Stability of Farm Income and the Role of Nonfarm Income in U.S. Agriculture

This study measures the variability in real net farm income in the U.S. agricultural sector and per farm and determines if variability has diminished over 1933 to 1999. Second, the role of nonfarm income in reducing the variability in total farm household income is examined. Results indicate that the variability in real net farm income in the sector and at the farm level has not diminished and that nonfarm income has helped to reduce the variability in total farm household income.     

The incidence of Cash for Clunkers: Evidence from the 2009 car scrappage scheme in Germany

This paper investigates the German car scrappage program, focusing on the incidence of the premium. We ask how much of the €2500 ($3500) buyer subsidy is actually captured by the demand side. More precisely, we analyze the program’s impact on different car segments, allowing for heterogeneity in incidence at different points in the vehicle price distribution. Using a unique microtransaction data set, we find that the incidence of the subsidy strongly and significantly varies across price segments. Subsidized buyers of cheap cars paid a little more than comparable buyers who did not receive the subsidy, indicating incidence amounts slightly below 100 %. For more expensive vehicles, subsidized buyers were granted large extra discounts on top of the government premium, translating into incidence amounts considerably greater than 100 %. Taken together, this results in an aggregate incidence amount of up to plus €350 million, suggesting that the positive effect for expensive cars overcompensates the negative effect for small cars.     

Agriculture,innovational ability,and dynamic comparative advantage of LDCs

The goal of this paper is twofold: (1) to model a process of development based on the notion that the engine of growth is the generation of new ideas by skilled individuals, and (2) to explore the role of agricultural productivity growth in such a process. The key ingredients of our model are: preferences consistent with Engel's Law, and the asymmetry arising from there being a greater scope in industry than in agriculture for incremental innovation.     

Price behaviour in European countries: testing the law of one price in the short– and long–run at various levels of aggregation

The objectives of this paper are to test the relaltive version of the law of one price in the short and the long run at various levels of aggregation for traded goods. The use of an error-correction model is made to test the validity of the hypothesis in the short run with a built-in tendency to one price in the long run. Using unit value trade data at the aggregate, 2-digit and 3-digit levels of the Standard International Trade Classification, the law of one price is generally rejected in the short run, although a long-run proportional relatlionship between prices of fairy homogeneous products are used the hypothesis is rejected both in the short and long run. This suggests that non-price changes which are likely to be incorporated in unit values are probably gradual and affect EEC countries in a similar manner. Price changes, however, are somewhat erratic and hence with unitvalue data, the law of one price in the long run is not contradicted, while it is refuted at the disaggregate level when price data are used.     

Do Chinese farmers benefit from farmland leasing choices? Evidence from a nationwide survey

Using China Family Panel Studies (CFPS), this study investigates factors associated with the choice of farmland leasing strategies and the impact of leasing options on farm performance. Particular attention is given to off‐farm employment and farm subsidies. Additionally, the study applies a selectivity‐based approach to assess the relationship between farmland leasing choices and farm businesses’ performance. Off‐farm employment, older and educated operators, large farms and old‐age pension plans increase the likelihood of leasing out farmland. Part‐time off‐farm employment, grain subsidies and mechanised farms increase the likelihood of leasing in farmland. Finally, the selectivity correction terms in the value of crop production are significantly negative in the choices of farmland leasing, indicating the presence of sample selection effects. Accounting for selectivity is essential to ensure unbiased and consistent estimates.     

Investment,subsidies, and pro‐poor growth in rural India

This article reviews the trends in government subsidies and investments in and for Indian agriculture; develops a conceptual framework and a model to assess the impact of various subsidies and investments on agricultural growth and poverty reduction; and presents reform options with regard to re‐prioritizing government spending. Subsidies in credit, fertilizer, and irrigation have been crucial for small farmers to adopt new technologies particularly during the initial stage of the green revolution in the late 1960s and 1970s. But it is now investments in agricultural research, education, and rural roads that are the three most effective public spending items in promoting agricultural growth and reducing poverty.