Effects of policy instruments on farm investments and production decisions in the Spanish COP sector

Our article assesses the impacts regarding on-farm investment and production decisions resulting from the Partially Decoupled (PD) payment scheme implemented during the 1990s and first half of the 2000s within the framework of the Common Agricultural Policy (CAP). The Spanish Cereal, Oilseed and Protein (COP) sector is taken as a case study regarding this effect due to its economic and political relevance in Spain. The empirical analysis is applied to farm-level data from 2000 to 2004 using the Farm Accountancy Data Network (FADN). We use a reduced-form application of the dual model of investment under uncertainty and estimate a system of censored and uncensored equations. PD payments are found to increase short-run production and generate a statically significant increase in the investment in farm assets. Results also show the importance of assessing the effects of PD payments in a dynamic framework as applied in this article.     

The impact of the 1999 CAP reforms on the efficiency of the COP sector in Spain

The cereal, oilseeds, and protein crop sector (COP) occupies a prominent position within the European Union's agricultural sector. Within Spain, the COP sector accounts for almost a third of total Agricultural Guidance and Guarantee Fund expenses, and half of the utilized agricultural area (UAA). The COP sector is not only relevant because of its physical and economic magnitude, but also because of the political attention it receives. The Common Agricultural Policy (CAP) reforms that occurred during the 1990s paid special attention to this sector. This article aims to determine the impacts of Agenda 2000 on a sample of Spanish COP farmers' production decisions by using an output-oriented stochastic distance function. The distance function allows for an assessment of the reform-motivated changes on total output, input used, input composition, and crop mix. It also permits an assessment of the impacts of the reform on farms' technical efficiency.
Results show that the reform has shifted the production frontier inward and changed output composition in favor of voluntary set-aside land. With respect to input composition, Agenda 2000 induced a decrease in land, fertilizers, pesticides, and other inputs in favor of labor. In addition, Agenda 2000 has had a negative impact on technical efficiency.     

Proactive intelligence

The traditional role of intelligence services has entered into a period of crisis. For decades the main objective of the intelligence system has been (and still is) to detect the moment at which a potential risk becomes a genuine threat and to act when this transition occurs. The logic of this system is based on the same conception that dominated futures studies in its early times: the predictive approach. Essentially, this approach postulates that it is possible to predict the future if you have enough high-quality information; the equivalent to this in intelligence terms would be that you can predict a threat if you have enough privileged information.This approach has been successful for some time, but the changes that the world has undergone in recent years have rendered it obsolete. Globalization, the collapse of the Eastern Bloc and the emergence of new forms of terrorism are forcing intelligence services to develop new methods to keep pace. The doctrine of pre-emptive attacks could be considered an initial move in this direction, but this paper, which is the preliminary version of a forthcoming dissertation, will argue that a far more profound change is required. In short, the current demand is for a new kind of intelligence that has a far more transversal perspective, a systemic mode of operation and an anticipatory approach to risks and threats: proactive intelligence.     

Derivation of netput shadow prices under different levels of pest pressure

In this paper, we propose a framework to derive agricultural netput shadow prices that assign values to netputs in terms of their contribution to technical and environmental efficiency. Our modeling approach is based on the dual representation of an event-specific data envelopment model and is applied to a panel dataset of Dutch arable farms. Results show that netput shadow prices vary significantly across pest pressure events, suggesting the relevance to consider the event-specific nature of the production technology when computing them. By revealing the relative importance of pesticides in terms of their contribution to environmental efficiency, this study provides a potential framework for constructing penalties aiming to internalize some portion of the social cost of pesticide use.     

Risk behavior in the presence of government programs

Our paper assesses the impacts of the 1996 US Farm Bill on production decisions. We apply the expected utility model to analyze farmers’ behavior under risk and assess how farmers’ production decisions change in the presence of government programs. Specifically, we empirically evaluate the relative price and the risk-related effects of farm policy changes at the intensive margin of production, as well as the extra value that these policies add to farmers’ certainty equivalent. We use farm-level data collected in Kansas to estimate the model. We find evidence that decoupled government programs have only negligible impacts on production decisions.     

Regional Integration of Nineteenth Century U.S. Egg Markets

Multivariate asymmetric threshold vector error correction models are applied to a historical analysis of the regional integration of U.S. markets for eggs at the turn of the nineteenth century. Two general approaches to the selection of the thresholds are considered. The first criterion ignores the cross equation correlation while the latter explicitly accounts for it. Our results suggest that threshold behaviour characterises spatial price linkages between the markets analysed.     

Child fostering in Africa: When labor and schooling motives may coexist

The paper proposes a theoretical framework for understanding purposive child fostering in Africa, whereby a non-orphaned child is sent to live temporarily with relatives. In the model, adults decide whether to foster in or out a child in conjunction with other household choices, e.g. own time allocation between market and non-market activities, children's amount of work, and schooling. By allowing for positive externalities from fostering, and thus asymmetric motives for fostering in (labor) and out (human capital), the proposed framework predicts that school-age children are sent to better-off households and that some families may foster in and out simultaneously. The model identifies the conditions under which all actors involved, children included, may benefit from fostering arrangements, but also points to situations where fostering may become an opportunity to marginalize a subset of children. The paper aims to provide a sound theoretical foundation that sheds light on why there exists mixed empirical evidence on the effects of fostering on children's well being, and cautions against demonizing non-parent residence as unequivocally detrimental to children.     

Hierarchical Determinants of Brazilian Stock Returns During the 2008 Financial Crisis

Abstract:

We analyze the influence of firm- and industry-level determinants on stock returns during the 2008 financial crisis, using a hierarchical linear model to analyze the returns of 135 Brazilian firms. The impact of these determinants on stock returns has not received sufficient attention in periods of severe market decline. The following determinants were significant: (1) industry-level determinants (unlevered beta, historical sales growth, and regulated tariff), and (2) firm-level determinants (size, illiquidity, and book-to-market ratio). We also identified an indirect influence of unlevered beta over book-to-market that reflects a behavior that we call the “misconfidence effect.”     

Food scare crises and price volatility: The case of the BSE in Spain

Recent incidents of contaminated food products coupled with the widespread diffusion of news by mass media and the growing social concerns about food safety, have resulted in significant food market crises. One of the most highly publicized recent food scares involved Bovine Spongiform Encephalopathy (BSE). In our analysis, we evaluate the impacts from a BSE outbreak on the price volatility transmission along the Spanish food marketing chain by using a smooth transition conditional correlation (STCC) GARCH model. Our work is the first to assess price volatility responses to food scares. Results suggest that two distinct regimes involving different price volatility behavior can be distinguished, one characterized by turbulent markets and another where markets are calming down.     

Factors influencing the propensity to export: A study of UK and Portuguese textile firms

The purpose of this paper is to determine which particular organisational and managerial factors contribute to the propensity to export in a declining sector. For this purpose the textile and clothing sector in Portugal and the United Kingdom is chosen for investigation. This study analyses firms’ resources and capabilities, as well as decision-makers’ objective and subjective characteristics in a sample of 167 Portuguese and 165 UK firms in the textile and clothing industry. The fundamental research questions are: which characteristics of the firm are associated with stronger export propensity, and is it possible to identify a profile of decision-makers associated with export propensity? For Portugal, the size of firm and the educational level of managers are the key determinants of export propensity. As to the UK, age and perception of costs are the key factors. In addition, we also investigated managers’ commitment to exporting, for which the important determinants of export propensity in the textile and clothing sector were found to be planning, advertising and promotion. When combining the two country data-sets, particular firm characteristics, namely, firm size, competitive advantage, and technology, and a specific objective characteristic, namely, the number of languages spoken, are the key factors associated with the propensity to export in this declining sector.