How Market Power Changes in Monopoly: Using Lau’s Hessian Identities

This research examines market power using Lau’s Hessian Identity relationships based on the empirical properties of duality theory. We compare the performance of the proposed dual approach using Lau’s Hessian Identity relationships with the simple traditional dual approach.Lau’s Hessian Identity, Monte Carlo simulation, Market Power, Monopoly, Marketing,

Nonparametric Efficiency Analysis for Coffee Farms in Puerto Rico

Coffee production in Puerto Rico is labor intensive since harvest is done by hand for quality and topography conditions. Färe's nonparametric approach was used to estimate technical, allocative, scale and overall efficiency measures for coffee farms in Puerto Rico during the 2000 to 2004 period. On average Puerto Rico coffee farms were 46% technically efficient, 79% scale efficient, and 74% allocatively efficient.coffee production, nonparametric efficiency, Crop Production/Industries, Research Methods/ Statistical Methods,

ON THE CHOICE OF FUNCTIONAL FORMS IN THE MEASUREMENT OF SCALE AND SCOPE ECONOMIES: GENERALIZED BOX-COX AND COMPOSITE COST FUNCTIONS

This paper estimates and compares generalized Box-Cox and composite cost functions to identify scale and scope economies. The robustness of the outcomes to different functional specifications was examined. Increasing returns to scale was common for product-specific and the overall measures. Generalized Leontief and composite forms yielded more robust elasticity, scale and scope measures. The generalized Box-Cox model was selected as the appropriate functional form as all the special cases were rejected.Research Methods/ Statistical Methods,

Determining the Probability of Default of Agricultural Loans in a French Bank

Recently, financial institutions have developed improved internal risk rating systems and emphasized the probability of default and loss given default. Also they have been affected by globalization and it became important to understand the way foreign banks operate. The probability of default is studied for 756 loans from a French bank: CIC- Banque SNVB. A binomial logit regression is used to estimate a model of the probability of default of an agribusiness loan. The results show that leverage, profitability and liquidity at loan origination are good indicators of the probability of default. The loan length is another good indicator of the probability of default. Also it is more accurate to develop a model for each type of collateral (activity).Agricultural Finance,

DETERMINING SOCIALLY OPTIMAL NITROGEN APPLICATION RATES USING A DELAYED RESPONSE MODEL: THE CASE OF IRRIGATED CORN IN WESTERN KANSAS

A delayed response model was used to examine the optimal nitrogen application for irrigated corn in western Kansas. Results show that taking into account the effect of leached nitrate on groundwater pollution reduces the profit-based nitrogen recommendation by 12.5% with a consequent reduction of the static profit of 6.7%.Crop Production/Industries,

SCALE ECONOMIES AND EFFICIENCIES FOR CHINESE RURAL CREDIT COOPERATIVES

This paper evaluates scale economies and efficiencies for Rural Credit Cooperatives (RCCs) in China using both parametric and nonparametric techniques. Diseconomies of scale and allocative inefficiency are found. The results reveal the need for RCCs to decrease their size and the need for government to liberalize the financial market.Agribusiness,

Estimating Economies of Scope Using Profit Function: A Dual Approach of the Normalized Quadratic Profit Function

Replaced with revised version of paper 06/26/06.Research Methods/ Statistical Methods,

DETERMINING SOCIALLY OPTIMAL NITROGEN APPLICATION RATES USING A DELAYED RESPONSE MODEL: THE CASE OF IRRIGATED CORN IN WESTERN KANSAS

Nitrate contamination of groundwater is an important problem. The transport of leached nitrate from the root zone to groundwater takes approximately 30 to 60 years. Many previous studies ignore this time lag by assuming instantaneous contamination. This analysis applies a delayed response model to account for the time lag between nitrogen fertilizer applications to the time the leached nitrate reaches groundwater. Results show that accounting for the leached nitrate externality reduces the nitrogen application rate by 13% and the returns above variable costs by 8% for farmers who apply both nitrogen and phosphorus. For farmers who do not use phosphorus, nitrogen use is reduced by 14% and the returns above variable costs by 22%. The application of phosphorous increased returns by more than 100% and significantly reduced leached nitrate.Crop Production/Industries,

A Comparative Efficiency Analysis of Wheat Farms using Parametric and Nonparametric Methods

Efficiency Analysis, Deterministic Nonparametric Method, Parametric, Stochastic Frontier., Production Economics, Q12,

FUZZY LOGIC AND COMPROMISE PROGRAMMING IN PORTFOLIO MANAGEMENT

The objective of this paper is to develop a portfolio optimization technique that is simple enough for an individual with little knowledge of economic theory to systematically determine his own optimized portfolio. A compromise programming approach and a fuzzy logic approach are developed as alternatives to the traditional EV model.Agricultural Finance,