Volume 22, Issue 1, July 1997

July, 1997

By: Cooper, Joseph C.
Using farmer responses to contingent valuation method (CVM) survey data in combination with actual market data from four watershed regions in the United States, this study estimates the minimum incentives payments a farmer would accept in order to adopt more environmentally friendly "best management practices" (BMPs). Combining actual market data with the CVM data adds information to the analysis, thereby most likely increasing the reliability of the results compared to analyzing the contingent behavior survey response data only. Given the decision to adopt, the article also presents a pooled model for the number of acres enrolled in the BMPs as a function of the incentive payments. Adoption rates predicted with the combination data model are significantly higher over a wide range of offers than those predicted using the traditional discrete choice analysis with the hypothetical data only. Hence, using the traditional CVM analysis results to determine payments to attain a given level of adoption may result in overpayment.

July, 1997

By: Stiegert, Kyle W.; Blanc, Jean-Pierre
Ladd and Martin's hedonic pricing model is extended to include the interactive effect of noncontracted characteristics on the value of contracted characteristics. Marginal values of wheat protein in the Japanese import market are estimated using the interactive effects of noncontracted dough/flour characteristics typically proxied by protein. Protein value is linked positively to farinograph stability, a prime factor in blending different flours. Three high protein wheats maintained about the same marginal value of protein. The marginal value for the two low protein wheats appear more end-use dependant. They varied in a $2.00/ton range depending on protein absorption, stability, and extensibility.

July, 1997

By: Lindberg, Kreg; Johnson, Rebecca L.; Berrens, Robert P.
Contingent valuation is used to measure the social impacts of tourism in rural Oregon communities. Impacts are substantial, for example, annual household willingness to pay (WTP) to reduce traffic congestion is $186. Study features include tests of sensitivity to a change in scope, tests of stability across survey mode, and a thorough system of no vote follow-up questions in a referendum format. While there is no evidence of scope effects (at the 0.05 level), results indicate that conclusions regarding sensitivity to scope may be dependent on the test used. WTP estimates are substantially less with the mail versus telephone survey mode.

July, 1997

By: Brester, Gary W.; Wohlgenant, Michael K.
The GATT/Uruguay Round trade negotiations have resulted in a multilateral relaxation of beef trade restrictions. A linear elasticity model of the U.S. beef industry is developed using log differentials equations. Beef consumption, production, and trade are disaggregated into appropriate ground and table cut components. The model predicts that GATT/Uruguay Round will cause asymmetric effects on ground and table cut beef consumers. In general, fed cattle and cow/calf producers will benefit from trade liberalization because of increases in fed and feeder cattle prices. However, nonfed cattle price will decrease.

July, 1997

By: Bhattacharyya, Arunava; Harris, Thomas R.; Kvasnicka, William G.; Veserat, Gary M.
Tritrichimonas foetus vaccine has been marketed since 1989 to combat the trichomoniasis disease that causes reproductive failure and considerable economic loss to Nevada ranchers. An ex post technology adoption model is estimated to examine the possible adoption rate, to identify the factors that may influence the adoption behavior, and to test how the probability of adoption for five possible adopter groups would change due to changes in various ranch specific factors. Results indicate that use of computers, veterinary checkup of herd, and herd size influence the probability of adoption. Model results show that cooperative extension programs enhance the rate of adoption.

July, 1997

By: Walburger, Allan M.; Foster, Kenneth A.
Regional live cattle prices are decomposed into two components: (a) a trend common to all regional cattle price series and (b) regional deviations or price dynamics around that trend. Tests are developed to determine if market factors are related to the regional price deviations around a common trend. Slaughter volume, distance between a market and the next closest, and forward contract deliveries are significantly related to price deviations from the estimated common trend.

July, 1997

By: Deodhar, Satish Y.; Sheldon, Ian M.
In this article, the degree of imperfect competition in the world market for soymeal exports is estimated using a structural econometric model. The procedure consists of estimating a demand function and the industry first-order profit-maximization condition, from which an estimate of the degree of market power can be retrieved. Using a nonlinear three-stage least squares procedure, the estimate of market power shows that the world market for soymeal exports is perfectly competitive. The empirical results also indicate that this market was competitive even prior to entry by Argentinean firms in the mid-1970s.

July, 1997

By: Larson, James A.; Mapp, Harry P., Jr.
Producers in southwest Oklahoma lack adequate information about optimal planting decisions for cotton. This study uses a cotton growth simulation model to evaluate alternative cultivar, planting date, irrigation, and harvest choices. Effects of using information about soil moisture at reproduction and revenue loss at harvest in making cultivar and planting data decisions are evaluated. Using soil temperature information to plant at an early date produced high net revenue some years, but reduced mean net revenue and increased risk. Producers maximizing expected net revenue should plant a short-season cultivar in late May and use soil moisture information to schedule irrigation at reproduction.