Tradeable permits,missing markets,and technology

This paper examines the effects of missing markets, heterogeneous pollutants, and the pollution technology of firms on the efficacy of transferable pollution permits. Under the assumption of perfect competition in all markets, we show that if firms can substitute among pollutants, then setting the optimal number of permits for only one pollutant will not, in general, lead to an efficient outcome. The degree of the inefficiency will depend on the information set available to the regulator and the substitutability among pollutants by firms. When establishing transferable pollution rights regulators should, therefore, consider the technology of firms. If firms discharge pollutants in the same fixed proportions, then the regulator need only set a market for one of the pollutants to ensure an efficient outcome. Where firms can substitute among pollutants, however, establishing a market for only one pollutant provides an incentive for firms to substitute to unregulated ones. This is an important policy issue as substitutability among pollutants within and across production processes may dampen the dynamic advantages of a tradeable permit policy.     

Price determination and dynamic adjustments: An inverse demand system approach to meat products in the United States

In this study the process of retail meat price determination is depicted in the form of an inverse demand system taking into consideration the dynamic adjustments present in monthly consumption data. The general dynamic framework identifies both long run and short run effects in a systematic manner and allows direct estimation of the long run price and scale flexibilities that are consistent with theory. The empirical application based on monthly U.S. meat products data provides reasonable and promising results.The authors are senior econometrician, Department of Risk Management, TRS, American Express Co., Phoenix, and assistant professor, Department of Applied Economics, University of Minnesota, St. Paul, respectively. The work was performed when the first author was an assistant research scientist at the Center for Agricultural and Rural Development, Department of Economics, Iowa State University, Ames. Journal Paper No. J-15784 of the Iowa Agriculture and Home Economics Experiment Station, Ames, Iowa. Project No. 3109.     

Climate adaptation in ‘new world’ cultural landscapes: The case of Bay of Fundy agricultural dykelands (Nova Scotia,Canada)

North America has few cultural agricultural landscapes, and often commensurately poor governance arrangements for managing change in such settings. This research uses the Acadian dykelands of Nova Scotia, Canada, as an opportunity to explore the social and governance limits to coastal climate adaptation in ‘new world’ cultural agricultural landscapes, as well as inform local decision-making. Approximately half of Nova Scotia’s coastal wetlands were converted to dykeland in the 1600s, lowering local resilience to the increased frequency and storm severity anticipated with climate change. Today, dykelands protect a diversity of public and private interests, meanings and values, yet are controlled by the agricultural sector, which can no longer afford to maintain them all to 2050 climate projections. We report here on a representative online Q-methodology survey of 183 adult Nova Scotians in the spring of 2015. Respondents sorted 34 statements along a normal distribution about whether they prefer dykeland maintenance or wetland restoration, and under what governance arrangements. Four factors were derived: the dominant discourse was local, female and strongly pro-dykeland, indicating the likelihood for local resistance to dykeland removal on for cultural, recreational and farming reasons. The second factor was supportive of wetland restoration for reasons of efficiency, not wetland affinity, but characterized by those in positions of management power. The two minority viewpoints were less informed about dykelands, characteristic of outsiders, and concerned more with governance. More education is needed about the challenges facing dykelands, the benefits of coastal wetlands, and the management options, but this research shows proposals to change landscape should emphasize flood mitigation over cost-saving. Cultural values and status quo bias are clearly barriers to adaptation planning, even when discussing the removal of man-made structures. The factors were surprisingly polarized, suggesting the forced-normal distribution affects the space available to convey nuanced perspectives. Large p-set Q-method of this kind is likely most useful for characterizing the emergent discourses demographically, and understanding their prevalence; the same discourses had emerged within a much smaller pilot study.     

The future of Russian gas exports to East Asia: Feasibility and market implications

For a long time, the Russian government has aimed to diversify gas exports to East Asian countries. This gearing of Russia towards Asia will have great consequences on world energy, the global economy, and geopolitics in the coming years. This paper analyzes the growth potential of Russia's diversification strategy and the impact this policy would have on sales to Europe. As the most likely scenario is for total gas exports to grow at a moderate rate from 2010 to 2030, any increase in sales to Asia could make difficult the raising of exports to Europe. Our thesis is that this trade-off will depend primarily on domestic consumption trends, geographic targeting of investments, and commercial and financial alliances with foreign partners. However, imports from Central Asia, declining exports to Ukraine and Belarus, and Gazprom investments in other gas-producing countries could also affect gas exports and gas distribution among different markets.     

BUILDING THE MANAGERIAL CAPITAL OF AGRICULTURAL COOPERATIVES IN AFRICA

Agricultural cooperatives in Africa tend to be community‐based organizations defined by principles of inclusion, voluntarism, democracy, equity, autonomy, mutuality and solidarity. This means that they generally operate in accordance with the principles endorsed by the International Cooperative Alliance (ICA). However, only a few of these organizations are successful in commercializing the agricultural produce of their members. In this study, we argue that growth‐problems leading to commercial failure and organizational degeneration in these cooperatives can be attributed to a lack of managerial capital. Drawing on the literature and evidence from the field we set out key management solutions for counterbalancing cooperative principles in the context of rural Africa. These solutions were taught to the leaders and managers of 362 cooperatives at four training events held in Madagascar, Malawi and twice in Uganda. Using a production function for cognitive achievement and key informant interviews, we find that our training contributed to the adoption of the proposed solutions by some of the cooperatives. Using the Ugandan sub‐ sample, we estimate an OLS regression and a PSM model to show that the training translated into higher revenues per member generated through collective commercialization.     

The productivity of agricultural credit in India

This study examines the nature of the relationship between formal agricultural credit and agricultural Gross Domestic Product (GDP) in India, specifically the role of the former in supporting agricultural growth, using state level panel data covering the period 1995–1996 to 2011–2012. The study uses a mediation analysis framework to map the pathways through which institutional credit relates to agricultural GDP relying on a control function approach to tackle the problem of endogeneity. The findings from the analysis suggest that over this period, all the inputs are highly responsive to an increase in institutional credit to agriculture. A 10% increase in credit flow in nominal terms leads to an increase by 1.7% in fertilizers (N, P, K) consumption in physical quantities, 5.1% increase in the tonnes of pesticides, 10.8% increase in tractor purchases. Overall, it seems quite clear that input use is sensitive to credit flow, whereas GDP of agriculture is not. Credit seems therefore to be an enabling input, but one whose effectiveness is undermined by low technical efficiency and productivity.     

Lumpy Investment and Corporate Tax Policy

In the presence of both convex and nonconvex capital adjustment costs in a dynamic general equilibrium model, corporate tax policy generates both intensive and extensive margin effects via the channel of marginal Q. Its impact is determined largely by the strength of the extensive margin effect, which, in turn, depends on the cross‐sectional distribution of firms. Depending on the initial distribution of firms, the economy displays asymmetric responses to tax changes. Moreover, an anticipated increase in the future investment tax credit reduces investment and adjustment rate initially.     

Food safety recall effects across meat products and regions

Food safety is one of the key issues for the international meat market. As a major meat exporter, few things facing the U.S. meat industry in recent years have garnered more attention than food safety events and policies. The impacts of Food Safety Inspection Services (FSIS) recalls on United States consumer meat demand are estimated using monthly grocery-scanner data identifying effects across products, geographic regions, and recall type. Results suggest beef E. coli recalls significantly reduce the demand for recalled ground beef contemporaneously among most, but not all, regions in the United States. Evidence of heterogeneity in demand impacts across regions and products is provided for the first time. Domestic and international implications for policy makers, industry leaders, and researchers are discussed.     

Firm-level determinants of tax evasion in transition economies

Business tax evasion is an important issue for governments. Yet the factors that determine business tax evasion have not been sufficiently examined in the literature in general, and in transition contexts in particular. To address this gap, this study uses the WB/EBRD Business Environment and Enterprise Performance Survey (BEEPS) database with a sample of over 12,692 firms from 26 transition economies. Applying various modelling strategies, we argue that tax evasion is a function of firm-level and institutional-level variables. We contribute to the literature by providing robust evidence showing that the perceived tax burden has a positive impact on tax evasion. We also find that the tax evasive behaviour of firms is positively influenced by low trust in government and in the judicial system as well as by higher perceptions of corruption and higher compliance costs. We find that smaller firms, individual businesses and firms in sectors that are less visible to the tax administration are more likely to get involved in evasive behaviour. Overall, institutional factors play an important role in determining firms’ tax evasion behaviour in transition economies. This finding has important policy implications.