Price integration in the Australian rock lobster industry: implications for management and climate change adaptation

Rock lobster fisheries are Australia's most valuable wild fisheries in terms of both value of production and value of exports. Different states harvest and export different lobster species, with most of the landings being sent to the Hong Kong market. A perception in the Australian lobster industry is that the different species are independent on the export market, such that a change in landings of one species has no impact on the price of the others. This study investigates the market integration of Australian exports to Hong Kong for the four species and different exporting states. Our results indicate all four species and producers/export states are perceived to be substitutes for one another, so that, in the long run, prices paid to operators in the industry will move together. The integrated nature of the Hong Kong export market for Australian lobster suggests that the potential impacts of alternative fisheries management and development strategies at state and species levels cannot be considered in isolation, at least from an economic perspective. In addition, impacts of external shocks affecting production in one state (e.g. climate change) can be expected to affect all Australian lobster fisheries.     

The Potential for Cross‐Compliance in Canadian Agricultural Policy: Linking Environmental Goals with Business Risk Management Programs

Environmental cross‐compliance links agricultural program payments to producer commitments to achieve agri‐environmental policy goals. The objective of this study is to determine the feasibility of using cross‐compliance to achieve environmental goals in a Canadian policy context. While Canadian policy makers have flirted with cross‐compliance, with the exception of phosphorus regulations for Quebec hog farms, they have never adopted this approach. The potential for effective cross‐compliance depends on producer participation, producer compliance with regulations, environmental performance, and overall welfare implications. This study reviews the application of cross‐compliance in the United States and EU with regard to the potential application to Canadian agriculture. Policy options are considered which link current business risk management (BRM) programs to alternative environmental regulations (wildlife habitat preservation, nutrient management plans, and beneficial management practices for nutrient management). In general, individual Canadian agricultural support program do not provide sufficient incentives for farmers to participate in cross‐compliance. However, if support programs are combined, it is better to link programs that redistribute income with environmental programs than to link agriculture programs that already address specific market failures.     

High Natural Gas Prices in California, 2000–2001: Causes and Lessons

The market prices of natural gas delivered to California rose to unprecedented levels in late 2000 and remained well above levels elsewhere in the country until the summer of 2001 (Figure 1). In addition to the direct impact on natural gas consumers, the high natural gas prices were also a major cause of the high electricity costs suffered by California and other western states in the June 2000–June 2001 period. This paper describes the market and regulatory circumstances that led to such high prices over such an extended period. Lessons are drawn from this experience for other regions wishing to understand and avoid such problems in natural gas markets.     

Trade, foreign firms and economic policy in Indonesian and Thai manufacturing

This paper first examines the rapid growth and changing composition of manufactured exports in Indonesia and Thailand, highlighting the rapid growth of office and computer machinery and electric machinery, somewhat slower growth of non-electric and transportation machinery, as well as the low growth of previously large exports of textiles apparel. Second, the important contributions of foreign multinational enterprises (MNEs) to export growth in the machinery industries, particularly in electric, office, and computing machinery, are documented. Third, the paper describes trade policies in all these industries in some detail, emphasizing how low protection was a key facilitator of rapid export growth in the MNEs that dominated the electric, office, and computing machinery industry, while high protection reduced incentives to export among MNEs in the transportation machinery industry.     

Production Effects of the European Union's Single Farm Payment

Since 1992, reform of the EU's Common Agricultural Policy has involved several rounds that have gradually changed the method of support from market‐based intervention purchases to direct producer payments. The Single Farm Payment (SFP) was introduced most recently and is claimed to be decoupled from production decisions. This study examines whether or not the SFP induces extra production. The study finds that the SFP provided less production incentives and is less trade distorting than the prior system of compensatory payments. Lessons from the EU policy reform for agricultural policy reform in Canada are also considered. Depuis 1992, la réforme de la Politique agricole commune (PAC) de l'UE a fait l'objet de plusieurs négociations qui ont peu à peu changé les formes de soutien, du système d'achat à l'intervention fondé sur le marché aux paiements directs versés aux producteurs. Le régime de paiement unique (RPU) a été mis en place plus récemment, et l'on prétend qu'il est indépendant des décisions de production. Dans la présente étude, nous avons examiné le RPU afin de savoir s'il stimulait ou non la production supplémentaire. Selon notre étude, le RPU offre moins d'incitatifs de production et entraîne moins de distorsion commerciale que le régime de paiements compensatoires antérieur. Nous avons aussi examiné les leçons qui pourraient être tirées de la réforme de la politique agricole de l'UE et appliquées à une réforme de la politique agricole au Canada.     

The Determinants of Life Expectancy: An Analysis of the OECD Health Data

This study considers an aggregate life expectancy production function for a sample of developed countries. We find that pharmaceutical consumption has a positive effect on life expectancy at middle and advanced ages but is sensitive to the age distribution of a given country. Thus, ignoring age distribution in a regression of life expectancy on pharmaceutical consumption creates an omitted-variable bias in the pharmaceutical coefficient. We find that doubling annual pharmaceutical expenditures adds about one year of life expectancy for males at age 40 and slightly less than a year of life expectancy for females at age 65. We also present results for lifestyle inputs into the production of life expectancy. For example, decreasing tobacco consumption by about two cigarettes per day or increasing fruit and vegetable consumption by 30% (one-third pound per day) increases life expectancy approximately one year for 40-year-old females.     

The use of spectral analysis to validate peanning models

Statistical fit of model predictions to empirical evidence is found to be an insufficient condition for establishing the validity of a planning model where the dynamic behavior is of particular importance. The paper describes a spectral analysis statistical test that can be used to validate the structure of a planning model by comparing the time series generated by the model with the actual time series of events for the real system under study. Validation of an ambulance simulation model is reported in which the model apparently was valid based on classical goodness of fit tests of aggregate data. However, following a spectral analysis of the simulation results, an entirely new method of generating incidents was found to be necessary. The resulting model then was able to duplicate realistically the essential cyclical nature of hourly demand for emergency care observed in the real system which periodically created excessive busy and idle periods not realized in the structure of the original model.     

Rationality,foolishness, and adaptive intelligence

Technologies of model‐based rationality are the core technologies of strategic management, having largely replaced earlier technologies that placed greater reliance on traditional practice or on communication either with the stars or with the gods. The technologies used by organizations in their pursuit of intelligence can be imagined to change over time as a result of responding to the successes and failures associated with the technologies. Although technologies of rationality seem clearly to be effective instruments of exploitation in relatively simple situations and to derive their adaptive advantage from those capabilities, their ventures in more complex explorations seem often to lead to huge mistakes and thus unlikely to be sustained by adaptive processes. Whether their survival as instruments of exploratory novelty in complex situations is desirable is a difficult question to answer, but it seems likely that any such survival may require hitchhiking on their successes in simpler worlds. Survival may also be served by the heroism of fools and the blindness of true believers. Their imperviousness to feedback is both the despair of adaptive intelligence and, conceivably, its salvation. Copyright © 2006 John Wiley & Sons, Ltd.     

IS ECONOMIC GROWTH GOOD FOR THE POOR? TRACKING LOW INCOMES USING GENERAL MEANS

We propose the use of an alternative methodology to track low incomes based on Atkinson's “equally distributed equivalent income” functions or “general means” and present a new characterization to justify their application. To evaluate the effects of growth on lower incomes, growth rates are compared for two income standards: the ordinary mean and a low‐income‐sensitive general mean. The question is: How closely related are these two variables? After estimating the growth elasticity, we find that it is not significantly different from zero. Thus, it cannot be concluded that poorer incomes grow proportionately to increases in the average income.