A time‐series analysis of Zimbabwe's corn sales to the Grain Marketing Board

This article considers methods of cointegration testing to construct a model of Zimbabwe ‘s corn sector. Corn production, sales of corn to the government, the price of corn, and price of beef are linked together in one long‐run equilibrium (cointegrating) relation. Only the price of beef is not weakly exogenous to perturbations in this relation. That is to say, when these variables are out of long‐run equilibrium, it is through subsequent changes in the price of beef that equilibrium is restored. The other variables do not respond to a long‐run disequilibrium. Short‐run forecasts from this model are compared with expert opinion forecasts made by the government's marketing board. Possibilities for improvement in long‐run forecasting and planning are discussed.     

Sharing the Market or Getting Closer for a Fight? Strategic Reaction to Reduced Trade Costs

Electronic coordination links markets that have initially been separated by transport costs, which in turn raises competitive pressure and affects incentives to differentiate products. We analyze private and social incentives to invest in a repositioning of products in a heterogeneous goods duopoly with two spatially separated markets. We consider both price and quantity competition to be able to distinguish between digital and physical products, respectively. For low transport costs, firms want to enhance product differentiation as expected. However, if transport costs remain close to prohibitive levels, they have an incentive to reduce heterogeneity.     

The Quality of Smallholder Coffee in South Sumatra: The Production of Low-Quality Coffee as a Response to World Demand 1

Improving the quality of Indonesia's coffee exports has been a priority of government and the Association of Indonesian Coffee Exporters for some years. Efforts to achieve this objective have, however, been hampered by misconceptions about the reasons why coffee producers and traders at each point in the marketing network do not deliver a higher quality product. The research reported here shows that price premia for higher quality coffee are not large enough to encourage greater quality enhancement. The world market for low to medium grades, used in the production of instant coffee, is much larger than that for high-quality coffee, and this preference is transmitted in the form of low incentives to improve the product. Failure to understand this has led to government policies which at best do not solve the quality problem and at worst exacerbate it.     

Cattle numbers,biomass, productivity and land degradation in the commercial farming sector of Namibia, 1915‐95

As part of a natural resource accounting project undertaken in Namibia, livestock accounts have been drawn up and are being used to analyse the relationship between numbers of livestock, rainfall, land degradation, and economic and policy variables. Part of the analysis concerns an investigation into trends in cattle numbers, changes in cattle biomass and the productivity of livestock in commercial areas. Cattle numbers increased from 1914 until 1960, then declined steadily to half that number. This decline was at least partly due to deliberate actions by farmers to improve herd productivity and production efficiency. Although beef production did not decline over this period, productivity is still lower than potential industry standards. Range degradation (bush encroachment) may have contributed to this curtailment. This investigation has implications for an understanding of long‐term carrying capacity, land degradation and rangeland management, and for agricultural development policies in Namibia and similar regions in southern Africa.     

The entry price system for fresh fruit and vegetable exports from China to the EU — Breaking a fly on the wheel?

China's exports of apples and pears to the EU have increased substantially, although the EU production of apples and pears is protected by the EU entry price system (EPS), aiming to protect EU producers against international competition by restricting imports below a minimum import price. This study investigates the relevance of the EPS for Chinese exports of apples and pears to the EU accounting for changes over time and seasonal variation. Our results suggest that the high relevance of the EPS for apples originating in China was of temporary nature, whereas the relevance of the EPS for pears originating in China is of a more general nature. In addition, the relevance of the EPS varies seasonally. Finally, we find that the production of pears in China is more competitive than the production of apples vis-à-vis the EU. Therefore, China's fresh fruit and vegetable (FFV) producers would benefit more from an improved EU market access for pears than for apples. Thus, China should put more effort in negotiating improved EU market access conditions for pears rather than for apples.     

Rural Cottage Industry in Transition: The Roof Tile Industry in Kabupaten Boyolali,Central Java

This paper attempts to explain changes in rural cottage industry (RCI) employment by means of a Central Javanese case study of the rural tile industry. It demonstrates that a decline in employment in this industry, despite a favourable rural industrial environment, is largely due to transition from household-based production to production by more specialised and productive units, with some functions, e.g. marketing and transport, being contracted out, and providing employment for those originally involved in household-based production. Transition has occurred in areas with access to wider markets and improved technology.     

The profits of excludability and transferability in redistributive land reform in central Namibia

Policies which redistribute property rights to land can improve the well-being of rural households and can have overall growth effects. In many cases, however, land reforms are driven mainly by politically justified objectives. Under such circumstances, little emphasis is placed on whether and, if so, how property rights can increase productivity. Following 18 years of land reform implementation in Namibia, we evaluated 65 beneficiaries in Namibia. We assess to which degree land rights affects their farm income. The study focuses on Namibia’s two main commercial land reform instruments, namely the Farm Unit Resettlement Scheme and the Affirmative Action Loan Scheme. We find evidence that the majority of land reform projects are not profitable. Further, our study confirms the importance of the right to restrict land access compared with the right to transfer. The long-term leasehold contract seemingly provides sufficient incentives to make productive use of the land.     

Assessing the price dynamics of onshore and offshore RMB markets: An ITS model approach

This paper investigates how the price dynamics of both onshore and offshore RMB markets are affected by fundamental determinants, market liquidity, global risk aversion and policies by using daily data from August 2010 to February 2016. The interval time series (ITS) modelling is applied to study the RMB price mechanism by capturing prices of the two markets as one self-formed interval data. An interval-based Wald test is constructed to examine the differences between the coefficients and an interval-based Mallows criterion is proposed for choosing appropriate explanatory variables. We find that both the price level and the price differences of onshore and offshore RMB markets are greatly affected by economic fundamentals indicated by different returns on stock indexes and market liquidity indicated by bid-ask prices of offshore market price. In addition, it is suggested that the interest rate spread between China and the US and the global risk appetite do not significantly affect the RMB price for both onshore and offshore markets. Finally, the results imply that “811 reform” of the RMB exchange rate regime does not change the fundamental price dynamics of RMB markets, but significantly changes how economic fundamentals affect the price mechanism of RMB exchange rate.     

Analytical methods for environmental and energy policies

Summary The article focuses on new techniques for effective decision making in the field of energy use and environmental quality. Special attention is paid to the solution of conflicts between different options for economic development. A multi-sector model is constructed which links the use of different energy inputs to production and consumption. This model is further extended with a pollution model which describes the waste discharges associated with a given pattern of energy consumption. Next, substitution between various energy alternatives (induced by price changes resulting from scarcity) are analysed. The conflicts between different options are further analysed by means of learning strategies for conflicting objectives based on the concept of displaced ideals. Finally, the model is applied to Dutch economic-environmental-energy interactions by means of a structural model describing environmental pollution and energy use in relation to production and employment. Some empirical results concerning price reactions from producers induced by external conditions are presented as well.     

Agricultural pricing policy in Kenya

This paper examines Kenya's agricultural pricing policy, its role in the development of key sectors of the agricultural economy during the 1970s and its impact on different classes of producers. Toward this end, the paper describes the process of agricultural price determination in Kenya, and examines trends in real producer price indices for selected crop groupings and by size of holding.The most important finding of the paper is that agricultural pricing policy has been used in Kenya to create incentives for the growth of marketed agricultural production. In addition, the paper shows that the Government of Kenya has also used pricing and marketing policy instruments to achieve its goal of promoting the agricultural development of smallholders, who constitute the dominant mode of agricultural production in Kenya. Significantly, these findings are contrary to the widely accepted notion that pricing policy in developing countries has uniformly been biased in favor of the urban sector and against agricultural producers.     

Agricultural planning,pricing policy and co-operatives in Vietnam

In the competition between national government and local co-operatives, a central contradiction in socialist rural development, the price system, market control and terms of trade are crucially related to the relative power and capacity of the central government to control ratios of accumulation and consumption. In Vietnam there is a dynamic interaction between government and agricultural producers over pricing policy and paradoxically, it is the co-operative, primarily viewed by the state as a means of providing cheap food, which has strengthened the collective bargaining position of agricultural producers. The government has had to introduce material incentives to expand agricultural production beyond subsistence levels and bow to pressure to alter the previous accumulation/consumption ratios in favour of consumption.     

Markets under price controls in partial and general equilibrium

When parallel markets arise in the face of price or other controls, two aspects of agents' behavior become crucial in analyzing market outcomes. First, sellers' risk will rise with increases in illegal sales, but may also fall with increases in legal sales. If the latter is true, the parallel market price will induce higher output. Second, if consumers can be given access to the price-controlled good without incurring search, queuing and other transaction costs due to rationing, production of the controlled good will be higher. These effects are demonstrated in both partial and general equilibrium.     

Investitionen in nachgeschaltete Umweltschutzma?nahmen und das Paradox der Umweltabgaben- und -subventionspolitik

Zusammenfassung Der Beitrag untersucht den Anreiz von Abgaben und Subventionen zu Investitionen in nachgeschaltete Umweltschutzma?nahmen, insbesondere Filter. Unter Einbezug der resultierenden Auswirkungen auf die Produktion und mit Hilfe der Dualit?tstheorie ermittelt er den für solche Investitionen auf unvollkommenen Kapitalm?rkten unter Unsicherheit maximal zahlbaren Preis und dessen Determinanten. Sensitivit?tsanalysen zeigen sodann, dass Versch?rfungen in der Umweltpolitik andere als die gewünschten, u. U. sogar ?konomisch und ?kologisch kontraproduktive Wirkungen entfalten k?nnen.

---

Summary The paper investigates the incentives of environmental policy using taxes and subsidies for investing in end-of-pipe-technologies, especially in filters. Considering the effects on production, it identifies the price ceiling and examines its determinants. Sensitivity analyses show that policy changes do not always encourage environmentally beneficial investments – in particular cases they even may be counterproductive.

     

FAIR VALUE PRICING OF AGRICULTURAL FUTURES IN SOUTH AFRICA

In the South African agricultural (specifically grain) markets an interesting phenomenon exists: where futures and options on grain products exist (i.e. white maize, yellow maize, soy beans, wheat, and sunflower seeds) price discovery in the spot (also known as “cash”) markets is poor, whereas price discovery in the futures markets is considered respectable. Consequently, whenever a spot deal is undertaken, this price is “derived” from the relevant futures market. This severely anomalous phenomenon will be evident: futures are generally labeled “derivatives” because their prices are “derived” from their spot markets, whereas here we have a situation where spot prices are derived from their futures price (specifically the price of the near – as opposed to far – future). Because of this unusual phenomenon the mathematics involved is not readily available in the literature; this article is an attempt to briefly outline the phenomenon and to present the relevant mathematics.     

Specialized markets and Chinese industrial clusters: The experience of Zhejiang Province

Local specialized markets and industrial clusters have been a driving force in China's transition from a rural to a market economy, as they have constituted a means for small local producers to access markets since the reform and the launching of the “open door” policies. In this article the industrial development of local industrial clusters endowed with specialized markets is outlined on the basis of fieldwork case studies in Zhejiang Province. In this area of China, tight linkages between the development of industrial clusters and specialized markets are based on social and economic foundations that have propelled the growth of market relations since the late 1970s. Together with local traditions and skills in both handcraft production and commerce, specialized markets accompanied the take-off of industrial clusters following the so-called “Zhejiang model” of development. The role of specialized markets is still crucial nowadays as a powerful channel for the distribution of consumer goods as well as a means of coordination of fragmented productions in China and abroad.     

WATER BILL ESTIMATION WHEN PRICE IS CRYPTIC: EXPERIENCE FROM WINDHOEK,NAMIBIA

For water policy to be effective, policy makers must know how water users perceive and respond to changes in water prices. However, it is not uncommon for water prices faced by consumers to be unclear. In Windhoek, Namibia, the marginal and average water price is difficult to calculate from the information provided in users' utility bills. This paper applies a hedonic pricing approach to investigate price perceptions of water users in a setting with cryptic price information. Using self‐reported water charges as the dependent variable, the pricing model utilises reported utility characteristics and other factors that may affect perceived price. Low‐income standpipe water users report a weighted average monthly charges of N$24.68, whereas users in high income segments report N$521.34. This reflects differences in service levels, possible subsidies to low‐income users and potential errors in respondents' understanding of their water price. Average price per litre (N$11.78 for the low‐use segment; N$1.89 for the highest segment of Tier 1 water use) tends to be perceived as higher by those with lower water use even though average prices in the relevant range should generally be identical.     

Pricing Liquid Petroleum Gas in Mexico

This paper considers the regulation of pricing of liquid petroleum gas in Mexico. We construct a model that incorporates all information essential to the pricing question and derive relationships that should hold between prices in Mexico and prices in world markets. Prices in Mexico can be tied to the readily observable prices in the United States by a netback rule. However, this rule can lead to incentives to increase the price of domestic liquid petroleum gas by diverting production from the regulated market.     

Modelling Intercontinental Tourism Consumption in South Africa: A Systems‐of‐Equations Approach

This paper investigates the pattern of inbound tourists' consumption in South Africa, examining four main intercontinental markets and five different tourism goods. The empirical investigation develops an almost ideal demand system (AIDS) model and it extends recent research by allowing tourists to base their spending decision on the real effective price differences between South Africa and their home country. The results show that tourist spending in South Africa is a luxury good, and tourists react normally to a change in the relative price of goods. The cross‐price elasticities suggest that the preferences of different markets influence their view of substitutability and complementary effects between various products in South Africa.     

The cost of railroad regulation: the disintegration of American agricultural markets in the interwar period

This article investigates the costs of transport regulation using the example of agricultural markets in the US. Using a large database of prices by state of agricultural commodities, we find that dispersion fell for many commodities until the First World War. We demonstrate that this reflected changes in transport costs which in turn in the long run depended on productivity growth in railroads. The year 1920 marked a change in this relationship, however, and between the First and Second World Wars we find considerable disintegration of agricultural markets, ultimately as a consequence of the 1920 Transportation Act. We argue that this benefited railroad companies in the 1920s and workers in the 1930s, and we put forward an estimate of the welfare losses for the consumers of railroad services (that is, agricultural producers and final consumers).     

The effect of futures trading on price variability in the market for onions

Conclusion This paper is in part a study of the operation of futures markets. The empirical evidence presented suggests that futures markets do reduce price fluctuations of traded commodities. Despite these facts, Congress eliminated futures trading in onions at the request of onion growers and shippers. As is often the case with political actions, the losses from the law are spread over a large number of individuals who do not have the incentive to become informed or to lobby on the matter, while the gains accrue to a smaller group with sufficient interest to lobby. Thus, in addition to shedding some light on the operation of futures markets, this paper is also a new illustration of an old maxim in political economy. Over 200 years ago, Adam Smith [11, p. 128] noted, People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. With the government becoming a larger and larger influence on the economy, producers are finding it to be more in their interest to organize with the assistance of the legislature.