Volume 29, Issue 2, August 2004

August, 2004

By: Jaeger, William K.
The curtailment of irrigation on the Klamath Reclamation Project in 2001 is estimated to have cost farmers more than $35 million. This study examines how alternative water allocations among irrigators in the Upper Klamath Basin could have lowered those costs. Per acre marginal water values vary by a factor of 20 due primarily to variations in soil productivity, with the highest productivity lands concentrated in the federal Project. A linear programming model estimates costs for alternative allocations. Findings indicate that compared to the 2001 allocation, costs could be reduced by 75% with a market-based approach.

August, 2004

By: Pennings, Joost M.E.; Isengildina, Olga; Irwin, Scott H.; Good, Darrel L.
A conceptual framework is developed which provides insight into the factors affecting the impact of market advisory service (MAS) recommendations on producer pricing decisions. Data from a survey of 656 U.S. producers reveal that the perceived performance of the MAS, the way in which MAS recommendations are delivered, as well as the match between MAS and producers' marketing philosophy, are important factors explaining the impact of MAS recommendations. Risk attitude does not affect the impact of MAS recommendations on producers' decisions, suggesting producers are more interested in the price-enhancing characteristics of MAS advice than in its risk-reducing features. Key words: market advisory services, ordered probit model, producers' marketing decisions

August, 2004

By: Feinerman, Eli; Fleischer, Aliza; Simhon, Avi
This study examines the optimal allocation of funds between national and urban parks. Since travel costs to national parks are significantly higher than to urban parks, poor households tend to visit the latter more frequently, whereas rich households favor the former. Therefore, allocating public funds to improving the quality of national parks at the expense of urban parks disproportionately benefits high income households. By developing a theoretical model and implementing it using Israeli data, findings indicate all households, except for the richest decile, prefer that the park authority divert a larger proportion of its budget from national to urban parks.

August, 2004

By: Scheierling, Susanne M.; Young, Robert A.; Cardon, Grant E.
A water-crop simulation/mathematical programming model of irrigation water demand in northeastern Colorado is formulated to develop an original concept of derived demand for consumptive use of water. Conventional demand functions for water deliveries are also developed, and the effect of hypothetical price increases on both consumption and delivery are illustrated. Findings indicate that demand elasticity estimates are quite sensitive to model specification, and consumptive use demand tends to be significantly less price-responsive than delivery demand. Thus price incentives are likely to have only limited impacts on basin-wide water consumption and would not make much additional water available for emerging demands.

August, 2004

By: Bergtold, Jason S.; Akobundu, Eberechukwu; Peterson, Everett B.
This study estimates a set of unconditional own-price and expenditure elasticities across time for 49 processed food categories using scanner data and the FAST multi-stage demand system with fixed effects across time. Estimated own-price elasticities are generally much larger, in absolute terms, than previous estimates, while our expenditure elasticities are generally much lower. The use of disaggregated product groupings, scanner data, and the estimation of unconditional elasticities likely accounts for these differences. Results of the study suggest providing more disaggregate product-level demand elasticities could aid in the economic analysis of issues relating to industry competitiveness or the impact of public policy.

August, 2004

By: Brester, Gary W.; Marsh, John M.; Atwood, Joseph A.
Concerns about the negative effects of U.S. meat and livestock imports on domestic livestock prices have increased interest in country-of origin labeling (COOL) legislation. An equilibrium displacement model is used to estimate short-run and long-run changes in equilibrium prices and quantities of meat and livestock in the beef, pork, and poultry sectors resulting from the implementation of COOL. Retail beef and pork demand would have to experience a one-time, permanent increase of 4.05% and 4.45%, respectively, so that feeder cattle and hog producers do not lose producer surplus over a 10-year period.

August, 2004

By: Lusk, Jayson L.; Anderson, John D.
Although several studies have estimated the costs of country-of-origin labeling (COOL), no previous study has documented how these costs will be distributed across the livestock sector or how producer and consumer welfare will be affected. This analysis presents an equilibrium displacement model of the farm, wholesale, and retail markets for beef, pork, and poultry that documents how producers and consumers will be affected by COOL. Findings reveal that as the costs of COOL are shifted from the producer to the processor and retailer, producers are made increasingly better off while consumers are made increasingly worse off. Further, an increase in aggregate consumer demand of 2% to 3% is likely sufficient to offset lost producer welfare due to COOL costs.

August, 2004

By: Shiptsova, Rimma; Goodwin, Harold L., Jr.; Holcomb, Rodney B.
This study provides a unique view of the demand for carbohydrate sources in Russia at the household level. The data used in this analysis were obtained from a 1996 survey in eight Russian metropolitan areas. An almost ideal demand system (AIDS) model is used to examine the expenditures for potatoes, bread, flour, rice, and pasta. The impacts of household demographic factors on the consumption of carbohydrates are also discussed.

August, 2004

By: Rezek, Jon P.; Perrin, Richard K.
This study adjusts 1960-1996 agricultural productivity gains in a panel of Great Plains states to account for the discharge of pesticide and nitrogen effluents into the environment. The agricultural-environmental technology is approximated with translog distance functions that allow us to contrast traditional versus environmentally adjusted productivity gains. Findings indicate technical change has been increasingly biased toward environmentally friendly production. While the environmental adjustment reduced overall productivity gains during the sample period, in recent years adjusted productivity outpaced the traditional measure, reflecting the pro-environment bias in technical change.