Capacity Depreciation, Implicit Rental Price, and Investment Demand for Farm Tractors in Canada

Among the different factors pertaining to the demand for durable inputs in agriculture, the way the input depreciates over time is an important issue. This study investigates four alternative capacity depreciation patterns for farm tractors. While published estimates from government agencies implicitly assume convex capacity depreciation patterns, the results of this study demonstrate that the use of agricultural engineering data which depict a concave rather than convex pattern better reflect farmers' investment decisions. An implicit rental price measure is also proposed to account for the fact that the purchase price of a durable input is not an appropriate measure of the implicit rental cost of the asset.
Parmi les facteurs déterminants de la demande pour les biens durables en agriculture, la rapidité avec laquelle I'intrant se déprécie est certainement importante lors des décisions d'investissement. La présente etude analyse quatre différents scénarios de dépréciation pour les tracteurs agricoles au Canada. Bien que les données publiées par les agences gouver-nementales supposent implicitement que les biens durables se déprécient à un taux annuel constant, les résultats de cette etude montrent que I'utilisation de données basées sur la valeur productive de I'intrant telle que calculée sur une base expkrimentale donne de meil-leurs résultats statistiques dans I'estimation de la demande pour les tracteurs agricoles. De plus, une mesure du coût implicite de I'intrant est également proposée pour tenir compte du fait que le prix d'achat n'est pas une mesure appropriée dans I'analyse de la demande pour un bien durable.     

Pareto Optimal Trade in an Uncertain World: GMOs and the Precautionary Principle

Optimal trade policy in an uncertain world is examined. Decision-maker attitudes toward uncertainty are represented in terms of the Gilboa–Schmeidler (1989) maximin expected-utility (MMEU) model. The central result is that in a two-country, general-equilibrium setting with both trading partners possessing an MMEU preference structure, Pareto optimality can require one trading partner to absorb all uncertainty in the economy if its set of priors is a subset of its trading partners. An immediate corollary is that autarky is Pareto optimal if the trading partner with the more inclusive set of priors either chooses or is endowed with a nonstochastic technology.     

Modelling stochastic crop response to fertilisation when carry-over matters

Soils in a large part of Niger's agricultural area are sandy and very low in nitrogen (N), phosphorus (P) and organic matter. This low soil fertility combined with low and erratic rainfall constitutes a severe constraint on food cropping in the area. Although agronomists have advised chemical fertilization as a means of improving soil fertility, little fertilizer has been used in this area of the world. The economic management of soil fertility in the agricultural area of Niger is analyzed using a dynamic model of farmer decision-making under uncertainty. The model is based on agronomic principles of plant growth and accounts for the carry over of P, an immobile nutrient. At current input prices, a soil P content of at least 14 ppm is found to be desirable. This target is above the natural soil fertility level of about 3 ppm. It can be maintained with a moderate annual application (12 kg P₂O₅ ha^?1) of simple superphosphate. Results also suggests that returns to N fertilization are too low and variable to warrant the use of this input.     

Supply Response under Risk: Implications for Counter-Cyclical Payments' Production Impact

This study investigates the role of risk in farmers' acreage decisions for major field crops in the North Central region by revisiting an earlier study by Chavas and Holt. The empirical model is forward-looking and reflects better variable measurement. We test the effects of wealth and revenue risk on supply response. Estimated results are also used to examine the production impact of counter-cyclical payments (CCPs). We find that the effects of risk on supply response are not strong. An increase in initial wealth would lead to greater crop acreage, consistent with decreasing absolute risk aversion. The effect of CCPs on production appears to be negligible.     

Forest Conservation in Costa Rica when Nonuse Benefits are Uncertain but Rising

Stochastic dynamic programming is used to investigate optimal holding of primary tropical forest in humid Costa Rica when future nonuse benefits of forest conservation are uncertain and increasing. The quasi-option value of maintaining primary forests is included as a component of investment in natural capital. Although the impact of uncertainty on conservation incentives is substantial, our results indicate that a rising trend in future benefits and compensation by the international community for beneficial spillovers are more important factors in determining optimal holdings of forest stocks. Without compensatory payments, however, further deforestation may be warranted.     

Can you handle failure?

Handling failure and blame is key to managerial success. But roughly 70 % of Americans have a personality type that tends to react inappropriately when things go wrong. Some people are extrapunitive, always pointing a finger at someone else. Others are impunitive, denying there's a problem or that they played any role. And still others are intrapunitive, heaping too much blame on themselves and seeing disasters where none exist. Fortunately, there are ways to fix such flawed responses. The first step is to cultivate self-awareness; several personality tests can help you assess your interaction style. Next, deepen your political awareness to better understand what messages others are receiving. Once you've identified your bad habits, you can move toward more-adaptive responses. Dattner and Hogan describe several strategies that can benefit any of the personality types. You should make sure to listen and communicate well, reflect on the situation and the people involved, think carefully before acting, and look for lessons when mistakes do happen. Using detailed examples, the authors illustrate how people with the various personality types are apt to react to specific failures and explain what they might do differently. They also offer insights to help you recognize when your bosses, peers, or subordinates fit into one of the problematic categories and suggest ways to influence their behavior. The taxonomy and tactics they present will help you approach failure with an open mind and react in a balanced, constructive way.     

Explaining asset pricing puzzles associated with the 1987 market crash

The 1987 market crash was associated with a dramatic and permanent steepening of the implied volatility curve for equity index options, despite minimal changes in aggregate consumption. We explain these events within a general equilibrium framework in which expected endowment growth and economic uncertainty are subject to rare jumps. The arrival of a jump triggers the updating of agents' beliefs about the likelihood of future jumps, which produces a market crash and a permanent shift in option prices. Consumption and dividends remain smooth, and the model is consistent with salient features of individual stock options, equity returns, and interest rates.     

Report data identify risk areas for improper payments

Hospitals should take several steps in using data from the Program for Evaluating Payment Patterns Report (PEPPER) to enhance compliance efforts and identify risk areas for improper payments: Designate one person to monitor PEPPER releases and download the quarterly report. Review the reports and list all areas where the hospital is most at risk for improper payments. Prioritize at-risk areas with the national comparison, followed by jurisdictional and state comparison. Conduct small-sample case reviews in at-risk areas and determine next steps, such as process improvement or rebilling. Include hospital finance, compliance, legal, case management, and coding experts as part of discussion.