Shively, Gerald E.

By: Fisher, Monica G.; Shively, Gerald E.
This paper examines impacts of an agricultural subsidy program on forest pressure in Malawi. Using household survey data, we measure the effect on forest product marketing and on forest clearing of Malawi's Starter Pack Scheme (SPS). Regression results show households receiving a free packet of hybrid maize seed and chemical fertilizer (a "starter pack") had lower levels of commercial forest extraction than nonrecipient households. In addition, no measurable effect of starter pack receipt is found on forest clearing decisions, suggesting the program raised agricultural output without encouraging agricultural expansion. Findings thus indicate potential modest improvement in forest condition due to the SPS.
By: Preckel, Paul V.; Shively, Gerald E.; Baker, Timothy G.; Chu, Mei-Chin; Burrell, Jessica Eide
This study examines incentives for input use under tournament contracts. We analyze implications of contract design for nitrate-based environmental externalities generated by agricultural producers. Outcomes are compared from contracts awarded by tournament to those from fixed-payment contracts. Our findings show contract insecurity can distort input use. The model developed in this analysis is applied to a region of the U.S. where tournament-based production is prevalent and groundwater contamination is a problem. We find contract insecurity increases nitrogen use by about 12%, resulting in a 17% increase in nitrate leaching. Implications for contract modification to reduce environmental externalities while maintaining contract incentives are discussed.