Country of origin labeling for complex supply chains: the case for labeling the location of different supply chain links

We investigate the value of a country of origin label (COOL) that separately identifies the geographic location of different stages in a food product's supply chain. We estimate the willingness‐to‐pay (WTP) of U.S. consumers for a packaged cereal product where the key grain ingredient may be grown in one country and processed in a second country (multicountry supply chain) and compare it to equivalent products that have both stages located in a single country. We find consumer WTP for products with single‐country and multicountry supply chains are statistically different, meaning that simplifying a multicountry label by listing only the country where the ingredients are grown or only the country where the ingredients are processed can result in different consumer values. We also find that for countries with a poor quality reputation, consumers respond more negatively when that country has the “last touch” than when that country's involvement is limited to upstream supply chain links.     

The effects of China's Sloping Land Conversion Program on agricultural households

In the late 1990s, China aimed to mitigate environmental degradation from agricultural production activities by introducing the world's largest “Payments for Environmental Services? program: the Sloping Land Conversion Program (SLCP). We develop a microeconomic Agricultural Household Model, which can model the production, consumption, and nonfarm labor supply decisions of agricultural households in rural China in a theoretically consistent fashion. Based on this theoretical model, we derive an empirical specification, which we econometrically estimate using the Hausman–Taylor method and a large longitudinal farm household data set. The empirical results significantly differ between regions, but are generally consistent with the results of our theoretical comparative static analysis, for example, that the SLCP significantly decreases agricultural production. While the SLCP only increases nonfarm labor supply and total consumption in some regions, these effects could not be observed in others. The recent reduction of the SLCP compensation payment rates generally had negligible effects on agricultural production and off‐farm work and only very small effects on household consumption.     

Estimating the impact of farmer field schools in sub‐Saharan Africa: the case of cocoa

This study measures the economic impact of the first phase of the Cocoa Livelihood Program (CLP‐I), a current World Cocoa Foundation (WCF) project, sponsored by the Bill and Melinda Gates Foundation and aimed at improving the livelihood of over 200,000 small cocoa producers in sub‐Saharan Africa via training, crop diversification, and farmer‐based organizations. Using data collected from 2,048 pre‐ and post‐CLP‐I interviews of cocoa producers in Ghana, Cote d'Ivoire, Nigeria, and Cameroon, the results show that yield enhancements attributable to CLP‐I are 32%, 34%, 50%, and 62% in Ghana, Côte d'Ivoire, Nigeria, and Cameroon, respectively. Using a total program cost of $151–$200 per beneficiary and estimated annual benefits of $109–$322 per beneficiary over 25 years, the benefit‐cost ratios are estimated to range from $18 to $62 for every dollar spent on human capital development. These results suggest the WCF should endeavor to increase the number of farmers who receive all, not some, of the components of the program. This would not only help ensure that each producer obtains as much human capital as possible from each of the training programs but increases the probability of reaching the CLP goal of doubling the income of cocoa‐growing households.     

Resource saving and productivity enhancing impacts of crop management innovation packages in Ethiopia

Crop management innovations are often not discrete fixed stand‐alone options—and their adoption may imply various combinations and adaptations. This potentially confounds their impact assessment. This article assesses the resource saving and productivity enhancing impacts of a crop management package revolving around minimum tillage in maize‐based farming systems in northwest Ethiopia. An endogenous switching regression model was applied to plot‐ and household‐level survey data collected from 290 rural households operating 590 maize plots during the 2012 production year. Controlling for variations in plot and household characteristics, the average effect of minimum tillage package (minimum tillage package) on maize productivity is 0.44 t/ha. Compared to conventional practice (CP), adoption of the MTP decreased the average male and female labor use in maize production by 14.4 and 8.2 person‐days per ha, respectively. Similarly, MTP adoption decreased draft power use for land preparation by 13.2 pair of oxen‐days per ha. Compared to CP, in general, there is a considerable short‐run maize productivity gain and reduction in labor and draft power use under MTP.     

Social Interaction Effects in Disability Pension Participation: Evidence from Plant Downsizing*

We estimate the magnitude of social interaction effects in disability pension participation among older workers in Norway. The problem of omitted variable bias is addressed using the exposure of an individual's neighbors to plant‐downsizing events as an instrument for the disability entry rate among the individual's previously employed neighbors. Our instrumental variable (IV) estimates suggest that an increase of one percentage point in the participation rate of previously employed neighbors increased the subsequent four‐year entry rate of older workers by about 0.4 percentage points. Numerous robustness and specification tests appear to support the validity of the identifying assumption in our IV strategy.     

Can Agents Be Better Off with Pay Caps?

A popular way to discipline the managers of companies or banks that got into trouble during the recent financial crisis has been to impose caps on managers' pay. Using a small extension of the standard principal–agent model, we argue that pay caps might serve the opposite purpose, because the agent might be better off with a pay cap. Specifically, we show that, given a fixed effort level to be implemented, the agent's expected utility can be decreasing in an upper bound for the agent's reward. The effect of pay caps on the general structure of optimal incentive contracts is also characterized. While an improvement of contracting information always helps the principal, it might increase or decrease the marginal cost of imposing pay caps.     

The Impact of School Lunches on Primary School Enrollment: Evidence from India's Midday Meal Scheme

At the end of 2001, the Indian Supreme Court issued a directive ordering states to institute school lunches – known locally as “midday meals” – in government primary schools. In this paper we provide a large‐scale assessment of the enrollment effects of India's midday meal scheme, which offers warm lunches, free of cost, to 120 million primary school children across India, and is the largest school feeding program in the world. To isolate the causal effect of the policy, we make use of its staggered implementation across Indian states in government but not private schools. Using a panel dataset of more than 420,000 schools observed annually from 2002 to 2004, we find that midday meals result in substantial increases in primary school enrollment, driven by early primary school responses to the program. Our results are robust to a wide range of specification tests.     

Innovation And Inter-Firm Co-Operation: The Case Of The West Midlands

Drawing upon the innovative milieux and industrial districts literature, the paper provides substantial empirical evidence that firms have a greater chance of being innovative if they co-operate with other firms over innovation, albeit undertaking no investment in RLD. This is an important result especially for small firms. In particular, the paper focuses on inter-firm cwperation along the supply chain, using a swey of firms in the West Midlands to investi-gate co-operation over innovation between suppliers and buyers. A probit model is used to test the link between innovation performance and four innovation inputs: R&D expenditure, R&D personnel, networking with suppliers and networking with client firms.     

Entry,reputation and intellectual property rights enforcement

We examine how reputation concerns induce a multinational to partly withhold its entry into a developing country under weak intellectual property rights (IPR) enforcement. Equilibrium IPR violations are shown to arise only in the presence of such concerns. Holding constant a multinational's incentive to innovate, better IPR enforcement encourages entry but reduces social welfare. The multinational's incentive to innovate may be inversely U‐shaped in the strength of IPR enforcement. If timed properly, however, stronger IPR enforcement can foster innovation without compromising social welfare. Testable implications concerning observable IPR violations are derived.     

House Prices,Wealth and Consumption: New Evidence from Australia and Canada

Over the past two decades, a number of countries have experienced appreciation in house prices at the same time that aggregate consumption has increased. This paper tests alternative hypotheses for this phenomenon by using repeated household surveys from Australia and Canada to identify the transmission mechanism that links consumption and household wealth. The empirical analysis suggests that neither a direct wealth effect nor a common causal factor likely accounts for the observed correlation between wealth and consumption in these two countries. Rather, indirect factors such as collateral effects arising from relaxation of credit constraints are a more likely explanation.