Ching-Cheng Chang

Sectoral Implications of Farm Program Modifications

The overall and distributional effects of farm programs and selected revisions are examined using a mathematical programming sector model. The model incorporates market distortions caused by price supports, target prices, program participation, deficiency payments and marketing loans. Current farm programs are found to increase producer prices, depress consumer prices, and in turn result in excess production and higher consumption and exports. Domestic and foreign consumers as well as domestic producers are subsidized by farm programs. Social deadweight loss occurs as government payments exceed welfare benefits received by consumers and producers. Society as a whole benefits from reductions in program provisions.

Uncertain Yields in Sectoral Welfare Analysis: An Application to Global Warming

Agriculture operates in an uncertain environment. Yields, prices, and resource usage can change dramatically from year to year. However, most analyses of the agricultural sector, at least those using mathematical programming methods, assume decision making is based on average yields, ignoring yield variability. This study examines how explicit consideration of stochastic yield outcomes influence a sector analysis. We develop a model that can be used for stochastic sector analysis. We extend the risk framework developed by Hazell and others to incorporate discrete yield outcomes as well as consumption activities dependent upon yield outcomes. An empirical application addresses a comparison between sector analysis with and without considerations of the economic effects of yield variability in a global warming context.

Climate change, sea level rise and rice: global market implications

Climate change will influence yields while sea level rise can inundate producing lands. The research reported investigates the individual and simultaneous effects of these factors on production, trade and consumption of rice the world’s number one food crop. A global rice trade model is utilized to do this. The results indicate that the combination of yield and sea level effects causes a significant reduction in production and an increase in rice prices which may have important policy implications for food security. Global rice production is reduced by 1.60% to 2.73% while global rice price increases by 7.14% to 12.77%. Sea level rise is particularly a risk factor in Bangladesh, Japan, Taiwan, Egypt, Myanmar and Vietnam. In the face of such developments, adaptation may well be desirable and thus an investigation is done over adaptation options of increased technical progress or trade liberalization with the results showing that both can mitigate such damages.

Performance measurement for incineration plants using multi-activity network data envelopment analysis: The case of Taiwan

This study proposes the use of multi-activity network data envelopment analysis to appraise how incineration plants in Taiwan perform. Sample data from 2006 is used to examine the trade-offs between efficiency enhancement and pollution abatement. The respective efficiencies of the waste treatment and electricity generation are also assessed in a unified framework. The empirical results indicate that it is more important to improve the efficiency of waste treatment activity than of electricity generation activity in order to enhance the overall performance of Taiwans incinerators. Since ownership, location and length of operations do not in general affect their performance, any improvement has to come from the careful monitoring of each process of the waste treatment operations. Furthermore, given that the policy in Taiwan has moved away from incineration to recycling, the problem of an over-supply of incinerators may become apparent in the near future. Our results indicate that the availability of capacity size may be an important factor when policy-makers consider whether to close down some existing incinerators.

Economic growth and openness in Africa: What is the empirical relationship?

This study examines the effects of trade policies on economic growth in Africa. The econometric methodology follows the cross-country studies by Barro (1991) and Kandiero and Chitiga (2003) with empirical application to a panel of 36 African countries observed over the period 1980 to 2009. Panel regressions are carried out using the fixed-effects models. The aim is to provide an empirical evidence for the driving force of Africas economic growth. The results illustrate that openness in trade and investment is positively related to economic growth significantly. However, foreign aid, gross national savings and investment have negative relationships to both Gross Domestic Product (GDP) growth and GDP. Using South Africa as benchmark, the regional performance indicates that North Africa is the best one in generating positive GDP growth from Foreign Direct Investment (FDI), followed by Middle Africa whilst East Africa and West Africa compete for the third and fourth positions.

Assessing Economic Implications of New Technology: The Case of Cornstarch-Based Biodegradable Plastic

A nonlinear mathematical programming model of the agricultural sector is utilized to examine the potential economic impacts of producing cornstarch-based biodegradable plastics. The model simulates market conditions in terms of prices, quantities, farm program expenditures, and resource usage while also generating social welfare measures. Six alternative biodegradable plastic production and technology scenarios are examined. The results indicate that biodegradable plastics production, even under optimistic scenarios, does not have major impacts on the agricultural sector. Producers gain welfare benefits, largely through corn and sorghum production. Biode-degradable plastics production causes increased farm program expenditures as well. A net welfare cost to the agricultural sector would need to be met by consumer and environmental gains due to biodegradable plastics use.

Efficiency and productivity change in Taiwan’s hospitals: a non-radial quality-adjusted measurement

This study measures the quality-adjusted hospital efficiency and productivity index of a production unit. We propose a non-radial output-oriented directional distance function approach to analyze Taiwan’s hospital productivity, which embeds the quality of care and environment variables simultaneously. There are two major advantages of this model. First, it considers all the radial and non-radial slacks that the model can identify, and hence is able to provide a more accurate performance measure and improve the discriminating power of the analysis. Second, it allows us to identify the source of the inefficiency. Our results show that the productivity indices of most of Taiwan’s hospitals got worse during the 2002–2004 period, during which both technology and efficiency performance deteriorated, but divergence appeared among different types of hospitals. We confirmed the need to incorporate quality factors while measuring a hospital’s efficiency and productivity. Nevertheless, there is no evidence to support the idea that healthcare quality is undermined by the cost-saving efforts by the care providers after the implantation of a global budget system.

A reassessment of the Global Food Security Index by using a hierarchical data envelopment analysis approach

Abstract This study proposes a hierarchical data envelopment analysis (H-DEA) approach to construct a multi-dimensional indicator, and applies it to reassess the 2014 Global Food Security Index created by the Economist Intelligence Unit (EIU) across 110 countries. Instead of using expert opinions to assign weights, the proposed model endogenises the weights, and thus avoids the problems of subjective weighting for international comparisons. The results show that although the ranking is not significantly different from that of the EIU, the optimal scores and weights differ by income levels. Additionally, this work articulates the value of a well-founded performance evaluation method by leveraging experts’ opinions and data-driven techniques through constructing a best-practice frontier with observation-specific weights. It is suggested that food availability should be the top policy priority in low- to medium-income and Sub-Saharan African countries where food deficits are most prevalent. The findings can serve as guidance to improve the design of the ongoing efforts for global food security.

A value-added analysis of trade in Taiwan and Korea’s ICT industries

Purpose – The purpose of this paper is to extricate value-added exports in information and communications technology (ICT) industry earned by Taiwan and Korea. Additionally, the authors decompose Taiwan and Korea’s gross exports into various meaningful components. Design/methodology/approach – The authors use the inter-country input-output (ICIO) table which endows with cost structures of industries as well as trade information, facilitating in keeping track of the flow of products and value-added. The ICIO table used in this paper comes from the World Input-Output Database. The authors also use the way Wang et al. (2013) decomposed the intermediate goods exports into various components to provide further insights. Findings – The empirical results indicate that Taiwan and Korea’s ICT export to the world shrink by 47.8 and 40.9 percent when the trades are measured in value-added terms. Taiwan and Korea’s ICT export will also decrease by 75.1 and 57.8 percent. From the viewpoint of value added in trade, the...

An economy-wide analysis of impacts on Taiwan of reducing tariff escalation on agriculture-related products in WTO Doha Round negotiations

Purpose - – The purpose of this paper is to assess the degree of tariff escalation in Taiwans agriculture-related commodities and the economy-wide impact of tariff harmonization. Design/methodology/approach - – A computable general equilibrium model of the Taiwan economy is applied to simulate for the economy-wide impact of three alternative proposals that reduce tariff rates as well as the degree of tariff escalation in agriculture-related products. Findings - – The paper shows that reduction in tariff wedge helps increase social welfare of Taiwan at the expense of some agricultural sectors. Based on the pair-wise comparisons of the three tariff reduction proposals, the scenario where the upstream products have the least reduction would have agricultural sectors fare better than in the other scenarios where more negative impact on output and employment would occur to agricultural sectors. Originality/value - – The paper assesses quantitatively the economy-wide impact of reducing tariff wedges between unprocessed and processed products, which is rarely seen in the literature using a detailed computable general equilibrium model.