Can Normality of Yields Be Assumed for Crop Insurance?

Normality of crop yield residuals pooled to the state and regional level is examined using a procedure that accounts for trend and heteroscedasticity. Normality tests are conducted using farm-level yield data from over 200,000 producers of six crops in seven U.S. states. The results indicate consistent non-normality of crop yields. The effects of assuming normality on insurance premium rates are examined. Assuming normality is found to generate premiums that can differ substantially from premiums derived using data-based empirical distributions.
Montana Agricultural Experiment Station Journal Series No. 2001-7. The Risk Management Agency, USDA, also provided support for this research. The views expressed herein are the authors' and do not necessarily represent those of Montana State University or the Risk Management Agency.
Les auteurs ont analysé la normalité du rendement résiduel des cultures à l'échelon de l'État et à l'échelon régional au moyen d'une méthode tenant compte des conjectures et de l'hétéroscédasticité. Ils ont utilisé les données sur le rendement fournies par plus de 200 000 cultivateurs produisant six cultures dans sept États américains pour effectuer des tests de normalité. Les résultats révèlent l'anormalité constante des rendements. Les auteurs s'interrogent sur les conséquences d'une normalité hypothétique sur les primes d'assurance. En supposant des rendements normaux, on obtient des primes sensiblement différentes de cedes calculées avec une distribution empirique des données.     

Economic Impacts of Technology,Population Growth And Soil Erosion At Watershed Level: The Case Of the Ginchi in Ethiopia

A dynamic bio‐economic model is used to show that, without technological and policy intervention, soil loss levels, income and nutrition could not be substantially or sustainably improved in a highland area of Ethiopia. Although cash incomes could rise by more than 40% over a twelve‐year planning period, average per ha soil losses could be as high as 31 tonnes per ha. With the adoption of an integrated package of new technologies, however, results show the possibility of an average two‐and‐a‐half‐fold increase in cash incomes and a 28% decline in aggregate erosion levels even with a population growth rate of 2.3%. Moreover, a minimum daily calorie intake of 2000 per adult equivalent could be met from on‐farm production with no significant increases in erosion. However, higher rates of growth in nutritional requirements and population introduce significant strains on the watershed system. From a policy perspective, there is a need for a more secure land tenure policy than currently prevailing to facilitate uptake of the new technology package, and a shift from the current livestock management strategy to one that encourages livestock keeping as a commercial enterprise. It would also imply a shift to a more site‐specific approach to land management.     

International linkage of the Russian market and the Russian financial crisis: A multivariate GARCH analysis

This study considers the linkage of the Russian equity market to the world market, examining the international transmission of the Russia's 1998 financial crisis utilizing the GARCH–BEKK model proposed by Engle and Kroner [Engle, R.F., Kroner, K.F., 1995. Multivariate simultaneous generalized ARCH. Economet. Theor. 11, 122–150]. We find evidence of direct linkage between the Russian equity market with regards to returns and volatility, while the weakness of the linkage suggests that the Russian equity market was only partially integrated into the world market. At the time of the crisis, evidence of contagion is clear.     

The impact of trade openness on technical efficiency in the agricultural sector of the European Union

The aim of this study is to analyse the impact of trade openness on technical efficiency of the European Union’s (EU) agricultural sector. There are no systematic theories linking trade policy to technical efficiency; hence, the relation between trade liberalization and technical efficiency is fundamentally ambiguous. Stochastic frontier analysis is used to model the relationship between EU’s production resources and agricultural output, as well as the importance of trade openness on technical efficiency of a country. The data for 16 of the 28 EU members were available for the period 1980–2007 including land, capital, fertilizer, labour, agricultural GDP, foreign direct investments (FDI), exports and import data. Results indicate that trade openness has an immediate, negative impact on efficiency in the EU agricultural sector. Over time, however, trade openness does increase efficiency. The FDI outflows increase efficiency. This suggests that an initial reduction in capital supply forces EU nations to utilize other factor inputs more efficiently. However, there is the unexamined potential that over time the depletion of capital results in a decrease in efficiency. Finally, formerly communist member-countries of the EU are found to have the lowest technical efficiency scores whereas Southern European nations have the highest efficiency.     

Re‐examination of production,cost, and restricted profit functions using quantile regression approach

This article estimates quantile regressions of production, cost, and restricted profit functions using a Cobb‐Douglas functional form with non‐Hicks neutral technology change. In contrast to previous studies, quantile regression estimates reveal the relationship between the independent (production, cost, and restricted profit) and dependent (input quantities and prices) variables at each quantile of the distribution. An empirical application using data from 48 states in United States from 1960 to 2004 indicates the returns to scale and aggregate technology not only differ across production, cost, and restricted profit functions but across states in different quantiles of the distribution. This suggests the traditional measures of returns to scale and aggregate technology are under‐ and overestimated in states at upper and lower quantiles, respectively.     

The ecology of diamond sourcing: from mined to synthetic gems as a sustainable transition

Luxury goods such as gemstones constitute a challenge for moving towards a sustainable society. From a purely bio-economic perspective, such goods consume planetary resources to provide a human “want” rather than a “need”. However, their extraction or manufacturing also provides important livelihoods for communities along the supply chain and hence contribute towards development outcomes. Comparing mined versus synthetic gems can provide consumers with important benchmarks on choice. The energy usage and emissions in mined versus lab-created diamonds was evaluated, based on industrial data, since these two factors are often a general indicator of environmental impact that can be useful in product comparisons. Depending on the process and the location of the mine, the data can be highly divergent and cannot be used as a singular measure of environmental impact. There is a need to develop life cycle analysis techniques from industrial ecology to conduct a detailed comparison of synthetic versus mined stones. Informed consumers could help to transition this luxury good towards a mix of mined and synthetic gems that best meet ecological and social metrics of sustainability.     

A Comparative Study of Alternative Approaches to Estimate Productivity

Theoretically, for single output-single input, annual productivity are expected to be identical across index, non-parametric programming and parametric statistical approaches. The following models within each approach is considered—index (Tornqvist-Theil and Ideal Fisher), the non-parametric programming (Malmquist input, output and graph; Malmquist total factor productivity) and parametric (Input and Output; total factor productivity) regression. Empirically, for single output-single input, this research show differences in annual productivity and productivity growth rate between and within each of the three approaches using Nebraska agriculture data from 1936 to 2004. The annual productivity growth rate from 1936 to 2004 was identical across non-parametric Malmquist output, input, graph and Malmquist total factor productivity, and parametric Malmquist total factor productivity. However annual productivity estimated by parametric Malmquist total factor productivity is identical to Ideal Fisher productivity.

     

Correction to: Determinants of agricultural entrepreneurship: a GEM data based study

International Entrepreneurship and Management Journal - The original article has been corrected. The spelling of author name Amit Kumar Dviwedi was incorrect and has now been corrected to Amit...     

Determinants of agricultural entrepreneurship: a GEM data based study

The aim of this study is to explain the determinants of entrepreneurship in agriculture industry. What are the drivers of early stage entrepreneurial activity of agri-business entrepreneur and how it is influenced by various cognitive and social capital factors? To answers these questions various driving factors of entrepreneurial activity have been explored from the literature. To achieve the objective, the study uses APS (Adult Population Survey) 2013 data of 69 countries provided by GEM (Global Entrepreneurship Monitor). Total number of respondents 1470, those who are alone or with others, currently trying to start a new business, including any self-employment or selling any goods or services to others in Agriculture Industry, were selected from the data set. To measure the influence of cognitive and social capital factors on early stage entrepreneurial activity logistic regression was employed. The findings show that those who see entrepreneurial opportunities, are confident in their own skills and ability, having personal relationship or social networks with existing entrepreneurs, and have invested in others business as business angels are more likely to become an entrepreneur. Additionally, fear of failure or risk perception does not prevent people to become entrepreneur. Policy implications have been discussed. This is one the first study of its kind and contributes to the existing literature by explaining agricultural entrepreneurship through an integrated approach of entrepreneurial cognition and social networking.