1997

December, 1997

RISK RESEARCH AND PUBLIC OUTREACH: A TALE OF TWO CULTURES?

By: Selley, Roger A.; Wilson, Paul N.
Agricultural economists have been challenged in recent years, by voices inside and outside the profession, to evaluate the integrity of the operational bridge between research and extension activities in the land grant system. This essay investigates links between the work of risk researchers and outreach programs. Survey results indicate that (a) a significant number of risk researchers are involved in extension activities; (b) extension economists are less frequently involved in risk research than their colleagues with no extension appointment; (c) full-time extension economists use less sophisticated risk tools in their outreach efforts than used in their research; and (d) all respondents, regardless of appointment, see a need for more applied risk analysis. Major challenges include a lack of financial support to close the data gap and to conduct relevant applied analysis present major communication challenges.
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December, 1997

END MATERIALS

This section includes: JARE Editor's Report for 1996-97; Reviewers, July 1996- June 1997; WAEA 1996 Award Winners; Past Presidents, Western Agricultural Economics Association, 1927-97; Past Editors; JARE Author Index, Volumes 20-22, 1995-97; JARE Key Words Index, Volumes 20-22, 1995-97; Guidelines for Submitting Manuscripts to JARE; Membership Information; Back Cover
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December, 1997

HOUSEHOLD WILLINGNESS TO PAY FOR DROPOFF RECYCLING

By: Tiller, Kelly; Jakus, Paul M.; Park, William M.
Increased landfilling costs and state-mandated reductions in municipal solid waste (MSW) disposal have combined to increase interest in recycling as an MSW management option. Most benefit-cost analyses, however, focus solely on urban curbside recycling programs and/or fail to include the benefits which accrue to households from the opportunity to recycle. This study focuses on the economic feasibility of dropoff recycling in rural areas, presenting estimates of household willingness to pay (WTP) for dropoff recycling in a rural/suburban area of Tennessee. Using contingent valuation, the most conservative mean household WTP is near $4.00 per household per month.
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December, 1997

ECONOMIC BENEFITS OF CRITICAL HABITAT FOR THE MEXICAN SPOTTED OWL: A SCOPE TEST USING A MULTIPLE-BOUNDED CONTINGENT VALUATION SURVEY

By: Loomis, John B.; Ekstrand, Earl
A split-sample design is used to test for a difference between mean willingness to pay (WTP) for protecting the Mexican spotted owl versus protecting 62 threatened/endangered species which includes the Mexican spotted owl. The multiple bounded contingent valuation method is used in a mail survey of U.S. residents. The mean WTP amounts are statistically different at the 0.1 confidence level indicating the multiple-bounded mail survey passes the scope test. The range of estimated benefits of preserving the 4.6 million acres of critical habitat for the Mexican spotted owl substantially outweighs the costs of the recovery effort.
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December, 1997

ACTUAL VERSUS STATED WILLINGNESS TO PAY: A COMMENT

By: Cohen, Daniel R.; Zilberman, David
Offering evidence from the California Irrigation Management Information System (CIMIS) and centering around Kenkel and Norris conclusions regarding "Agricultural Producers' Willingness to Pay for Real-Time Mesoscale Weather Information," this article questions the use of growers' hypothetical willingness-to-pay responses as the sole basis for deciding whether to invest in Mesonet, a statewide network of weather station. Survey respondents' lack of familiarity with a new technology and strategic behavior lead to underestimates of actual willingness to pay. Moreover, weather information has numerous agricultural and nonagricultural uses, and only sampling growers overlooks gains to other potential users. Low hypothetical willingness-to-pay responses of a subsection of the potential adopters should necessarily discourage investment. Rather, a substantial willingness to pay may signal a need for further market research.
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December, 1997

THE IMPACT OF TECHNOLOGICAL CHANGE ON A COMPETITIVE INDUSTRY

By: Perrin, Richard K.
This study analytically evaluates the impact of technological change on output and input markets in a competitive industry of identical firms. Firm-level technology and technological change are represented parametrically as local approximations to unknown functional forms. The comparative statics analysis solved for changes in equilibrium market prices and quantities as functions of parameters that characterized technological change. The technology-induced shift-weighted induced change input prices. The model provides a consistent and systematic framework for evaluating the impact of technological change, either ex ante or ex post.
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December, 1997

TESTING MARKET EQUILIBRIUM: IS COINTEGRATION INFORMATIVE?

By: McNew, Kevin; Fackler, Paul L.
Cointegration methods are increasingly used to test for market efficiency and integration. The economic rationale for these tests, however, is generally unclear. Using a simple spatial equilibrium model to simulate equilibrium price behavior, it is shown that prices in a well-integrated, efficient market need not be cointegrated. Furthermore, the number of cointegrating relationships among prices is not a good indicator of the degree to which a market is integrated.
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December, 1997

CONGRESSIONAL VOTING ON FARM PAYMENT LIMITATIONS: POLITICAL PRESSURE OF IDEOLOGICAL CONVICTION?

By: Brooks, Jonathan
The determinants of House and Senate votes on congressional amendments to limit payments to farmers are investigated. One concern is that campaign contributions may influence politicians' votes. Lobbying activity, as attempts to distinguish ideological motivations from passive constituency pressures suffer from theoretical and empirical shortcomings. So-called ideologically based decisions may reflect the ideology of the congressman's constituents rather than independent action on the basis of exogenous beliefs, while this ideology may itself be determined by politicoeconomic factors. A simultaneous relationship between money and votes is found in the House, but not in the Senate.
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December, 1997

AN ECONOMETRIC ANALYSIS OF DONATIONS FOR ENVIRONMENTAL CONSERVATION IN CANADA

By: Yen, Steven T.; Boxall, Peter C.; Adamowicz, Wiktor L.
As provincial governments in Canada trim budgets, fewer funds are available for environmental conservation programs. Many jurisdictions are letting private interests and/or users of the resource base help fund conservation projects. Thus funding for conservation is becoming more dependent on donations to environmental causes either through direct giving of funds or through memberships in organizations. This study explores some determinants of private contributions to environmental conservation activities through an econometric analysis of donations and memberships relating to wildlife habitat protection and enhancement. We use data from a 1991 survey conducted in the three prairie provinces that provides information on donation behavior, income, wildlife-related activity, household compositions, and a variety of other factors. A double-hurdle econometric model is used to allow independent variables to have different effects on the probability of donations and the level of donations. Our empirical results suggest that changes in the economy will be important to donation behavior. Declines in participation and recruitment in hunting will also have impacts on donations to conservation causes, but these impacts, although significant, may not be as large. However, consumptive and nonconsumptive activities may be influenced by management agencies and used to bolster environmental donations.
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December, 1997

NONMARKET VALUE OF WESTERN VALLEY RANCHLAND USING CONTINGENT VALUATION

By: Rosenberger, Randall S.; Walsh, Richard G.
With the irreversible loss of agricultural land to develop uses in certain areas, there is increased concern that land be preserved for posterity's sake. We estimate the nonmarket value of a ranchland protection program in the Yampa River Valley in Routt County, Colorado, including the Steamboat Springs resort. The case study builds on previous land preservation studies by adding several preferences indicators. We find that local residents' willingness to pay is substantial, but insufficient, to justify protecting the existing quantity of valley ranchland in the study area.
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December, 1997

PESTICIDE USE AND REGULATION: MAKING ECONOMIC SENSE OUT OF AN EXTERNALITY AND REGULATION NIGHTMARE

By: Zilberman, David; Millock, Katti
This article argues that the existing maze of pesticide policies reflects the multidimensionality of side effects of pesticide use that cannot be addressed by uniform policies. Pesticide policies will improve as (a) economic literacy among natural scientists and policymakers increases; (b) economic models of pesticide use and agricultural production in general better incorporate biological consideration; (c) benefit-cost criteria are introduced to determine regulations of pesticide, and (d) policies are enacted that take advantage of new information technologies and enable increased reporting of pesticide use. Moving from bans toward financial incentives and flexible policies that will allow chemical use where the benefit-cost ratios are high will improve resource allocations.
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December, 1997

AGRICULTURE TO INSTREAM WATER TRANSFERS UNDER UNCERTAIN WATER AVAILABILITY: A CASE STUDY OF THE DESCHUTES RIVER, OREGON

By: Turner, Brenda; Perry, Gregory M.
Prior appropriations of river flows (primarily to agriculture) have greatly reduced flow in many Oregon streams, causing major changes in stream ecosystems. This study focuses on trade-offs between instream and agricultural uses for the two largest irrigation districts in Oregon's Deschutes River basin. Both short- and long-term water lease strategies are examined, as are requirements now in place that water leases be accompanied by fallowing land formerly served by the leased water. The low-cost strategies combine canal lining with reductions in farmer's per acre water use. Short-term leases are less costly than long-term leases
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December, 1997

FARMERS’ PREFERENCES FOR CROP CONTRACTS

By: Lajili, Kaouthar; Barry, Peter J.; Sonka, Steven T.; Mahoney, Joseph T.
An empirical approach combining elements of principal-agent theory and transaction cost economics is used to determine farmers' preferences for contract terms in crop production. The approach is tested by asking grain farmers to rank contract choices and specify price premiums in simulated case situations. The statistical results indicate that farmers' preferences for rates of cost sharing, price premiums, and financing arrangements are significantly influenced by asset specialization and uncertainty associated with the case situations, and by selected business and personal characteristics.
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December, 1997

WHEAT YIELD RESPONSE TO CHANGES IN PRODUCTION PRACTICES INDUCED BY PROGRAM PROVISION

By: Epplin, Francis M.
From 1986 to 1995 the Oklahoma five-year moving average wheat grain yield declined from 32.6 to 26.7 bu./ac. This study was conducted to determine why the state average wheat yield declined. Changes in government program provisions and changes in production practices were investigated. Changes in acreage base and changes in program diversion requirements were associated with changes in planting date and changes in the proportion harvested for grain that had been fall/winter grazed. Yield responded to these induced changes in production practices. Yield was inversely related to the proportion of the state's wheat acres planted prior to 1 October and inversely related to the proportion of acres harvested for grain that had been winter grazed.
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December, 1997

PANEL ESTIMATORS TO COMBINE REVEALED AND STATED PREFERENCE DICHOTOMOUS CHOICE DATA

By: Loomis, John B.
Combining stated and revealed preference data often involved multiple responses from the same individual. Panel estimators are appropriate to jointly model the decision to actually visit at current trip costs, the intention to visit at hypothetically higher trip costs, and the intention to visit at proposed quality levels. To incorporate data on all three choices, the random effects probit model is used to estimate the economic value of changes in instream flow as a covariate in the model and calculating value under alternative flow regimes.
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December, 1997

LAND ALLOCATION, SOIL QUALITY, AND THE DEMAND FOR IRRIGATION TECHNOLOGY

By: Green, Gareth P.; Sunding, David L.
Economists have long argued that increasing the price of agricultural water will encourage the adoption of efficient irrigation technologies. This article considers the choice of irrigation systems conditional on prior land allocation decisions. Adoption functions for gravity and low-pressure irrigation technologies are estimated for citrus and vineyards crops using a field-level data set from California's Central Valley. Results show that the influence of land quality and water price on low-pressure technology adoption is greater for citrus than for vineyard crops. Consequently, the response of growers to changes in policy will be conditional and land allocation.
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