only be evaluated with cooperation between economists and weed scientists. The weed control choice set available to farmers cannot be observed through deductive research. Economists and weed scientists worked together to identify all possible weed control strategies for corn and sorghum in the Midwest and to incorporate them into an economic model. An atrazine ban was found to be the costliest strategy, and a targeted, water-quality based strategy the most cost effective.Atrazine, Deductive research, Environmental exposure, Herbicides, Inductive research, Welfare, Crop Production/Industries,

Private participation in public policy: the economics of strategic lawsuits against public participation

The primary purpose of this dissertation is to construct a game theoretic model to explore the economic incentives encouraging strategic lawsuits against public participation (SLAPPs), and to explore the efficiency consequences of eliminating SLAPPs. The model that is constructed is a two-stage contest with asymmetric incomplete information regarding agents\u27 benefits. Using the perfect Bayesian equilibrium concept, equilibrium behavior is characterized assuming a ratio contest success function with asymmetric abilities. Comparative static results are derived for the second-stage of the contest, and efficiency is evaluated using contest efficiency as the primitive measure of efficiency where the concept of contest efficiency is developed in an appendix. Given the general ambiguity of the analytic efficiency results, the contest success function is parameterized and efficiency is evaluated assuming that the firm has normal and uniform a priori beliefs regarding the distribution of the homeowner\u27s benefit of winning the contest. Finally, the predictive power of the perfect Bayesian equilibrium concept and the intuitive refinement is tested using experimental methods and a specific case of the general SLAPP model. The primary conclusions are that SLAPPs represent a strategic commitment of effort by an agent with incomplete information and relatively low benefits and/or ability to reduce the total amount of effort invested in the contest, and that the elimination of SLAPPs will either reduce or have no effect on the efficiency of the contest

PRODUCTION DECISIONS WITH UNCERTAIN MARKETS: THE CASE OF BT CORN

The effect of marketing uncertainty due to consumer opposition over genetically modified (GM) grain is modeled in the context of a producer's decision to plant GM. The model shows that a tendency to plant less GM acreage and obtain premium prices for Non-GM grain is tempered by increased price risk.Crop Production/Industries,

Estimating the Benefits of Bt Corn and Cost of Insect Resistance Management Ex Ante

This paper estimates farmer benefits for corn rootworm (CRW) active Bt corn and costs of complying with Environmental Protection Agency insect resistance management requirements. The estimates are obtained from farmer survey data that were collected in Minnesota in 2002, just prior to the commercial releases of CRW Bt corn. Benefit estimates range from $14 to$33.4 million, while compliance cost estimated range from $3.5 to$8.7 million depending on whether or not CRW Bt corn also controlled the European corn borer and whether of not it was approved for sale in major export markets.Bt corn, compliance costs, corn rootworm, insect resistance management, willingness to pay, Crop Production/Industries,

MANAGING EUROPEAN CORN BORER RESISTANCE TO BT CORN WITH DYNAMIC REFUGES

We develop a dynamic bioeconomic model of temporally optimal dynamic refuge recommendations for resistance management when a backstop technology arrives at a known date. The impact of the characteristics of the backstop on the use of the current technology, and the difference between static and dynamic refuges are examined.Crop Production/Industries,

AN ANALYSIS OF OCCUPATIONAL HEALTH IN PORK PRODUCTION

The rapid expansion of large-scale pork production has been accompanied by increasing concerns regarding potential detrimental consequences of environmental hazards on the health of producers. This study makes use of health indicators obtained from attendees at the World Pork Expo between 1991 and 1995 to evaluate the impact of pork production generally and of confinement production, specifically, on producer health. The analysis expands existing studies because the larger number of participants allows for detailed analysis, both nonfarmers and non-pork farmers are used as controls, both objective as well as self-reported health measures are considered, and personal characteristics such as height, weight, age, gender, smoking habits, and years of exposure to confinement operations and swine operations are controlled. The analysis shows that pork producers are more likely to report nagging respiratory symptoms (cough, sinus problems, sore throat) than are other farmers. Confinement operators have increased incidence of some symptoms relative to other pork producers. However, there was no evidence of permanent loss of pulmonary function associated with pork production or confinement operation. Farmers suffered from a greater incidence of hearing loss and loss of dominant hand strength relative to nonfarmers. Pork producers had even greater incidence of lost hand strength than other farmers but had no added incidence of hearing loss. On the plus side, farmers had lower blood pressure than did nonfarmers.

Estimating the Potential Value of Variable Rate Nitrogen Applications: A Comparison of Spatial Econometric and Geostatistical Models

Site-specific crop response functions (SSCRFs) are useful for estimating the value of variable rate nitrogen applications (VRA), but appropriate statistical models are necessary. Problems estimating SSCRFs using experimental field data include region, spatial, treatment, and strip dependent heteroskedasticity and correlation. We develop a spatial autoregressive error (SARE) model for dealing with these problems and compare results with previous analysis based on a geostatistical (GEO) model. VRA value estimates for the two models differ notably for 1995 data from Southern Minnesota. Furthermore, findings show that the results of a comparison of model performance are location specific.geostatistics, precision agriculture, site-specific crop response functions, spatial autoregressive error, variable rate nitrogen application, Crop Production/Industries,

MANAGING THE RISK OF EUROPEAN CORN BORER RESISTANCE TO TRANSGENIC CORN: AN ASSESSMENT OF CONTROVERSIAL REFUGE RECOMMENDATIONS

A bioeconomic model is developed to evaluate the tradeoff between the risk of resistance and increased productivity when refuge is planted in conjunction with transgenic pesticidal corn. The model is used to evaluate controversial refuge recommendations when producers are allowed to treat refuge in years of high pest pressure.Productivity Analysis, Research and Development/Tech Change/Emerging Technologies, Risk and Uncertainty,

ESTIMATING SITE-SPECIFIC NITROGEN CROP RESPONSE FUNCTIONS: A CONCEPTUAL FRAMEWORK AND GEOSTATISTICAL MODEL

Confirming the precision agriculture hypothesis for variable rate nitrogen applications (VRA) is challenging. To confront this challenge, researchers have used increasingly sophisticated statistical models to estimate and compare site-specific crop response functions (SSCRFs). While progress has been made, it has been hampered by the lack of a conceptual framework to guide the development of appropriate statistical models. This paper provides such a framework and demonstrates its utility by developing a heteroscedastic, fixed and random effects, geostatistical model to test if VRA can increase nitrogen returns. The novelty of the model is the inclusion of site, spatial, treatment, and treatment strip heteroscedasticity and correlation. Applied to data collected in 1995 from two corn nitrogen response experiments in South Central Minnesota, results demonstrate the importance of including site, spatial, treatment, and treatment strip effects in the estimation of SSCRFs. Results also indicate a significant potential for VRA to increase nitrogen returns and that these potential returns increase as the area of the management unit decreases. At one location, there was greater than a 95% chance that VRA could have increased profitability if the cost of implementing VRA was less than 14.5 $ha-1. At the other location, if implementation costs were less than 48.3$ ha-1, there was greater than a 95% chance of increased profitability.Crop Production/Industries,