Outstanding Master's Thesis Award: The law and economics of "consumer only" financed export subsidies: a context for the WTO panel on Canadian dairy pricing policy, by Isabel Schleup; Assessing the market potential for character marked wood furniture, by Guanming Shi; The economics of 2-tier tariff-rate import quotas: an empirical application to the United States dairy industry, by Devry Seanna Boughner; Underemployment dynamics of women in the United States, by Qiuyan Wang Distinguished Member Award: Conrado M. (Bobby)Gempesaw and John M. Halstead Journal Article of the Year for 1999: Examining packer choice of slaughter cattle procurement and pricing methods, by Oral Capps, Jr., H. Alan Love, Gary W. Williams, and Wendi L. AdamsTeaching/Communication/Extension/Profession,

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Research Papers in Economics

NAREA Awards
Outstanding Master’s Thesis Award
The Law and Economics of “Consumer Only”
Financed Export Subsidies: A Context for the WTO
Panel on Canadian Dairy Pricing Policy
Isabel Schleup
Cornell University
Advisor: Harry de Gorter
The recent World Trade Organization (wTO) Dispute
Settlement Panel on Canadian dairy policy provides the
background and the motivation for the thesis. The Panel
finds Canada in violation of commitments in the Agree-
ment on Agriculture (the Agreement) of the Uruguay
Round by providing producer financed export subsidies
for dairy products.
The Agreement imposed limits and reduction commitm-
ents on taxpayer and producer financed export subsi-
dies only (in terms of both the value of export subsidies
and the quantity of exports subsidized). The thesis fo-
cuses on consumer only financed export subsidies that
are not recognized by the WTO. It is demonstrated that
this new type of export subsidy circumvents the guide-
lines established in the Agreement and is more trade
distorting than a taxpayer financed export subsidy. A
producer levy with a consumer only financed export sub-
sidy is identical to a consumer only financed export sub-
sidy alone (for the same amount of producer welfare).
A consumer only financed export subsidy does not
involve taxpayer costs, but instead transfers revenue di-
rectly from consumers to producers. Price discrimination
and a revenue pooling system administered by State
Trading Enterprises (STES)l are prerequisites for this
new type of export subsidy. The economics of similar
dairy pricing practices adopted by California, the U.S.
Federal Order pooling price policy, and the New Zealand
Dairy Board are also investigated.
‘ State Trading Enterprises are also referred to as single-desk buying or
sellingagents.
The findings of this study show that the ruling of the
Panel is inconsistent with the economic definition of an
export subsidy developed in this thesis. The Panel’s de-
cision has direct implications for Canada, and for other
dairy and commodity policies worldwide. Recommen-
dations are provided on how the WTO could deal with
consumer only financed export subsidies and, for ex-
ample, how the General Agreement on Tariffs and Trade
(GATT) text could be modified to include this new type
of export subsidy.
Canada’s dairy policy involves border protection, a
production quota, end-use pricing, price discrimination
and revenue pooling. The component-based empirical
model assesses the different options for Canada to elimi-
nate export subsidies to comply with the Panel’s rulings
and the economic definition of a consumer only financed
export subsidy. It turns out that Canadian producers are
better off when revenue pooling is removed or when the
production quota is reduced by the volume of the milk
classes that provide for the implicit export subsidy.
Canada’s dairy policy is government regulated
(through STES) and therefore subject to the reduction
commitments on export subsidies made in the Agree-
ment. It is shown how price discrimination in combina-
tion with revenue pooling practices give a competitive
advantage to STES in the world dairy market. The thesis
also addresses how their behavior differs from commer-
cial firms and what the implications are for the next
GATT Round. Suggestions are provided on how the
definition of an STE in the GATT could be altered to
scrutinize consumer only financed export subsidies.
Agricultural and Resource Economics Review 2912(October 2000) 259-262
Copyright 2000 Northeastern Agricultural and Resource Economics AssociationAgricultural and Resource Economics Review 260 October 2000
Outstanding Master’s Thesis Award
Assessing the Market Potential for Character
Marked ‘Wood Furniture
Guanming Shi
University of Vermont
Advisor: Qingbin Wang
While wood is a critical resource for many small busi-
nesses and rural communities, a major problem faced by
the wood product industry is a shortage of high-grade
hardwood lumber and inefficient use of low-grade hard-
wood timber. This study evaluates the market potential
for character marked hardwood furniture with four spe-
cific objectives: (a) to evaluate consumer preferences for
hardwood chairs made from low-grade hardwood with
character marks (knots, pith, etc), (b) to determine the
tradeoffs between price and other attributes, (c) to iden-
tify socioeconomic factors that determine consumer ac-
ceptance of such chairs, and (d) to evaluate strategies for
increasing consumer acceptance of character marked
wood furniture. While a conjoint analysis is conducted to
examine consumer preferences for four major attributes
of hardwood chairs, parametric and non-parametric
econometric approaches are used to address other eco-
nomic and marketing questions.
This study based on a survey conducted in four northeast
states in 1998 indicates that there is likely a niche market
for character marked wood furniture with attractive design
and competitive price and guarantee policy. While the con-
joint analysis indicates that design is the most important
attribute, followed by price, density of character marks and
guarantee policy, additional statistical anatyses suggest that
consumer preferences are significantly affected by socio-
demographic factors. Individuals also tend to have different
responses to alternative descriptions and messages regard-
ing the character marked hardwood chairs: messages asso-
ciated with place and construction of the furniture tend to
be influential but the use of environmental messages
should be selective.
Master’s Thesis Award of Merit
The Economics of 2-Tier Tariff-Rate Import Quotas:
An Empirical Application to the United States Dairy .
Industry
—
Devry Seanna Boughner
Cornell University
Advisor: Harry de Gorter
The Agreement on Agriculture in the Uruguay Round
implemented 2-tier tariff-rate import quotas (TRQs). Im-
port quotas guaranteed minimum market access with
commitments for future expansion. Tariffs were meant
to maintain protection but also included commitments
for their reduction over time. Hence, TRQs were meant
to serve as a transition policy to pure tariffication, with
free trade as the ultimate goal.
This study develops a theoretical model to analyze the
market effects and welfare economics of TRQs under
alternative policy combinations of tariffs and quotas, and
of varying market conditions. Alternative methods for
allocating rights to import quotas, including import and/
or export licenses and export country allocations, is
shown to result in inefficiencies due to rent seeking and
quota under-fill.
A trade policy model of the U.S. dairy market is de-
veloped to analyze the economics of a TRQ scheme. TheNAREA Awards 261
effects of the quota and each tariff are isolated to under- duction in 2ndtier tariffs has a greater impact on increas-
stand the implications of each policy instrument under ing market access than scheduled increase in import
alternative trade policy liberalization scenarios. In the quotas.
case of U.S. dairy, empirical results indicate that a re-
Master’s Thesis Award of Merit
Underemployment Dynamics of Women in the
United States -
Qiuyan Wang
The Pennsylvania State University
Advisor: Jill Findeis
Underemployment remains a serious problem among
traditionally disadvantaged female populations of the
United States. Increased female labor force participation
in the United States and current debates over welfare
reform have refocused attention on the centrality of ad-
equate employment for anti-poverty policy. To be fully
informed, new policies need to be grounded in a better
understanding of the determinants and dynamics of ad-
equate employment, especially among economically at-
risk women and single women with children. A useful
way to analyze employment adequacy is through the
concept of underemployment. In addition to the tradi-
tionally-defined unemployed, the underemployed in-
clude those who would like to work but have given up
looking for a job, part-time workers who would like to
work more hours, and those working for poverty-level
wages.
Using data from the annual March Current Population
Surveys (CPS), this thesis pursues four research objec-
tives: First, to determine trends in the prevalence of un-
distinguished Member Award
Conrado M. (Bobby) Gempesaw
Bobby Gempesaw has been involved with NAREA since
his M.S. program at West Virginia University and his
Ph.D. program at the Pennsylvania State University. He
joined the University of Delaware faculty as assistant
professor in the Department of Food and Resource Eco-
nomics in 1985, and earned rapid promotion to full pro-
fessor through a combination of excellent teaching and a
remarkable publication record. He served as department
chair for two terms, and is now Vice Provost for Aca-
demic Programs and Planning at the University of Dela-
ware.
deremployment and its specific forms, and how these
trends differ across sociodemographic groups for the pe-
riod 1968–98. Second, to determine those individual,
household and labor market characteristics that explain
outcomes of women in the labor market. Third, to create
a matched CPS file linking data for individuals across
years and to use this file to describe the dynamics of
year-to-year transitions in employment status. Fourth, to
use logistic and multinominal logit models to determine
the effects of individual, household and labor market
characteristics on transitions in employment status, and
how these effects change over time. The specific focus
of this objective is on the transitions women make be-
tween “out of labor force, “ “in the labor force,” under-
employment and adequate employment. Comparisons
are made between metro and nonmetro areas that typi-
cally have both higher rates of unemployment and a
greater proportion of their labor force classified among
the “working poor.”
Bobby served NAREA as editor of the Northeastern
Journal of Agricultural and Resource Economics, elic-
iting a significant increase in submission numbers and
quality, broadening the journal’s disciplinary focus,
readership and reputation, and overseeing its change of
name to the Agricultural and Resource Economics Re-
view. He subsequently served as NAREA’s president-
elect, president and past president, bringing a special
energy to the annual meetings held during his tenure, His
loyal work for NAREA over the years has helped this
Association thrive.262 October 2000
Distinguished Member Award
John M. Halstead
John Halstead has served the Association in a variety of
ways, but in particular as Secretary-Treasurer, 1996–99.
The job of Secretary-Treasurer is particularly important
in that it requires considerable effort while not having
the professional benefits of such high profile jobs as
President or Editor. John performed well as Secretary-
Treasurer and left the Association in good economic
condition with no unpaid page charges when he passed
the books on to his successor.
In addition to his term as Secretary/Treasurer, John
also was a Director from 1990 to 1993, served on the
Editorial Council of the Agricultural and Resource Eco-
Agricultural and Resource Economics Review
nornics Review from 1991 to 1993, on the Membership
Committee (1990-1 992), Finance Committee (1999-
2002), and was Local Arrangements Chair for the 1991
New Hampshire NAREA Meetings. He has published 4
articles and 12 abstracts in the Agricultural and Re-
source Economics Review (and its predecessors) and
made 15 presentations at annual NAREA conferences.
In total, John has been an active and contributing
member of the Association for many years, and made a
distinguished contribution in his role as Secretary/
Treasurer. He is well deserving of the title Distinguished
Member.
Journal Article of the Year for 1999
Examining Packer Choice of Slaughter Cattle
Procurement and Pricing Methods
Oral Capps, Jr., H. Alan Love, Gary W. Williams, and Wendi L. Adams
Using daily fed cattle purchase transaction records col- of head per lot; average weight per head; cattle type;
Iected by the Packers and Stockyards Program over the yield grade; quarterly grade, seasonality, and distance
period April 1992 to April 1993, we identify character- from packing plants play a significant role in determin-
istic associated with the choices of fed cattle procuri- ng the methods of procurement and pricing chosen by
ment and pricing methods. The methodology involves packers. The method chosen by packers to procure fed
the use of a multinominal logit model. cattle also affects the choice of a given pricing method.
Regional concentration; processing capacity; number

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