Are the U.S. farm wages equalizing? Markov chain approach

This study investigates convergence in hired farm wages in U.S. counties over the period 1978-92. The time-invariant distribution of wages is characterized using Markov chains. This study is concerned with two questions: Are regional hired farm wages moving in the same direction? If so, are they consistent with the direction of the entire U.S. farm wages? Concerning with e¢ ciency in agricultural labor markets, the study approximates it to the extent that it is re�ected in farm wages. Time-invariant distributions of wages are calculated for the Northeast, Midwest, South, and West region, and for the entire U.S. The results support the hypothesis of convergence at regional level to lower-than-respective regional average wage. Convergence is the strongest in the Northeast and the weakest in the South. Likewise, convergence to lower-than-average wage is present at the U.S. level, but it is stronger than that at the regional level.farm wage movements; labor markets; convergence; Markov chains; U.S. agriculture.

The formation of offer prices in farmland markets: A hedonic price approach

This study develops a game-theoretic framework to examine the preservation and capitalization effects of government farmland preservation policies. More specifically, emphasis is given to the effects of such policies on the number and type of land buyers, the distribution of offer price, and the mean waiting period. The results suggest that, in the context of the agricultural zoning policy, the final impact on the reservation price and mean waiting period depends on the magnitude of changes in the number and spread of the type of buyers.hedonic price; Bayesian approach; farm land valuation; government farm policy.

Family size, human capital and growth: structural path analysis of Rwanda

This paper analyzes the macroeconomic role that different household groups play in human capital formation, sectoral growth and income distribution in Rwanda. Using a disaggregated SAM for Rwanda and with the assistance of structural path analysis, the paper explores the macroeconomic implications of family size for human capital, sectoral growth and income distribution. The findings support the so-called quantity-quality trade-off hypothesis: the smaller the family size, the higher the investment in human capital. In particular, the human capital investment of households with 1-3 children tends to be more pronounced than that of households with more than 3 children. Moreover, households with 1-3 children act as an important intermediate pole transmitting the influence of human capital investment on agricultural production. As a result, promoting family planning programs seems to be a viable strategy for economic growth and poverty reduction.Family size, human capital, growth, Rwanda, structural path analysis

Industrial policy, collective action, and the direction of technological change

This paper studies patterns of technological change under two scenarios. In Scenario I, a distorted government is open to the influence of producers' collective action, while in Scenario II a benevolent government operates to maximize national income. The paper draws attention to the role that institutional arrangements and asymmetries in sectoral technology absorption play in shaping the path of technological change. Simulation results are threefold. First, biased institutions under Scenario I might help drag the economy towards the right trajectory, with current generations experiencing welfare loss. Secondly, the benevolent government under Scenario II supports the path of capital-augmenting technological change, which is also supported by the distorted government only when institutions deliberately favor the investment goods producing sector. Thirdly, sectoral asymmetries in technology assimilation do not help industries overcome disadvantageous situations in the political market, and hence do not in�uence the direction of technological developments.Technological change; industrial policy and lobbying; political-economic equilibrium.

Unemployment insurance and home production

In this paper, we incorporate home production into a quantitative model of unemployment and show that realistic levels of home production have a significant impact on the optimal unemployment insurance rate. Motivated by recently documented empirical facts, we augment an incomplete markets model of unemployment with a home production technology, which allows unemployed workers to use their extra non-market time as partial insurance against the drop in income due to unemployment. In the benchmark model, we find that the optimal replacement rate in the presence of home production is roughly 40% of wages, which is 40% lower than the no home production model’s optimal replacement rate of 65%. The 40% optimal rate is also close to the estimated rate in practice. The fact that home production makes a significant difference in the optimal unemployment insurance rate is robust to a variety of parameterizations and alternative model environments.Unemployment insurance, home production, incomplete markets, self-insurance

Disaggregate fluctuations in the US farm output: Testing for convergence

This study examines movements in per farm real output in the US counties, and tests for convergence of output at the aggregate, regional, and divisional levels. The estimations are carried out for the period 1982-1992 and for its two constituent sub-periods, 1982-87 and 1987-92. For the period 1982-92, results show weak convergence at aggregate and regional levels. For the first sub-period 1982-87 (the second sub-period 1987-92) weak convergence (strong divergence) takes place at aggregate and regional levels, except the Northeast region showing strong divergence (weak convergence). These results indicate the Northeast region having distinct movements in farm output compared to the rest of the US. This can, in part, be attributed to the type of farming prevailing in Northeast. At divisional level the estimates are not robust neither for the entire period nor its sub-periods. Overall, the conjecture of the neoclassical growth model is supported at aggregate and regional levels, with unclear pattern at the divisional level.Convergence of farm output; US farm policy

Estimation of a system of national accounts: implementation with mathematica

This study implements Mathematica to estimate a system of national accounts. The estimation methods applied are portrayed in Danilov and Magnus (2008), including the Bayesian estimation, restricted and unrestricted least-squares estimation and best linear unbiased estimation. Operationalizing these methods in the Mathematica environment is the main contribution of the current study. In light of the United Nations�e¤orts aimed to standardize across countries the compilation of national accounts, the Mathematica codes developed here should provide an important tool both for the estimation of unrealized or unavailable national accounts data and for conducting cross-country and within-country macroeconomic policy analysis.System of national accounts; Social Accounting Matrix; Bayesian estimation; Least-squares estimation; Best linear unbiased estimation; Linear programming

A nonparametric hypothesis test via the Bootstrap resampling

This paper adapts an already existing nonparametric hypothesis test to the bootstrap framework. The test utilizes the nonparametric kernel regression method to estimate a measure of distance between the models stated under the null hypothesis. The bootstraped version of the test allows to approximate errors involved in the asymptotic hypothesis test. The paper also develops a Mathematica Code for the test algorithm.Hypothesis test; the bootstrap; nonparametric regression; omitted variables

Family planning, growth and income distribution in Rwanda: SAM multiplier and graph-theoretic path analysis

This paper examines the linkages among family planning, sectoral growth and income distribution in Rwanda. Drawing on the 2006 SAM accounting multipliers, macroeconomic e¤ects of alternative income policies are evaluated. Furthermore, the high and low-income gain pathways are identi�ed by applying the graph-theoretic path analysis. The following �ndings are noted. The rural income gain spreads over the entire economy, whereas the urban income gain largely remains within urban areas, suggesting relatively larger income multiplier e¤ects of rural development policies. Second, investing in education, health and family planning promises a signi�cant increase in agricultural production, which in turn creates considerable employment in rural areas. Targeted rural development policies thus seem to be the best strategy to bring growth and harmoniously improve income distribution. Third, a unit increase in the demand for family planning-health commodities generates 60% more income for the urban-Kigali households than rural households. Finally,a unit increase in the family planning-health demand raises agricultural production by 1.3 unit, which is followed by 1.2 unit increase in service production and by 0.74 unit increase in manufacturing production. To sum up, investing in family planning-health is a viable strategy to promote agricultural growth and reduce poverty through employment created in the rural sector.Family planning; growth; income distribution; Rwanda; SAM multiplier; Graph-theoretic path analysis