Capacity Depreciation, Implicit Rental Price, and Investment Demand for Farm Tractors in Canada

Among the different factors pertaining to the demand for durable inputs in agriculture, the way the input depreciates over time is an important issue. This study investigates four alternative capacity depreciation patterns for farm tractors. While published estimates from government agencies implicitly assume convex capacity depreciation patterns, the results of this study demonstrate that the use of agricultural engineering data which depict a concave rather than convex pattern better reflect farmers' investment decisions. An implicit rental price measure is also proposed to account for the fact that the purchase price of a durable input is not an appropriate measure of the implicit rental cost of the asset.
Parmi les facteurs déterminants de la demande pour les biens durables en agriculture, la rapidité avec laquelle I'intrant se déprécie est certainement importante lors des décisions d'investissement. La présente etude analyse quatre différents scénarios de dépréciation pour les tracteurs agricoles au Canada. Bien que les données publiées par les agences gouver-nementales supposent implicitement que les biens durables se déprécient à un taux annuel constant, les résultats de cette etude montrent que I'utilisation de données basées sur la valeur productive de I'intrant telle que calculée sur une base expkrimentale donne de meil-leurs résultats statistiques dans I'estimation de la demande pour les tracteurs agricoles. De plus, une mesure du coût implicite de I'intrant est également proposée pour tenir compte du fait que le prix d'achat n'est pas une mesure appropriée dans I'analyse de la demande pour un bien durable.     

Reassessing the productivity gains from trade liberalization

This paper reassesses the impact of trade liberalization on productivity. We build a new, unique database of effective tariff rates at the country‐industry level for a broad range of countries over the past two decades. We then explore both the direct effect of liberalization in the sector considered, as well as its indirect impact in downstream industries via input linkages. Our findings point to a dominant role of the indirect input market channel in fostering productivity gains. A 1 percentage point decline in input tariffs is estimated to increase total factor productivity by about 2 percent in the sector considered. For advanced economies, the implied potential productivity gains from fully eliminating remaining tariffs are estimated at around 1 percent, on average, which do not factor in the presumably larger gains from removing existing non‐tariff barriers. Finally, we find suggestive evidence of complementarities between trade and FDI liberalization in boosting productivity. This calls for a broad liberalization agenda that cuts across different areas.     

Robust political economy correlates of major product and labor market reforms in advanced economies: Evidence from BAMLE for logit models

The political economy literature has put forward a multitude of hypotheses regarding the drivers of structural reforms, but few, if any, empirically robust findings have emerged thus far. To make progress, we draw a parallel with model uncertainty in the growth literature and provide a new version of the Bayesian averaging of maximum likelihood estimates (BAMLE) technique tailored to binary logit models. Relying on a new database of major past labor and product market reforms in advanced countries, we test a large set of variables for robust correlation with reform in each area. We find widespread support for the crisis‐induces‐reform hypothesis, as high unemployment and economic crises are robustly correlated to structural reforms. We also find evidence of reform convergence—that is, countries with tighter regulation are more prone to liberalize. Reforms are more likely when other countries also undertake them and when there is formal pressure to implement them. Other robust correlates are more specific to certain areas—for example, international pressure and political factors are most relevant for product market and job protection reforms, respectively.     

Structural changes in the demand for food in Asia: empirical evidence from Taiwan

Many Asian countries are expected to undergo structural transformations in their economies and rapid urbanization over the next 25 years. The changes in tastes and lifestyles engendered by urban living are likely to have significant influences on food demand. Changes in marketing systems and occupational changes, closely linked with increasing GNP per capita, also may influence the demand for food. In this paper, estimates presented for Taiwan demonstrate that structural changes in food demand (as distinguished from changes due to income and price effects) have been significant factors driving the rapid changes in dietary patterns seen in East Asia over the past three decades. Because most previous demand studies have ignored the possible influence of structural shifts which are highly correlated with increases in per capita income over time, the effects of income on food demand have been overestimated.     

Level of access and infrastructure investment in network industries

In this paper, we study how the terms of access to an incumbent’s infrastructure (i.e., the level of access and price) affect an entrant’s incentives to build its own infrastructure. Setting a high level of access (e.g., a resale arrangement), which requires relatively small up-front investment for entry, accelerates market entry, but at the same time delays the deployment of the entrant’s infrastructure. This is also true for a lower access price. We show that the socially optimal access price can vary non-monotonically with the level of access. We also study the case where access is provided at two different levels, and show that access provision at multiple levels can delay infrastructure building. Finally, we modify our baseline model to allow for experience and/or market share acquisition via access-based entry, and show that high levels of access may accelerate facility-based entry.     

Consumers’ Behaviors and Attitudes toward Doggy Bags: Identifying Barriers and Benefits to Promoting Behavior Change

ABSTRACT

This study identifies barriers and benefits of consumers’ current doggy bag behaviors and provides the information required to run an effective community-based social marketing campaign encouraging consumers to take their uneaten restaurant and café food home. This is done by applying a two-stage methodology, including quantitatively analyzing existing survey data and qualitatively investigating focus group discussion. Multiple barriers to widespread doggy bag participation were common and varied for different individuals and included both convenience and social stigma-related factors. The rational appeal of “saving money” was found to be the most effective motivator for encouraging doggy bag usage, especially for women, young people, students/unemployed, and low-income earners. Social marketing strategies and behavior change tools can be developed to remove the barriers and enhance the benefits of using doggy bags, such as developing positive social norms around using doggy bags and highlighting the financial incentive of using them. This research contributes to a limited but growing literature on out-of-home food waste and provides practicable insights for both public policy and for the food service sector for future initiatives aiming to reduce food waste.     

Unanticipated vs. Anticipated Tax Reforms in a Two-Sector Open Economy

We use a two-sector neoclassical open economy model with traded and non-traded goods to investigate the effects of unanticipated and anticipated tax reforms. First, an unanticipated tax reform produces an expansion of GDP, labor, and investment, while an anticipated tax reform has opposite effects before the implementation of the labor tax cut. Quantitatively, if the traded sector is more capital intensive, GDP increases by 1.6 percentage points or declines by 2.7 percentage points after three years, depending on whether the tax cut is unanticipated or anticipated. Second, we find that GDP change masks a wide dispersion in sectoral output responses. As long as investment is both traded and non traded, a tax reform substantially raises the relative size of the non-traded sector after three years while traded output always drops. Third, a tax reform improves welfare in all scenarios, more so if the markup is endogenous, but less so if the shock is anticipated. Importantly, we find that welfare gains in a two-sector economy with capital accumulation and perfect access to external borrowing are between 39 % and 89 % higher than those in an economy without physical capital.