Bundling agricultural technologies to adapt to climate change

Farmers can respond to climate change by modifying their technologies or management practices, or both. In this paper, we examine the choice of crop, irrigation, and cover as a bundled decision by a farmer. Using discrete choice analysis and a cross section of farms from Israel, we test whether these decisions are sensitive to climate and find that they are. In the case of Israel, the farmers completely substitute capital for climate. Simulating increase in temperature suggests that warming would lead Israeli farmers to shift mainly to orchards under cover and irrigation. But it is likely that bundling adaptations will provide flexibility and sustainability for future farmers in many locations under climate change conditions.     

Choosing the two finalists

This paper studies a decision maker who for each choice set selects a subset of (at most) two alternatives. We axiomatize three types of procedures: (i) The top two: the decision maker has in mind an ordering and chooses the two maximal alternatives. (ii) The two extremes: the decision maker has in mind an ordering and chooses the maximal and the minimal alternatives. (iii) The top and the top: the decision maker has in mind two orderings and he chooses the maximal element from each.     

How to Count Patents and Value Intellectual Property: The Uses of Patent Renewal and Application Data

Patent counts are very imperfect measures of innovative output. This paper discusses how additional data—the number of years a patent is renewed and the number of countries in which protection for the same invention is sought—can be used to improve on counts in studies that require a measure of the extent of innovation. Simple weighting schemes are proposed, which may remove half of the noise in patent counts as a measure of innovative output. We describe models of the patent application and renewal processes whose parameter estimates can be used to assess the value of the proprietary rights created by the patent laws. We illustrate their use with estimates of how the value of patent protection would vary under alternative legal rules and renewal fees and with estimates of the international flows of returns from the patent system. Recent progress in the development of databases has increased the potential for this type of analysis.     

Risk adjusted discount rates and the present value of risky costs

In capital budgeting the correct risk adjusted discount rate for future cash flows is independent of whether the flow is a cost or a revenue. Contrary to a widely disseminated view in some popular textbooks and elsewhere, costs are not especially safe (nor risky), and accordingly costs should not be discounted at especially low risk adjusted discount rates. This paper analyzes capital budgeting within a portfolio model in which revenues and costs appear as “long’ and “short’ portfolio positions, respectively, and proves that costs are neither more nor less intrinsically risky than revenues.     

The Impact of the Entry of Biosimilars: Evidence from Europe

Biologics represent a substantial and growing share of the U.S. drug market. Traditional “small molecule” generics quickly erode the price and share of the branded product upon entry, however only a few biosimilars have been approved in the US since 2015, thereby largely preserving biologics from competition. We analyze European markets, which have had biosimilar competition since 2006. Using our own survey, we analyze how market features and public policies predict biosimilar entry, price, and penetration, finding significant heterogeneity across countries and products. Effective buyer institutions are associated with increased biosimilar penetration. Our estimates can inform ongoing policy discussions.     

Welfare consequences of water supply alternatives in rural Tunisia

Many economic studies have addressed the issue of inefficiency of public water supply in rural areas and the potential for improved service by private companies. Many of these analyses focused on identifying either willingness to pay or comparing average service costs and prices paid by customers. This paper performs a welfare analysis of two water supply systems—public and self owned—in rural Tunisia. The paper calculates consumer and producer surplus and compares the performance of the two systems from a social point of view. Results suggest that both systems are inefficient, mainly because of a production level that is low compared with production capacity.     

The Relative Efficiency and Implementation Costs of Alternative Methods for Pricing Irrigation Water

A useful means for achieving efficient allocation of irrigationwater is to put the right price tag on it. This article discussessome of the more pervasive pricing methods and compares theirefficiency performance, paying special attention to the impactof the cost of implementing each method on its efficiency. Thearticle uses an empirical example to demonstrate numericallythe relative efficiency of the different pricing methods andthe important role of implementation costs. The volumetric,output, input, tiered, and two-part tariff methods all can achieveefficiency, although the type of efficiency varies from onemethod to another. These methods also differ in the amount andtype of information, and the administrative cost, needed intheir implementation. The example indicates that water pricingmethods are most pronounced through their effect on the croppingpattern—more so than through their effect on water demandfor a given crop. Implementation costs have a large effect onwater tariffs and on welfare and hence should have an importantrole in determining the desirable method to use in any givenwater situation.     

ECONOMIC FREEDOM AND STATE BOND RATINGS

Are state bond ratings, ceteris paribus, related to economic freedom? We test for the relationship between economic freedom and an aggregate index comprised of ratings by Standard & Poor, Moody's, and Fitch. We also test for a relationship between economic freedom and the ratings by these three agencies individually. With a sample covering all 50 states for the period 1995–2008, the evidence strongly indicates that state bond ratings are positively and significantly related to overall economic freedom as well as three sub‐categories of economic freedom. Our results show that the quantitative impact of economic freedom on bond ratings is comparable to the effect of state real income and the unemployment rate. (JEL E43, H71)     

Integrating Leadership Constructs Into the Schwartz Value Scale: Methodological Implications for Research

The aim of the current paper was to address central conceptual and methodological complications in leadership studies, particularly as these have been detected in the Multifactor Leadership Theory and its principle instrument, the Multifactor Leadership Questionnaire. To this end, a methodological tool is presented that integrates three central leadership constructs into the Schwartz Value Scale (SVS). The tool offered here, which is grounded on the recent differentiation between transformational and transformative leadership, awards conceptual and methodological clarity and addresses incongruities that are insufficiently explained by current models. Integrating the Multifactor Leadership Theory with the SVS offers a more complex and conceptually sound methodological basis that can be used for leadership research in general and the connection between leaders’ motivational values and behavior in particular.