We develop and analyze an unexplored mechanism to reduce biorefinery supply chain costs when the feedstock is a perennial crop: adjusting the age structure, and hence yield, of the perennial feedstock. The non-monotonicity of the age-yield function introduces a non-convexity to the cost minimization problem. We show that, despite this, the problem has a solution and present analytic and numeric comparative statics, finding that larger refineries are most likely to benefit from optimizing age structure. The model is calibrated to the sugarcane industry in Brazil. The cost reductions from optimizing age, compared to the observed regional average age, are less than 1%.
{"title":"Minimizing the Costs of Biorefinery Feedstock by Managing Perennial Crop Age: The Case of Brazilian Sugarcane","authors":"Daniel Tregeagle, D. Zilberman","doi":"10.1017/aae.2023.21","DOIUrl":"https://doi.org/10.1017/aae.2023.21","url":null,"abstract":"\u0000 We develop and analyze an unexplored mechanism to reduce biorefinery supply chain costs when the feedstock is a perennial crop: adjusting the age structure, and hence yield, of the perennial feedstock. The non-monotonicity of the age-yield function introduces a non-convexity to the cost minimization problem. We show that, despite this, the problem has a solution and present analytic and numeric comparative statics, finding that larger refineries are most likely to benefit from optimizing age structure. The model is calibrated to the sugarcane industry in Brazil. The cost reductions from optimizing age, compared to the observed regional average age, are less than 1%.","PeriodicalId":14970,"journal":{"name":"Journal of Agricultural and Applied Economics","volume":" ","pages":""},"PeriodicalIF":1.9,"publicationDate":"2023-06-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43583576","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
As food producers face increasing costs, many greenhouse growers are turning to controlled environment agriculture. The use of light-emitting diode (LED) supplemental lighting systems may increase a producer’s profitability, but it also comes with a unique set of externalities. Using an online survey, we found that showing images of light pollution from supplemental LED lighting sources facilitated respondents to want more regulation with state government being the desired regulator. Several significant factors influenced survey respondents’ posttreatment preference outcomes for different levels of regulation and regulators including demographic characteristics as well as initial attitudes toward LED lighting systems before treatment.
{"title":"Impact of Information on Attitudes Regarding Greenhouse Lighting Externality Regulation","authors":"Jared Daniel, Will Secor, Benjamin L. Campbell","doi":"10.1017/aae.2023.20","DOIUrl":"https://doi.org/10.1017/aae.2023.20","url":null,"abstract":"\u0000 As food producers face increasing costs, many greenhouse growers are turning to controlled environment agriculture. The use of light-emitting diode (LED) supplemental lighting systems may increase a producer’s profitability, but it also comes with a unique set of externalities. Using an online survey, we found that showing images of light pollution from supplemental LED lighting sources facilitated respondents to want more regulation with state government being the desired regulator. Several significant factors influenced survey respondents’ posttreatment preference outcomes for different levels of regulation and regulators including demographic characteristics as well as initial attitudes toward LED lighting systems before treatment.","PeriodicalId":14970,"journal":{"name":"Journal of Agricultural and Applied Economics","volume":" ","pages":""},"PeriodicalIF":1.9,"publicationDate":"2023-06-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43574553","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Faced with risky yields and returns, risk-averse farmers require a premium to take risks. In this paper, we estimate individual farmers’ degrees of risk aversion to adjust for the risk premium in returns and to replace the farmers’ realized returns with their certainty equivalent returns in the production function. In that way, the effect of the inputs on returns will automatically be risk-adjusted, i.e., we obtain risk-adjusted marginal effects of inputs, which can be used in decision-making support of farmers’ input choices in production. Using farm-level data from organic basmati rice smallholders in India, we illustrate this method using nonparametric production functions. The results show that the input elasticities and returns-to-scale estimates change when the farmers’ degree of risk aversion is taken into consideration.
{"title":"Production Function and Farmers’ Risk Aversion: A Certainty Equivalent-adjusted Production Function","authors":"Gudbrand Lien, S. Kumbhakar, A. Mishra","doi":"10.1017/aae.2023.18","DOIUrl":"https://doi.org/10.1017/aae.2023.18","url":null,"abstract":"\u0000 Faced with risky yields and returns, risk-averse farmers require a premium to take risks. In this paper, we estimate individual farmers’ degrees of risk aversion to adjust for the risk premium in returns and to replace the farmers’ realized returns with their certainty equivalent returns in the production function. In that way, the effect of the inputs on returns will automatically be risk-adjusted, i.e., we obtain risk-adjusted marginal effects of inputs, which can be used in decision-making support of farmers’ input choices in production. Using farm-level data from organic basmati rice smallholders in India, we illustrate this method using nonparametric production functions. The results show that the input elasticities and returns-to-scale estimates change when the farmers’ degree of risk aversion is taken into consideration.","PeriodicalId":14970,"journal":{"name":"Journal of Agricultural and Applied Economics","volume":" ","pages":""},"PeriodicalIF":1.9,"publicationDate":"2023-06-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43248442","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Seth Ingram, Charles C. Martinez, C. Boyer, S. Huseynov, T. Rowan, Mykel Taylor, Elmin Alizada
We investigate the role of optimism bias in bull price expectations using incentivized lab-in-the-field experiments with Alabama and Tennessee cattle producers. We develop bull price prediction tasks and reward accurate predictions. We find that the EPD information provision prevents optimism bias from contaminating price expectations in the whole sample. However, we also document that, unlike buyers, sellers are prone to unrealistic optimistic expectations, and our results reveal that optimism bias can be moderated by the type of expected progeny difference information utilized, breed characteristics, and regional differences in cattle operations. We contribute to the literature by documenting the role of behavioral biases.
{"title":"Predicting Seedstock Bull Prices: Does Information Matter?","authors":"Seth Ingram, Charles C. Martinez, C. Boyer, S. Huseynov, T. Rowan, Mykel Taylor, Elmin Alizada","doi":"10.1017/aae.2023.19","DOIUrl":"https://doi.org/10.1017/aae.2023.19","url":null,"abstract":"\u0000 We investigate the role of optimism bias in bull price expectations using incentivized lab-in-the-field experiments with Alabama and Tennessee cattle producers. We develop bull price prediction tasks and reward accurate predictions. We find that the EPD information provision prevents optimism bias from contaminating price expectations in the whole sample. However, we also document that, unlike buyers, sellers are prone to unrealistic optimistic expectations, and our results reveal that optimism bias can be moderated by the type of expected progeny difference information utilized, breed characteristics, and regional differences in cattle operations. We contribute to the literature by documenting the role of behavioral biases.","PeriodicalId":14970,"journal":{"name":"Journal of Agricultural and Applied Economics","volume":" ","pages":""},"PeriodicalIF":1.9,"publicationDate":"2023-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49567045","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study examines the impact of land tenure rights on the adoption of short- and long-term agricultural practices and the impact of these practices on the income and food insecurity for rural households in Burkina Faso. The bivariate probit model and propensity score matching are used to analyze data collected from 4,398 rural households. The results show that ownership of permanent land rights only increases the likelihood of adopting long-term agricultural practices. In addition, adoption of short-term practices increases household income and reduces food insecurity, while adoption of long-term practices only increases household income.
{"title":"Land Tenure Rights and Short- and Long-term Agricultural Practices: Empirical Evidence From Burkina Faso","authors":"A. Diendéré, Jean-Paul Wadio","doi":"10.1017/aae.2023.10","DOIUrl":"https://doi.org/10.1017/aae.2023.10","url":null,"abstract":"\u0000 This study examines the impact of land tenure rights on the adoption of short- and long-term agricultural practices and the impact of these practices on the income and food insecurity for rural households in Burkina Faso. The bivariate probit model and propensity score matching are used to analyze data collected from 4,398 rural households. The results show that ownership of permanent land rights only increases the likelihood of adopting long-term agricultural practices. In addition, adoption of short-term practices increases household income and reduces food insecurity, while adoption of long-term practices only increases household income.","PeriodicalId":14970,"journal":{"name":"Journal of Agricultural and Applied Economics","volume":"1 1","pages":""},"PeriodicalIF":1.9,"publicationDate":"2023-05-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41486798","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We use a Bayesian approach to estimate elasticities of former Conservation Reserve Program (CRP) land allocation and the impact of the US–China trade conflict on post-CRP land transitions. Economically acceptable elasticities of land exiting CRP are important for applied analysis, including market shocks and environmental policy. Taking as given the total area exiting the CRP, the Phase 1 deal raised the posterior mean of national post-CRP soybean area by 155 thousand acres and the market facilitation program by 89 thousand acres. Cross-commodity effects are important, and elasticities vary depending on the direction and magnitude of changes in net returns and payments.
{"title":"The United States–China Trade War and Impact on the Post-Conservation Reserve Program Land Allocation","authors":"Meongsu Lee, P. Westhoff, W. Thompson","doi":"10.1017/aae.2023.3","DOIUrl":"https://doi.org/10.1017/aae.2023.3","url":null,"abstract":"\u0000 We use a Bayesian approach to estimate elasticities of former Conservation Reserve Program (CRP) land allocation and the impact of the US–China trade conflict on post-CRP land transitions. Economically acceptable elasticities of land exiting CRP are important for applied analysis, including market shocks and environmental policy. Taking as given the total area exiting the CRP, the Phase 1 deal raised the posterior mean of national post-CRP soybean area by 155 thousand acres and the market facilitation program by 89 thousand acres. Cross-commodity effects are important, and elasticities vary depending on the direction and magnitude of changes in net returns and payments.","PeriodicalId":14970,"journal":{"name":"Journal of Agricultural and Applied Economics","volume":" ","pages":""},"PeriodicalIF":1.9,"publicationDate":"2023-05-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49655899","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Aleksandre Maisashvili, Bart L. Fischer, Henry Bryant
The United States has a long history of providing ad hoc disaster assistance to agricultural producers. The latest version – the Emergency Relief Program (ERP) – follows five consecutive years of appropriations for disaster assistance. In response to ongoing appropriations, there is growing interest in establishing a permanent disaster program. However, with that comes concerns over the impact it could have on the existing farm safety net, particularly crop insurance. In this paper, we characterize the likely effects on crop insurance coverage levels of a permanent authorization of ERP. We assume that corn and soybean producers choose a coverage level based on the effects of that choice on the distribution of future ending wealth reflecting crop revenue, insurance indemnities, and ERP payments. We find very modest effects on crop insurance coverage level choices and crop insurance premiums collected.
{"title":"Crop Insurance Implications of Permanently Authorizing the Emergency Relief Program","authors":"Aleksandre Maisashvili, Bart L. Fischer, Henry Bryant","doi":"10.1017/aae.2023.14","DOIUrl":"https://doi.org/10.1017/aae.2023.14","url":null,"abstract":"\u0000 The United States has a long history of providing ad hoc disaster assistance to agricultural producers. The latest version – the Emergency Relief Program (ERP) – follows five consecutive years of appropriations for disaster assistance. In response to ongoing appropriations, there is growing interest in establishing a permanent disaster program. However, with that comes concerns over the impact it could have on the existing farm safety net, particularly crop insurance. In this paper, we characterize the likely effects on crop insurance coverage levels of a permanent authorization of ERP. We assume that corn and soybean producers choose a coverage level based on the effects of that choice on the distribution of future ending wealth reflecting crop revenue, insurance indemnities, and ERP payments. We find very modest effects on crop insurance coverage level choices and crop insurance premiums collected.","PeriodicalId":14970,"journal":{"name":"Journal of Agricultural and Applied Economics","volume":" ","pages":""},"PeriodicalIF":1.9,"publicationDate":"2023-05-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43932134","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Chengyan Yue, Yufeng Lai, E. Watkins, A. Patton, Ross Braun
Adopting eco-friendly technologies, such as converting lawns to alternative low-input grass species, can reduce household expenditures and mitigate negative environmental impacts at the same time. However, the rate of adoption of these technologies has not been as high as expected. This study develops a behavioral framework to identify barriers to new technology adoption by incorporating both prospect theory and present bias. We apply the framework in a choice experiment to investigate the relative importance of several factors that shape decisions associated with adoption of low-input turfgrass. We find that loss aversion plays a significant role. Though consumers exhibit present bias, long-term benefits still matter to them. Insights from the behavior model suggest that marketing and government programs that promote cost–benefit-efficient technologies should focus on eliminating or reducing potential losses caused by product failure.
{"title":"A Behavioral Approach to Identify Barriers to Adoption of New Technology: A Case Study of Low-input Turfgrasses","authors":"Chengyan Yue, Yufeng Lai, E. Watkins, A. Patton, Ross Braun","doi":"10.1017/aae.2023.7","DOIUrl":"https://doi.org/10.1017/aae.2023.7","url":null,"abstract":"\u0000 Adopting eco-friendly technologies, such as converting lawns to alternative low-input grass species, can reduce household expenditures and mitigate negative environmental impacts at the same time. However, the rate of adoption of these technologies has not been as high as expected. This study develops a behavioral framework to identify barriers to new technology adoption by incorporating both prospect theory and present bias. We apply the framework in a choice experiment to investigate the relative importance of several factors that shape decisions associated with adoption of low-input turfgrass. We find that loss aversion plays a significant role. Though consumers exhibit present bias, long-term benefits still matter to them. Insights from the behavior model suggest that marketing and government programs that promote cost–benefit-efficient technologies should focus on eliminating or reducing potential losses caused by product failure.","PeriodicalId":14970,"journal":{"name":"Journal of Agricultural and Applied Economics","volume":" ","pages":""},"PeriodicalIF":1.9,"publicationDate":"2023-05-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43202955","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We estimate the benefits of the saturated thickness (water-bearing porous material) of the alluvial aquifer in Arkansas through an application of the hedonic price model to the sale of agricultural land. There is evidence from the first-stage analysis of diminishing returns from increasing saturated thickness. Using a survey of farmer operators’ preferences and socioeconomic characteristics, we recover the underlying demand function for saturated thickness in a second-stage analysis. Shifts in the demand function reveal that produced/social capital can be a substitute or a complement to saturated thickness, and human capital is a substitute for saturated thickness.
{"title":"Estimating the Demand for Groundwater: A Second-stage Hedonic Land Price Analysis for the Lower Mississippi River Alluvial Plain, Arkansas","authors":"K. Kovacs, Shelby Rider","doi":"10.1017/aae.2023.15","DOIUrl":"https://doi.org/10.1017/aae.2023.15","url":null,"abstract":"\u0000 We estimate the benefits of the saturated thickness (water-bearing porous material) of the alluvial aquifer in Arkansas through an application of the hedonic price model to the sale of agricultural land. There is evidence from the first-stage analysis of diminishing returns from increasing saturated thickness. Using a survey of farmer operators’ preferences and socioeconomic characteristics, we recover the underlying demand function for saturated thickness in a second-stage analysis. Shifts in the demand function reveal that produced/social capital can be a substitute or a complement to saturated thickness, and human capital is a substitute for saturated thickness.","PeriodicalId":14970,"journal":{"name":"Journal of Agricultural and Applied Economics","volume":" ","pages":""},"PeriodicalIF":1.9,"publicationDate":"2023-05-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43951929","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Kwabena Nyarko Addai, Omphile Temoso, John N. Ng’ombe
Abstract This study uses a marginal treatment effects approach and farm household rice survey data from Northern Ghana to examine the heterogeneous effects of agricultural technologies on household welfare. Results indicate significant heterogeneity in the gains from the adoption of improved rice technologies among farmers. We found significant evidence of a pattern of positive selection on unobserved gains from the adoption of agricultural technologies on rice yield and household dietary diversity scores (HDDS). Moreover, the policy-relevant treatment effects suggest that reducing the distance to sources of agricultural technologies increases rice yield and HDDS through technology adoption.
{"title":"Heterogeneous Effects of Agricultural Technology Adoption on Smallholder Household Welfare in Ghana","authors":"Kwabena Nyarko Addai, Omphile Temoso, John N. Ng’ombe","doi":"10.1017/aae.2023.16","DOIUrl":"https://doi.org/10.1017/aae.2023.16","url":null,"abstract":"Abstract This study uses a marginal treatment effects approach and farm household rice survey data from Northern Ghana to examine the heterogeneous effects of agricultural technologies on household welfare. Results indicate significant heterogeneity in the gains from the adoption of improved rice technologies among farmers. We found significant evidence of a pattern of positive selection on unobserved gains from the adoption of agricultural technologies on rice yield and household dietary diversity scores (HDDS). Moreover, the policy-relevant treatment effects suggest that reducing the distance to sources of agricultural technologies increases rice yield and HDDS through technology adoption.","PeriodicalId":14970,"journal":{"name":"Journal of Agricultural and Applied Economics","volume":"36 2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135345161","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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