Adesoji O. Adelaja

PREDICTING WILLINGNESS-TO-PAY A PREMIUM FOR INTEGRATED PEST MANAGEMENT PRODUCE: A LOGISTIC APPROACH

Pesticide residue has repeatedly been documented as a leading source of food safety concern among consumers. While many studies have presented aggregate, descriptive illustrations of consumer response to Integrated Pest Management (IPM), consumer willingness-to-pay a premium for IPM produce and the factors that determine such willingness have received relatively little research attention. Such information is critical in the marketing of IPM produce. This study empirically evaluates the demographic characteristics that influence consumers to pay a premium for IPM grown produce. Results indicate that females, those with higher annual incomes, younger individuals, and those who frequently purchase organic produce are all more likely to pay a premium for IPM produce.

Predicting mergers and acquisitions in the food industry

Two logit models are estimated to explain merger and acquisition (M&A) activities in US food manufacturing using firm level data for public firms: a “target model” predicting the likelihood of a firm being targeted for M&A and a “takeover model” predicting the likelihood of a targeted firm being taken over. Target model results suggest the importance of firm liquidity, debt|leverage, profitability, growth in sales, stock earnings capacity, percentage of common stocks traded in the stock market, and market-to-book ratio. Activity or turnover ratio, firm size, and price-earnings ratio were not statistically significant. Takeover model results suggest the importance of degree of officer control, attitude surrounding the transaction, number of prior bids, existence of litigation during negotiations, and involvement of the bidder and|or target in other takeovers during negotiations. With predictive accuracy of 74.5 and 62.9%, respectively, these models suggest the systematic nature of M&A activities.

LAND VALUES, MARKET FORCES, AND DECLINING DAIRY HERD SIZE: EVIDENCE FROM AN URBAN-INFLUENCED REGION

The role of land values in the dairy industry of an urban-influenced region is investigated by estimating a dairy herd equation based on pooled cross-section and time-series data from counties in New Jersey, Pennsylvania, and New York. The use of cross-terms between hypothesized causal variables and a dummy variable capturing the effect of location allowed the estimation of the differences across states in the effects of milk, feed, and land prices. Results confirm the important role of rising land values in the decline of the dairy industry in the tri-state area, and suggest greater vulnerability of dairy enterprises in urban-influenced areas to rising adverse economic forces. The adverse effects of declining milk prices and higher land values are greatest in New Jersey. The results support the notion that programs such as price support, farmland preservation, farmland assessment, and right-to-farm may have to be maintained in order to retain dairy farms at the urban fringe, where land values are rising rapidly.

Political Economy Of Right-To-Farm

This paper investigates the motivations for local right-to-farm protection ordinances by estimating a logit model relating the adoption of these ordinances to various political, economic and demographic factors previously found to affect the likelihood of passage of farmland preservation policies. Results suggest that the probability of adopting right-to-farm policies increases with the size and political clout of the farm public and with incentives to promote right-to-farm. Adoption is not enhanced by environmental concerns, nor by factors known to encourage adoption of farmland preservation policies. These findings raise serious concerns about the long-run viability of protections afforded agriculture in urbanizing areas.

Market Share, Capacity Utilization, Resource Conservation, and Tradable Quotas

This paper examines the impact of the introduction of Individual Transferable Quotas (ITQs) on catch, market share, and capacity utilization of firms in the Mid Atlantic Surf Clam and Ocean Quahog (SCOQ) Fishery. Via the production function framework, catch and market share regression models are utilized in examining the effects of operator size, vessel age, and alternative product catch variables on industrial structure and how such effects changed after ITQs were introduced. Results indicate that in both fisheries, the ITQ system enhanced the value of each vessel by allowing vessel owners to apply greater effort to fewer boats, thus reducing excess capacity in the fishery. Results also indicate an overall resource conservation effect of ITQ introduction in the surf clam fishery. These results suggest that in the presence of ITQs, overall efficiency was enhanced in the SCOQ fishery.

Material Productivity in Food Manufacturing

Material prices have risen in food manufacturing, resulting in material productivity growth. This study estimates material productivity indexes for New Jerseys food-manufacturing sector. A 21% material productivity growth is indicated for the 1964–84 period. The mechanism of material productivity growth is also investigated. Results suggest that greater material efficiency is encouraged by rising material prices, wage rates, and regulation, and by declining food prices. Short-run impacts on material productivity are caused by input substitution; beyond-the-short-run impacts are caused by material-saving technological change. In some food-manufacturing subsectors, higher material prices may bring lower revenues to material suppliers.

The impact of down-zoning on land values: A theoretical approach

Purpose - This paper aims to build a mathematical model to determine the price of an acre of developable land, whether it is part of a large open tract (farm) or a smaller residential parcel that can legally be subdivided. The primary purpose of the model is to explore the effect of various minimum lot-size regulations on the price of these two types of vacant land. The study also attempts to explain apparently conflicting findings that have recently appeared in empirical studies of “down-zoning” in the states of Maryland and New Jersey. Design/methodology/approach - The mathematical model of land value is based on principles of asset valuation under uncertainty at various locations within a metropolitan area. The price of an acre of land is modeled as the present value of a stream of indirect utility to homeowners, and economic rents to farmers, developers or landlords, depending on an endogenous date of development. The cases of New Jersey and Maryland are compared using parameterized simulations, with minimum lot size allowed to vary. Findings - The simulations reconcile earlier empirical studies on Maryland and New Jersey. The observed absence of any price effect of down-zoning in rural Maryland appears to be caused by the fact that development is not imminent there. In New Jersey, development is imminent virtually everywhere, and a high proportion of todays vacant land value is due to its development potential. This means that down-zoning will typically lead to dramatic declines in vacant land value in New Jersey. Research limitations/implications - The study relies on state averages, so its results should not be applied to particular parcels in Maryland or New Jersey. The study incorporates uncertainty in expected developer profits, but not in future political decisions. Practical implications - By clarifying the context in which zoning changes will or will not lead to decline in a landowners asset value, the study can inform legal and political debates over re-zonings in the USA. Included in these debates is the claim that some re-zonings violate the “takings” clause of the USA constitution. Originality/value - The majority of papers on this subject are empirical, using a hedonic or an appraisal methodology. This paper provides a coherent theoretical model of per-acre land prices under different levels of zoning restriction. It can be used for simulation or prediction with relatively few input parameters.

Economic and equity implications of land-use zoning in suburban agriculture

A cash-flow viability model is used to evaluate the impacts of land-use zoning on farm households in New Jersey. Findings suggest that zoning results in increased production expenses, lower efficiency and profitability, and the devaluation of land assets. Cash flow and economic viability are, thus, reduced. Impacts of zoning on farm incomes, off-farm incomes, revenues from land sales, indebtedness, and farm sizes were not statistically significant. The results suggest that the use of land-use zoning statutes to guarantee the existence of agriculture may not be equitable unless transferable development rights or other methods of compensating farmers for their losses are simultaneously implemented.

A MULTI-PRODUCT ANALYSIS OF ENERGY DEMAND IN AGRICULTURAL SUBSECTORS

A multi-product cost function model was used to analyze energy demand in various agricultural subsectors. This approach has advantages over previously used approaches since it reduces aggregation bias, considers technological jointness, and provides various disaggregative measures related to energy input demand. When fitted to West Virginia county level data, labor and miscellaneous inputs in crop and livestock production were found to be substitutes for energy, while capital, machinery, and fertilizer were complementary to energy. Energy demand was inelastic and increases in machinery prices had the largest reduction effect on energy demand. Technological change was found to be capital, machinery, and fertilizer using, but it was labor and energy saving. Analyses indicated that the elasticity of demand for energy inputs with respect to livestock output was significantly larger than the elasticity with respect to crop output.

Understanding the Challenges Facing the Food Manufacturing Industry

Abstract The Northeasts share of US food processing activity has decreased significantly over the last three decades as many food processing firms have exited the region and located elsewhere, particularly in the South and the West. This decline has been most severe in New Jersey, the state that is frequently cited as having the most stringent business and regulatory climate in the nation. To investigate why food processors have found the New Jersey environment to be so unfriendly, this study organized focus groups of food processing industry executives, trade organizations and researchers. The findings suggest that the area of environmental and other regulation is the most problematic for food processors. Other areas of concern include, in order of importance, taxation and fiscal problems, economic barriers to development and expansion, high cost of doing business, education, training and labor concerns, communication and public relations, and transportation. Policy makers in New Jersey, and in other northeastern states facing similar food processing declines, interested in the retention and economic development of food processing firms need to be cognizant of the impediments currently constraining the industry. Industry-based public policy recommendations for enhancing the business climate for food processors are presented.