MEASUREMENT OF GRADING ERROR COSTS IN THE BEEF INDUSTRY

This paper models the market for beef products when quality production is stochastic and quality information is asymmetric between producers and consumers. Independent sorters act as intermediaries to enhance market efficiency by guaranteeing minimum quality levels. Market shares, effort levels, prices, and quality standards are obtained for general market equilibrium.Marketing,

De Gustibus Asparagus: Habits, Trade, and Welfare from Out of Season Imports of Fresh Vegetables

Fresh vegetables, including asparagus, are now available in months outside of the domestic growing season for most U.S. consumers. We use the virtual price method to calculate the equivalent variation for increased availability in a demand system for fresh and frozen vegetables and find that virtual price of out-of-season asparagus is roughly 3 times higher than its in-season price in years prior to year round availability. We find the equivalent variation between 1986-1991 (when asparagus was available approximately half the year) and 1993-1999 (when it was available year round) to be 0.91 of consumer vegetable budgets, implying a welfare benefit of approximately $86 million annually. We also find evidence of habit formation for fresh but not frozen goods.vegetable, translog, asparagus, habits, virtual price, welfare, fresh, frozen, Consumer/Household Economics, Demand and Price Analysis, International Relations/Trade,

Habit Effects and Producer Welfare in the Fresh Vegetable Trade

trade, vegetable, free trade agreement, tariff, habits, NAFTA, Andean Trade Preference Act, Agricultural and Food Policy, Demand and Price Analysis, International Relations/Trade,

The Economics of Agricultural and Wildlife Smuggling

The United States bans imports of certain agricultural and wildlife goods that can carry pathogens or diseases or whose harvest can threaten wildlife stocks or endanger species. Despite these bans, contraband is regularly uncovered in inspections of cargo containers and in domestic markets. This study characterizes the economic factors affecting agricultural and wildlife smuggling by drawing on inspection and interdiction data from USDA and the U.S. Fish and Wildlife Service and existing economic literature. Findings reveal that agricultural and wildlife smuggling primarily include luxury goods, ethnic foods, and specialty goods, such as traditional medicines. Incidents of detected smuggling are disproportionately higher for agricultural goods originating in China and for wildlife goods originating in Mexico. Fragmentary data show that approximately 1 percent of all commercial wildlife shipments to the United States and 0.40 percent of all U.S. wildlife imports by value are refused entry and suspected of being smuggled.Smuggling, illicit trade, SPS, quarantine, endangered species, CITES, Agribusiness, Agricultural and Food Policy, Financial Economics,

HYPOTHESIS TESTING USING NUMEROUS APPROXIMATING FUNCTIONAL FORMS

While the combination of several or more models is often found to improve forecasts (Brandt and Bessler, Min and Zellner, Norwood and Schroeder), hypothesis tests are typically conducted using a single model approach 1 . Hypothesis tests and forecasts have similar goals; they seek to define a range over which a parameter should lie within a degree of confidence. If it is true that, on average, composite forecasts are more accurate than a single model's forecast, it might also be true that hypothesis tests using information from numerous models are, on average, more accurate in the sense of lower Type I and Type II errors than hypothesis tests using a single model.Research Methods/ Statistical Methods,

MODEL SELECTION CRITERIA USING LIKELIHOOD FUNCTIONS AND OUT-OF-SAMPLE PERFORMANCE

Model selection is often conducted by ranking models by their out-of-sample forecast error. Such criteria only incorporate information about the expected value, whereas models usually describe the entire probability distribution. Hence, researchers may desire a criteria evaluating the performance of the entire probability distribution. Such a method is proposed and is found to increase the likelihood of selecting the true model relative to conventional model ranking techniques.Research Methods/ Statistical Methods,

Irradiation of Produce Imports: Small Inroads, Big Obstacles

Fruit and vegetable imports to the U.S. have been growing, but fumigation, 25 the main treatment for quarantine pests on fruit and vegetables, faces an uncertain regulatory climate.Irradiation can act as an alternative treatment for foodborne pests, but it requires labeling and large investments in facilities. Though some consumers remain wary of the process, irradiated specialty products have gained a foothold where few alternative treatments are available

Illicit Agricultural Trade

Agricultural and wildlife trade is subject to sudden, disruptive import restrictions arising from concerns over sanitary and phytosanitary safety and the conservation of natural resources. These restrictions can create significant international price differences that encourage the smuggling of goods across borders. This article presents an equilibrium model of smuggling where the supply and demand for smuggled goods depend on interregional price disparities in the presence of a trade ban. In this model, smuggling is more prevalent when demand and supply among trade partners is more inelastic or when there are fewer total trade partners at the time a trade ban is enacted. Applications are presented for regionalization, destruction of goods in government eradication programs, price support, stockpiling, and the development of substitutes. Regionalization may increase smuggling under certain production and consumption patterns

MEASUREMENT OF GRADING ERROR COSTS IN THE BEEF INDUSTRY

This paper models the market for beef products when quality production is stochastic and quality information is asymmetric between producers and consumers. Independent sorters act as intermediaries to enhance market efficiency by guaranteeing minimum quality levels. Market shares, effort levels, prices, and quality standards are obtained for general market equilibrium

Is More Distinction Better? The Welfare Effects of Adjusting Quality Grades

Grading of agricultural commodities for quality is ubiquitous. By ensuring a minimum level for product qualities that can range over a broad spectrum, grading mitigates the asymmetric information problem, eliminates the repetition of costly inspection, and harmonizes pricing. Despite the potential for vast gradation by quality, only a limited number of coarse grades are typically available to consumers. While technology, costs and available information may limit the extent of grading, this coarseness, nonetheless, has important consumer and producer welfare effects. This paper shows that, even in the absence of consumer uncertainty and grading costs, both increasing the number of available grades and changing the standards of existing grades will alter and redistribute the total gains from trade. Producer or consumer groups can potentially increase their gains to trade simply by influencing the grading system. The model is related to rise of certification and branding programs in the beef industry in the last decade to supplement the longstanding grading program