2024

May, 2024

By: Bakhtavoryan, Rafael; Capps, Jr., Oral
An Exact Affine Stone Index model is estimated to capture demand interrelationships among Muenster, Mozzarella, Colby, Cheddar, Swiss, other natural, specialty/imported, and processed cheese. A balanced panel constructed from designated market areas and quarterly periods from 2018 to 2020 derived from Nielsen is used. The demand for Muenster, Cheddar, Swiss, and specialty/imported cheese is unitary elastic, while the demand for Mozzarella, Colby, other natural cheese, and processed cheese is inelastic. All varieties are necessities, and substitution relationships are predominant. Demographic characteristics impact the demand for these cheese varieties. Retail pricing strategies designed to maximize total sales are provided.

May, 2024

By: Rozowski, Casey; Vukina, Tomislav
North Carolina imposed a moratorium on the construction and expansion of swine farms in 1997. Existing facilities were granted production permits tied to specific properties, but the quota contributed to the consolidation of pork processors and stifled competition in the market for live hogs. Theory predicts that production permits should be a source of quasi rents to farmers but that the market power of processors would reduce their value. Using a hedonic model of farm sales from 1994 to 2010 we find that the value of production permits dropped from 55% of the average farm price to 49%, costing farmers on average $68 thousand.

May, 2024

By: Ridley, William; Devadoss, Stephen
We assess the economic and political factors that underpinned the scope and magnitude of tariffs and US subsidies during the US--China trade dispute. We develop a political-economy model of tariff retaliation and compensatory subsidization and econometrically quantify the determinants of trade and subsidy policies during the trade dispute. Our empirical findings confirm that political (electoral geography of targeted commodities) and economic (optimal tariff relationships, attributes of export supply and import demand, and trade balances) factors were key determinants of US policies. China's tariff retaliation was consistent with higher protectionism for larger sectors with extensive state ownership.

May, 2024

By: Biram, Hunter; Tack, Jesse; Nehring, Richard; Yu, Jisang
The potential for moral hazard is an unforeseen outcome of achieving the dual agricultural policy goals of income stabilization and limited environmental impact. Here, we review key issues for identifying the moral hazard effects of crop insurance on pesticide use and include an empirical application that addresses both insurance endogeneity and quality adjustment of pesticides over time. Our results reveal no consistent linkage between insurance and pesticide use across four major crops. We discuss the differences in these effects across different specifications and crops and conclude by stressing that caution be used when looking to the academic literature for guidance on this key policy question.

May, 2024

By: Raveh, Ohad; Zhang, Yan
Does the discovery and operation of a nearby giant oil field carry long-term health consequences? Capitalizing on the 2011Ð2018 waves of the China Health and Retirement Longitudinal Study, we find that a giant oil discovery occurring within a 60-km radius significantly decreases the relative average long-term health conditions of individuals born after it. Specifically, the average share of individuals diagnosed with a chronic disease in these areas increases, in relative terms, by 22%. This effect is observed most notably in diseases related to the respiratory, digestive, and urinary systems and may be driven by changes in the consumption habits of alcohol and tobacco.

May, 2024

By: Goodrich, Brittney K.; Davidson, Kelly A.
Relatively little is known about producersÕ decisions to enroll in the Pasture, Rangeland and Forage Rainfall Index (PRF-RI) insurance program. By analyzing survey data from producers in the northeastern and southeastern United States, we show that assuming that producers are aware of crop insurance options leads to false inferences about enrollment decisions. Full-time producers who were more reliant on rented hay and pastureland and those who learned about PRF-RI from a crop insurance agent were more likely to enroll in PRF-RI. Livestock revenue insurance was found to be a complementary product to PRF-RI. Our study highlights the importance of targeted PRF-RI information campaigns.

May, 2024

By: Kang, Nawon; Sims, Charles B.; Armsworth, Paul R.; Mingle, James C. ; Zhu, Gengping; Cho, Seong-Hoon
Applications for risk diversification strategies in addressing conservation problems commonly ignore upper limits in returns, which may not reflect the fact that these economic returns are often beyond the scope of what conservation assets can produce given constraints on species, sites, or activities. This research identifies the consequences of failing to account for upper limits on returns from conservation in a modern portfolio theory (MPT) framework. We find that the amount of risk reduction conservation organizations can achieve with the same level of compromise in the expected return on investment is higher when returns are constrained.

May, 2024

By: Samper, Bailey A.; Koziol, Jennifer H.; Williams, Ryan B.
This study evaluates the costs associated with bovine viral diarrhea virus (BVDV) control strategies for cowÐcalf producers and aims to identify minimum viable premiums to induce control measures. Monte Carlo simulations were used to estimate the cost of control strategies, risk of BVDV outbreak, and BVDV-attributed production losses. We find that the price premiums needed to induce enhanced BVDV control by cowÐcalf producers range from $8.41 to $35.52 per head. Additionally, management of larger herds are more likely to adopt rigorous control protocols due to the increased likelihood of PI exposure and ability to absorb additional costs.

May, 2024

By: Yang, Yao; Karali, Berna
Output markets usually respond asymmetrically to input price changes, with prices rising faster than they fall; this phenomenon is known as the rockets and feathers pattern. This pattern has not yet been tested for a joint production process despite strong connections among markets. We fill this gap by using a vector error correction quantile framework and apply our model to soybean meal and oil, which are jointly produced by crushing soybeans. We find that output prices respond more to input price increases when their own market is bullish but the other market is bearish, confirming the rockets and feathers pattern at the extremes of price distributions.

May, 2024

By: Kemper, Nathan; Popp, Jennie; Nayga, Jr., Rodolfo M.; Bazzani, Claudia
Overlooking respondents' attribute attendance in choice experiments affects coefficient estimates, model fit, performance measures, and welfare estimates. How best to identify and account for individual attribute processing strategies is still unclear. Query theory suggests that preferences are subject to the processes and dynamics associated with retrieval from memory. We apply Query theory to the study of attendance to attributes to approximate the thoughts generated by individuals while they make choices in a choice experiment. Our results demonstrate that the stated and query approaches improve model fit and performance. The query approach has distinct advantages but also important limitations.