Middlemen behaviour and generic advertising rents in competitive interrelated industries

This article focuses on the role of middlemen in determining the returns to generic advertising in a competitive industry where supply is uncontrolled, the price of marketing inputs is endogenous, and retail markets are interrelated through consumer preferences. Theoretical analysis suggests farm-gate returns (quasi-rents) are overstated when input substitution at middlemen level is ignored, a result confirmed in the empirical application. As for mark-up behaviour, represented by the farm-retail price transmission elasticity, a general result is that farm-gate returns to generic advertising always increase as the transmission elasticity decreases, provided retail demand is more elastic than input substitution. Endogenising the price of marketing inputs has little effect on advertising rents.     

Some implications of generalised C.E.S. production functions for normative effects of output prices and shifts in supply schedules

Abstract

This paper studies the demand for hired casual labour under production risk for a sample of Indian cultivators. A simple static household model under production risk is constructed to yield the demand for hired labour function. A detailed discussion of the various technological and non‐technological regressors is then presented. Empirical results reveal that the risk variables do not have a significant influence on hiring‐in behaviour. This result is important since the theoretical literature shows that a marginal increase in risk would lead to a decline in the demand for labour. Further, caste factors do not appear to influence hiring‐in, contrary to evidence for eastern India. Land‐augmenting technological factors appear to be the most important in explaining rightward shifts in the demand curve over time.     

Beef import market shares in Taiwan: implications for Australia

Market shares of major beef suppliers to Taiwan, including Australia, the United States and New Zealand, were estimated econometrically to determine their relative competitiveness. The analysis, based on monthly data from June 1990 to August 1997, showed that relative prices and consumer incomes were important factors influencing suppliers' market shares. Specifically, the demand for Australian beef responded little to an increase in price and negatively to an increase in consumer income. Furthermore, the growth in Taiwan beef consumption has slowed down and Australian beef suppliers need to re-assess the market potential and develop appropriate marketing strategies to maintain competitiveness.     

Voluntary Funding for Generic Advertising Using a Provision Point Mechanism: An Experimental Analysis of Option Assurance

The mandatory nature of check-off programs remains a contentious policy issue. A provision point mechanism with a money-back guarantee offers an attractive, alternative voluntary funding approach, yet faces the problem of how to maintain future administrative capacity should contributions fall short of the funding threshold in the present period. To address this concern, a novel two-threshold, provision point mechanism is tested that sets a high threshold to fund marketing and a low threshold, if necessary, to secure administrative capacity for future advertising. Experimental results demonstrate that providing such "option assurance" sustains high overall contributions and, in some settings, can increase producer surplus.     

Optimal Producer Investment in Generic Advertising: The Case of Fluid Milk in Ontario and Quebec

The fluid milk sectors in Ontario and Quebec operate under myriad restrictions reflecting the supply management system in place. Active advertising campaigns for fluid milk are undertaken by producer organizations in each province. In Ontario, the provincial government contributes to the provincial advertising campaign. To investigate the implications of the advertising programs, econometric models of the Ontario and Quebec milk sectors are specified, estimated and simulated. Given the measured responses to advertising, optimal advertising expenditure rules are applied to the Ontario and Quebec milk sectors to evaluate the implications of moving from actual to optimal advertising expenditure for producer welfare. Les secteurs du lait de consommation de l'Ontario et du Québec fonctionnent sous une myriade de restrictions attachees au système actuel de gestion de l'offre. Des campagnes de publicité vigoureuses pour la consommation du lait sont entreprises dans chaque province par les organisations de producteurs et en Ontario le gouvernement provincial donne son appui financier à la campagne de publicité provinciate. Pour scruter les implications des programmes de promotion, les auteurs ont construit, évalué et appliqué en simulation des modèles économiques du secteur du lait de consommation des deux provinces. À la lumière des réactions mesurées à l'égard de la publicité, des règies de dépenses de publicité optimales sont appliquées aux deux secteurs, afin d'évaluer ce que le passage du niveau de promotion actuel à un niveau optimal signifierait pour la situation économique des producteurs.     

Landlords and farmers: implications of disparities in bargaining power for tenancy in agriculture

The equilibrium allocation of owner operated and rental land in the agricultural sector is examined given risk averse agents, risky returns and asset price risk. The model is extended to account for disparities in bargaining power among landlords and farmers. In the absence of disparities, the competitive equilibrium allocation satisfies the general conditions for optimal risk sharing with an adjustment factor similar to the optimal hedge ratio. Differences in bargaining power result in deviations from the optimal risk sharing conditions. Numerical simulations of tenancy structure are conducted for a developed agricultural economy exposed to various forms of risk. Estimates of parameter values representing the riskiness of returns and asset prices in this study are based on vector auto regressive techniques. The simulations show that a substantial reduction of the rental ratio is obtained in a situation where farmers are equally or more risk averse than landlords. Consequently, the results indicate that the importance of the tenancy institution as a risk sharing mechanism is severely mitigated in the presence of asset price risk, risky returns, relatively risk averse farmers and disparities in bargaining power.     

Price dynamics in the Bangladesh rice market: implications for public intervention

In this paper, the price dynamics of a rice market are examined using dynamic programming techniques. The model is parameterised to the case of Bangladesh and thus represents the situation of a very poor country which has characteristically high price elasticity (due to income effects) and high storage and interest costs. The incentives for private sector storage and its impact on price stability are examined. Various options for public intervention in the storage sector are also explored, including price ceiling schemes and subsidisation of storage costs. Results show that interventions that remove private disincentives (such as storage subsidies) are much cheaper than direct intervention by government, but the impact on the probability distribution of prices is quite different. The effect of trade on the probability distribution of prices is also examined.     

The Problem of Free Riding in Voluntary Generic Advertising: Parallelism and Possible Solutions from the Lab

Producers of many commodities pay for generic advertising, which is a public good for producers and, in cases like healthy foods, enhances social welfare. Though most programs were initially funded through the Voluntary Contribution Mechanism, many became mandatory to mitigate free riding. This experimental research simulates key economic and psychological details of these programs and produces donation results strikingly similar to a historic example. Because mandatory programs may be declared unconstitutional, the Provision Point Mechanism is tested as an alternative. This research also shows that refund-by-request donation mechanisms establish a status quo of contributing and reduce free riding.     

Industrial relations reform in Australia: implications for the agricultural and mining sectors

A major transformation in the processes that underpin industrial relations arrangements in Australia appears to have occurred during the last decade. The tribunal-based systems of conciliation and arbitration that have shaped labour-management relationships now play a far less pivotal role, and the system of awards is far less central to the determination of wages and conditions. Greater scope now exists for employees and employers to tailor their industrial relationship to the needs of the enterprise. This article provides an overview of the development of both collective and non-collective bargaining within the formal framework, and the likely impacts of such developments.     

Incentive systems for food quality control with repeated deliveries: Salmonella control in pork production

This paper presents a dynamic principal-agent analysis of incentivesystems for Salmonella control. The European Union will requireSalmonella testing from 2008. On the basis of the producer'sperformance history in controlling Salmonella, the incentivesystems analysed determine quality premiums to the producer,testing frequencies for hogs delivered, as well as charges tothe producer for testing and penalties. Using cost estimatesand technical parameters, we evaluate two dynamic incentivesystems. We also assess the impact of ownership structure onperformance. The more efficient incentive system economiseson testing costs by reducing the probability of testing in responseto a favourable production history and is preferred under allownership structures.     

韩国依靠科技提高渔业产业竞争力的机制研究

本文作者通过问卷调查、交流座谈、参观实验室、观看PPT等形式对韩国国立水产科学院的工作性质、主要任务、组织机构、运行机制、学科建设、人员情况、院所文化等进行了全面考察,结合自己的思考,以韩国国立水产科学院为借鉴,对我国国家水产科研机构——中国水产科学研究院的发展提出了一些建议。     

Recent trends in the supply of land for industrial development in Hong Kong: A case study in planned decentralization

Summary

Although free enterprise remains the dominant characteristic of the Hong Kong economy, new land supply is controlled largely by the Hong Kong Government. Rather than establish a detailed system of development plans and controls, the Government has been able to achieve substantial decentralization of housing and industry through the location of new land release. The evidence suggests that industrial developers have been willing to build and industrialists to locate in decentralized areas, especially those close to the main urban areas. Furthermore, although vacancy rates are generally higher and rental levels lower in decentralized compared to centralized locations, the extent of the differences over time is not as pronounced as might be expected. Indeed, the overall strength of demand for industrial land, other than in the recent slump, has necessitated special policies to protect land for low‐density industrial users in decentralized locations. As planned decentralization approaches completion, attention is beginning to focus upon redevelopment in the older urban areas and upon the consequences of the Sino‐British Joint Declaration of 1985. Overall, recent land policies in Hong Kong offer the British observer some useful indications of the impact of government intervention in land use on existing property markets.     

Government intervention in city development of China: A tool of land supply

There has been continuous debate on whether the state can support market-based activities in the land market. It is widely recognized that land markets do not function by themselves, mainly because they are inherently imperfect; this imperfection provides foundation for state intervention. Under the Land Use Rights System of China, land supply is a powerful tool for intervening into land markets, and proceeds from land supply greatly contribute to local revenue and financing of infrastructure construction. The state, however, is not an impartial entity. Its desire to increase local revenue through land leasing has led to the oversupply of land and housing affordability problems in real estate markets. This paper, using evidence from Guangzhou, argues that land supply intervention is a two-edged sword in Chinese city development. It further claims that the state intervention is becoming gradually professional after the real estate market bubble in the early 1990s. Problems, such as structure imbalance in land supply, however, still have negative impacts on the sustainable development of Chinese cities.