Carl H. Nelson

The Conditional Beta Distribution as a Stochastic Production Function

The conditional beta distribution is proposed as a parametric model of the probability distribution of agricultural output. A two-stage maximum likelihood estimation procedure is shown to produce consistent, asymptotically efficient and normal estimates of maximum output and the parameters of the conditional distribution. Application of the procedure to data on corn yield response to fertilizers shows that fertilizers have a significant impact on each of the first three moments of the distribution of corn yield. Corn yield distributions are found to be negatively skewed, implying that above average yields are more probable than below average yields.

Risk Perception, Behavior, and Consumer Response to Genetically Modified Organisms: Toward Understanding American and European Public Reaction

Public debate about the acceptability of genetically modified organisms in the production of food and feed has included controversy about risks of harming human health and/or the natural environment. Consumer and public response to the risks can be volatile, as manifested in some of the extreme protest actions in Europe. These reactions are due, in part, to strong judgments formed from memorable events. Such judgments are common when individuals do not have a good understanding of risks. Economic and psychological theories of decision making provide understanding of how these judgments are formed, how they might evolve, and what can be done to influence them. Public dialogue and action must account for cognitive difficulties assessing risks to stimulate public evaluation that gives full consideration to the benefits and cost of genetically modified organisms.

Measuring the Economic Efficiency of Producing Rural Road Services

The research reported here examines the ability of a sample of Midwest township officials to produce low-volume rural road services in an economically efficient manner. Farrell-type measures of input use and scale efficiency are reported. Results suggest that over 50% of costs may be unnecessarily incurred because of input use inefficiency. Correlation between output measures and the efficiency measures suggests that larger jurisdictions are more efficient than smaller jurisdictions. In addition, 84.5% of the townships exhibit technology characterized by increasing returns to scale. These results suggest that jurisdictional consolidation of production-related responsibilities may yield substantial cost savings.

A Note on the Efficiency of Seemingly Unrelated Regression

Abstract The variance-covariance matrix for the seemingly unrelated regression estimator is expressed as an ordinary-least-squares variance-covariance matrix. This permits new insights into the efficiency of seemingly unrelated regression, especially the role of correlations among variables.

Welfare Effects of the National Pseudorabies Eradication Program

A welfare methodology is adapted to evaluate market and distributional effects of a completed pseudorabies eradication effort in the U.S. The model predicts small market effects from pseudorabies eradication. Welfare analysis suggests that, in states generating relatively large hog numbers, producers will experience a net gain from eradication in all scenarios considered, yet in smaller hog producing areas individual hog operations may lose producer surplus. Consumer surplus changes vary by scenario but are always positive. In general, the national pseudorabies eradication program is shown to be economically efficient.

Method development and analysis of retail foods for annatto food colouring material

Analytical methods for the determination of the permitted food colouring annatto (E160b) have been developed or refined to encompass the wide range of food commodity types permitted to contain it. Specific solvent extraction regimens have been used depending upon the food commodity analysed and HPLC analysis techniques coupled with spectral confirmation have been used for the determination of the major colouring components. Qualitative and quantitative data on the annatto content of 165 composite and two single retail food samples covering a wide range of foods at levels above the limit of quantification (0.1mg kg−1) is reported. Quantitative results are given for the major colour principals 9′-cis-bixin, 9′-cis-norbixin andtrans-bixin. Semi-quantitative results are given for the minor bixin and norbixin isomers monocis- (not 9′-), di-cis- andtrans-norbixin, for which authentic reference standards were not available. Repeat analyses (n = 4−9) of 12 different types of food commodity (covering the permitted range) spiked with annatto at levels between 1.7 and 27.7 mgkg−1 gave mean recoveries between 61 and96%. The corresponding relative SDs (RSD) were between 2.1 and7.9%.

Is there Evidence of Learning‐by‐Exporting in Turkish Manufacturing Industries?

Abstract Exporting has always been thought of as one tool to improve productivity and, consequently, to spur economic growth in low‐ to middle‐income economies. However, empirical evidence of this so‐called ‘learning‐by‐exporting’ effect has been limited. This article determines whether learning‐by‐exporting is evident in two Turkish manufacturing sectors—the textile and apparel (T&A) and the motor vehicle and parts (MV&P) industries. A semi‐parametric estimator that controls for problems associated with simultaneity and unobserved plant heterogeneity is used to test the learning‐by‐exporting hypothesis. After controlling for these issues, our results suggest statistically stronger learning‐by‐exporting effects in the T&A than in the MV&P industry. The highly concentrated and capital‐intensive nature of the MV&P industry is the main reason for the lower learning‐by‐exporting effect in this sector. From a policy perspective, this implies that targeting export‐enhancing policies to industries with significant learning‐by‐exporting effects may lead to more productivity gains and would better stimulate an export‐led growth.

Asset Fixity and Investment Asymmetry in Agriculture

Fixed asset theory implies that it is more difficult to dispose of capital specific to agricultural production than to add to the stock of specialized capital. This theory is tested by determining whether transitions between states of disinvestment are as likely as transitions between states of investment. Of the twenty-four annual capital stock series analyzed, evidence of asymmetry between investment and disinvestment is strong in eight cases, weak in four, and insignificant in twelve. There is considerable, although mixed, evidence of asymmetry for tractors (farm and nonfarm) and other specialized vehicles since World War II and for agricultural machinery.

Welfare Impacts of Alternative Public Policies for Agricultural Pollution Control in an Open Economy: A General Equilibrium Framework

A general equilibrium approach is used to evaluate the welfare impacts of alternative policies for reducing agricultural pollution in an open economy with preexisting distortions caused by income taxes and agricultural subsidies. The policies examined here include the removal of distortionary agricultural subsidies. We find that even though these distortions are small compared to others in the economy, removing them and imposing nitrogen reduction subsidies and/or output taxes can enhance welfare and reduce nitrogen pollution; thereby leading to a substantial double dividend. The relative efficiency of the alternative policies examined here depends on the level of the nitrogen reduction target. Copyright 2008, Oxford University Press.

Up in smoke ? agricultural commercialization, rising food prices and stunting in Malawi

Diversification into high-value cash crops among smallholders has been propagated as a strategy to improve welfare in rural areas. However, the extent to which cash crop production spurs projected gains remains an under-researched question, especially in the context of market imperfections leading to non-separable production and consumption decisions, and price shocks to staple crops that might be displaced on the farm by cash crops. This study is a contribution to the long-standing debate on the links between commercialization and nutrition. It uses nationally-representative household survey data from Malawi, and estimates the effect of household adoption of an export crop, namely tobacco, on child height-for-age z-scores. Given the endogenous nature of household tobacco adoption, the analysis relies on instrumental variable regressions, and isolates the causal effect by comparing impact estimates informed by two unique samples of children that differ in their exposure to an exogenous domestic staple food price shock during the early child development window (from conception through two years of age). The analysis finds that household tobacco production in the year of or the year after child birth, combined with exposure to an exogenous domestic staple food price shock, lowers the child height-for-age z-score by 1.27, implying a 70-percent drop in z-score. The negative effect is, however, not statistically significant among children who were not exposed to the same shock. The results put emphasis on the food insecurity and malnutrition risks materializing at times of high food prices, which might have disproportionately adverse effects on uninsured cash crop producers.