A critical assessment of the political preference function approach in agricultural economics

The policy preference function (ppf ) approach has become popular with economists seeking to explain the origin of government policies. In this paper, a distinction between positive and normative work with the ppf concept is made. Positive work is shown to suffer from a variety of shortcomings including the misspecification of traditional ppfs and the failure to consider the importance of institutions, constraints and the interaction between different commodity policies. These weaknesses are reflected in the counter-intuitive results of a simple ppf model designed to reflect the interaction between the EC's wheat and barley policies. Furthermore, it is demonstrated that ppf weights change as a result of both political preferences and market parameters. Hence, changes in ppf weights cannot be attributed to changes in preferences alone. Tests of the axioms of revealed preference theory are used to demonstrate that even though ppf weights derived for the EC's wheat and barley markets have fluctuated considerably since the early 1970s, we are not able to conclude that there has been a shift in political preferences. The paper concludes with some comments about the use of ppfs in a normative framework. The underlying assumption that policy-makers optimise seems, not surprisingly, often to lead practitioners to the conclusion that observed policies are not so bad after all. Economists should also beware of the tendency to overlook possible differences between the ppf and the social welfare function.     

State abortion policy and infant health: A simulation model of the impact of hypothetical patterns of state laws proscribing abortion services

Prior research suggests that the availability of abortion services may affect the proportion of observed births with poor outcomes (e.g., low birth weight). Recent Supreme Court decisions and changes in the composition of elected officials of state governments have increased the saliency of state discretion over abortion related policies. This paper presents results from a simulation model of the effects of hypothetical state laws prohibiting abortion on observed measures of infant health in the states regarded as most likely to adopt laws significantly restricting abortion access. Under several model scenarios, both the incidence of low birthweight infants and neonatal mortality among blacks are predicted to increase substantially in states adopting restrictive abortion laws. The predicted impact among whites, however, is relatively small. Helpful comments on previous drafts were provided by Janet Bronstein, Jacob Klerman, and Michael Morrisey. Aaron Stinnett provided excellent research assistance. This research was funded in part by a grant from the Agency for Health Care Policy and Research (R01-HS06685). The authors are responsible for the views expressed.     

Susanne Fengler,Universität Dortmund

Ohne Zusammenfassung     

Levels,trends and consistency of employment and unemployment figures in South Africa

This article appraises the similarities and dissimilarities between the major sources of information on the South African labour force, ie the CSS Employment Series, the Standardised Employment Series and recent household surveys. It concludes that the generally bleak picture of very high unemployment rates presented in the household surveys is broadly accurate. Further, race, gender and location are major determinants of labour‐force participation and employment. Finally, the article highlights the lack of work experience among the unemployed.     

Unravelling the JPMorgan spoofing case using particle physics visualization methods

On 29 September 2020, JPMorgan was ordered to pay a settlement of $920.2 million for spoofing the metals and Treasury futures markets from 2008 to 2016. We examine these cases using a visualization method developed in particle physics (CERN) and the messages that the exchange receives about market activity rather than time-based snapshots. This approach allows to examine multiple indicators related to market manipulation and complement existing research methods, thereby enhancing the identification and understanding of, as well as the motivation for, market manipulation. In the JPMorgan cases, we offer an alternative motivation for spoofing than moving the price.     

Partner country selection between development narratives and self-interests: A new method for analysing complex donor approaches

Partner country (PC) selection lies in the centre of development policy decision-making of donor countries and institutions, and plays a significant role in shaping aid patterns. This paper proposes a comprehensive analysis contrasting donor intentions in PC selection with actual aid flows. Having analysed selected members of the Development Assistance Committee of the Organization for Economic Cooperation and Development, namely, the European Union, France, Germany, Japan, Netherlands, Sweden, the United Kingdom and the United States of America, we suggest that (1) donors might not only be either altruistic or self-interested but also motivated by an intention to contribute to the provision of global public goods; (2) self-interest in aid provision can be an explicitly-stated strategy, contrary to what has been argued in the majority of the literature, which often treats self-interest as a non-stated donor intention; and (3) donors' self-interested intentions do not always lead to a less development-oriented donor approach.     

Distance and Border Effects on Price Transmission: A Meta‐analysis

Using price transmission estimates for 1,189 cereal market pairs extracted from 57 published studies in a meta‐analysis, we examine whether geographic distance and separation by an international border affects the strength and speed of price transmission. Our findings indicate that a border reduces the likelihood that two cereal prices will be cointegrated by 23%, and each additional 1,000 km of distance reduces the probability of cointegration by 7%. The speed of price transmission is on average 13 percentage points per period faster between prices that are located within the same country compared with cross‐border price pairs. Our meta‐analysis also indicates that increasing distance strongly reduces the speed of price transmission on domestic markets, but that the effect of distance on the speed of transmission is considerably weaker for trade over longer international distances. Overall, these results confirm expectations and complement the findings in the trade literature that borders and distance affect trade flows and price dispersion.     

Tax and spend or spend and tax? An empirical investigation for Austria

The aim of this contribution is to discriminate between the rivallingspend and tax andtax and spend hypotheses in order to check empirically the relationship between government spending and taxation decisions in Austria. For that purpose, the authors estimate a tri-variate structural VAR Model of Austria's public sector that, besides expenditures and revenues, includes aggregate income as an additional variable. They implement impulse-response functions and frequency domain techniques in order to identify the causal relation between government outlays and receipts. The budget making process is interpreted as an error correction model which allows to estimate to what extent revenues and expenditures are adjusted whenever the government sees its long run budget constraint violate. The empirical findings strongly support the spend and tax view that budget decision-making is significantly dominated by the expenditure side in Austria.We are gratefully indebted to Peter Weiss and three anonymous referees for many valuable comments and suggestion.     

Comparing support for organic and conventional farming in the European Union using an adjusted Producer Support Estimate

This paper compares support for organic and conventional farmingin 2001, using the methodology of the Producer Support Estimate(PSE). Although market price support for organic products isdifficult to determine, our case study-based estimates indicatethat the PSE for organic farming ranged between 41 and 44 percent in the EU, compared with 35 per cent for conventional farming.However, the structure of support for the different commoditiesis similar between organic and conventional farming, althoughdirect payments are generally higher for organic farming. Noclear link between the level of support and the share of organicfarming in Member States could be detected. An annual calculationof separate PSEs for both forms of farming could provide usefulinformation about developments in support.