Published Online (Pre-Prints)

Advance articles are accepted but have not yet undergone the copyediting process in preparation for publication. Minor stylistic changes may occur during the publication preparation process.

By: Sunil P. Dhoubhadel
5/21/2020
This paper uses the staggered differenceÐinÐdifference model to assess the ex post impact of PA technology adoption on whole-farm profitability. The results indicate that PA technologies do not contribute as much to farm profitability when analyzed over a period. PA technologies may increase some operational efficiency, but farmers should not adopt PA, assuming that it will improve farm profitability. The positive contribution of the majority of PA technologies to farm profitability is not yet established.
By: Per-Olav Johansson and Bengt Kristrsm
5/21/2020
The purpose of this note is to address a problem faced in using stated preference methods to estimate the willingness-to-pay (WTP) for a project. The considered problem occurs under pure altruism. Even though an agent is equipped with well-behaved preferences, a conventional closed-ended (binary) valuation question may induce her to overrate or underrate her true willingness-to-pay. On the other hand, an open-ended valuation format seemingly provides a correct answer, but such a format fails to be incentive compatible.
By: Zach Raff and Jason M. Walter
5/21/2020
This study evaluates the health benefits and abatement costs of the PM$_{2.5}$ National Ambient Air Quality Standards (NAAQS) at coal-fired power plants. We find that the emission reductions from the PM$_{2.5}$ NAAQS between 1995 and 2016 are sizable and that the health benefits from these reductions far exceed the abatement expenditures of affected plants. We then use this textit{ex post} analysis to simulate future health benefits and abatement costs in this sector from more stringent PM$_{2.5}$ standards. Our policy simulation shows that tightening these standards to levels recommended by the World Health Organization also passes clearly a benefit-cost test.
By: Yunjunjie Zhang and Marco A. Palma
5/21/2020
Berkeley's sugar tax policy is currently under intense scrutiny and debate while similar tax policies are rapidly expanding to other US states. Contrary to theoretical predictions and policy expectations, previous literature documents short-term evidence of increased consumption of sugary drinks in response to a sugar tax policy. We investigate the underlying mechanism behind this behavioral anomaly using the BLP-RC Logit demand model in characteristic space. We find that the sugary drink consumption increase is mainly driven by a change in the average valuation of the sugar content going from negative to positive following the enactment of the sugar tax policy.
By: Jihyun Eum, Ian Sheldon, and Stanley R. Thompson
5/21/2020
A heterogeneous firm model is developed allowing identification of the relationship between firm productivity and product quality. The model is used to analyze the impact of trade costs on food and agricultural trade based on a bilateral trade dataset covering 159 countries over the period 2010-13. The results show that a high firm capability cutoff, implying an ability to produce high quality, limits export market entry. In addition, fixed and variable trade costs have a negative and significant impact on the probability of firms entering export markets, while variable trade costs have a negative and significant effect on the export level of firms.
By: Lisha Zhang, James L. Seale Jr., Mechel S. Paggi, and Troy G. Schmitz
5/21/2020
The Food Safety Modernization Act (FSMA) provides new U.S. food safety standards to lower the incidence of foodborne diseases. The FSMA is analyzed in terms of adoption effects on differently sized domestic and foreign farms producing fresh tomatoes for the U.S. market. Findings indicate that adoption of the FSMA will negatively affect the revenues of Very Small farms the most and Small U.S. farms as well. However, it will positively affect the revenues of foreign farms (especially Canadian) and Large U.S. farms. This may lead to the restructuring of tomato production and distribution in the U.S. tomato market.
By: Aditya R. Khanal, Ashok K. Mishra, Joaquin Mayorga, and Stefan Hirsch
5/21/2020
Contracting firms attach conditions to producer contracts. These conditions can be attached to inputs, output, or both inputs and outputs. This study examines the impact of the choice of contract farming (CF) conditions on the productivity and profitability of ginger growers. Using farm-level data from Nepal collected in 2015 from 611 sampled farmers and the selectivity-corrected multinomial endogenous switching regression (MESR) method, the study found that ginger growers increased yield by 16%, 19%, and 15% by participating in CF with input conditions (IC), with output conditions (OC), and with input and output conditions (BC), respectively. Additionally, ginger growers increased profits by 46%, 63%, and 40% by participating in CF with IC, OC, and BC, respectively. The study found that the price difference in spot and contract markets, distance to market and transportation facilities, and farm location are important factors affecting participation in any form of CF (IC, OC, and BC). Finally, smallholders should be encouraged to adopt CF with OC.
By: Ardian Harri, Joshua G. Maples, John Michael Riley, and Jesse B. Tack
5/21/2020
Theory of the firm suggests that optimal production levels decrease as output price becomes random. Firms operating in industries with long production lags are also exposed to input price uncertainty. This paper provides a novel decision theoretic model in the presence of both input and output price uncertainty and uses U.S. beef sector data to test theoretical propositions concerning firm behavior. Our findings confirm that, in a two-stage production, the introduction of input price uncertainty leads to increased use of the input and an increased level of output in stage one and a decreased level of output in stage two.
By: Kevin Meyer
5/21/2020
This paper illustrates how to improve the immersiveness of an environmental valuation study using virtual reality headsets and real video footage. Recent research has used ``virtual environments" to study this issue, however technological advances in virtual reality headsets allow for a far greater degree of immersion. In this study, subjects were randomly shown either a virtual reality video or static pictures of a polluted lake, before and after cleanup. They were then asked to indicate whether they would be willing to pay a random amount to improve lake water quality to the level shown. A discrete choice model is used to estimate and compare the willingness to pay for both groups. In this case study there was no detectable effect on willingness to pay estimates. However, the technology may be beneficial for other valuation scenarios, particularly when the environmental change is complex or difficult for participants to evaluate.
By: Steven Otto, Gregory Poe, and David Just
5/21/2020
Rent-seeking behavior by participants in payment for environmental services auctions reduces the number of affordable contracts and decreases environmental protection. We propose a new auction mechanism, the provision point reverse auction (PPRA), to mitigate this rent-seeking behavior. The PPRA includes a public component where the probability of contract acceptance for one individual is affected by the sum of the other accepted offers. We provide theoretical support for the new mechanism and follow with laboratory experiments. The experiments yield average offers between 12.57% to 58.17% smaller in a PPRA compared to alternate reverse discriminative auctions, with the exact difference dependent on the compared mechanism and auction parameters. Implementing a PPRA to procure environmental or conservation goods may therefore increase the total quantity of these services acquired.
By: Minfeng Tang, Nathanael Thompson, Christopher N. Boyer, Nicole J. Olynk Widmar, Terry S. Stewart, Donna L. Lofgren, and Nick Minton
5/21/2020
Past attempts to price bull attributes have relied on static marginal valuations due to cross-sectional data limitations. This analysis investigates if bull buyersÕ marginal valuations of Angus bull attributes have changed over time using 17 years of bull auction data from Indiana. Results indicate statistically significant time effects on some traits (e.g., ribeye area, percent intermuscular fat, ribeye area expected progeny difference [EPD], and maternal milk EPD). Not all of these effects align with prior expectations. Nonetheless, results have important implications for the beef industry in terms of signaling quality ques and incorporating proven information in the form of EPDs.
By: Eunchun Park, B. Wade Brorsen, and Ardian Harri
5/21/2020
Many crop insurance studies have pointed out that considering spatial yield similarity can help provide more precise premium rating. We use Bayesian Kriging for spatial smoothing to consider such similarity when estimating crop yield densities. This articleÕs innovation is that the spatial smoothing is based on climate space, which is composed of climatological measures. We compare the climate space smoothing with a general physical space (longitude-latitude space) smoothing. The test results are favorable to the proposed climate smoothing method. The climate smoothing performs particularly well in states that have many missing counties and varied climate due to varying topography.
By: Xuan Wei, Hayk Khachatryan, and Alicia Rihn
5/21/2020
Neonicotinoid pesticide use in the U.S. ornamental horticulture industry continues to capture attention due to the potential health risks to pollinator insects. While several retailers have announced mandatory labeling policies for plants treated with neonicotinoids, little is known about how individual consumers react to a firmÕs disclosure of neonicotinoid use in production and the extent to which this additional information is valued. Here, a laboratory experiment assessed consumersÕ preferences for environmentally friendly production practices focusing on neonicotinoid labeling. Despite broad consumer unfamiliarity with neonicotinoids, results show consumers have differentiated preferences for neonicotinoid-related labels and information disclosure.
By: Gabriel S. Sampson, Edward D. Perry, and Mykel R. Taylor
5/21/2020
We estimate the effects of utility-scale wind turbines on agricultural land values in Kansas using parcel-level transaction data from 2001 to 2017 in a hedonic price model. By matching transaction data and wind turbine data at the common land units scale, we are able to ascertain on-farm effects as well as near-farm effects. Across all our analyses, the preponderance of results suggests that wind turbines do not affect agricultural property values, both on-farm and nearby, in a statistically significant way. Thus, our results cannot confirm that wind turbines will increase land values when installed on a parcel.
By: Prithviraj Lakkakula and William Wilson
5/21/2020
Forward pricing and allocation mechanisms for rail transportation serve critical functions for the grain-marketing system. We examine the effects of shipping costs on the origin and export basis using a panel simultaneous-equations model. Results indicate that the origin and export basis are determined simultaneously with each one affected by the dynamic variability of shipping costs. On average, a dollar increase for the shipping costs decreases the origin basis by 19 cents and increases the export basis by 82 cents per bushel of soybeans. The interaction between shipping cost and exports on the export basis impacts both marketing and trading strategies in the grain-marketing system.
By: Horlick Ng and Alan P. Ker
5/21/2020
Feeding nine billion people by 2050, yield resiliency, climate change, and remaining economically competitive have received significant attention in the literature. Technological change in agriculture will largely dictate our ability to meet these challenges. Although there is significant literature on technological change in U.S. crop yields, very little has been done with Canadian yields. Moreover, the adoption and effect of various technologies and their interaction with climate tend to be crop-region specific. To this end, we model the changing nature of county-level yields for barley, canola, corn, oats, soybean and wheat in Canada. We use mixtures to allow and test for heterogeneous rates of technological change within the yield data generating process. While we tend to find increasing but heterogeneous rates of technological change, increasing and asymmetric yield volatility, and increasing textit{absolute} but decreasing textit{relative} yield resiliency, our results do differ across crops and exhibit spatial bifurcations within a crop. Using a standard attribution model, we find changing climate has differing effects across crops. We also consider the public funding implications for Canadian Business Risk Management programs.