2000

December, 2000

By: Gould, Brian W.; Dong, Diansheng
Increased availability of scanner-based panel data has enabled researchers to better understand nondurable commodity purchase dynamics. In this study, we focus on one component of the purchase process--when to buy. The relationship between the discrete purchase decision and a set of household and purchase characteristics is quantified using a simulated maximum-likelihood procedure. Given the longitudinal nature of our data, unobserved heterogeneity is addressed by adopting an auto-correlated error structure. Our empirical application is household purchases of cheese. We find evidence of significant persistent unobservable household heterogeneity, which is not eliminated by the inclusion of lagged exogenous variables.

December, 2000

By: Moore, Michael R.; Gollehon, Noel R.; Hellerstein, Daniel
Application of the tobit model to estimate economic welfare is transferred from the consumer side to the producer side. Supply functions are estimated for multioutput irrigators in the Pacific Northwest. Empirical procedures are then developed for computing expected producer's surplus from the output supply functions. Confidence intervals for the surplus measures are generated using the Krinsky-Robb method. An experiment predicts decreases in surplus given increases in water pumping cost. The experiment replicates possible increases in hydroelectric prices due to the salmon recovery program in the Columbia-Snake River Basin. Output substitution explains producers' ability to mitigate the effect of the price increases on producer's surplus.

December, 2000

By: Chen, Chi-Chung; McCarl, Bruce A.
The agricultural value of El Nino-Southern Oscillation (ENSO) phase knowledge is measured in a value-of-information framework using economic models. We examine the value of considering the full distribution of ENSO phase strength effects as opposed to average ENSO phase strength effects, as well as the implications of considering ENSO impacts on the rest of the world (ROW). A stochastic U.S. agricultural sector model linked with a global trade model is used to assess the value of ENSO phase information. When the full distribution of ENSO phase strength is considered, the value of phase information increases twofold with respect to the average ENSO effects.

December, 2000

By: Jakus, Paul M.; Dowell, Paula; Murray, Matthew N.
The effect of Tennessee Valley Authority reservoir water levels on recreational fishing is evaluated. Data were collected in east Tennessee during March through August of 1994-97. Water levels were not a major barrier to participation during the six-month period, but levels did affect the number of trips taken by anglers. Maintaining lakes at full pool for one additional summer month would result in an additional one-third trip per angler, or an additional 87,000 trips in the study region. The average net benefit of a full pool is $1.82 per angler, or an aggregate benefit of approximately $476,500 in the region.

December, 2000

By: Nkonya, Ephraim M.; Featherstone, Allen M.
Nitrate contamination of groundwater is an important problem. The transport of leached nitrate from the root zone to groundwater takes approximately 30 to 60 years. Many previous studies ignore this time lag by assuming instantaneous contamination. This analysis applies a delayed response model to account for the time lag between nitrogen fertilizer applications to the time the leached nitrate reaches groundwater. Results show that accounting for the leached nitrate externality reduces the nitrogen application rate by 13% and the returns above variable costs by 8% for farmers who apply both nitrogen and phosphorus. For farmers who do not use phosphorus, nitrogen use is reduced by 14% and the returns above variable costs by 22%. The application of phosphorous increased returns by more than 100% and significantly reduced leached nitrate.

December, 2000

This study examines the pricing behavior of Canadian and U.S. agri-food exporters consistent with a model that permits the identification of pricing to market (PTM) behavior and imperfect market competition in agri-food markets. The estimation strategy takes advantage of recently developed panel unit root tests to determine the time-series properties of the data and avoid the problem associated with lower power conventional unit root tests. Among U.S. products, the conventional PTM model indicated evidence of a greater degree of imperfect competition in international markets for U.S. wheat. While price discrimination and market segmentation are apparent for Canadian exports in selected markets, the export adjustment pattern in most cases tended to exacerbate the effect of exchange rate fluctuations on foreign currency prices of Canadian products.

December, 2000

By: Scrogin, David; Berrens, Robert P.; Bohara, Alok K.
Lotteries are commonly used to allocate big game hunting privileges. In this study, lottery demand and consumer surplus are modeled before and after policy changes designed to increase participation. The application is to New Mexico elk hunt lotteries. Given the volume and variety of hunts, we adopt a disaggregated and flexible count modeling approach. Two welfare measures are estimated: Marshallian surplus and a proposed measure that incorporates consumer uncertainty. The Marshallian measure produces smaller and slightly less precise estimates. However, regardless of the surplus measure examined, welfare increased significantly with the policy changes, while revenues changed by less than 1%.

December, 2000

By: Yoder, Jonathan K.
Predator control cost-share contracts among livestock producers to control coyote predation date back to 1630 in North America and are common today among sheep producers in western states. Typically, per unit assessments are imposed on a monitorable input, and revenues are used to purchase predator control for participants' land. This study presents a model which provides refutable implications for the structure and distribution of these contracts over time and space. Historical and contemporary state and county data on sheep producer assessments support a model that is applicable more generally to the problem of investment in common property inputs.