Incentivising teachers? Evaluating the incentive effect of China’s teacher performance‐based compensation reform in rural China

In this paper, we evaluate the incentive role of a teacher performance‐based compensation reform in rural China. Using the value‐added model widely adopted in the education literature, we first estimated the teacher effects on student academic scores with panel data of a large number of students and teachers from rural and urban schools in one county in a south‐western province of China. The estimated teachers’ value‐add was then allowed us to examine the effectiveness of the 2009 teachers’ compensation reform. We find that despite the strong intent of the performance‐based compensation reform to improve student’s academic performance, teachers’ compensations are not closely tied to teachers’ value‐add to student academic achievement. This suggests that the performance‐based compensation reform is not able to provide strong incentives for teachers to raise students’ test scores and points towards the possible problems with the design and/or implementation of the reform.     

‘Deal’ or ‘No Deal’? Impacts of Alternative Post‐Brexit Trade Agreements on UK Agriculture

Brexit will have important implications for UK agricultural commodity markets due to potentially significant changes to trade flows. We quantify the sectoral impacts on UK agriculture of three illustrative scenarios, which capture a broad range of potential trade arrangements: Bespoke Free Trade Deal , WTO Default and Unilateral Trade Liberalisation . It is estimated that the projected market impacts are relatively small if the UK negotiates a Bespoke Free Trade Agreement with the EU. The projected impacts are much greater under the two other scenarios, which capture potential trade arrangements if ‘no deal’ is reached. The high tariffs imposed under the WTO default scenario lead to significant adjustments in trade between the UK and EU‐27, with the impact on the domestic UK market depending on whether the UK is a net importer or a net exporter of the relevant commodity. All sectors experience price and production declines under the trade liberalisation scenario in which the UK unilaterally sets tariffs on imports from both the EU‐27 and the rest of the world to zero; the impacts are particularly severe in the beef and sheep sectors where international competition is very strong.     

How Large is Congressional Dependence in Agriculture? Bayesian Inference about ‘Scale’ and ‘Scope’ in Measuring a Spatial Externality

The political economy literature on agriculture emphasises influence over political outcomes via lobbying conduits in general, political action committee contributions in particular, and the pervasive view that political preferences with respect to agricultural issues are inherently geographic. In this context, ‘interdependence’ in Congressional vote behaviour manifests itself in two dimensions. One dimension is the intensity by which neighbouring vote propensities influence one another, and the second is the geographic extent of voter influence. We estimate these facets of dependence using data on a Congressional vote on the 2001 Farm Bill using routine Markov chain Monte‐Carlo procedures and Bayesian model averaging, in particular. In so doing, we develop a novel procedure to examine both the reliability and the consequences of different model representations for measuring both the ‘scale’ and the ‘scope’ of spatial (geographic) co‐relations in voting behaviour.     

Does ‘Protection for Sale’ Apply to the US Food Industries?

This paper tests the Protection for Sale model in terms of the structure of protection and how realistic the estimated domestic welfare weight is relative to campaign contributions. Using data from US food manufacturing, empirical results support the key predictions for the structure of protection when either all food manufacturing industries or most of the general population is assumed to be politically organised. The domestic welfare weight is estimated as low as 0.837, the lowest econometric estimate to date, underlining that protection is for sale and that, with a qualified ‘yes’, the model fits the data for these industries.     

Deracializing Exploitation? ‘Black Economic Empowerment’ in the South African Wine Industry

This paper considers the discourse and practice of 'Black Economic Empowerment' (BEE) in the South African wine industry. It argues that far from representing a decisive break with an inequitable past, BEE allows the South African wine industry to avoid potentially more uncomfortable options to redress current and past race-based imbalances – such as land redistribution, import boycotts and better working conditions for grape pickers. An essentialist racial discourse, pivoting on ahistorical and dislocated notions of 'blackness', has been used to displace the transformation agenda away from addressing the conditions faced by workers, and to an ameliorism that allows a small cohort of black entrepreneurs to become the preferred beneficiaries of 'transformation' in the wine industry. The new terrain is characterized by branding, advertising and image building on the one side: and by codes of conduct, a sectoral BEE charter, scorecards and auditing on the other. These allow the standardization, legitimation and ostensible deracialization of exploitative labour and social relations in the South African wine industry.     

Consumers’ Preferences for Bread: Transgenic,Cisgenic, Organic or Pesticide‐free?

Consumers are apprehensive about transgenic technologies, so cisgenics, which limit gene transfers to sexually compatible organisms, have been suggested to address consumer concerns. We study consumer preferences for rye bread alternatives based on transgenic or cisgenic rye, grown conventionally or without the use of pesticides, relative to traditionally bred rye, grown with conventional or organic farming methods. Stated preference (SP) data from a choice experiment are combined with revealed preference (RP) data from market purchases from the same respondents. Results show that respondents prefer pesticide‐free production methods, and that while cisgenics is preferred over transgenics, the majority of respondents favour traditional breeding methods. The distribution in preferences suggests that some respondents prefer bread from cisgenic crops produced without pesticides over traditional crops produced using pesticides. Preferences for organic bread are stronger than for pesticide‐free products. From a policy perspective results suggest that excluding cisgenics from mandatory labeling in the EU, or including it in the voluntary non‐GM labelling in the US, would cause welfare losses for consumers.     

Cheating? The Case of Producers’ Under‐Reporting Behavior in Hog Insurance in China

Information asymmetry exists in virtually every insurance setting. The institutional arrangement of hog insurance in China offers a unique opportunity to investigate the farmer's behavior of under‐reporting the actual number of finished hogs on one hand, and the insurer's efficiency in determining the actual numbers on the other. Using data on 444 hog operators synchronized from farm production survey and insurance records, results showed that farmers report on average 11.5% fewer hogs to the insurance company. The level of under‐reporting is positively associated with the size of operation. Farmers with longer farming experience and more conservative risk attitude report more accurately. The under‐report behavior is also partially attributed to a farmer's limited capacity of accurate estimation. Due to information barrier, the insurance company is only able to recover 18.6% of the under‐report at the indemnity payment stage. Results are robust after controlling for potential sample selection problems. It is suggested that technical supports, public programs and premium incentive designs in repeated insurance should be considered to promote more accurate reports.     

Adopting bioenergy crops: Does farmers’ attitude toward loss matter?

We apply prospect theory to examining farmers’ economic incentives to divert a share of their land to bioenergy crops (miscanthus and switchgrass in this study). Numerical simulation is conducted for 1,919 rain‐fed U.S. counties to identify the impact of loss aversion on bioenergy crop adoption, and how this impact is influenced by biomass price, discount rate, credit constraint status, and policy instruments. Results show that ignoring farmer's loss aversion causes overestimation of miscanthus production but underestimation of switchgrass production, particularly when farmers are credit constrained and have a high discount rate. We find that establishment cost subsidy induces more miscanthus production whereas subsidized energy crop insurance induces more switchgrass production. The efficacy of these two policy instruments, measured by biomass production increased by per dollar of government outlay, depends on the magnitude of farmers’ loss aversion and discount rate.     

Investing Today or Tomorrow? An Experimental Approach to Farmers’ Decision Behaviour

An understanding of farmers’ decision‐making behaviour is important for adequate forecasts as well as policy recommendations regarding structural changes. We experimentally analyse the investment behaviour of real farmers. The observed investment decisions are contrasted with theoretical benchmarks from classical investment theory and the real options approach. Our results show that both theories cannot exactly explain investment behaviour. However, farmers learn from former investment decisions and do consider the value of waiting over time.     

How do informal farmland rental markets affect smallholders’ well‐being? Evidence from a matched tenant–landlord survey in Malawi

We estimate the efficiency and equity returns to farmland rental markets in Malawi using a matched tenant–landlord survey of smallholder farm households in four districts. Our sample allows us to more fully observe the landlord side of the rental market, which is almost always missing in previous studies. Our results suggest that land rental markets promote efficiency by facilitating a net transfer of land to more productive farmers. We also find that land rental markets promote equity as conventionally defined in the land markets literature, that is, by transferring land from land‐rich households to land‐poor households, and from labor‐poor to labor‐rich households. However, our study identifies some important challenges for land rental markets in this context. First, we find that tenants in our sample are wealthier than their landlord counterpart on average in all dimensions other than landholding. In addition, most landlords report the motive for renting out their land as either the need for immediate cash, or the lack of labor and/or capital to cultivate the plot that was rented out. These findings align with concerns about potential “stress renting” by poor landlords and suggest the value of defining equity along a broader set of dimensions other than simply equalizing the distribution of farmland and labor.     

Does Intensive Tillage Enhance Productivity and Reduce Risk Exposure? Panel Data Evidence from Smallholders’ Agriculture in Ethiopia

We analyse the impact of intensity of tillage on wheat productivity and risk exposure using panel household‐plot level data from Ethiopia. In order to control for selection bias, we estimate a flexible moment‐based production function using an endogenous switching regression treatment effects model. We find that tillage has a complementary impact on productivity and risk exposure. As the intensity of tillage increases, productivity increases and farmers’ exposure to risk declines. Our results suggest that smallholder farmers use tillage as an ex‐ante risk management strategy. The main policy implication of this study is that the opportunity cost of switching to reduced tillage in wheat production seem rather high unless farmers are supported by appropriate incentive schemes.     

Cereal price shocks and volatility in sub‐Saharan Africa: what really matters for farmers’ welfare?

The lack of information as well as some misperceptions about the distinction between the welfare consequences of higher versus more volatile cereal prices has limited the effectiveness of policy interventions during the recent food crises in many developing countries. This article proposes an integrated empirical strategy to investigate and compare the different effects of these two phenomena and tests it using nationally representative household survey data from four sub‐Saharan countries. Results show that the negative impacts of a cereal price increase substantially outweigh the effects of price volatility on household welfare across the entire income distribution. The amplitude and the distribution of those effects depend heavily on specific factors, such as: the weight of food consumption over total expenditure; the budget share devoted to cereals; the substitution effect among food groups; and the relative number of net sellers versus net buyers accessing the market. We also show that volatility mainly harms the poorest quintile of the population.     

Would African Countries Benefit from the Termination of Kenya’s Economic Partnership Agreement (EPA) with the EU? An Analysis of EU Demand for Imported Roses

This paper assesses the impact of Kenya’s preferential status on EU demand for imported roses by country. Import demand equations were estimated using a production version of the Rotterdam model in an Armington framework. With the expiration of the Lomé Convention, tariffs (up to 24%) on Kenyan roses were likely if an Economic Partnership Agreement (EPA) was not signed by January 2008. Roses from African countries not subject to tariffs were expected to displace Kenya’s exports in the future. However, results of this study showed that roses from African countries were complements in the EU market and those exports from Zimbabwe and Other African countries would have been negatively impacted if a Kenya–EU EPA was unsuccessful. Given the maximum import duty on Kenyan roses, EU imports from Kenya would decrease by 9.1% and imports from Zimbabwe and Other African countries would decrease by 6% and 4%, respectively.     

The End of a Romance? A Note on the Quantitative Impacts of a ‘Brexit’ from the EU

This study suggests UK equivalent variation (EV) gains of €8.9 billion on withdrawal from the EU budget. Factoring in associated trade facilitation costs from the loss of UK access to the single market, annual UK EV losses could be as high as €14.0 billion, with the EU‐28 facing a corresponding loss of €40.4 billion. Interestingly, the extrapolated UK gain arising from withdrawal from the ‘CAP’ component of the EU budget exceeds estimated lower and upper bound trade facilitation costs exclusively on EU agrofood trade. Accordingly, the UK should realistically remain as an EU member, although continue to lobby for reductions in the CAP budget.     

The Effects of Kenya's ‘Smarter’ Input Subsidy Programme on Smallholder Behaviour and Incomes: Do Different Quasi‐experimental Approaches Lead to the Same Conclusions?

Kenya joined the ranks of sub‐Saharan African (SSA) countries implementing targeted input subsidy programmes (ISPs) for inorganic fertiliser and improved seed in 2007 with the establishment of the National Accelerated Agricultural Inputs Access Programme (NAAIAP). Although several features of NAAIAP were ‘smarter’ than other ISPs in the region, some aspects were less ‘smart’. However, the efficacy of the programme, and the relationship between its design and effectiveness, have been little studied. This article uses nationwide survey data to estimate the effects of NAAIAP participation on Kenyan smallholders’ cropping patterns, incomes, and poverty status. Unlike most previous studies of ISPs, a range of panel data‐ and propensity score‐based methods are used to estimate the effects of NAAIAP. The article then compares these estimated effects across estimators and to the effects of other ISPs in SSA, and discusses the likely links between differences in programme designs and impacts. The results are robust to the choice of estimator and suggest that, despite substantial crowding out of commercial fertiliser demand, NAAIAP had sizeable impacts on maize production and poverty severity. NAAIAP's success in targeting resource‐poor farmers and implementation through vouchers redeemable at private agro‐dealer shops likely contributed to its more favorable impacts than those of ISPs in Malawi and Zambia.