Organic Crowding Out? - A Study of Danish Organic Food Demand

Only a handful of studies have estimated organic food demand. These all focus on specific food sub-markets assuming separability from other food consumption. However, consumers typically associate attributes such as e.g. healthiness and environment friendliness with organic variants of most types of food. If such general organic attributes are important for consumer behaviour then separability may not hold and what could be termed organic crowding out might result. In this paper we utilize a unique Danish micro panel where all food demand is registered on a disaggregated level with an organic/non-organic indicator to estimate a general food demand system with organic variants. We clearly reject the usual separability assumption and find that our data is consistent with organic crowding out in the Danish food market. In addition estimation of a general demand system makes calculation of economy wide organic price elasticities and other insights into the structure of organic food demand possible

The Dynamics of Farm Land Allocation – Short and Long Run Reactions in a Long Micro Panel

This study develops a dynamic multi-output model of farmers’ crop allocation decisions that allows estimation of both short-run and long-run adjustments to a wide array of economic incentives. The method can be used to inform decision-makers about a number of issues including agricultural policy reform and environmental regulation. The model allows estimation of dynamic effects relating to price expectations adjustment, investment lags and crop rotation constraints. Estimation is based on micro-panel data from Danish farmers that includes acreage, output and variable input utilisation at the crop level. Results indicate that there are substantial differences between the shortrun and long-run land allocation behaviour of Danish farmers and that there are substantial differences in the time lags associated with different crops. Since similar farming conditions are found in northern Europe and parts of the USA and Canada, this result may have more general interest.land allocation, crop rotation, system of dynamic equations, micro panel data, GMM

Jointness through fishing days input in a multi-species Fishery

Some multi-species fisheries are characterised by production jointness in the sense that several species are caught through a joint production process (literally in the same haul of the net). Other multi-species fisheries (so called purse seine fisheries) are specialized in the sense that species are targeted individually and by-catch is negligible, but over the fishing season the same boat chooses to target several species with varying intensity which also results in a sort of jointness. Both types of fisheries are typically modelled using standard multi-input multi-output profit function forms (e.g. translog, normalized quadratic). In this paper we argue that jointness in the latter, essentially separable fishery is caused by allocation of fishing days input among harvested species. We developed a structural model of a multi-species fishery where the allocation of fishing days input causes production jointness. We estimate the model for the Norwegian purse seine fishery and find that it is characterised by non-jointness, while estimations for this fishery using the standard multi-input multi-output profit function imply jointness.production jointness, multi-species fisheries, structural modeling

The Rise and Fall of Divorce - A Sociological Adjustment of Becker’s Model of the Marriage Market

Despite the strong and persistent influence of Gary Becker’s marriage model, the model does not completely explain the observed correlation between married women’s labor market participation and overall divorce rates. In this paper we show how a simple sociologically inspired extension of the model realigns the model’s predictions with the observed trends. The extension builds on Becker’s own claim that partners match on preference for partner specialization, and, as a novelty, on additional sociological theory claiming that preference coordination tend to happen subconsciously. When we incorporate this aspect into Becker’s model, the model provides predictions of divorce rates and causes that fit more closely with empirical observations.marriage market

Danish organic food demand - Separability and Substitution Patterns

Most studies of organic food demand are based on questionairs focussing on buying motives. Only a handful of studies estimate organic food demand and these all focus on food submarkets and must assume separability of the organic/non-oragnic nest of analysed food from other food submarkets. The soundness of this separability assumption may nevertheless be questioned since general attributes such as animal welfare and environmental effects are cited as buying motives for organic variants irrespective of food type in most surveys. The assumption of separabilety of nests of organic/non-oragnic variants of foods has, however, not been tested empirically. In this paper we exploit unique Danish micro level data where all food demand has been registered on a disaggregated good level and in all cases with an indicator of weather the good is of an organic or non-organic variant to test the separability assumption empirically. Our results indicate that the assumption should be rejected and further that the cross-price elasticity pattern resulting from estimation of a non-nested system is consistent with non-separability being caused by general organic food attributes such as animal welfare and environmental effects. This has implications for policy, and organic food estimation

Quota Enforcement in Resource Industries: Self-Reporting and Differentiated Inspections

Quotas or permits are frequently used in the management of renewable resources and emissions. However, in many industries there is concern about the basic eectiveness of quotas due to non-compliance. We develop an enforcement model of a quota-regulated resource and focus on a situation with signicant non-compliance and exogenous constraints on nes and enforcement budget. We propose a new enforcement system based on self-reporting of excess extraction and explicit dierentiation of inspection rates based on compliance history. In particular, we use state-dependent enforcement to induce rms to self-report excess extraction. We show that such system increases the eectiveness of quota management by allowing the regulator to implement a wider range of aggregate extraction targets than under traditional enforcement, while ensuring an ecient allocation of aggregate extraction. In addition, inspection costs can be reduced without reductions in welfare.Enforcement, Non-compliance, Self-reporting, Dierentiated inspections, Quotas, Emissions standards, Resource Management

Instrument Choice when Regulators are Concerned about Resource Extinction

In this paper we undertake a systematic investigation of instrument choice when preventing a population collapse rather than maximizing industry profit is the overriding concern. Contrary to what seems to be the general consensus we find that landing fees do provide more effective insurance against extinction than quotas under more or less the same conditions as those implying that landing fees are better at maximising industry profit. Thus, the efficiency of the regulatory instrument mainly depends on the basic information asymmetries characterizing the fishery, and is not sensitive to whether the regulators total catch goals are set according to economic or precautionary principles.

Aspects of the political economy of environmental voluntary agreements - a meta study

Environmental voluntary agreements with industries are becoming a popular alternative to traditional regulation. One reason may be that such agreements increase implementation cost efficiency. On the other hand, models of the political economy of environmental voluntary agreements point out that efficiency reducing agreements are also possible under certain conditions. In this paper we interpret empirical evidence from case studies of environmental voluntary agreements using one such policy formulation and implementation model. When our sample is interpreted in this light the data suggests that environmental voluntary agreements may often be chosen in order to shift the responsibility for implementation to industrial organizations that are less sensitive to criticism from powerful environmental interest groups. When this explanation of an environmental voluntary agreement applies, the model predicts that the agreement will be less cost effective and achieve lower environmental performance than the traditional regulatory alternative which would otherwise have been adopted. Although our findings are not conclusive nor necessarily representative they do suggest the worrying possibility that many of the environmental voluntary agreements being established today achieve lower environmental performance less cost effectively than the most likely traditional regulatory alternative