Crop Insurance as a Strategy for Adapting to Climate Change

Financial insurance for extreme events can play an important role in hedging against the implications of climate change. This paper combines a comprehensive estimation strategy and a unique panel dataset to study the role of financial insurance in farmers' welfare under uncertainty. Data are drawn from a large Italian farm panel dataset. We find that (i) demand for insurance products is likely to increase in response to climatic conditions, and (ii) that the use of insurance reduces the extent of risk exposure. We also find that farms growing more crops are less likely to adopt the insurance scheme. This confirms what is found in the theoretical literature. Crop diversification can be a substitute for financial insurance in hedging against the impact of risk exposure on welfare.     

Good standing and cooperation

Indirect reciprocity is generally considered one of the leading mechanisms to explain how cooperation may emerge by natural selection. The basic intuition is that establishing a reputation of being a helpful individual increases the probability of being in turn helped. Two models have been proposed to describe how indirect reciprocity may work: the standing model (Sugden 1986/2004 in The economics of rights, cooperation and welfare. Blackwell, Oxford.) and the image-scoring model (Nowak and Sigmund 1998a in Nature 393:573–577, b in J Theoretical Biol 194:561–574). Although there is evidence that the former model would perform better under a wide set of circumstances, it is often maintained that it requires individuals with an implausibly large capacity of processing recursive information. In this paper, I argue that this is not actually the case. I further emphasize that even if the hypothesis of indirect reciprocity is unable to give a fair account of the ecological bases of cooperation, it has inspired a deal of research precious to social sciences.     

A social welfare function characterizing competitive equilibria of incomplete financial markets

A classic characterization of competitive equilibria views them as feasible allocations maximizing a weighted sum of utilities. It has been applied to establish fundamental properties of the equilibrium notion, such as existence, determinacy, and computability. However, it fails for economies with missing financial markets.We give such a characterization for economies with a single commodity and missing financial markets, by an amended social welfare function. Its parameters capture both the relative importance of households welfare, through the classic welfare weights, as well as the disagreements among them as to the value of the missing markets.As a by-product, we identify the dimension of the set of interior equilibrium allocations.     

Risk-type density diagrams by crash type on two-lane rural roads

The research presented here aims to plot density diagrams per road crash risk type to identify all possible scenarios where driving is less than safe. The starting point was the prediction of injury crash rate on horizontal homogeneous segments of two-lane rural roads for three main injurious crash types (head-on/side collisions, rear-end crashes, and single-vehicle run-off-road crashes) as observed on the network. A careful analysis of the database shows that a wide variety of factors appear to be influenced or associated with the crash dynamic, as follows: the road scenario (combination of infrastructure and environmental conditions found at the site at the time of the crash), mean lane width, the horizontal curvature indicator (measurement of the curvature change rate), and mean speed. Crashes recorded from 2003 to 2010, of which 1597 were injurious, and 645 resulted only in damage to property, were analyzed on more than 3700?km of road network in Southern Italy. Generalized estimating equations with a negative binomial distribution were implemented. Risk-type density charts were plotted to thoroughly identify all possible combinations of existing explicative variables producing hazardous conditions on the road. The different shades in the diagrams represent different ranges of injurious crash rates: the white band shows low levels, while a black band shows high values. It is not possible to consider working on an explanatory variable to reduce hazardous conditions on the road network without also considering how this variation might affect the influence of the remaining explanatory variables on crash phenomena and, consequently, on the predictive model. The risk maps make it possible to keep under control in a simple and immediate approach the way each variable as a result of variations of a part or of all.     

Network formation with sequential demands

This paper introduces a non-cooperative game-theoretic model of sequential network formation, in which players propose links and demand payoffs. Payoff division is therefore endogenous. We show that if the value of networks satisfies size monotonicity, then each and every equilibrium network is efficient. The result holds not only when players make absolute participation demands, but also when they are allowed to make link-specific demands.     

Technology development in developing countries: The case of a private R & D institution in Brazil

Research Development (RD) is concerned with the conversion of inventions (i.e. new ideas) into innovations (i.e. new products, processes and services in the market-place). Empirical evidence indicates that the rate of success of RD is small. In the innovation chain of events the scientific or technical accomplishment is but one link, a necessary but not sufficient condition of success. Often the market is the decisive factor.
Many research and development organizations (R & DOs), especially those funded privately, allocate their resources with a strong orientation towards satisfying perceived market needs. If this incentive persists during the R & D work the RD effort will probably be much facilitated.
In the light of the above concepts, the Brazilian R & D and RD experiences are reviewed with practical examples and emphasis on the efforts of Centro de Tecnologia Promon—CTP (Promon Technology Center). CTP works on non-conventional energy, industrial process development and telecommunication product development.
The experience reported is not intended to serve as a general solution to R & D or RD problems in the developing world. The purpose is rather to suggest alternative pathways and to point out the importance of a diversified approach to the tough task of closing the innovation loop.     

Long-period Positions and Economic Change. A rejoinder

Roncaglia and Nell have criticised the interpretation of Sraffa's normal prices as centres of gravitation for actual prices. Roncaglia mainly focuses on the interpretation of the notion of gravitation in Smith and on the meaning of the ‘given outputs’ in Sraffa. Nell attempts to confine the relevance of Sraffa's theory to specific historical circumstances and to find a role for Sraffa's prices in his version of post-Keynesian price theory. This rejoinder criticises the case made by both Roncaglia and Nell, and defends Sraffa's centre of gravitation view.     

Putable common stock

The underpricing of initial public offerings is a well-documented phenomenon in the financial literature. The purpose of this paper is to show how this empirical regularity could be solved by an appropriate choice of financing instruments, namely, by an intelligent mix of common stocks and put options. The latter additional instrument, modeled in this paper as a lump sum paid by insiders of the firm to outsiders, helps alleviate the asymmetry of information existing between insiders and outsiders of the corporation, allowing good firms to sell the package they offer at the full information value.     

A model of dumping and protectionism in the United States

Zusammenfassung Dumping und Protektionismus in den Vereinigten Staaten-ein Modell. — Der Autor untersucht die Beziehung zwischen Antidumpingma\nahmen und dem neuen Protektionismus, reformuliert und erweitert die Theorie des Dumping und sch?tzt ein Modell mit simultanen Gleichungen, um die Ursachen und Wirkungen von Antidumpingma\nahmen in den Vereinigten Staaten zu überprüfen. Der empirische Test des Modells zeigt, da\ die Durchdringung des amerikanischen Marktes mit Importwaren negativ korreliert ist mit dem Prozentsatz der erfolgreichen Antr?ge auf Antidumpingma\nahmen, aber positiv mit der überbewertung des Dollar und dem Grad an Offenheit der US-Wirtschaft. Die Zahl der registrierten Antidumpingantr?ge steht in direktem Verh?ltnis zum wirtschaftlichen Wachstum der Vereinigten Staaten im Vergleich zu anderen Industriel?ndern, und der Prozentsatz der erfolgreichen Antidumpingantr?ge ist negativ korreliert mit der Handelsbilanz, der H?he des Volkseinkommens und der Anzahl der registrierten Antidumpingantr?ge.

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Résumé Un modèle du dumping et du protectionisme aux Etats-Unis. — Cette étude examine les relations entre l’action anti-dumping et le nouveau protectionisme, revise et étend la théorie du dumping et estime un modèle d’équations simultanées pour examiner les causes et les effets de l’action anti-dumping aux Etats-Unis. Le test empirique du modèle démontre que la pénétration de l’importation dépend (i) de sens inverse du rapport des requêtes anti-dumping déposées, mais couronnées de succès et (ii) de sens positif de la surévaluation du dollar et du degré que l’économie américaine est ouverte. Le nombre des requêtes anti-dumping déposées dépend directement du croissance économique des Etats-Unis en relation aux autres pays industriels. Le rapport des requêtes anti-dumping dépend de sens inverse de la balance commerciale, du niveau du produit domestique et du nombre des requêtes anti-dumping déposées.

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Resumen Un modelo de dumping y proteccionismo para los EE UU. — Este trabajo examina la relatión entre una medida antidumping y el nuevo proteccionismo, reformula y extiende la teoria del antidumping y estima un modelo de ecuaciones simultáneas para estudiar las causas y efectos de medidas antidumping en los EE UU. El test empirico del modelo muestra (1) que la penetration con importaciones esta inversamente relacionada con el porcentaje de peticiones antidumping exitosas registradas y afectadas positivamente por la sobrevaluación del dólar y el grado de apertura de la economia de los EE UU, (2) que el numéro de peticiones antidumping registradas esta relacionado directamente con el credimiento de los EE UU relativo al de otros pa?ses industriales, y (3) que el porcentaje de peticiones antidumping exitosas está inversamente relacionado con el balance comercial, el nivel de ingreso nacional real y el núméro de peticiones antidumping registradas.

     

Geographic Indications and Farmer‐Owned Brands: Why Do the US and EU Disagree?

Geographic Indications (GIs) identify the geographic origin of products whose quality, reputation or other characteristic can be attributed to the geographic origin. We focus on a subcategory of GIs, Farmer Owned Brands. Like GIs in general, FOBs require governmental assistance to protect the property rights of the brand owners. GIs are receiving increased attention because many countries and producer groups realize the importance of property right protection for GIs, and are negotiating such rights in international forums like the World Trade Organization. Here we explore possible reasons for US opposition to EU policies conferring special property right protection to GIs. We conclude that the most plausible explanation for the US position is the lack of a domestic constituency advocating greater GI protection, which means that the US position represents the interests only of those who stand to lose from such protection. It will take a change in US property right regulations and a widespread understanding and adoption of the concept among producer groups before the political pendulum changes within the US. This process will take several years and until then we will have the unusual situation of the US opposing the only market-based solution to the US rural development problem that we are aware of.