ECONOMICS AND INTERDISCIPLINARY COLLABORATIVE EFFORTS

Research and Development/Tech Change/Emerging Technologies,

DYNAMIC SUPPLY RESPONSE AND AGRICULTURAL INVESTMENT: DISCUSSION

Resource /Energy Economics and Policy,

The value of economic research:

Economic research generates a wide array of benefits. These include information, technological change, and improved policy. There are few quantitative studies of the benefits of economic research, and some benefits may be misattributed to biological and physical research. To be productive, economic research must be transmitted and the user must be able to use it. Therefore, investment in extension outreach and economic literacy are important to improve its impact. Even casual observation suggests that economic research is valuable, but noneconomists must be convinced of this. Since benefits are likely to be concentrated in a small number of successful projects, a useful approach to the assessment of the benefits of research is to identify these projects and their results. The analysis must recognize that the accuracy of any estimates of benefits is uncertain. In addition, the argument behind the estimates should be transparent, relying on documentation and testimony from users, policymakers, and noneconomists. Assessments of the benefits of economic research provide information that can be used both to justify support for economic research and to allocate monies among lines of research.Research Economic aspects., Impact assessment,

Price volatility in ethanol markets

Our paper looks at how price volatility in the Brazilian ethanol industry changes over time and across markets by using a new methodological approach suggested by Seo (2007). The main advantage of Seo’s proposal over previously existing methods is that it allows to jointly estimate the cointegration relationship between the price series investigated and the multivariate GARCH process. Our results suggest that crude oil prices not only influence ethanol price levels, but also their volatility. Increased volatility in crude oil markets results in increased volatility in ethanol markets. Ethanol prices, on the other hand, influence sugar price levels and an increase in their volatility levels also impacts, though less strongly, on sugar markets.volatility, ethanol, GARCH, cointegration, Demand and Price Analysis, Resource /Energy Economics and Policy, Risk and Uncertainty, Q11, C32,

Review of environmental, economic and policy aspects of biofuels

The world is witnessing a sudden growth in production of biofuels, especially those suited for replacing oil like ethanol and biodiesel. This paper synthesizes what the environmental, economic, and policy literature predicts about the possible effects of these types of biofuels. Another motivation is to identify gaps in understanding and recommend areas for future work. The analysis finds three key conclusions. First, the current generation of biofuels, which is derived from food crops, is intensive in land, water, energy, and chemical inputs. Second, the environmental literature is dominated by a discussion of net carbon offset and net energy gain, while indicators relating to impact on human health, soil quality, biodiversity, water depletion, etc., have received much less attention. Third, there is a fast expanding economic and policy literature that analyzes the various effects of biofuels from both micro and macro perspectives, but there are several gaps. A bewildering array of policies - including energy, transportation, agricultural, trade, and environmental policies - is influencing the evolution of biofuels. But the policies and the level of subsidies do not reflect the marginal impact on welfare or the environment. In summary, all biofuels are not created equal. They exhibit considerable spatial and temporal heterogeneity in production. The impact of biofuels will also be heterogeneous, creating winners and losers. The findings of the paper suggest the importance of the role biomass plays in rural areas of developing countries. Furthermore, the use of biomass for producing fuel for cars can affect access to energy and fodder and not just access to food.Energy Production and Transportation,Environmental Economics&Policies,RenewableEnergy,Transport Economics Policy&Planning,Energy and Environment

Collective penalties and inducement of self-reporting

Random accidents can be contained by collective penalties. These penalties are not likely to be enforced but rather induce self-reporting that enhances welfare due to early containment. Self-reporting under collective penalties increases overall welfare, but may increase expected environmental cost. Even when regulation is constrained by an upper limit on the acceptable collective penalty, the threat of collective penalties can induce an incentive-compatible mutual insurance scheme under which a side-payment is made to the agent that self-reports an accident. This self-reporting mechanism is welfare-improving, but first-best outcomes can only be obtained when the collective penalty is unconstrained, or when an honor system applies. In cases when there is a new externality that requires fast response (avian flu), collective penalties can compliment or substitute for monitoring.Ambient tax, collective penalties, enforcement, self-reporting.

IS EQUITY A CONSTRAINT? APPLICATIONS TO BLOCK RATE AND OTHER PRICING SCHEMES WITH HETEROGENEOUS USERS

In this paper, we model the trade-off between equity and efficiency in a market for a resource when users of that resource are heterogeneous. We develop the analytical model, and show that under certain circumstances efficiency can be achieved in a manner that also reduces inequality. We also illustrate these results through the use of simulation methods.Research Methods/ Statistical Methods,

Innovation Behaviour At Farm Level – Selection And Identification

Using a squential logit model and a mixed-effects logistic regression approach this empirical study investigates factors for the adoption of automatic milking technology (AMS) at the farm level accounting for problems of sequential sample selection and behaviour identification. The results suggest the importance of the farmer’s risk perception, significant effects of peer-group behaviour, and a positive impact of previous innovation experiences.Technology Adoption, Mixed-Effects Regression, Risk, Agricultural and Food Policy, Farm Management, Land Economics/Use,

Innovation behaviour at farm level: Selection and identification

Using a squential logit model and a mixed-effects logistic regression approach this empirical study investigates factors for the adoption of automatic milking technology (AMS) at the farm level accounting for problems of sequential sample selection and behaviour identification. The results suggest the importance of the farmer’s risk perception, significant effects of peer-group behaviour, and a positive impact of previous innovation experiences.squential logit model, automatic milking technology (AMS), Livestock Production/Industries, Research Methods/ Statistical Methods, Risk and Uncertainty,

STORAGE TECHNOLOGY AND THE ENVIRONMENT

A dynamic framework is presented for analyzing regulations affecting the use of spoilage-reducing inputs with potential negative environmental effects, such as pesticides, growth regulators, chemical preservatives, and irradiation. Such regulations change intertemporal consumption patterns as well as total output. Consumers may benefit from restrictions on storage technology, giving them a reason to support regulation even when it may not be warranted to correct environmental externalities. Static analyses do not take into account changes in intertemporal consumption, and thus may give misleading depictions of the effects of imposing new regulations. Implications of the framework for development and trade policy are discussed, as are extensions to cases of uncertainty and multiple time periods.Environmental Economics and Policy,