AgriStability with Catastrophic Price Risk for Cow-Calf Producers

AgriStability is the primary Canadian agricultural risk management program. Recent experience with bovine spongiform encephalopathy (BSE) in the cattle sector demonstrated that output prices are susceptible to both “normal” risk and sudden, “catastrophic” declines. This paper evaluates the AgriStability program for cow-calf producers when there is potential for catastrophic price risk. A simulation model is developed. Under a base case scenario, when there is no catastrophic price risk, AgriStability behaves more like an income support program than a risk management tool. Risk-neutral producers see a 12.1% increase in certainty equivalent wealth compared to 12.5% for moderately risk-averse producers. Introducing catastrophic price risk increases risk-averse producers’ expected benefits to 21.8%. Actuarially fair program premiums and implied subsidies are also estimated. These results demonstrate that AgriStability is highly subsidized. Finally, benefits from supplementary catastrophic revenue insurance are calculated and discussed, along with several additional structural features of the program. Agri-stabilité constitue le principal programme canadien de gestion des risques en agriculture. L'encéphalopathie spongiforme bovine qui a frappé le secteur de l’élevage bovin a démontré que les prix des extrants sont exposés à des risques « normaux » et à des chutes soudaines et « catastrophiques ». Le présent article évalue le programme Agri-stabilité dans le cas des producteurs vache-veau (veaux d’embouche) lorsqu’un potentiel de risque de prix catastrophique existe. Nous avons élaboré un modèle de simulation. Dans le cadre d’un scénario de référence, lorsqu’il n’existe pas de risque de prix catastrophique, le programme Agri-stabilité ressemble davantage à un programme de soutien du revenu qu’à un outil de gestion des risques. Dans le cas des producteurs indifférents aux risques, l’équivalent certain de la richesse aléatoire est supérieur de 12,1 % comparativement à 12,5 % dans le cas des producteurs modérément risquophobes. L'introduction de risque de prix catastrophique augmente les bénéfices espérés des producteurs risquophobes de 21,8 %. Nous avons également estimé ce que représentent les indemnités actuariellement justes ainsi que les subventions implicites. Les résultats ont montré que le programme Agri-stabilité est très subventionné. Finalement, nous avons examiné et calculé les indemnités tirées d’une assurance-revenu supplémentaire en cas de risque catastrophique et nous avons aussi analysé plusieurs autres caractéristiques structurelles du programme.     

The effectiveness and valuation of political tax minimization

We find evidence suggesting that corporate lobbying for tax purposes over the period 1999–2009 is one method by which firms managed corporate taxes. Furthermore, tax management strategies employed by these politically active firms were valued by shareholders. Firms lobbying on tax issues have lower book effective taxes and greater discretionary permanent differences in GAAP and IRS taxable income. Investors place a premium on lobbying activities for tax purposes unless the firm already has a low effective tax rate or very high book-tax differences. We conclude that lobbying political officials is one method by which firms manage risks attendant an aggressive tax strategy.     

The Dual-Agency Problem of Labor Union Pension Fund Shareholder Activism

Employee Responsibilities and Rights Journal - Through their pension funds, labor unions have grown increasingly active as shareholders over the last 2 decades. As shareholders, research suggests...     

A Primer for New Teachers of Economics

In many economics programs, both graduate students and new assistant professors are thrown into the classroom without guidance, with the potential for negative ramifications that can last throughout their careers as teachers. This article is a primer in which we offer unique insights into useful methods and practices for new teachers in the economics profession. We discuss organizational and logistical issues that new teachers must consider and then offer our advice on specific pedagogical tools and techniques. Following the growing literature on the benefits of student‐centered and interactive instruction, we focus on ways instructors can move away from the traditional “chalk and talk” approach. We organize and present these alternative pedagogies in terms of their level of complexity and time required. We conclude with suggestions and resources for the continued growth and development of new teachers in economics.     

Impact of Parental Resources on Student Outcomes Using Elementary School Data

This paper examines the use of parental volunteer hours in elementary schools in the state of Kentucky and assesses whether they improve student learning in math, reading, writing, science, and social studies. A unique annual school-level panel dataset was created of over 600 elementary schools from 2000 until 2017. This approach is novel because it permits investigation of the impact of parental involvement in schools through achievement distributions in each subject area. The findings suggest that use of parental volunteer hours tends to reduce the percentage of students at the low end of the achievement distribution and increases the percentage at the high end in many grades and across several subjects. No instances were identified of detrimental impacts. The research implications are that opportunities may exist for school districts to improve student outcomes through encouragement and increased use of parental involvement in schools.

     

Meeting Magnet research evidence-based practice expectations through hospital-based research centers

Hospital-based nursing research centers can create the structures and processes needed to promote and sustain research and evidence-based practice (EBP) and assist in the monitoring of care delivery outcomes. At the University of Rochester Medical Center, New York, a highly successful nursing research center has succeeded in creating a Magnet environment that incorporates research and EBP into strategic planning, individual employee performance review, and organizational processes. Support of a hospital-based research center can provide the foundation for an infrastructure that supports achievement of Magnet designation research and EBP criteria. The costs pertain primarily to the staff required to develop and manage the center and the educational programs offered through it. Based on the experience at this center, administrators should plan 3-5 years before significant impact is seen in terms of numbers of consultations performed and tangible increases in staff and leadership participation in research and EBP initiatives.     

New vehicle feebates

New vehicle feebate programs encourage improved fleet‐wide vehicle fuel efficiency; yet analyses of these policies have been limited to ad hoc proposals. In this paper, we exploit an extensive, multi‐year dataset which includes more than 16 million observations to evaluate the welfare implications of a long‐standing vehicle feebate program in the Canadian province of Ontario. We: (1) show that second‐best optimal feebates can be written as a function of new vehicle Pigouvian taxes; (2) find that Ontario's feebate program was welfare‐enhancing relative to a no feebate scenario but that a second‐best optimal benchmark would have yielded additional welfare while reducing fleet‐wide emissions; and (3) find that Ontarian consumers responded asymmetrically to fees versus rebates.     

How Does an Individual's Innate Preferences Impact Innovation and Creativity?

Organizational leaders commonly reward innovation and creativity and many times it is the individual with the “brilliant idea” who is recognized. The current article examines the four types of innovative ideas that lead to organizational change and effectiveness and how every person on a team plays a role in achieving the idea. As a manager or leader of people being aware of individual styles and preferences will lead to increased recognition of all innovative and creative contributions that can have a positive impact on organizational culture.     

Proximity to the SEC and Stock Price Crash Risk

We explore the possibility that Securities Exchange Commission (SEC) oversight influences disclosure practices in a manner that reduces the likelihood of individual stock price crashes. Firms located farther from the SEC have greater stock price crash risk and this result is more pronounced for firms with financial statements that are less readable (those with larger 10‐K filings) and more pronounced when SEC budgets are relatively smaller. Similar results are obtained in response to SEC regional office location changes that are more likely to be exogenous. Our results suggest that SEC oversight induces disclosure practices that reduce the likelihood of large negative disclosures.