733 research outputs found

    MONOTONICITY AND CURVATURE - A BOOTSTRAPPING APPROACH

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    This research contributes to the ongoing discussion on functional flexibility and theoretical consistency by comparing the empirical performance of two second order flexible functional forms - the Symmetric Generalized McFadden and the Transcendental Logarithmic. It proposes an estimation procedure to enhance the domain of applicability for the Translog by a combination of matrix decomposition, classical non-linear estimation techniques as well as bootstrapping based resampling. The validity of the proposed procedure is exemplified by applying it to a sample of small-scale farmers. The results show that the range of theoretical consistency can be crucially enhanced for the Translog functional form by maintaining its flexibility and statistical significance. Hence, beside its empirical superiority by applying the outlined procedure the Translog can also catch up with respect to the range of functional consistency.Econometric Modeling, Flexible Functional Forms, Theoretical Consistency, Bootstrapping, Financial Economics,

    Die Ökonomie der (lĂ€ndlichen) Wasserversorgung

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    Der vorliegende Beitrag diskutiert die optimale Organisation der Wasserversorgung unter BerĂŒcksichtigung der grundlegenden Gutscharakteristika und der spezifischen Produktions-struktur. Nach einer formalen Beschreibung der einzelnen Produktionsstufen und der realen Organisation des Wassersektors in Deutschland werden kurz verschiedene Modelle zur Sek-tororganisation vorgestellt. Anschließend wird versucht, die Bestimmung der ökonomisch optimalen Betriebs- und Angebotsorganisation zu erlĂ€utern. Schließlich werden zentrale öko-nomische Konzepte der Produktionsanalyse und der industriellen Organisation fĂŒr eine empi-rische ÜberprĂŒfung am Beispiel der Wasserversorgung beispielhaft modelliert. Es zeigt sich, dass empirisch fundierte Organisationsmodelle bisher keinen Eingang in die aktuelle Liberali-sierungsdiskussion in den Wassersektoren gefunden haben. Im Hinblick auf eine Restruktu-rierung der Wasserversorgung in lĂ€ndlichen Regionen könnte das sog. 'Pool-Modell' eine Al-ternative zur derzeitigen integrierten Verbundlösung darstellen. -- E N G L I S H V E R S I O N: This paper deals with the optimal organisation of the water supplying industry by having a close look on the basic characteristics of water as a economic good as well as the specific structure of production. After the formal description of the individual stages of production and the real organisation of the German water sector, different models for the sector organisation are briefly being considered. Subsequently, the determination of the optimal firm and industry structure is illustrated from the economic point of view. Finally, central economic concepts with respect to production analysis as well as industrial organisation are modelled for an empirical application to the water supplying industry. It is revealed that empirically based organisation models have not been considered in the course of the ongoing discussion on water sector liberalisation so far. The 'pool-model' seems to be a promising alternative with respect to the restructuring of the water supplying industry in rural areas.Water Supply Industry,Production Analysis,Industrial Organisation,Economic Modelling,Wasserversorgung,Produktionsanalyse,Industrielle Organisation,Modellierung

    Natural Disasters and Agriculture: Individual Risk Preferences towards Flooding

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    This study contributes to the understanding of behavioural responses to climate change induced extreme weather events. It suggest a microeconometric method for measuring flooding related risk preferences of affected individuals. The method is outlined using the empirical case of agricultural production in floodplains of the UK over 28 years. A quasi-experimental approach to measure differences in the risk attitudes of farmers located in high flooding risk areas versus farmers located in low flooding risk areas is followed. Changes in flooding risk related behaviour over time is analysed and marginal effects of different individual and disaster related characteristics for this behaviour are investigated. Beside a moments based risk estimation approach the study also applies a dynamic panel estimator. The estimates suggest that the average farmer located in a high flooding risk area is prepared to pay about 6% more of his profit for insuring against the higher risk of flooding compared to farmers in low flooding risk areas. The significance of considering individual risk preferences for an efficient flood policy design is discussed using the example of voluntary agreements for the maintainance of flood defences. Die folgende Studie untersucht individuelle VerhaltensĂ€nderungen im Hinblick auf Klima induzierte extreme Wetterereignisse. Es wird eine mikroökonometrische Methode zur Messung Flutungsbedingter RisikoprĂ€ferenzen vorgeschlagen. Die Methode wird exemplarisch am Fall landwirtschaftlicher Produktion in England fĂŒr einen Zeitraum von 28 Jahren aufgezeigt. Es wird ein quasi-experimenteller Ansatz verfolgt um Unterschiede in den RisikoprĂ€ferenzen von Landwirten in Gebieten mit geringem Flutungsrisiko und solchen in Gebieten mit hohem Flutungsrisiko zu untersuchen. Änderungen in Flutungsrisiko bezogenem Verhalten im Zeitablauf sowie die marginalen Effekte verschiedener Charakteristiken und Faktoren werden beleuchtet. Neben einem ‚moments based‘ SchĂ€tzansatz wird ebenso ein dynamischer Panel SchĂ€tzer verwandt.Extreme Events, Risk, Agriculture, Natural Experiments, Behavioural Adaptation, Extreme Ereignisse, Risiko, Landwirtschaft, NatĂŒrliche Experimente, Verhaltensadaption, Agribusiness, Agricultural and Food Policy, Q12, C54,

    The Need for Theoretically Consistent Efficiency Frontiers

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    The availability of efficiency estimation software freely distributed via the internet and relatively easy to use recently inflated the number of corresponding applications. The resulting efficiency estimates are often used without a critical assessment with respect to the literature on theoretical consistency, flexibility and the choice of the appropriate functional form. The robustness of policy suggestions based on inferences from efficiency measures nevertheless crucially depends on theoretically well-founded estimates. This paper addresses stochastic efficiency measurement by critically reviewing the theoretical consistency of recently published technical efficiency estimates. The results confirm the need for a posteriori checking the regularity of the estimated frontier by the researcher and, if necessary, the a priori imposition of the theoretical requirements.functional form, stochastic efficiency analysis, theoretical consistency, Research and Development/Tech Change/Emerging Technologies, C51, D24, Q12,

    ESS versus NVZ – The Cost-Effectiveness of Command-and-Control versus Agreement Based Policy Instruments

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    This study empirically investigates the cost-effectiveness of different agri-environmental policy instruments. We compare the Environment Stewardship Scheme (ESS) as an example for a management agreement type instrument, to the Nitrate Vulnerable Zones (NVZ) as an example for a command-and-control type instrument. Both instruments are currently applied in the UK. Based on a simple cost model considering also relevant transaction costs and risk we use different regression and resampling techniques to estimate the marginal effects of different factors with respect to the instruments‟ relative cost-effectiveness and to identify factors for cost variation over space and time. We control for the actual level of compliance by using compliance weighted average scheme cost ratios. The findings suggest that the ESS instrument has a higher cost-effectiveness whereas the NVZ instrument is more expensive on a general level. However, if the focus is on compliance weighted cost ratios, the picture changes somewhat. Further, we find a significant regional variation in the cost-effectiveness for both instruments as well as a significant variation over time.Agri-Environmental Instruments, Costs, Risk, Risk and Uncertainty,

    Soil Fertility Management And Maize Productivity In Malawi: Curvature Correct Efficiency Modeling And Simulation

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    We assess the level and determinants of relative technical efficiency of maize-based smallholder farmers using a translog stochastic frontier (TL) model and a symmetric generalized Barnett production function (SGB), both of which are tested for economic regularity conditions. In addition, we conduct a bootstrapping procedure in order to infer about the probability distributions and significance of the relative efficiency values for farmers using different soil fertility management options. The results indicate that higher levels of relative technical efficiency obtain when farmers use integrated soil fertility options compared to the use of chemical fertilizer only. The consistency of the results across the two models increase the robustness of the findings. The paper concludes that productivity growth under the maize-based farming systems is considerably higher when farmers use integrated soil fertility management options. Thus there is need for policy and institutional interventions that enhance farmers’ adoption and scaling-up of integrated soil fertility management.Smallholder agriculture, relative technical efficiency, soil fertility management, Malawi, Agricultural and Food Policy, Consumer/Household Economics, Demand and Price Analysis, Farm Management, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, International Relations/Trade, Labor and Human Capital, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies,

    Evaluating Agri-Environmental Schemes – The Marginal Costs of Ecosystem Services

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    We provide a new approach for assessing the cost of marginal ecosystem changes and the effectiveness of agri-environmental schemes. The approach is based on a theoretical and empirical analysis of the bio-economic production interactions between marketed outputs and non-marketed ecosystem services at the micro level. To frame the economic nature of the problem, we employ a generalized joint production model in combination with cost minimization. The generalized joint production framework allows for the consideration of complementary, substitutive and competitive relationships between agricultural production and non-marketed ecosystem services generation and avoids double counting. From this theoretical model we distinguish three theoretical cases depending on the imposed minimum acceptable level of the non-marketed ecosystem services. We employ farm level panel data for the UK to empirically investigate these cases. More specifically, to represent and evaluate the production structure, we estimate first- and second-order elasticities derived from a flexible transformation function. Results show that the majority of farms produce agricultural output and ecosystem services in a complementary relationship. Generation of multiple ecosystem services on the same farm showed either a substitutive or competitive relationship. A change in the composition of the ecosystem services output would have very different implications for individual farms.agri-environmental services, bio-economic modelling, economies of scale and scope, Agricultural and Food Policy, Environmental Economics and Policy, Q18, Q57, Q58.,

    Marketed Outputs and Non-Marketed Outputs: The Marginal Costs of Producing Ecosystem Services

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    We provide a new approach for assessing the cost of marginal ecosystem changes and the effectiveness of green payment schemes. The approach is based on a theoretical and empirical analysis of the bio-economic production interactions between marketed outputs and non-marketed ecosystem services at the micro level. To frame the economic nature of the problem, we employ a generalized joint production model in combination with cost minimization. The generalized joint production framework allows for the consideration of complementary, supplementary and competitive relationships between agricultural production and non-marketed ecosystem services generation and avoids double counting. From this theoretical model we distinguish three theoretical cases depending on the imposed minimum acceptable level of the non-marketed ecosystem services. We employ farm level panel data for the UK to empirically investigate these cases. More specifically, to represent and evaluate the production structure, we estimate first- and second-order elasticities derived from a flexible transformation function. Results show that the majority of farms produce agricultural output and ecosystem services in a complementary relationship. Generation of multiple ecosystem services on the same farm showed either a supplementary or competitive relationship. Changing the composition of the ecosystem services output would have very different implications for individual farms.ecosystem services, green payments, bio-economic modelling, economies of scale and scope, program evaluation., Environmental Economics and Policy, Land Economics/Use, Q18, Q57, Q58.,

    Alternative Soil Fertility Management Options in Malawi An Economic Analysis

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    In this paper, we analyze the factors that influence t he productivity of maize among smallholder farmers, given that unfavourable output and input market conditions throughout the 1990s have compelled smallholder farmers into unsustainable agricultural intensification. We use farm-household survey data in order to compare the productivity of smallholder maize production under integrated (ISFM) and chemicalbased soil fertility management using a normalized translog yield response model. The results indicate higher maize yield responses for integrated soil fertility management options after controlling for the intensity of fertilizer application, labour intensity, seed rate as well as land husbandry practices a s well as selected policy factors. The estimated model is highly consistent with theoretical conditions. Thus we conclude that the use of ISFM improves maize productivity, compared to the use of inorganic fertilizer only. Since most farmers in the maize-based farming systems are crowded out of the agricultural input market and can hardly afford optimal quantities of inorganic fertilizer, enhancement of ISFM is likely to increase their maize productivity. We finally highlight areas of policy support needed to enhance ISFM uptake in smallholder maize-based farming systems.smallholder agriculture, yield response model, soil fertility management, Malawi, Land Economics/Use,

    SOIL FERTILITY MANAGEMENT AND AGRICULTURAL PRODUCTIVITY IN MALAWI

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    In this paper we analyze the factors that influence the productivity of maize among smallholder farmers. We use farm-household survey data in order to compare the productivity of smallholder maize production under integrated (ISFM) and chemical-based soil fertility management using a normalized translog yield response model. The results indicate higher maize yield responses for integrated soil fertility management options after controlling for the intensity of fertilizer application, labour intensity, seed rate, land husbandry practices as well as selected policy factors. The estimated model is highly consistent with theoretical conditions. Thus we conclude that the use of ISFM improves maize productivity, compared to the use of inorganic fertilizer only. Since most farmers in the maize-based farming systems are crowded out of the agricultural input market and can hardly afford optimal quantities of inorganic fertilizer, enhancement of ISFM is likely to increase their maize productivity. We finally highlight areas of policy support needed to enhance ISFM uptake in smallholder maize-based farming systems.Malawi, smallholder agriculture, soil fertility management, yield response model, Farm Management,
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