A choice experiment model for beef: What US consumer responses tell us about relative preferences for food safety,country-of-origin labeling and traceability

Several food safety issues have prompted questions regarding the role of country-of-origin labeling, traceability, and food safety inspections in consumers’ perceptions of food safety and quality. The importance of origin-labeling and traceability have been discussed in the EU for some time. North American cases of mad cow disease have led to increased discussions of these topics in the US, however, relatively little research has been conducted to examine the value US consumers place on these attributes. Choice experiments were used to analyze US consumers’ relative preferences and willingness-to-pay for these meat attributes in labeled ribeye beef steaks. Relatively speaking, consumers value certification of USDA food safety inspection more than any of the other choice set attributes, including country-of-origin labeling, traceability and tenderness. As a result, indication of origin may only become a signal of enhanced quality if the source-of-origin is associated with higher food safety or quality.     

Economic growth,telecommunications development and productivity growth of the telecommunications sector: Evidence around the world

This paper studies the relationships between economic growth, telecommunications development and productivity growth of the telecommunications sector in different countries and regions of the world. In particular, this study assesses the impact of mobile telecommunications on economic growth and telecommunications productivity. The results indicate that there is a bidirectional relationship between real gross domestic product (GDP) and telecommunications development (as measured by teledensity) for European and high-income countries. However, when the impact of mobile telecommunications development on economic growth is measured separately, the bi-directional relationship is no longer restricted to European and high-income countries. This study also finds that countries in the upper-middle income group have achieved a higher average total factor productivity (TFP) growth than other countries. Countries with competition and privatization in telecommunications have achieved a higher TFP growth than those without competition and privatization. The diffusion of mobile telecommunications services is found to be a significant factor that has improved the TFP growth of the telecommunications sector in Central and Eastern Europe (CEE).     

Shadow vs. market prices in explaining land allocation: Subsistence maize cultivation in rural Mexico

Prices may fail to explain farmers’ land allocation if the relevant decision prices are “shadow prices” that deviate from market prices. This may be the case for farmers who attach significant non-market values to their crops. I theoretically explain why land allocation may not respond to market signals even if transaction costs are not binding. I use nationally representative rural household data from Mexico to show that shadow prices better explain the land subsistence farmers allocate to traditional maize in this center of maize diversity. I discuss the importance of non-market values in understanding supply response and on-farm conservation of traditional crops.     

Changes in South Korean consumers’ preferences for meat

This study analyzes the South Korean meat demand system, and the empirical results show that there are two statistically significant structural changes in Korean consumers’ meat preferences, respectively in August 1998 and October 2001. The first break point is related to the Asian financial crisis and the second one coincides with the BSE outbreak in Japan. This implies that South Korean consumers reacted by taking defensive actions to lower their level of health risk by responding to a myriad of mass media reports regarding the Japanese BSE outbreak, although there was no case of BSE in South Korea.     

What difference does dynamics make? The case of digital cameras

When the well-known BLP model is applied to products with rapid technological changes and declining prices it tends to yield implausible results. A sequence of increasingly sophisticated dynamic demand models, most recently Gowrisankaran and Rysman (2009, hereafter GR), have been developed to overcome these problems. We apply both models to new data on the US digital camera market. In addition, we demonstrate that the GR model can be specified as a BLP model plus an additional set of terms. This suggests that a dynamic model can be estimated as a BLP model plus a non-parametric function which is less computationally demanding. As a first step to implementing this semi-parametric approach we estimate a BLP model augmented with age as a proxy for the non-parametric component. We find that demand for digital cameras is more elastic when demand dynamics is accounted for in both the dynamic model and the BLP model with the age proxy. This suggests that the market is more competitive though the results are consistent with firms engaging in intertemporal price discrimination. Merger simulations predict the lowest price and quantity changes using the GR model.     

The evolution of hog production and potential sources for future growth in China

Following reforms to the market, China’s hog industry has developed rapidly, however, with social and economic transitions, China’s hog industry is facing challenges which might restrict long-term growth in production. This paper analyzes the changes in regional scale, organization, input factors, and technological progress for China’s hog production over the last few decades. The paper seeks to reveal the sources of hog production growth and provide some suggestions for future development of the hog industry. To achieve these aims, the paper uses stochastic frontier production functions and the Malmquist index to measure total factor productivity (TFP) in the hog industry and decompose TFP into technical efficiency; technological progress; scale efficiency; and allocative efficiency using data for 25 provinces from 1980 to 2008. The results show firstly that; the TFP of hog production increased by 64.3% from 1980 to 2008, and allocative efficiency and scale efficiency improvements played a key role in this TFP growth. In contrast, technical efficiency and technical progress have changed little over this period. Secondly, TFP’s contribution to output was 39.7%, it being less than that of factor inputs to output. Thirdly, the results suggest that the growth of China’s pork production depends mostly on the increase in the quantity of factor inputs, especially feed. As a consequence, the key to ensuring long-term and stable development of China’s hog production would seem to involve focusing on enhancing total factor productivity and changing the pattern of production growth.     

The effects of price deregulation on maize marketing margins in South Africa

There has been continuous controversy over the impact of food market reforms on food security in Africa. In South Africa, the government and media have often questioned the effects of price deregulation of maize meal, the major staple food, on consumers. This article determines the effect of retail price deregulation on the size of maize milling/retail margins in South Africa. Regression models of monthly milling/retail margins are run from the period May 1976 to December 2004. To assess the robustness of our findings, we estimate several different models of structural change, vary the sample period to examine the sensitivity of findings to unusual weather and market conditions in the region during episodes between 2001 and 2004, and run the models using different estimation techniques, OLS with Newey-West robust estimators and Feasible General Least Squares. In virtually all models, the results indicate that real maize milling/retailing margins in South Africa have increased by at least 20% since the deregulation of retail prices in 1991. Moreover, there is evidence of trend growth in the size of the milling margin over time. Simulations indicate that the deregulation of maize meal prices has entailed a transfer of at least US$179 million/year from consumers to agents in the marketing system. Further study is needed to understand why this outcome in South Africa differs from findings in other countries in the region concerning the effects of reform on food marketing margins.     

Vertical Industry Linkages: Sources of Productivity Gains and Cumulative Causation?

In this paper we analyse how vertical industry linkages maywork as channels for externalities. We test for activity based externalities stemming from outputgrowth and output level in vertically linked industries. Moreover, by comparing resultson localised inter-industry externalities as well as significance of local sales linkages,we try to reveal the strength of self-reinforcing agglomeration forces. A number of Norwegianmaritime transport and services sectors are analysed. The results are promising inthe sense that the model allows us to distinguish empirically between different sources ofexternalities, and unveils the extent to which vertical industry linkages give rise to self-reinforcingagglomeration.     

Licensing information goods

A significant amount of research on patent licensing and the diffusion of knowledge is organized around static frameworks of analysis. Patent holders, however, may face a dynamic problem, namely the intertemporal consistency problem of the durable-goods monopolist that is induced by durability on the demand side. Licensing practices such as exclusive licensing contracts and most favored customer clauses allow patentees to solve or mitigate this dynamic consistency problem. There are situations, however, where these practices are not possible either due to the nature of the patent (the case of information goods) or due to compulsory patenting laws. We study the effects of the intertemporal consistency problem on patent licensing in these situations. Relative to the existing literature, we obtain the following main results: (i) all of the firms that remain in the industry will be using the innovation; (ii) royalty licensing may be superior to fixed-fee or auction licensing from the licensor's point of view; (iii) social welfare and consumer surplus may be lower than when the patent holder can commit not to make additional sales; (iv) even for non-drastic innovations, the price of the good that is produced may be lower than the competitive price corresponding to the initial situation (before the innovation was discovered).     

Optimal pricing and quality choice of a monopolist under Knightian uncertainty

This paper analyzes a simple vertical product differentiation model with demand uncertainty and derives a risk neutral monopolist's optimal market entry timing, her optimal pricing and optimal quality choice by incorporating Knightian uncertainty, irreversibility, and flexibility in quality-enhancing investment into a continuous-time stochastic model. It is shown that an increase in Knightian uncertainty induces decreases in the optimal price, the optimal quality, and the value of undertaking the quality-enhancing investment by the monopolist. The social optimal entry timing, pricing and quality are also analyzed.     

Are China’s regional agricultural productivities converging: How and why?

This article tests the hypotheses of convergence to a single level of total factor productivity (TFP), and a steady state of TFP growth rate in China’s agricultural sector. Based on multilateral TFP estimates we found that China’s agricultural sector has rebounded in recent years from a slower TFP growth in the 2005–2007 period. While convergence test results confirm a “catch-up” effect that provinces with lower TFP levels tend to grow faster than others, estimated rates of β convergence are conditional on how we capture the heterogeneity effect across regions. The rates of β convergence range from 0.016 to 0.039 under different model specifications. Estimates show that higher growth rates of educational attainment, R&D, and intermediate goods density (per unit of labor) can enhance TFP growth. Unfortunately, there is no evidence of an overall σ convergence, indicating that TFP levels are not converging except in the South region. It implies that to catch up with leading provinces, it would require extra efforts for those lagging behind by increasing their region-specific research investment, promoting rural educational attainment, and enhancing embodied technical change.     

Impact of information and communication technologies on agricultural households’ welfare in Benin

Information technologies are very important to transform the agricultural sector and improve economic performance. Nevertheless, does the use of information and communication technologies (ICT) improve agricultural households' welfare? To answer this, the study used a nationally representative household survey, the Comprehensive Food Security and Vulnerability Analysis (CFSVA) carried out in 2017 in Benin. The survey covered a sample of 15 000 households, however, the analysis focused on the 6502 agricultural households. An endogenous switching regression model was employed to control for selection bias and endogeneity issues. Results indicated that the use of ICT increases households' consumption expenditure by 89.6%. This implies that the use of ICT improves agricultural households' welfare. Other variables that affect agricultural households’ welfare include age, marital status, farm size, access to credit, ownership of livestock, membership in a farmer-based organization, and region of residence. Furthermore, the decision to use ICT in agricultural households depends on the level of education, age, sex, marital status, farm size, access to credit, ownership of livestock, membership in a farmer based organization, and location. These findings suggest that policies that promote the use of ICT are key to improving welfare of agricultural households in Benin. These policies must consider demographic, socio-economic, and institutional characteristics of households.