2005

December, 2005

By: Norwood, F. Bailey; Luter, Ryan L.; Massey, Raymond E.
The Environmental Protection Agency's new Concentrated Animal Feeding Operations (CAFO) regulations are forcing some farms to export livestock manure to off-farm acres. The regulation compliance cost depends on the willingness of neighboring crop producers to accept or pay for the manure. This study estimates a manure willingness-to-pay distribution for crop producers using a contingent valuation mail survey. A flexible parametric distribution is borrowed from the crop yield literature, which shows that manure willingness to pay is left-skewed. Most crop producers in our sample will pay a positive price close to the savings in commercial fertilizer, but approximately 25% require a payment before accepting manure.

December, 2005

By: Ward, Clement E.
Previous research has not addressed the impacts of alternative supply conditions on price discovery and pricing choice. This study estimated models with data from an experimental market, the Fed Cattle Market Simulator, encompassing live weight, dressed weight, and grid pricing under two alternative supply scenarios. Significance of variables explaining transaction price variation and pricing choice differed between the two supply periods. Overall results were close to expectations. Higher quality cattle marketed with a grid brought higher prices in both supply periods. Having lower quality cattle in either supply period increased the probability of cattle being marketed (purchased) on a live weight basis.

December, 2005

By: Davis, David E.; Schluter, Gerald E.
Results of this study show that a heterogeneous labor force serves to attract new food manufacturing investment. We conduct analysis for SIC 20, Food and Kindred Product Manufacturing, and disaggregate analysis on all nine three-digit SIC food industries. Heterogeneity variables are a significant factor in nearly all specifications. We also examine which factors create the greatest increases in the expected number of new establishments. Areas with a high degree of labor heterogeneity are found to have large advantages. Labor heterogeneity is among the most important factors attracting food manufacturing to urban areas over rural areas.

December, 2005

By: Koundouri, Phoebe; Nauges, Celine
In the estimation of production functions, ignoring risk considerations can cause inefficient estimates, while biased parameter estimates arise in the presence of sample selection. In the presence of uncertainty and selection bias, the latter introduced by the endogeneity of qualitative characteristics of inputs in crop choice, we show that correcting for risk considerations (a la Just and Pope, 1978, 1979) but not selection bias, can produce incorrect inferences in terms of risk behavior. The arguments raised in this study have estimation and policy implications for stochastic production analysis applied to all goods whose qualitative characteristics can affect sample selection.

December, 2005

This section includes: JARE Editor's Report; Reviewers November 2004-October 2005; WAEA 2004 Award Winners; WAEA Past Presidents 1927-2005; Past Editors: Western Journal of Agricultural Economics, 1977-1991, Journal of Agricultural and Resource Economics, 1992-2003; Minutes of 2005 WAEA Executive Committee Meeting;

December, 2005

By: Wheatley, W. Parker; Buhr, Brian L.
This paper presents a theory of how industry structure and beliefs about Internet marketplace use have driven choice and ownership of marketplaces. The theory's predictions suggest that surviving Internet marketplaces will be those with strong historical linkages in an industry and those owned by or affiliated with major commodity buyers. Comparisons of these predictions with actual outcomes provide validation of the theory. Where predictions differ from results, observations are made as to the nature of the deviations.

December, 2005

By: Johnson, Heather C.; Ward, Clement E.
Grid pricing improves the flow of information to producers, but market signals sent by grids may not be clearly understood. This study uses a two-stage Coefficients of Separate Determination process, four sets of fed cattle carcass data, and sensitivity analyses to identify market signals sent by grid pricing. Weight sends a stronger market signal than carcass quality characteristics such as quality and yield grade. Although grids are shaping production, market signals indicate that lower quality carcasses are penalized more than higher quality carcasses are rewarded. Sensitivity analyses suggest changes in quality and yield grade discounts have the greatest impact on market signals.

December, 2005

By: Peterson, Hikaru Hanawa
As increasingly more transactions occur away from open markets, the so-called "thin" market issues arise. This paper analyzes unpublished transaction data from Egg Clearinghouse, Inc. (ECI), a marginal marketplace for eggs that trades 4% of all eggs (80% of eggs available for open trading). Results suggest that marginalized markets can serve as an inventory adjustment mechanism while maintaining the role of price discovery as a check for non-market prices. At ECI, most firms both buy and sell regardless of operational types, participation is balanced across all types of firms in the industry, and sellers in general yield to buyers' preferred terms of trade.