Valuing options for reserve water in the Fitzroy Basin*

Option values may be an important component of non‐use values when development options for environmental assets are considered. These are values that the community might hold for maintaining options to make future choices about allocating resources. However, option values are very difficult to define, at both theoretical and practical levels, and there has been a retreat over the past decade to the more inclusive concept of option prices. In the present paper, estimates of option values are reported for retaining unallocated water in reserve rather than using it for current development. The use of option values rather than option prices is justified on the basis that the focus is on non‐use values, and demand and supply uncertainties have been minimised. These values have been assessed through a series of nine choice modelling surveys that have been conducted over a 3‐year period in the Fitzroy River Basin in central Queensland. The results are then extrapolated to the case study areas within the basin to assess whether unallocated water should be held in reserve or used for development.     

面筋蛋白对馒头加工品质影响的研究进展

本文介绍了小麦蛋白中面筋蛋白——醇溶蛋白和谷蛋白的研究现状,重点综述了这两种蛋白及其比例对馒头加工品质的影响,旨在探析面筋蛋白对馒头加工品质的影响机理,为更好地提高馒头加工品质提供理论基础.     

Design efficiency for non‐market valuation with choice modelling: how to measure it,what to report and why*

We review the basic principles for the evaluation of design efficiency in discrete choice modelling with a focus on efficiency of WTP estimates from the multinomial logit model. The discussion is developed under the realistic assumption that researchers can plausibly define a prior belief on the range of values for the utility coefficients. D‐, A‐, B‐, S‐ and C‐errors are compared as measures of design performance in applied studies and their rationale is discussed. An empirical example based on the generation and comparison of fifteen separate designs from a common set of assumptions illustrates the relevant considerations to the context of non‐market valuation, with particular emphasis placed on C‐efficiency. Conclusions are drawn for the practice of reporting in non‐market valuation and for future work on design research.     

Upstream demand for water use by new tree plantations imposes externalities on downstream irrigated agriculture and wetlands*

Large‐scale tree plantations in high rainfall upstream areas can reduce fresh water inflows to river systems, thereby imposing external costs on downstream irrigation, stock and domestic water users and wetland interests. We take the novel approach of expressing all benefits and costs of establishing plantations in terms of $ per gigalitre (GL) of water removed annually from river flows, setting upstream demands on the same basis as downstream demands. For the Macquarie Valley, a New South Wales sub‐catchment of Australia’s Murray‐Darling Basin, we project changes in land and water use and changes in economic surpluses under two policy settings: without and with a policy requiring permanent water entitlements to be purchased from downstream parties, before plantation establishment. Without the policy, and given a high stumpage value for trees ($70/m³), upstream gains in economic surplus projected from expanding plantations are $639 million; balanced against $233 million in economic losses by downstream irrigators and stock and domestic water users for a net gain of $406 million, but 345 GL lower mean annual environmental flows. With the policy, smaller gains in upstream economic surplus from trees ($192 million), added to net downstream gains ($138 million) from sale of water, result in gains of $330 million with no reduction in environmental flows. Sustaining the 345 GL flow for a $76 million (406–330) reduction in gains to economic surplus may be seen to cost only $0.22 million/GL; but this is much lower than the market value of the first units of that water to agriculture and forestry.     

Testing for allocation efficiencies in water quality tenders across catchments,industries and pollutants: a north Queensland case study*

The design of competitive tenders to purchase environmental services requires judgements to be made about the funding scale and tender scope, with the latter incorporating considerations of geographic area, industries involved and the types of environmental outputs required. Increasing the scale and scope of tenders increases the likelihood that a larger range of proposals will be proposed and cost‐effective ones selected. However, the use of larger and more broadly scoped tenders may reduce landholder participation and increase asking bids. In the study reported here, these issues have been tested with a single water quality tender run in north‐eastern Australia in 2007 and 2008. Post hoc tests and workshop exercises show that while larger‐scale and scope tenders can generate efficiency gains, care has to be taken to maintain participation and avoid higher bid levels.     

Time-varying Armington elasticity and country-of-origin bias: from the dynamic perspective of the Japanese demand for beef imports

Elasticities of substitution, often called Armington elasticities, reflect incomplete substitutability because of perceived product characteristics. This study divides the determinants of the Japanese demand for beef imports into two factors: (i) substitution elasticity and (ii) country-of-origin bias, and demonstrate how these measurements are associated with trade policy and food scare events. The Japanese beef industry serves as a case study to evaluate the multifold impact of import liberalisation and a series of bovine spongiform encephalopathy (BSE) outbreaks. A time-varying parameter model is used to shed light on the dynamic effects of the import liberalisation and BSE outbreaks on the measurements. The estimation results reveal that the estimated substitutability and country-of-origin bias are very sensitive to the BSE cases, but not to the process of trade liberalisation. The results also confirm that as a result of the BSE outbreaks, the major factor of the Japanese demand for beef imports has changed from relative prices to the country-of-origin effect, thereby emphasising the importance of a traceability system and promotional activities, which would help in the formation of the country-of-origin effect.     

Impacts of terrain attributes on economics and the environment: costs of reducing potential nitrogen pollution in wheat production

The economic cost of achieving desired environmental outcomes from uniform and variable rate fertilizer application technologies depends both on market forces and agronomic properties. Using spatial econometric methods, we analyze the impact of nitrogen fertilizer supply by terrain attribute on the yield and protein content of hard red spring wheat grown in Eastern Washington as well as the impact on residual nitrogen. We find significant association with all three. The economic impact of nitrogen restrictions depends critically on both prices and level of the restriction. Uniform application of nitrogen was found to economically outperform variable rate application, but variable rate application provided positive environmental benefits due to less residual nitrogen.     

Complexity in choice experiments: choice of the status quo alternative and implications for welfare measurement*

We examine the propensity of respondents to choose the status quo (SQ) or current situation alternative as a function of complexity in two separate state‐of‐the‐world choice experiments. Complexity in each choice set was characterized as the number of single and multiple changes in levels of attributes from the current situation and the order of the choice task in the sequence of multiple tasks provided to respondents. We show that increasing complexity leads to increased choice of the SQ and that a respondent’s age and level of education also influenced this choice. We outline the effects of the alternate approaches for incorporating the SQ into welfare measurement. These findings have implications for the design of stated preference experiments, examining passive use values and for empirical analysis leading to welfare measurement.     

Supply and demand for commodity components: implications of free trade versus the AUSFTA for the US dairy industry*

During the negotiations on the Australia–US free trade agreement (AUSFTA), the US dairy industry vigorously opposed opening the US market to imports of Australian dairy products on the grounds that the US industry would be devastated. Subsequently, the agreement signed in February 2004 made an exception for dairy, providing for only limited quota expansion and no free trade, even at the end of the long implementation period. This paper presents a simulation model of world dairy markets, represented by supply and demand equations for fat and non‐fat components of milk and manufactured dairy products. We use the model to analyse the effects on US milk markets of both a hypothetical agreement, allowing free bilateral trade in dairy products, and the actual AUSFTA. An important contribution to the literature is the derivation of explicit supply and demand relationships for milk components. The components model allows an analysis of long‐term production, consumption, and trade patterns that is not tied to specific, fungible products. Simulations indicate that increased imports from Australia resulting from bilateral trade liberalisation would have resulted in small reductions in US milk prices and production. The much smaller increases in Australian access to the US market under the actual AUSFTA will have even smaller, almost negligible, impacts.     

Quarterly Dynamic Relationships Between the U.S. Wheat Market and Wheat-Related Prices for Products Downstream

Abstract

A quarterly VA R econometric model of the reduced form relationships between the U.S. wheat market and prices of processed wheat-related flour, bread, and other bakery products downstream was estimated. The model then simulated under a rise in production- or import-induced increase in wheat quantity, and a decline in wheat price, to examine the dynamic effects on the U.S. wheat market and on processed wheat-related prices downstream. U.S. trade negotiators at the upcoming WTO agricultural round, Federal policy makers, farmers, and agribusiness agents should be interested in the dynamic patterns with which negotiated trade conditions, farm policy alterations, and climatic variation influence wheat quantity and price, and in turn the price of more highly processed wheat-based products downstream.