Volume 38, Issue 3, December 2013

December, 2013

Price- and Policy-Induced Innovations: The Case of U.S. Biofuel

By: Jang, Heesun; Du, Xiaodong
Using patent counts and citation data from 1977 to 2011, we explore the determining factors of innovative activities of the U.S. biofuel industry.We take into account both demand-side factors— such as crude-oil price, government R&D expenditure on biofuel, and federal-level support policies—and supply-side factors, represented by constructed knowledge stocks, to quantify the effects on biofuel-related innovations. The citation generation process is quantified using patent citation records and the estimates are used to construct the simple and weighted stocks of knowledge with weights of patent productivity. We confirm that both the demand and supply factors have positive and statistically significant effects on technological biofuel innovations in the United States.
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December, 2013

Decomposing Productivity and Efficiency among Western Australian Grain Producers

By: Tozer, Peter R.; Villano, Renato
We provide empirical evidence to decompose productivity growth of a group of producers into technical change and efficiency measures at the farm level. Using four years of farm-level data from forty-five grain producers in the low- to medium-rainfall zone of Western Australia, we decompose productivity numbers to analyze total factor productivity. The results show that producers are generally technical, mix, and scale efficient, but the results for input and output mix efficiencies vary. The outcomes for input mix efficiency suggest that producers face some rigidity in their production decisions. In contrast, output mix efficiency suggests that most producers adjust their output mixes to account for different seasonal conditions and enterprise mixes.
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December, 2013

Do Residual Development Options Increase Preserved Farmland Values?

By: Schilling, Brian J.; Sullivan, Kevin P.; Duke, Joshua M.
Previous research has reached inconsistent, if not paradoxical, conclusions regarding the impact of conservation easements on farmland prices. Expectations of price reductions, strongly grounded in economic theory, are not always observed.We develop a hedonic model to examine the sale prices of 325 New Jersey preserved farms. We find strong evidence that residual development options retained under farmland deeds of easement have significant and positive effects on preserved farmland prices. This suggests that appraisals are undervaluing deed-restricted farmland, resulting in possible overpayment for conservation easements. This may explain the limited price differentials researchers have observed between preserved and unpreserved farmland.
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December, 2013

Measuring Environmental Quality: Ecosystem Services or Human Health Effects

By: Strong, Aaron
The relationship between income and environmental quality is poorly understood at best. We expand the Environmental Kuznets Curve (EKC) literature by considering not only the role of emissions but also the role of the environment’s absorptive capacity in the relationship between income and environmental quality. Building off of a simple conceptual model, we construct two different aggregate measures of environmental quality. Using these measures, we find that emissions and emissions toxicity exhibit a relationship consistent with the EKC hypothesis, while biodiversity and ecosystem services do not.
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December, 2013

The Economic Impact of Services Provided by an Electronic Trade Platform: The Case of MarketMaker

By: Zapata, Samuel D.; Carpio, Carlos E.; Isengildina-Massa, Olga; Lamie, R. David
Despite the touted potential of e-commerce to improve agriculture profits, the literature on effectiveness of e-commerce is very limited. This paper assesses the economic impact of an electronic trade platform (i.e., MarketMaker) on agricultural producers. Contingent valuation techniques are employed to estimate the monetary value that producers placed on MarketMaker services. Results indicate that producers are willing to pay $47.02 annually for the services they receive. Registration type, amount of time registered, amount of time devoted to MarketMaker, type of user, number of marketing contacts received, and firm total annual sales have a significant effect on producers’ willingness to pay.
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December, 2013

Consumer Preferences for Tomatoes: The Influence of Local, Organic, and State Program Promotions by Purchasing Venue

By: Carroll, Kathryn A.; Bernard, John C.; Pesek, John D. Jr.
A choice experiment of consumers from five Mid-Atlantic states was conducted to compare marginal willingness to pay for fresh tomatoes with the attributes locally grown, state marketing program promoted, and organic from either a grocery store or farmers’ market. Data were analyzed using a mixed logit model. Results show that consumers in Maryland, Pennsylvania, and Virginia prefer local tomatoes, while those in Delaware and New Jersey prefer state program versions. Unexpectedly, price premiums for organic over conventional tomatoes were only exhibited in Maryland, and Virginia was the only state with a significant premium for the farmers’ market venue.
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December, 2013

Consumer Preferences for Verified Pork-Rearing Practices in the Production of Ham Products

By: McKendree, Melissa G.S.; Olynk Widmar, Nicole; Ortega, David L.; Foster, Kenneth A.
A hypothetical choice experiment was conducted to determine consumers’ willingness to pay for three verified production practice attributes (pasture access, antibiotic use, and individual crates/stalls) in smoked ham and ham lunchmeat. These attributes were verified by the USDA Process Verified Program (PVP), a retailer, or the pork industry. Willingness to pay for verified attributes varied across attributes and verifying entity for both products. Consumers were willing to pay the most for attributes verified by the USDA-PVP. No statistical differences, relative to the product price level, were found across products for the same attribute-verifier combination.
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December, 2013

Consumer Attitudes toward Farm-Animal Welfare: The Case of Laying Hens

By: Heng, Yan; Hanawa Peterson, Hikaru; Li, Xianghong
Concerns over laying hens’ welfare have led to many different labels for eggs and changes to state regulations. Consumer attitudes toward farm-animal welfare were examined using a national survey in the context of preferences for eggs differentiated by layer management practices. Most respondents perceived caged housing and other conventional management practices as reducing hens’ welfare and were willing to pay a premium for eggs produced in cage-free and other nonconventional production systems. Although participants responded to information about environmental consequences of management practices, they placed more weight on animal welfare issues than environmental issues in their egg-purchase decisions.
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December, 2013

Factors Affecting Cow-Calf Herd Performance and Greenhouse Gas Emissions

By: Wang, Tong; Park, Seong C.; Bevers, Stan; Teague, Richard; Cho, Jaesung
A Cobb-Douglas stochastic frontier function is estimated for the cow-calf enterprises in the Texas Rolling Plains using Standardized Performance Analysis (SPA) data. We find that factors promoting higher herd productivity include machinery investment, pasture-quality improvement, and protein supplement. In contrast, herd productivity is compromised by a longer breeding season, percentage of hired labor, and deviation from mean annual rainfall. Interestingly, more technically efficient farms tend to emit fewer greenhouse gas units per unit of output. For example, net greenhouse gas emissions are 6.12 and -8.70 pounds of carbon equivalent, respectively, for farms with technical efficiency below 0.8 and above 0.96.
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December, 2013

JARE Editors’ Report

The JARE editorial team of Chris McIntosh, Hayley Chouinard, Greg Galinato, and Larry Makus began their three-year term with manuscript 2012-December33, submitted April 1, 2012. This report covers the period from June 1, 2012, through May 31, 2013. Publication details for the three issues published during the past year (2013) are reported in table 1.
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