EX POST MORAL HAZARD IN CROP INSURANCE: COSTLY STATE VERIFICATION OR FALSIFICATION?

This article examines the extent to which actual crop insurance indemnification behavior conforms to the theoretical predictions of two ex post moral hazard models costly state verification and costly state falsification. A nonparametric regression technique is used to estimate the crop insurance indemnification profile for non-irrigated cotton in Texas. The results suggest that indemnification behavior in crop insurance is more in line with the costly state falsification paradigm. Thus, crop insurers seem to indemnify based on the assumption that it is not easy to verify actual ex post loss magnitude and eliminate the asymmetric information held by the insured farmers.Risk and Uncertainty,

Abundance of harbor porpoise (Phocoena phocoena) in three Alaskan regions, corrected for observer errors due to perception bias and species misidentification, and corrected for animals submerged from view

Estimating the abundance of cetaceans from aerial survey data requires careful attention to survey design and analysis. Once an aerial observer perceives a marine mammal or group of marine mammals, he or she has only a few seconds to identify and enumerate the individuals sighted, as well as to determine the distance to the sighting and record this information. In line-transect survey analyses, it is assumed that the observer has correctly identified and enumerated the group or individual. We describe methods used to test this assumption and how survey data should be adjusted to account for observer errors. Harbor porpoises (Phocoena phocoena) were censused during aerial surveys in the summer of 1997 in Southeast Alaska (9844 km survey effort), in the summer of 1998 in the Gulf of Alaska (10,127 km), and in the summer of 1999 in the Bering Sea (7849 km). Sightings of harbor porpoise during a beluga whale (Phocoena phocoena) survey in 1998 (1355 km) provided data on harbor porpoise abundance in Cook Inlet for the Gulf of Alaska stock. Sightings by primary observers at side windows were compared to an independent observer at a belly window to estimate the probability of misidentification, underestimation of group size, and the probability that porpoise on the surface at the trackline were missed (perception bias, g(0)). There were 129, 96, and 201 sightings of harbor porpoises in the three stock areas, respectively. Both g(0) and effective strip width (the realized width of the survey track) depended on survey year, and g(0) also depended on the visibility reported by observers. Harbor porpoise abundance in 1997–99 was estimated at 11,146 animals for the Southeast Alaska stock, 31,046 animals for the Gulf of Alaska stock, and 48,515 animals for the Bering Sea stock

Safety Nets or Trampolines? Federal Crop Insurance, Disaster Assistance, and the Farm Bill

We review the implications of the 2007 Farm Bill for the risk management dimensions of U.S. agriculture and policy. Legislative proposals suggest significant changes in risk management policy, including the introduction of state or national revenue insurance. We also pursue an empirical analysis of the interrelationships of crop insurance, disaster relief, and farm profitability. We find an inverse relationship between disaster assistance and insurance purchases. Our analysis also suggests that farmers that buy insurance and that receive disaster payments tend to have higher returns to farming.crop insurance, disaster payments, Farm Bill, Agribusiness, Agricultural and Food Policy, Crop Production/Industries, Risk and Uncertainty, Q18,

Combining Ethological Thinking and Epidemiological Knowledge to Enhance the Naturalness of Organic Livestock Systems

Organic livestock farming places strong emphasis on conditions that allow animals to exhibit behavioural needs. This involves the provision of a natural environment and, in particular, outdoor conditions and a reliance on natural forages. Such environments also allow animals to be effectively integrated into crop production. However, there are potential disease risks associated with these conditions, with control options being partly limited by restrictions on chemoprophylactic measures. Examples from dairy and poultry production demonstrate how a basic understanding of ethology and a knowledge of disease epidemiology can enhance the welfare of animals whilst satisfying the ecological objectives of organic farming. Existing epidemiological models and published data can be used to examine the potential ensuing health hazards and control possibilities and to suggest alternatives

Farmland Control Decisions under Different Intertemporal Risk Behavioral Constructs

Simulation-optimization techniques are employed to analyze changes in farmland control arrangements as a result of using different constructs of intertemporal risk behavior. Risk behavior based on constant absolute risk aversion (CARA) and constant relative risk aversion (CRRA) mean-standard deviation functions are used to achieve this objective. Specfically, a multi-period programming framework for a representative grain farm is developed to explore farmland control decisions under these two behavioral assumptions. Our results suggest that the use of a CRRA behavioral construct in analyzing farmland control decisions produce predictions that are more consistent with observed farm behavior.Farm Management,

DETERMINANTS OF THE VALUE OF SITE-SPECIFIC INFORMATION (SSI) IN AGRICULTURE: A UNIFYING THEORY TO ANALYZE ITS RELATIVE IMPACTS

This paper develops a theoretically consistent behavioral model of farmer decision-making that allows for analysis of the relative impacts of the determinants of SSI value. The model departs from previous literature by assuming that SSI reduces uncertainty, but not eliminate it. Results show that increasing the accuracy (or the "level of informativeness") of SSI, increasing initial wealth, improving management ability to reduce uncertainty in the posterior, and increasing the uncertainty in the prior, increases the value of SSI. Furthermore, mean input use is found to decrease, as SSI becomes more "informative." On the other hand, the value of SSI is found to be decreasing as relative risk aversion increases. These results have policy implications for controlling non-point source pollution from fertilizer inputs and SSI-adoption behavior.Farm Management, Research Methods/ Statistical Methods,

Food Calorie Intake under Grain Price Uncertainty: Evidence from Rural Nepal

This study evaluates the effects of grain output price uncertainty on the farm income of rural households and, consequently, how this uncertainty influences caloric intake through changes in farm income. Using a rural household data set, augmented with output price uncertainty measures calculated from historical time-series data, we find that grain output price uncertainty tends to decrease crop production income of rural households. In addition, we find that higher crop income from production increases calorie intake of rural households. Taken together, these results suggests that output price uncertainty during the production process may tend to reduce caloric intake of rural Nepalese households since the price uncertainty negatively affects the crop income households need to buy calorie-rich staple foods.Food Calorie Intake, Price Uncertainty, Nepal, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, D12, O13, Q11, Q12,

Beluga, Delphinapterus leucas, Group Sizes in Cook Inlet, Alaska, Based on Observer Counts and Aerial Video

Belugas, Delphinapterus leucas, groups were videotaped concurrent to observer counts during annual NMFS aerial surveys of Cook Inlet, Alaska, from 1994 to 2000. The videotapes provided permanent records of whale groups that could be examined and compared to group size estimates ade by aerial observers.Examination of the video recordings resulted in 275 counts of 79 whale groups. The McLaren formula was used to account for whales missed while they were underwater (average correction factor 2.03; SD=0.64). A correction for whales missed due to video resolution was developed by using a second, paired video camera that magnified images relative to the standard video. This analysis showed that some whales were missed either because their image size fell below the resolution of hte standard video recording or because two whales surfaced so close to each other that their images appeared to be one large whale. The correction method that resulted depended on knowing the average whale image size in the videotapes. Image sizes were measured for 2,775 whales from 275 different passes over whale groups. Corrected group sizes were calcualted as the product of the original count from video, the correction factor for whales missed underwater, and the correction factor for whales missed due to video resolution (averaged 1.17; SD=0.06). A regression formula was developed to estimate group sizes from aerial observer counts; independent variables were the aerial counts and an interaction term relative to encounter rate (whales per second during the counting of a group), which were regressed against the respective group sizes as calculated from the videotapes. Significant effects of encounter rate, either positive or negative, were found for several observers. This formula was used to estimate group size when video was not available. The estimated group sizes were used in the annual abundance estimates

A Dose of Reality: Overcoming Usability Challenges in VR Head-Mounted Displays

We identify usability challenges facing consumers adopting Virtual Reality (VR) head-mounted displays (HMDs) in a survey of 108 VR HMD users. Users reported significant issues in interacting with, and being aware of their real-world context when using a HMD. Building upon existing work on blending real and virtual environments, we performed three design studies to address these usability concerns. In a typing study, we show that augmenting VR with a view of reality significantly corrected the performance impairment of typing in VR. We then investigated how much reality should be incorporated and when, so as to preserve users’ sense of presence in VR. For interaction with objects and peripherals, we found that selectively presenting reality as users engaged with it was optimal in terms of performance and users’ sense of presence. Finally, we investigated how this selective, engagement-dependent approach could be applied in social environments, to support the user’s awareness of the proximity and presence of others

Household Vegetable Demand in the Philippines: Is There an Urban-Rural Divide?

A three-step estimation method and a Nonlinear Quadratic Almost Ideal Demand System (NQAIDS) are used to assess the vegetable demand behavior of rural and urban households in the Philippines. The results show that most of the expenditure and own-price elasticities of the vegetables analyzed are near or larger than unitary in both rural and urban areas. For majority of the vegetable commodities, there are no significant differences in the expenditure, own-price, and cross-price elasticities of urban households relative to rural households. Only demand for cabbage and tomatoes in the urban areas tend to be statistically different compared to rural areas. The demand behavior information gleaned from the analysis provides important insights that could help guide nutritional and public policies in rural and urban areas of the Philippines.Community/Rural/Urban Development, Consumer/Household Economics,