ESTIMATION ISSUES IN SINGLE COMMODITY GRAVITY TRADE MODELS

Recently gravity trade models are applied to disaggregated trade data. Here many zeros are characteristic. In the presence of excess zeros usual Poisson Pseudo Maximum Likelihood (PPML) is still consistent, the variance covariance matrix however is invalid. Correct economic interpretation however requires also the last. So alternative estimators are looked for. STAUB &WINKELMANN (2010) argue that zero-inflated count data models (i.e. zero-inflated Poisson / Negative Binomial Pseudo Maximum Likelihood (ZIPPML / ZINBPML)) are no alternative since under model misspecification these estimators are inconsistent. Yet zeroinflated Poisson Quasi-Likelihood (PQL) is a reliable alternative. It is consistent even under model misspecifications and beyond that robust against unobserved heterogeneity. Another alternative is a log-skew-normal Two-Part Model (G2PM) which generalises the standard lognormal Two-Part Model (2PM). It is insofar advantageous as it adjusts for (negative) skewness and regression coefficients retain usual interpretations as in log-normal models. PQL is useful for multiplicative gravity model estimation and G2PM for log-linear gravity model estimation. Exemplarily the estimators are applied to intra-European piglet trade to assess their empirical performance and applicability for single commodity trade flow analysis. The empirical part favours PQL but G2PM is a reliable alternative for other trade flow analyses. PQL and G2PM should become standard tools for single commodity trade flow analysis.Gravity Model, Excess Zeros, Poisson Quasi Likelihood, Generalised Two Part Model, Gravitationsmodell, Exzess an Nullen, Poisson Quasi Likelihood, Generalisiertes Zwei-Teile Modell, Agribusiness, Agricultural and Food Policy, Agricultural Finance, Demand and Price Analysis, Financial Economics,

Wheat / Flour Price Transmission and Agricultural Policies in Ukraine: A Markov-Switching Vector Error Correction Approach

The analysis of price transmission between raw and processed agricultural products in transition countries is complicated by the frequently changing conditions on their way from plan to market. We utilise a Markov-switching vector error correction model to allow for multiple regime shifts in the price relationship between wheat and wheat flour in Ukraine from June 2000 to November 2004. The analysis reveals four regimes. The observed temporal pattern of these regimes can be matched with certain political and economic events in Ukraine. In particular, we find a strong link between the 'high uncertainty' regime and discretionary policy interventions in 2003.Markov-switching vector error correction model, vertical price transmission, regime shifts, grain policies, Ukraine, Demand and Price Analysis, Industrial Organization, C22, Q11, Q18,

Demand for Irrigation Water for Pistachio Production from Depleting Groundwater Resources: Spatial Econometric Approach

Depletion of groundwater resources is an international problem, and groundwater is probably the world’s most extracted raw material. The agriculture sector is one of the biggest users of groundwater resources for irrigation activities, and it plays an important role in the depletion of these resources. The estimation of demand function for groundwater resources is the first step toward any policy recommendation in this field of research. However, only scarce attention has been given to empirical studies of the demand structure of groundwater resources by the help of econometrics and considering the quality of the resources in the context of a single aquifer. Therefore, an empirical estimation of the demand function for individual users which considers water quality enhances further economic analysis and results in better policy recommendations. In this study, we have analysed the economic factors and the groundwater quality as influencing variables on derived demand function for irrigation water in the pistachio production of the Rafsanjan aquifer in the southeastern part of Iran. The field study was conducted from November 2008- February 2009. Translog cost function has been applied for the estimation of the derived demand function for groundwater in pistachio production and its shadow price. The spatial econometrics has been applied to correct the results. Results show that water pumping costs are much less than their shadow prices.Groundwater resources, derived demand function, pistachio, Rafsanjan, Crop Production/Industries, Resource /Energy Economics and Policy,

INVESTIGATING RAPESEED PRICE VOLATILITIES IN THE COURSE OF THE FOOD CRISIS

Multivariate GARCH, MATIF, rapeseed, crude oil, volatilities, food crisis, Demand and Price Analysis, Research Methods/ Statistical Methods, C32, E44, G1, Q11, Q13, Q49,

HOW DID POLICY INTERVENTIONS IN WHEAT EXPORT MARKETS IN RUSSIA AND UKRAINE DURING THE FOOD CRISIS 2007/2008 INFLUENCE WORLD MARKET PRICE TRANSMISSION?

International price transmission, wheat market, food crisis, Markov switching error correction model, Russia, Ukraine, Agricultural and Food Policy, Demand and Price Analysis, Research Methods/ Statistical Methods,

Impacts of Export Controls On Wheat Markets During the Food Crisis 2007/2008 in Russia and Ukraine

This paper investigates the impacts of export controls in Russia and Ukraine on wheat world market price transmission during the 2007/2008 global food crisis. Russia and Ukraine aimed to reduce wheat exports induced by extraordinarily high world market prices to secure sufficient wheat supply on the domestic markets. Utilizing a Markov-Switching vector error correction model (MSVECM), we find that the temporary export restrictions induced negative effects on wheat markets in Russia and Ukraine. Although instability increased on the world markets itself, we have shown that the increase in the market instability was particularly pronounced in Russia and Ukraine. Also, the export restrictions dampened price transmission to the farmers’ prices, which pushed the growers’ prices below their long-run equilibrium level. Thus, investment incentives in wheat production which could result from high world market prices were foregone.International price transmission, wheat market, food crisis, Markov switching error correction model, Russia, Ukraine, Demand and Price Analysis, International Relations/Trade,

Impacts of environmental regulations on the efficiency of arable farms in France and Germany

This paper develops a methodology for asymmetric treatment of desirable and undesirable outputs. First, a hyperbolic output efficiency measurement is used to describe a middle term transformation of production processes where producers try to improve their competitiveness together with a reduction of the negative impact on the environment. Second, a radial efficiency measurement, called directional output distance function, is used to depict a long-term transformation of the production process. A non-parametric Data Envelopment Analysis (DEA) and a Stochastic Frontier Analysis (SFA) are used to evaluate the impact of agricultural policy changes, both in France and Germany, on the technical and environmental efficiency of arable farms, taking into account participation or not in agri-environmental programs. The results from both methods indicate only limited possibilities for environmental improvements, mainly for farms participating in agri-environmental programs.Frontier analysis, technical and environmental efficiency, environmental regulations, Agricultural and Food Policy, Environmental Economics and Policy, Productivity Analysis,

Policy Reform and Productivity Change in Chinese Agriculture: A Distance Function Approach

Agricultural policy reform has been an important source of change in the Chinese agricultural sector. The reforms led to productivity growth and helped China in pursuing its self-sufficiency goal especially in the grain sector. To analyse whether observable productivity growth stems from technologically induced components, or from the market induced parts, a multi-input-multi-output model is derived using an econometric distance function framework. A decomposition allows to distinguish allocative effects, scale effects, technological change, and technical efficiency change. Data on farms in Zhejiang from 1986 to 1999 are used to analyse the impact of policy reform.Productivity growth, China, Policy reform, Distance function, Productivity Analysis,

Technical Efficiency Effects of Technological Change: Another Perspective on GM Crops

An important approach to reducing persistent technical inefficiency is through technical change. This paper considers the case of genetically modified crop production. A stochastic frontier approach is used to examine how a drastic change from non-GM to GM technology effects the position of the production frontier as well as the extent and nature of technical inefficiency. A one-step method is applied to consider firm-level effects on technical inefficiency. Using soybean production from the U.S. we find that GM technology improves productivity and reduces technical inefficiency though these effects vary across farm characteristics.technical efficiency, technical change, genetically-modified, soybean, Crop Production/Industries, Research and Development/Tech Change/Emerging Technologies, D24, O33,

POLICY REFORM AND PRODUCTIVITY CHANGE IN CHINESE AGRICULTURE: A DISTANCE FUNCTION APPROACH

Agricultural policy reform has been an important source of change in the Chinese agricultural sector. The reforms led to productivity growth and helped China in pursuing its self- sufficiency goal especially in the grain sector. To analyse whether observable productivity growth stems from technologically induced components, or from the market induced parts, a multi-input-multi-output model is derived using an econometric distance function framework. A decomposition allows to distinguish allocative effects, scale effects, technological change, and technical efficiency change. Data on farms in Zhejiang from 1986 to 1999 are used to analyse the impact of policy reform.Agricultural and Food Policy,