Damaged Goods: A resource depletion model of addictive consumption

Economic research on the consumption of harmful goods focuses principally on the addictive nature of consumption rather than its impacts on health, despite medical research showing that consumers primarily consider health effects when making decisions about addictive behaviour. In this paper, the standard rational addiction model is recast in terms of a resource depletion problem, where the resource in question is a depletable stock of health, and the time horizon is finite. Analysis of the prototype health depletion model finds two types of consumption path, one that is compatible with the results from rational addiction and one that is not. Several extensions to the prototype model are explored.Resource /Energy Economics and Policy,

The Dynamics of Perennial Crop Production and Processing

Perennial crops are plants, used in agriculture, that can be harvested multiple times before replanting. They are beneficial in a variety of ways, producing food and fuel, and providing agronomic, environmental, and cultural benefits. Economic analysis of the production of perennials is complicated by the long life of these crops, and by the changing patten of productivity over the crop's lifespan. This dissertation contains three studies looking at the implications of these two facts on perennial crop production and processing. The first chapter introduces perennial crops and the history of agricultural economists' attempts to study these issues. Chapters 2 and 3 analyze perennial crop production and processing in the context of biofuel production in Brazil. Chapter 4 presents the foundation of a unifying framework that can overcome limitations in the proceeding two chapters. Brazilian sugarcane production growth, being a key feedstock to sugar and ethanol production, exhibited a puzzling slow-down in the decade starting in 2010. In chapter 2 I investigate a noted, but unexplored, mechanism to explain this slow-down: the link between credit availability, sugarcane replanting, and sugarcane yield. Using secondary sources, I establish the plausibility of the conjecture that credit restrictions affected sugarcane farmer replanting decisions. To establish the link between replanting and yield, I develop a formal model to analyze the dynamics of yield after a change in the replant rate. I test this model econometrically using data from the South-Central region of Brazil, finding evidence mostly consistent with the model. The model is able to explain around one third of the variation in sugarcane yields, implying that, while this channel is important, it alone cannot explain the production slow-down.Perennial crop field-biorefinery supply chains are necessary in the production of many agricultural products. In particular, the low-cost production of low-carbon biofuels, such as ethanol from sugarcane or cellulosic feedstocks, relies on minimizing the costs of production along a perennial crop field-biorefinery supply chain. In chapter 3 I develop and analyze an unexplored mechanism to reduce perennial crop field-biorefinery supply chain costs: adjusting the age-structure, and hence yield, of the perennial feedstock. I present comparative statics of this model, finding that smaller biorefineries are most likely to benefit from age-structure endogenization. However, the results from a simulation of this model, calibrated to the sugarcane ethanol industry in the South-Central region of Brazil and comparing the cost-minimizing to the yield-maximizing age-structure, show that the cost-reductions from endogenization are small in this case (less than 1 percent cost reduction). Generally, the magnitude of the cost-reduction will depend on the growing pattern of the crop, the costs of growing and transporting the feedstock, and the reference age-structure. In chapter 4 I adapt the theoretical framework of \citet{Mitra1991} to a two-age-class, finite horizon model, recasting their growth theoretic model into a form better suited for policy analysis. After introducing a simplified version of the model, and its general case, I determine necessary conditions on key parameters (relative productivity of mature trees, opportunity cost of land, and farmer patience) for each qualitative trajectory type in an arbitrary period. I use these conditions to develop a proposition about planting in the final period, and to analyze an example trajectory. Finally, I propose ways that this model can be used to answer several questions about perennial crop management

Willingness-to-Pay for Produce: A Meta-Regression Analysis Comparing the Stated Preferences of Producers and Consumers

Willingness-to-pay (WTP) estimates help agribusinesses estimate whether a new product is likely to be profitable. For produce, new products, such as new fruit varieties, need to be adopted by producers before they can be sold to consumers. The study of ex ante fruit and vegetable producer preferences is relatively new. This study uses meta-regression analysis to compare the estimated WTP premium between U.S. producers and consumers to determine whether they differ. After controlling for differences in study methods, product attributes, and potential publication bias, the producer WTP was between 14.16 and 27.73 percentage points higher. Subject to several caveats and limitations, this suggests that consumer WTP can be a sufficient metric for the profitability of new produce products

The Yield Dynamics of Perennial Crops: An Application to Sugarcane in Brazil

In 2011-2012 sugarcane yields in the Brazilian south-central region fell 15 percent lower than the average of the previous decade. This corresponded to the end of a decade of uninterrupted growth in sugarcane ethanol production in Brazil. Several explanations for this fall have been proposed including inclement weather, and a low field renewal rate due to the 2008-2009 financial crisis. We gather academic and journalistic evidence to demonstrate the possiblity of the crisis-renewal pathway. We develop a theoretical model of perennial crop yields as a function of the renewal rate. We theoretically derive the number of lags of the renewal rate that should be used in a reduced form specification of perennial crop yields. Using a balanced panel of yields and renewal rates in the South-Central region of Brazil from 2005-2013 we investigate the relevance of these pathways. We find that the yield effects from a renewal rate change in Brazil are consistent with the yield effects predicted by our model. We also find that both pathways are significant, but that the weather pathway is driven by temperature, not rainfall

Willingness-to-Pay for Produce: A Meta-Regression Analysis Comparing the Stated Preferences of Producers and Consumers

Willingness-to-pay (WTP) estimates help agribusinesses estimate whether a new product is likely to be profitable. For produce, new products, such as new fruit varieties, need to be adopted by producers before they can be sold to consumers. The study of ex ante fruit and vegetable producer preferences is relatively new. This study uses meta-regression analysis to compare the estimated WTP premium between U.S. producers and consumers to determine whether they differ. After controlling for differences in study methods, product attributes, and potential publication bias, the producer WTP was between 14.16 and 27.73 percentage points higher. Subject to several caveats and limitations, this suggests that consumer WTP can be a sufficient metric for the profitability of new produce products

Damaged Goods: A resource depletion model of addictive consumption

Economic research on the consumption of harmful goods focuses principally on the addictive nature of consumption rather than its impacts on health, despite medical research showing that consumers primarily consider health effects when making decisions about addictive behaviour. In this paper, the standard rational addiction model is recast in terms of a resource depletion problem, where the resource in question is a depletable stock of health, and the time horizon is finite. Analysis of the prototype health depletion model finds two types of consumption path, one that is compatible with the results from rational addiction and one that is not. Several extensions to the prototype model are explored