DEMAND ASYMMETRY AND MONEY ILLUSION WITH AN EXAMPLE-MILK

This paper examines the question of an asymmetric response by consumers to equivalent real price movements depending on whether the source of the real price movement is a change in the money price of the product itself or a change in the general price level. This asymmetry is discussed as a special but pervasive case of asymmetry due to limited information in an inflationary environment. A method is developed to capture possible asymmetric responses of this type by consumers with which it is possible to measure the degree of money illusion they exhibit. This method is then applied to the demand for milk using Australian data to show evidence of a considerable degree of money illusion.     

Getting Institutions "Right" for Whom? Credit Constraints and the Impact of Property Rights on the Quantity and Composition of Investment

Property rights reform is typically hypothesized to boost investment through investment demand and credit supply effects. Yet when the credit supply effect is muted, property rights reform would be expected to induce liquidity-constrained farms to reduce investment in movable capital even as they increase investment in attached capital. This expectation is corroborated by econometric analysis of panel data from Paraguay. While all farmers experience a positive investment demand effect, liquidity-constrained producers correspondingly reduce their demand for movable capital. Given an estimated pattern of wealth-biased liquidity constraints, property rights reform will get institutions "right" for only wealthier producers.     

Farmers’ decisions to adapt to climate change under various property rights: A case study of maize farming in northern Benin (West Africa)

Making the assumption that property rights might determine whether farmers adopt particular strategies, this study aims at modelling farmers’ decisions to adapt to climate change by focusing on their property rights – declined as institutional arrangements on land and rights on land – as well as their socio-economic and demographic characteristics. The case study took place in northern Benin (West Africa). In this zone, 308 farmers producing maize and adapting to climate change were randomly sampled. The study was conducted by a survey method on respondents using structured interviews based on a questionnaire. A simultaneous modelling using a Multivariate Probit (MVP) model highlighted that socio-economic and demographic characteristics, institutional arrangements on land, and rights on land determine the farmers’ decisions to adapt to climate change. The land ownership has a positive effect on the decision to adopt any adaptation strategy. Subsequently, securing farmers’ property rights would help to enhance their capacity to adapt to climate change.     

The components of the bid‐ask spread: Evidence from the corn futures market

This article examines whether USDA announcements and commodity index fund rolling activity have an impact on liquidity costs, measured by the bid‐ask spread. Using Huang and Stoll's (1997) model of liquidity costs, we estimate whether changes to liquidity costs are driven by its adverse selection, inventory, or order processing components. Commodity index fund roll activity reduces the asymmetric information cost component of liquidity cost due to an increased proportion of noninformation‐based trading, but the inventory cost component increases as (mostly long only) commodity index funds sell their nearby positions and buy the first deferred contract—raising liquidity providers’ risk of building a position. The sum of these two effects is that liquidity costs remain low during index fund roll periods, averaging one “tick” (0.25 cents). On USDA report release days, we find that informed traders raise the asymmetric information component of liquidity costs in the first hour after release, but the inventory cost component is reduced due to the increase in volume. Similar to index fund roll activity, liquidity costs on USDA report release days remain low, averaging one “tick”. Our findings that liquidity costs are minimally changed during USDA report releases and commodity index fund roll periods is consistent with other recent research on liquidity costs, but we show that what drives liquidity costs differs substantially depending on the circumstances surrounding daily trading.     

Dial “A” for agriculture: a review of information and communication technologies for agricultural extension in developing countries

Agriculture can serve as an important engine for economic growth in developing countries, yet yields in these countries have lagged far behind those in developed countries for decades. One potential mechanism for increasing yields is the use of improved agricultural technologies, such as fertilizers, seeds, and cropping techniques. Public sector programs have attempted to overcome information‐related barriers to technological adoption by providing agricultural extension services. While such programs have been widely criticized for their limited scale, sustainability, and impact, the rapid spread of mobile phone coverage in developing countries provides a unique opportunity to facilitate technological adoption via information and communication technology (ICT)‐based extension programs. This article outlines the potential mechanisms through which ICT could facilitate agricultural adoption and the provision of extension services in developing countries. It then reviews existing programs using ICT for agriculture, categorized by the mechanism (voice, text, internet, and mobile money transfers) and the type of services provided. Finally, we identify potential constraints to such programs in terms of design and implementation, and conclude with some recommendations for implementing field‐based research on the impact of these programs on farmers’ knowledge, technological adoption, and welfare.     

How to assess the impact of hope on a change in the use of land on market value?

This article is devoted to common yet quite specific approaches to valuation practice tasks that are involved in determining the market value of real properties in areas of possible land use changes. An intrinsic element of market value in such areas is the hope value, for which an option pricing model is used quite frequently.The authors propose a specially adapted Samuelson-McKean model for this task, which allows market value indication to be determined not only with the built-in development option, but also the dynamics of its components value in the current highest and best use and hope value – depending on the location of the given property. The greatest advantage of the Samuelson-McKean model is that it can be treated as universal for analyzing the range of possible indications of market value seeing as how its main task is to find a compromise between the interests of the buyer and the seller, which is the goal of any fair transactions and decisions.     

Off-farm labor supply responses to permanent and transitory farm income

A sample of Iowa farm couples is used to evaluate whether off‐farm labor supply decisions respond to permanent and transitory components of farm income. Off‐farm labor supply of both spouses declines in response to increases in permanent farm income. Farm wives also reduce off‐farm labor supply in response to positive transitory farm income shocks. Consequently, one mechanism farm households use to smooth their goods consumption when facing fluctuating farm income is to modify their consumption of leisure. Ability to smooth goods consumption does not imply the absence of liquidity constraints among farm households unless leisure consumption is also smoothed.     

A capability perspective on indigenous autonomy

This paper argues that the capability approach can add to the concept of autonomy (as defined in international law) as a means to provide larger freedoms to indigenous peoples. We show that autonomous regimes established within nation-states – by opening up a space for self-governance – provide a means to facilitate indigenous peoples’ pursuit of their own paths of development. However, such regimes frequently face, and their effectiveness can be reduced by, various problems such as tensions between individual and collective rights, the definition of the ideal scope of autonomies, and the lack of proper implementation. This is illustrated with case studies from Colombia, Mexico and Nicaragua. We argue that the capability approach, and in particular its focus on the freedom to choose a life path one has reason to value, can be used to address such problems confronting autonomous regimes.     

Commodity price bubbles and macroeconomics: evidence from the Chinese agricultural markets

This article investigates the links between commodity price bubbles and macroeconomic factors, with an application to the agricultural commodity markets in China from 2006 to 2014. Price bubbles are identified using a newly developed, recursive right‐tailed unit root test. A Zero‐inflated Poisson model is used to analyze the factors contributing to bubbles. Results show that (a) there were speculative bubbles in most Chinese agricultural commodity futures markets during the sample period, though their presence was infrequent; (b) economic growth, money supply, and inflation have positive effects on bubble occurrences, while interest rates have a negative effect; and (c) among all macroeconomic factors considered, economic growth and money supply have the greatest impact in triggering bubbles. Our findings shed new light on the nature and formation of bubbles in the Chinese agricultural commodity markets.     

Understanding the resource curse (or blessing) across national and regional scales: Theory,empirical challenges and an application

The relationship between resource extraction activity and economic growth has been widely studied in the literature, and the resource curse hypotheses emerged as a theory to explain the effects of resource windfalls on national economies. However, within countries, resource booms and busts can have distinctive effects across local economies, as extractive regions face particular economic consequences unlikely to be observed in nonresource regions. Empirically, most studies analysing the resource curse have relied on cross‐country models to estimate effects and inform policy; however, the use of regional – within‐country – analysis has gained attention from scholars lately, promoted by two advantages: it avoids unobserved country heterogeneities confounding economic outcomes caused by resources and exploits the subnational quasi‐natural experimental conditions generated by endowments. This paper contributes to the resource curse literature by discussing its theoretical causes across scale (regional vs. national effects) and highlighting the empirical challenges involved in the analysis of mining economic impacts across regions. We complement the discussions by econometrically modelling economic growth across nonmetropolitan substate regions of Australia during a period of resource windfalls, finding that in most cases, resources have been a blessing for local economies, although negative effects have also been experienced in parts of the country.     

期货市场、货币供应量对农产品价格波动的影响——基于对小麦、玉米、大豆粮食品种的实证分析

近年来我国农产品价格波动频繁,特别是短期内小宗农产品价格波动剧烈,在一定程度上影响了农业生产秩序和物价稳定.基于2010年1月至2014年4月小麦、玉米和大豆价格的月度数据,采用VAR模型实证分析了农产品期货价格和货币供给的增长在影响农产品价格波动方面的差异性,并提出稳定农产品价格异常波动的相关策略及方法.     

Technology,market policies and institutional reform for sustainable land use in southern Mali

To identify appropriate interventions that support sustainable land use; a farm household modelling approach is applied to analyze micro-economic supply reactions to various policy measures. The modelling framework links agro-technical and economic data, and takes both production and consumption decisions into account, allowing land use and production technology adjustments in accordance with farm household objectives. Different types of farm households are distinguished on the basis of their resource endowments, savings coefficients and time discount rate. Actual and alternative (sustainable) cropping and livestock activities for different weather regimes are defined for southern Mali. The effects on sustainable land use and expected farm household welfare of adopting alternative technologies and modifying prices, transaction costs, access to credit and land taxes are demonstrated. Even with full information on sustainable technologies, strong policy interventions are required to halt soil degradation. Structural policies proved to be more effective than price policies to reduce soil degradation while maintaining positive income effects. When prices are determined endogenously, structural policy loses some effectiveness as an incentive for sustainable land use due to the effect of additional supply on local cereal and meat Prices.     

Comparing conventional and organic agriculture in Karnataka,India: Where and when can organic farming be sustainable?

Karnataka is one of the south-western Indian states where agrarian distress as a major problem. Crop yields have been stagnant in the last decade, and coupled with increased input costs, this has led to reduced incomes and debts. There is an urgent need to study options to improve the sustainability of farming systems in Karnataka. One adopted strategy to stabilize agriculture in the state is organic farming, which is less dependent on external inputs. In this paper, we assess the sustainability of conventional and organic farming practices using the model TechnoGIN. TechnoGIN calculates inputs and outputs of farming practices, allowing assessment of its impacts on economic and environmental indicators. Data on inputs and yields have been collected in two districts in 2009 from farms with conventional and organic cultivation at the same time. Additional data were collected from literature and experts. Next, the current situation was assessed and projections were made towards 2015 for two scenarios per village, using either conventional or organic practices.Modeling results show that for the study site situated in a dry region, Chitradurga, profits with organic farming are higher than in conventional farming, except for rotations that include onion. Input costs are lower resulting in lower financial risks with organic farming. Nutrient balances in organic agriculture were however found to be negative for all crop rotations indicating imbalanced supply of nutrients. This suggests it may not be possible to sustain current yields in the long term with current nutrient applications.In the second site situated in a transition zone with intensive cultivation of commercial crops, Mysore, yields and profits are similar in organic farming compared to those under conventional practice, except for commercial crops like cotton and coconut where the profits are lower. The debt risk in case of crop failure appears to be practically similar for both types of farming practices in Mysore. Nutrient balances are generally positive, indicating that NPK supplies are not the main yield limiting factor.It is concluded that organic farming can be a sustainable farming practice in Karnataka depending on regional conditions and the crops cultivated. Policies stimulating organic farming should therefore consider the regional differences and farmer's preferences.     

Price formation in the German biodiesel supply chain: a Markov‐switching vector error‐correction modeling approach

Changing linkages between agricultural and energy markets have attracted considerable attention in research and policy discussions during recent years. As one of the largest biofuel markets worldwide, the German biodiesel market is of particular interest. It has grown rapidly since the beginning of the new millennium, with this growth being driven mainly by political interventions. Vertical price transmission channels along the biodiesel supply chain are analyzed in this study. We examine the relationship between diesel and biodiesel prices, and between rapeseed oil, soy oil, and biodiesel prices between 2002 and 2008. Due to pronounced changes in market conditions and the policy framework, a regime‐dependent Markov‐switching vector error‐correction model is used. The regimes are characterized by markedly different price adjustment behaviors. Before 2005 and from late 2007 onward, a regime characterized by the strong orientation of biodiesel prices toward diesel prices dominates. Between 2005 and 2007, biodiesel and rapeseed oil prices are mutually interdependent. Frequent switches between the regimes of the price dynamics during this period indicate a high extent of uncertainty and instability in the market.     

云南松茸采集制度及其经济收益的比较研究——滇西北三村案例

基于滇西北3个村的开放、集体、私人三种松茸采集制度的形成原因、实施特点、生计影响的比较分析,通过三种不同采集制度下所采1254个松茸的长度、重量、生长天数以及经济收益的实地测量和比较分析,并建立采集特征模型,从经济层面得到云南松茸被过度使用的证据和结论,探讨了公共产权资源私人化采集的可行性,并提出云南松茸采集管理的长效机制和途径。     

Soil quality and fertilizer use rates among smallholder farmers in western Kenya

Studies of fertilizer use in sub-Saharan Africa have been dominated by analyses of economic and market factors having to do with infrastructure, institutions, and incentives that prevent or foster increased fertilizer demand, largely ignoring how soil fertility status conditions farmer demand for fertilizer. We apply a switching regression model to data from 260 farm households in western Kenya in order to allow for the possibility of discontinuities in fertilizer demand based on a soil carbon content (SCC) threshold. We find that the usual factors reflecting liquidity and quasi-fixed inputs are important on high-SCC plots but not on those with poorer soils. External inputs become less effective on soils with low SCC, hence the discernible shift in behaviors across soil quality regimes. For many farmers, improved fertilizer market conditions alone may be insufficient to stimulate increased fertilizer use without complementary improvements in the biophysical conditions that affect conditional factor demand.     

From Extensive to Involutionary Growth: A Dialectic Interpretation of the Boom and Busts of Cocoa Production in the Gold Coast

African economic history has undergone impressive revitalization in the past decade. Much of the recent work is, quite naturally, inspired by developments in economic history at large, and increasingly – indirectly or directly – using markets as the organizing principle in understanding how economies evolve over time. More specifically, recent work assumes that markets create the possibility to use resources more efficiently, which, theoretically, enables economies to grow as long as institutions adjust and enable the population to exploit the arising opportunities. That is, the current works in African economic history are to a large extent grounded in Smithian growth models, labelled after Adam Smith's work on the mechanisms of long‐term growth. This paper critically discusses the explanatory value of the Smithian growth models for understanding the long‐term economic development in Africa. The latter is best described as recurrent growth episodes, and we argue that while Smithian models can account for initial periods of growth, they fail to explain why the growth was not sustained. We use the boom and busts of cocoa production in Ghana in the twentieth century as a case in point. We show that the decline in cocoa production was not caused by state policies distorting the functions of the markets, as the Smithian growth models suggest. Instead, the decline in production was an outcome of changes in the ecological and institutional conditions that caused the initial growth. The irony is that it was the initial growth in cocoa production that altered the conditions, making further growth in production impossible. We capture these changes – for the first time ever – by combining the concepts of forest rents and involutionary growth in an African case.     

构建森林生态资源产权交易机制的理论探索

森林生态资源的公共物品属性引发了森林生态生产和消费过程中的正、负外部性,进而导致森林生态供需失衡。通过构建产权交易机制可以消除由于外部性而引发的森林生态资源供需失衡问题。森林生态资源利益相关主体包括森林经营者、厂商和居民,将享受良好生态环境的权利赋予居民,由企业承担环境治理费用,将森林生态资源的收益权赋予森林经营者,采用污染者付费模式,借助产品市场所构建的森林生态资源交易模型,能够在交易成本最低的前提下实现森林生态资源供需均衡。森林生态产权交易成本包括创建成本和运行成本两部分,当森林生态资源产权交易的运行成本小于政府行政管理成本时,产权交易市场才被认为是有效的。对于任何一项森林生态资源来讲,在稀缺性、竞争性和排他性3种经济属性上表现出相应的适应性,是建立该项森林生态资源产权交易市场的前提。现阶段只有森林景观和碳汇两类森林生态资源的经济属性符合私有化产权交易的基本条件。     

A game theory approach to the analysis of land and property development processes

Land and property development processes obviously can be seen as a social situation in which the interaction of individuals or groups of individuals is one of the essential elements. To study and understand social situations, it is important to analyse how the decisions of actors are interrelated and how those decisions result in outcomes. In this paper, we propose a game theoretical modelling approach to analyse it. Hence, the objective of the paper is to investigate the usefulness as well as the limitations of game theoretical modelling for analysing and predicting the behaviour of actors in decision-making processes with respect to the development of land and property. For that purpose, we have developed game models for the case study of the development of a greenfield residential location in the Netherlands with respect to the implementation of new Dutch legislation on cost recovery.     

Changes in land requirements for food in the Philippines: A historical analysis

Land for food production is limited. We investigate how land demand for food develops as populations grow, diets change and agricultural practices become more intensive. The Philippines provide an excellent case: during the 20th century population grew tenfold implying similar increases in basic dietary needs. To quantify occurring changes, we link average dietary patterns to their arable land requirements. For this, we utilize data on population, dietary patterns and crop yields from 1910 to 2003. While average per capita food supply improved during the century, the amount of land required to feed a person declined, albeit not continuous: it was at about 2500 m² in 1910, at 2000 m² in 1960, at 1000 m² in 1985, and did not change greatly since then. Accounting for population growth, this translates to a fourfold increase in total land required for food from 1910 to 2003. When investigating what drove the observed developments at national level, we find that in the first half of 20th century population growth was linked to increased land requirements, before strong increases in yields were enabling constant land requirements for about two decades. Recently, the combined effect of dietary change and population growth led again to increased land requirements for food. Different yield developments in individual crops caused shifts in the relative land requirements of different food items. Our findings suggest that developments in land requirements for food and underlying factors are often non-linear. Caution is warranted when discussing futures of global food supply, based on assumptions of linear or continuous trends.