OWNERSHIP AND INDUSTRIAL POLLUTION CONTROL: EVIDENCE FROM CHINA

This study explores the differences in pollution control performances of industrial enterprises with various ownerships in China - State owned (SOE), collectively or community owned (COE), privately owned (POE), foreign directly invested (FDI) companies as well as joint ventures. A survey was conducted of approximately 1000 industrial firms in three provinces in China, which collects the detailed firm-level information in the year of 1999. Personal interviews of enterprises managers were also conducted in these samples, and subjective information was collected. Analyses have been performed on the differences in receiving and reacting to environmental regulatory enforcement, community pressure, environmental services, and internal environmental management among different ownerships. The determinants of the industrial pollution emissions in China are identified in the econometrical analyses. The results show that FDI and COE have better environmental performances, while SOEs and the POEs in China are the worst.Environmental Economics and Policy,

Animal Disease Related Pre-event Investment and Post-event Compensation: A Multi-agent Problem

We employ a game-theoretic principal agent framework to analyze the individual farmer and governmental behavior pre- and post-animal disease outbreak. We examine the gap between the privately optimal and socially optimal levels of ex ante biosecurity investment and then investigate how a well-designed differentiated compensation scheme can close this gap. Our results also show that the privately optimal investment is generally lower than the first best socially optimal level, and a well-designed differentiated compensation scheme conditional on ex ante biosecurity investment can induce private preventive investment at least greater than the second best socially optimal level when the government face constraints, or even increase approaching the first best socially optimal level. Furthermore, our results suggest that compensation schemes be expanded to encompass features that provide incentives for ex ante biosecurity investment and ex post truthful disclosure. Specifically inclusion of the following two mechanisms is warranted: (a) a penalty for farms who are found to have disease incidence but have not disclosed that information.Risk and Uncertainty,

Choosing Brands: Fresh Produce versus other Products

This study presents a framework to analyze how uncertainty about product attributes affects consumers' WTP for brand name products over generic ones, incorporating key elements of a random utility model and product attribute models. We found that in comparison to electronics, clothing, and processed food, consumers buy brand name vegetables and fruits mainly because of quality uncertainty, and they can easily reduce uncertainty of product quality of fresh vegetables and fruits by seeing, touching, smelling, and tasting. Hence, consumers are less willing to pay for brands of fresh vegetables and fruits. However, simulation results show that brands of fresh fruits and vegetables may have a similar price premium as other products, but they lack the market share. Thus, the main challenge in building brands of fresh produce is to establish a critical mass. We also find that demographic information such as education and gender does affect consumers' WTP for brands.Consumer/Household Economics,

Do Consumers Trust the National Inspection Exemption Brands? Evidence from Infant Formula in China

Consumers are often uncertain about product quality and have to rely on different information, either given or pursued, to assess quality. Developing countries may lack institutional and technical resources to rigorously monitor and enforce product quality standards and/or to implement market-based instruments where market failures are common. The information-based instruments on product quality may work well in these countries as they reduce information asymmetry between firms and consumers. This study investigates one particular information-based instrument, the National Inspection Exemption (NIE) system in China. China launched the National Inspection Exemption (NIE) System in various industries in 2000 to award firms who are in compliance with the quality standards, to inform consumers of product quality, and to lessen the pressure on regulatory monitoring and enforcement of product quality standards. Once a firm is granted the NIE title by China's National Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), its products are exempted from quality inspections by all governmental agencies at different levels for three years; but it is obligated to report the product quality condition to the local AQSIQ office annually. The NIE titled firms are also allowed to include the title in the product label and to use the status in the advertisement campaign. Based on the theoretical framework, we establish the hypothesis that consumers are more willing to buy the product with the NIE title and the NIE title is likely to increase sales revenue when consumers lack of means to assess quality. The empirical application of China dairy industry supports the theoretical hypothesis. In particular, using the firm-level panel data, we find that the NIE title boots sales revenue and the impact is both statistically and economically significant based on the difference-in-difference estimate and the random-fixed effect estimations. Furthermore, using the survey data collected right after the 2008 China milk scandal regarding the brand choice of infant formula among 1,228 mothers with infants and young children, we find that consumers’ preference for the NIE title still present even the NIE titled firms are involved in a food scare event. The positive NIE preference is particularly strong among highly educated consumers and those who buy domestic brands.brand choice, food safety, product quality, national inspection exemption, quality standards, Food Consumption/Nutrition/Food Safety, Institutional and Behavioral Economics,

Contract Pricing and Packer Competition in Fed Cattle Market

We use a game-theoretical framework to analyze the coexistence of spot and contract markets in the cattle industry. A duopsony scenario with two packers and N feeders is used to reflect the reality in the cattle industry. Our main contribution is to incorporate the risk components and the pricing of hedonic attributes of cattle quality. Our preliminary results show that packers have an incentive to transform bidding strategies in spot markets when a series of hedonic characteristics play some significant roles in establishing cattle prices in contract market. That is, we will show that the effectiveness of contract with TOMP clauses on packer competition in a spot market depends on whether there is a correlation between spot price and hedonic characteristics. The results may shed light on understanding potential effects of captive supplies on market power and may aid in the assessment of the policies designed to enhance competition in the cattle industry.Marketing,

Economics of Homeland Security: Carcass Disposal and the Design of Animal Disease Defense

In an effort to bolster confidence and protect the nation the U.S. government through agencies like the Department of Homeland Security is identifying vulnerabilities and evolving strategies for protection. Agricultural food supply is one identified vulnerable area, and animal disease defense is one of the major concerns there under. Should an outbreak of animal disease occur, it is likely to have a mass slaughter and disposal of animal carcasses. The current existing policy, mainly including slaughter policy and strict movement bans, may be not sufficient to control disease spread at reasonable cost. We address the issue modeling vaccination as a supporting strategy with later slaughter of animals and argue that vaccination can decrease slaughter and disposal cost in the case of emergency. Our results show that (a) Vaccination gains time to slow down the flow of slaughter, thereafter the disposal operation of animal carcasses. By smoothing slaughter/disposal flow, vaccination likely decreases slaughter and disposal cost; (b) Vaccination likely reduce the total amount of slaughter and disposal of animals mainly because vaccinated animals shed less and disease spread slower; and (c) Vaccination becomes more valuable in reducing slaughter and disposal costs when the marginal cost of vaccination falls, the even size of disease outbreak is larger, the disease is more contagious and spreads faster, and/or vaccines are more effective in controlling disease spread.Food Consumption/Nutrition/Food Safety,

The Impacts of Animal Disease Crises on the Korean Meat Market

Employing the error correction method and historical decomposition with direct acyclic graphs, we quantify the impacts of domestic and oversea animal disease crises on the Korean meat markets. We find that (a) the market partially recovered 16 months after the foot-and-mouth outbreak in 2000, and 13 months after the avian influenza and the U.S. BSE incidents in 2003; (b) animal disease outbreaks have differentiate impacts by disease type and supply chain level. Retailers likely to have windfall profits as the retail price margin increased relative to the farm and wholesale levels; and (c) disease outbreaks affect dynamic price interdependence.Animal disease outbreak, Error correction model, Direct acyclic graphs, Korean meat market, Historical Decomposition, Price margins, Livestock Production/Industries, C32, Q11, L11,

Privatization, Public R&D Policy, and Private R&D Investment in China's Agriculture

Private R&D is a major source of innovation and productivity growth in agriculture worldwide. This paper examines trends and determinants of agricultural R&D in China. Results show that while the public sector monopolized agricultural research until recently, private agricultural R&D has grown rapidly since 2000, driven largely by agribusiness privatization. Public-sector R&D investments in basic research also encouraged private R&D research, but public investments in technology development crowded out private R&D investment. China’s private R&D investment would grow more rapidly if the government shifted public resources from technology development to basic research.Agriculture, China, Private R&D, Privatization, Public R&D, Research and Development/Tech Change/Emerging Technologies,

The Value of Transportation for Improving the Quality of Life of the Rural Elderly

When an elderly individual living in a rural community is no longer able to drive, issues that come with living in an isolated area (i.e. limited access to health and personal services, distance between home and town centers) are exaggerated and the individual may experience a decrease in their quality of life. Public transportation that supports elderly individuals may be an important issue for rural communities to consider in creating an aging-friendly community and maintaining quality of life for residents who are no longer able to drive. The purpose of this research is to obtain an understanding of opinions about public transportation for the elderly held by rural county residents and their WTP for transportation options through an additional vehicle registration fee. To achieve this objective, a survey with choice experiments was distributed to residents in Atascosa and Polk County, Texas in September 2011. Researchers employed a conditional logit model to analyze the choice survey data and examine county residents’ WTP for various transportation options. The results of this study provide public transportation managers insights into the attributes taxpayers expect in transportation routes and programs.Elderly Transportation, Rural Transportation, Rural Elderly, Rural Quality of Life, Community/Rural/Urban Development,

Interocular suppression prevents interference in a flanker task

Executive control of attention refers to processes that detect and resolve conflict among competing thoughts and actions. Despite the high-level nature of this faculty, the role of awareness in executive control of attention is not well understood. In this study, we used interocular suppression to mask the flankers in an arrow flanker task, in which the flankers and the target arrow were presented simultaneously in order to elicit executive control of attention. Participants were unable to detect the flanker arrows or to reliably identify their direction when masked. There was a typical conflict effect (prolonged reaction time and increased error rate under flanker-target incongruent condition compared to congruent condition) when the flanker arrows were unmasked, while the conflict effect was absent when the flanker arrows were masked with interocular suppression. These results suggest that blocking awareness of competing stimuli with interocular suppression prevents the involvement of executive control of attention