Volume 21, Issue 2, December 1996

This section includes: Invited Papers Abstracts; JARE Editor's Report for 1995-96; Reviewers, July 1995-June 1996; WAEA 1995 Award Winners; Past Presidents, Western Agricultural Economics Association, 1927-94; Past Editors; Guidelines for Submitting Manuscripts to JARE; Membership Information; Back Cover
By: Ding, Lily; Kinnucan, Henry W.
Rules are derived to indicate the optimal allocation of a fixed promotion budget between domestic and export markets when the commodity in question represents a significant portion of world trade and is protected in the domestic market by a deficiency-payment program. Optimal allocation decisions are governed by advertising elasticities in the domestic and export markets and the export market share. Promotion's ability to lower deficiency payments is inversely related to the absolute value of demand elasticities in the domestic and export markets and directly related to advertising elasticities and certain policy parameters. The empirical application suggests subsidies for nonprice export promotion may be efficiency increasing in a second-best sense. That is, the heightened subsidies associated with the Targeted Export Assistance program and the Market Promotion Program appear to have corrected allocative errors that favored domestic market promotion.
By: Posnikoff, Judith F.; Knapp, Keith C.
Source control is one way to address salinity and drainage problems in irrigated agriculture, and reuse of drainage flows on salt-tolerant crops or trees in agroforestry production is another. A regional model of agricultural production with drainwater reuse and disposal is developed. Deep percolation flows are controlled through choice of crop areas, irrigation systems, and applied-water quantities. Crop drainwater may by reused in agroforestry production, and residual emissions are disposed of in an evaporation pond. A significant role for both source control and reuse is found. Sensitivity to various cost and revenue parameters is also analyzed.
Variability in published meat demand elasticity estimates for Canada motivates examining the importance of dynamics and endogeneity of right-hand-side variables. Wickens and Breusch suggest a re-parameterization of dynamics which allows estimating the long-run parameters directly and maintains linearity. A symmetric approach, employing both ordinary and inverse demand systems, to endogeneity of right-hand-side variables is used. Endogeneity of both prices and quantities is examined. Results show both dynamics and endogeneity are important in quarterly Canadian meat demand.
By: Berrens, Robert P.; Ganderton, Philip T.; Silva, Carol L.
Currently, New Mexico law does not provide any legal avenue of protecting instream flows. A change in the status quo requires that a prima facie case be made establishing sufficient evidence of the public benefits from maintaining instream flows to warrant consideration, or standing, in future water policy deliberations. Using the contingent valuation (CV) method, we investigate the nonmarket benefits of protecting minimum instream flows in New Mexico. Results from a dichotomous choice CV telephone survey show significant nonmarket values for protecting instream flows that are sensitive to a change in scope and insensitive to a group-size reminder.
By: Gopinath, Munisamy; Roe, Terry L.
Sources of growth in U.S. gross domestic product (GDP) are analyzed in a general equilibrium, open economy framework using time-series data. Contributions from labor and capital account for 75% of the economy's average growth, with total factor productivity (TFP) accounting for the remainder. Changes in the domestic terms of trade appear to be biased in favor of the services sector and against the agricultural and industrial sectors. A number of Rybczynski and Stolper-Samuelson-like linkages between the agricultural sector and the rest of the economy are identified. Labor-using technological change and favorable terms of trade appear to be the major contributors to the growth of the services sector. These changes have led to a decline in the competitiveness of the industrial and agricultural sectors for economy-wide resources. Technological change has tended to be neutral toward the production of farm output.
By: Lin, Pei-Chien; Adams, Richard M.; Berrens, Robert P.
Severe declines in Pacific Northwest salmon stocks, coupled with increasing recreational demands, and judicial decisions supporting Native American fishing rights create challenges for fishery agencies. This article explores the welfare effects on recreational anglers of alternative salmon allocation policies to meet Native American treaty rights. A discrete choice random utility model, coupled with a Poisson trip frequency model, is used to analyze these welfare effects. The model is fit to survey data from the Willamette River spring chinook fishery, an important recreational fishery in Oregon. Management options have dramatically different welfare effects.
By: Bangsund, Dean A.; Leitch, Jay A.; Leistritz, F. Larry
Leafy spurge (Euphorbia esula L.), a widely established exotic, noxious, perennial weed, is a major threat to the viability of commercial grazing and to beneficial outputs of wildlands in the Upper Great Plains. Herbicide treatments are often recommended based upon measures of physical control rather than on economic criteria. A deterministic, bioeconomic model was developed to evaluate the economic viability of current herbicide control strategies for leafy spurge. Control viability is highly site specific but falls into three categories. First, broadcast herbicide treatment may result in positive net returns for some grazing situations, especially small infestations on highly productive land, in the Upper Great Plains. Second, treating the perimeter to prevent patch expansion is viable in some situations when treating the entire infestation is not viable. Finally, for well-established infestations on less-productive land the best alternative, from an individual landowner's perspective, is to not treat leafy spurge with herbicide and bear the increasing productivity losses.
By: Bulte, Erwin H.; van Soest, Daan P.
Conventional wisdom implies that high discount rates accelerate depletion of tropical forests. As shown in this article, this result does not necessarily hold in a two-state variable model that distinguishes between primary and secondary forest stocks. In the context of a fixed concession period and imperfect government control, logging of primary forests may be both accelerated and depressed as discount rates increase.
By: Shonkwiler, John Scott; Shaw, W. Douglass
When a sample of recreators is drawn from the general population using a survey, many in the sample will not recreate at a recreation site of interest. This study focuses on nonparticipation in recreation demand modeling and the use of modified count-data models. We clarify the meaning of the single-hurdle Poisson (SHP) model and derive the double-hurdle Poisson (DHP) model. The latter is contrasted with the SHP and we show the DHP is consistent with Johnson and Kotz's zero-modified Poisson model.
By: Krause, Mark A.; Koo, Won W.
Wheat, barely, flaxseed, and oilseed sunflower acreage respond to different economic variables. Wheat and barely acreage must be divided among program-complying, program-planted, and nonprogram-planted acreage because these categories respond to different variables and respond to own expected-revenue and price-risk variables in opposite ways. Flaxseed, sunflower, and nonprogram-planted acreage of wheat and barley have highly significant, positive responses to their own expected revenue and negative responses to their own-price risk. Flaxseed and sunflower acreage have been more responsive to their lagged values than to expected revenues for wheat.
By: Dhuyvetter, Kevin C.; Schroeder, Ted C.; Simms, Danny D.; Bolze, Ronald P., Jr.; Geske, Jeremy
Bulls are an important investment for commercial beef cattle producers since, over time, bulls introduce most of the new genetic attributes into typical beef cow herds. Therefore, heritable bull traits determine bull prices. Bulls possess a large number of traits to consider in pricing. In recent years, new measures of both qualities have been introduced in the form of expected progeny differences (EPDs). This study estimates market values associated with specific bull attributes, recently introduced EPDs, and bull sale marketing efforts. Important bull price determinants include bull color, polled, conformation, muscling, disposition, age, birth weight, weaning weight, milk EPD, birth and weaning weight EPDs, sale location, order bull was sold, whether the bull had a picture in the sale catalog, and whether a percentage of semen rights were retained by the seller.
By: Mittelhammer, Ronald C.; Shi, Hongqi; Wahl, Thomas I.
This study revisits the consistent aggregation (over households) property of almost ideal demand system (AIDS) models and presents a method to explicitly account for expenditure aggregation bias when estimating the aggregate AIDS model with time-series data. Ignoring aggregation bias can lead to biased and inconsistent parameter estimates and can cause aggregate demand functions to be inconsistent with the demand functions at the individual household level. Recognizing the general limited information contained in aggregate time-series data for explicitly modeling aggregation bias, we present a new method of constructing an aggregation bias term that is derived from the proportions of household in different income groups. This information is generally available in developed economies. We use this framework to estimate aggregate meat demand within a complete demand system based on U.S. annual expenditure data.
By: Reberte, J. Carlos; Kaiser, Harry M.; Lenz, John E.; Forker, Olan D.
This article examines two major generic fluid milk advertising campaigns in New York City during the 1986-92 period. Estimates from a time-varying parameter model show that the evolution of the impact of generic advertising on fluid milk sales over each campaign followed a bell-shaped pattern. Results also show that the first campaign was effective for twice as long as the second campaign and that it has a higher peak and higher average advertising elasticity. These findings may reflect long-term generic milk advertising wearout in the New York City market.
By: Yen, Steven T.; Huang, Chung L.
This study estimates household demand for finfish in the United States using a limited dependent variable model that accounts for both participation and consumption decisions and also accommodates nonnormal heteroskedastic errors. Results suggest that own-price elasticity is near unitary and income elasticity is small. Price of finfish, shopping frequency, Northeast, Black and other non-Whites, and the life-cycle variable "young, single, no children" are they key factors that affect significantly both the probability of participation and the level of finfish consumption. Furthermore, a variable may exert opposite effects on the probability and level of consumption.
By: Kastens, Terry L.; Schroeder, Ted C.
Three procedures are used to test Fama semistrong from efficiency of harvesttime price of Kansas City July wheat futures from 1947 through 1995. The three methods are (a) testing for jointly significant parameter estimates on nonfutures explanatory variables in econometric forecasting models, (b) testing the relative accuracy between model-based forecasts and using deferred futures prices as forecasts, and (c) testing for abnormal profits associated with simulated futures trading signaled by the forecasts. Kansas City July wheat futures are generally efficient. Furthermore, relative to the efficiency associated with forecasts constructed one to two months before harvest, the efficiency associated with the five- to six-month period before harvest has increased, especially since the early 1980s.