Pigs in Space: Modeling the Spatial Structure of Hog Production in Traditional and Nontraditional Production Regions

We posit a spatially explicit, county-level model of the hog production sector and estimate how numerous firm-specific, locality-specific, and spatial agglomeration factors affect the location, movement, and intensity of hog production within 15 key hog production states. Spatial agglomeration, urban encroachment, input availability, firm productivity, local economy, slaughter access, and regulatory stringency variables affect the sample regions' spatial organization. Analyses suggest that western states in the sample may shape hog production levels by wielding traditional business recruitment and retention tools (e.g., tax rates, environmental stringency) while Corn Belt states may shape hog production via nontraditional tools (e.g., land use controls).     

Risky business: Financial‐sector liberalization and China

China's dramatic growth in exports, its rising conflict with its trade partners over the perceived undervaluation of the renminbi, and the snail's pace of financial liberalization is pushing its bilateral trade and monetary relations to a boil. Discontent in the United States, Japan, Southeast Asia, and, most recently, Brazil, has led popular pundits and even country finance ministers to speak publicly of a “currency war” with many calling for the de‐pegging of the renminbi to the dollar and an immediate appreciation of China's currency. However, China's history of liberalization, beginning with the opening to the West in 1978, is well known as one of gradualism in trade and the financial spheres. Economic history is replete with economic crises brought on by too rapid or premature liberalization of countries' capital flows. This article presents the case both for and against capital account liberalization and highlights the risks that China in particular confronts in responding to external demands for greater openness and an appreciation of the renminbi. It clearly captures the tightrope that China must walk between responding to the demands of its trade partners and maintaining economic growth and political stability at home. © 2011 Wiley Periodicals, Inc.     

Genetically modified food labeling: The impacts of message and messenger on consumer perceptions of labels and products

We analyze responses to a survey designed to elicit consumer reaction to various approaches to labeling genetically modified (GM) foods. Consumers were shown sample labels that differed with respect to claims concerning the presence and potential effects of GM ingredients and the agency that certified these claims. A sample of 1898 US consumers rated 3681 labels with regard to the credibility and adequacy of the information content, with regard to perceived health and environmental impacts of the product and with regard to purchase intent. Simple claims that a product contains GM ingredients are viewed as most credible while simple claims of no GM content are viewed as most adequate. Label claims certified by the US Food and Drug Administration (FDA) are, in general, viewed as most credible and adequate and products with FDA certified claims are perceived to have fewer long-term health problems. Several practical policy implications of the results are discussed, including how different label messages may impact consumer reactions in markets involving GM products.     

A general equilibrium analysis of conjunctive ground and surface water use with an application to Morocco

Groundwater resources (GW) account for nearly 30% of the world's sustainable water supplies. Yet, this resource, which is fraught with externalities, has largely been left unregulated. The economic literature on GW is predominantly of a partial equilibrium type. We analyze GW regulation in a general equilibrium setting, focusing on the stabilization value of GW under natural (drought) and economic (rural–urban water transfer) shocks. A general equilibrium approach allows evaluating direct and indirect effects of GW regulation on agriculture and nonagriculture sectors and extends the scope for water policy. The analysis is applied to Morocco by extending an existing computable general equilibrium (CGE) model to include ground and surface water (SW) resources. We study effects of (i) an increase in GW extraction cost (e.g., as a result of prolonged extraction beyond natural recharge that lowers the aquifer's water table), (ii) a transfer of SW from rural (irrigation) to urban (domestic) use, and (iii) a reduction of water availability due to severe drought. We estimate the value of GW and assess the direct (partial equilibrium) and indirect (general equilibrium) impacts. We find that GW plays a critical role in mitigating the negative effects of these types of shocks.     

Behavioral and Welfare Effects of Tournaments and Fixed Performance Contracts: Some Experimental Evidence

Using experimental economics, we compare the efficiency and welfare effects of tournaments and fixed performance contracts. Our subjects (agents) were generally better off under fixed performance contracts, but the advantage of the fixed performance contract disappears if the relative magnitude of the standard deviation of the common shock exceeds a critical value. Efficiency wise, agents tend to exert higher effort under fixed performance contracts, on average. Additionally, an increase in the common shock standard deviation appeared to be associated with lower effort under tournaments. Our results shed light on the potential impact of legislative proposals to ban tournament contracts.     

Mexican agriculture in economy-wide policy: Latitude for special treatment

The Mexican economy has gone through radical transformations in the past 7 years which have been reinforced during the Salinas administration. From the early 60s up to the mid-eighties, Mexico tended to pursue an inward-oriented development strategy. Those economic policies affected negatively the agricultural sector, especially through the indirect effects of the macroeconomic policies. The paper analyzes the role of the agricultural sector in the process of liberalization. It is argued that strategies to develop agriculture must also focus on policies outside the sector, that the level and rate of economic growth is particularly sensitive to investment in public goods, and that an over-investment in these goods might be justified if it induces rural households to engage in political activity that will prevent a movement towards the old policy regime once an economic crisis is resolved.     

Agricultural competitiveness: The case of the United States and major EU countries

Growth in the agricultural GDP of four major European countries is compared with US agricultural growth for the period 1974–1993. The agricultural sector's relative prices are taken into account along with economy-wide factor market adjustments. For Denmark, France, Germany and the UK, the effects of declining real prices and changes in input levels on growth in agricultural GDP are relatively small. Total Factor Productivity (TFP) growth appears to be the major contributor to European agricultural GDP growth. In comparison, TFP is the major source of growth in US agricultural GDP, but its rate of growth is lower than the European countries. In contrast, the declining real prices for US agriculture had a relatively large effect on its GDP. However, in recent years, the effects of declining real prices and declining rates of growth in TFP on European agriculture are relatively large. In the longer-run, the relative competitiveness of US agriculture is largely dependent on its ability to sustain and increase growth in TFP.