Dong Hee Suh

Why do we adopt environmentally friendly lawn care? Evidence from do-it-yourself consumers

ABSTRACT This study identifies the factors determining the purchase frequencies of organic/natural fertilizers (ONFs) with a focus on do-it-yourself (DIY) consumers’ perceptions and motives. The estimation results of the generalized ordered logit model provide statistical evidence that environmental perceptions are critical factors in directing DIY consumers to purchase ONFs frequently. The results imply that educational programmes, informational campaigns, or advertisements to improve their perceptions on the potential negative impacts of fertilization on the environment may increase the purchase frequencies of ONFs. In addition, the results show that DIY consumers perceive that it is worth using ONFs despite their higher prices than chemical fertilizers. Their purchase frequencies will increase if they positively perceive the values of ONFs and are willing to pay a premium for ONFs. Moreover, the purchasing behaviour of DIY consumers is associated with their perceptions of neighbourhood landscaping. If neighbours or homeowner associations encourage landscaping improvements in their community, DIY consumers may increase their purchase frequencies of ONFs accordingly.

The impact of Mexican competition on the U.S. strawberry industry

This paper models the U.S. strawberry market and examines how increasing imports from Mexico affect the prices and shipment values of California and Florida winter strawberries. The Synthetic Inverse Demand System is used to quantify the impact of Mexican shipments on the prices of strawberries. The estimation results indicate that market prices are responsive to supply from each of the three sources, suggesting an integrated, competitive national market. The simulation results suggest that rapidly growing Mexican shipments will cause large losses to the U.S. strawberry industry, posing challenges to the sustainability and survival of the industry, particularly that of the Florida industry. Policy implications and recommendations for the industry are discussed.

Dynamic interfeed substitution: implications for incorporating ethanol byproducts into feedlot rations

ABSTRACT This study examines interfeed substitution with a focus on the relationship between distiller’s dried grain with solubles (DDGS) and traditional feed grains. The dynamic linear logit model is used for the empirical analysis of interfeed substitution. The estimation results reveal that an increase in livestock and poultry outputs reduces the relative shares of corn and soybean meal to DDGS. The estimated adjustment rate indicates that the demand for feed grains is responsive in the short run with about 37% of the long-run response. This study also finds that the demand for corn and soybean meal remains inelastic even in the long run, showing the possibilities that livestock and poultry producers face high feed costs in response to an increase in the prices of corn and soybean meal. The pressures on feed costs can be alleviated by the substitutable relationship between DDGS and corn, but the substitution of DDGS for corn has a potential to provide livestock and poultry with different nutritional contents.

Examining crop price effects on production decision and resource allocation: an ex-ante approach

ABSTRACT This article examines the output price effects on the US crop production, employing an ex-ante approach to the differential systems of input demand and output supply. The estimation results of the differential input demand show that the expansion of crop production leads to an increase in acreage (i.e. extensive margin) and a proportional rise in input usage improving yield per acre (i.e. intensive margin). The substitutable relationship between fertilizer and land supports that crop producers have an option to choose either intensive or extensive margin in response to changes in their relative prices. In addition, the estimation results of the differential output supply highlight that the composition of crop supply can be altered by changes in ex-ante crop prices. The estimation results suggest that crop producers substitute corn supply for the supply of cotton, wheat and soybeans or vice versa. Based on the estimated elasticities, the decompositions of profit-maximizing input demand are conducted, which reveals that a change in ex-ante crop prices is associated closely with resource reallocation.

The Effects of Tomato Suspension Agreements on Market Price Dynamics and Farm Revenue

Since 1996 there have been several suspension agreements between the United States and Mexico that set reference prices for imported Mexican tomatoes. The 2013 suspension agreement raised the reference prices of Mexican tomatoes by 43%. This study conducts an econometric analysis to examine the effects of reference prices on the dynamics of tomato price and farm revenue. Findings indicate that the suspension agreements have resulted in significant adjustments in the U.S. and Mexican tomato prices, and that the two prices are now more interdependent under the 2013 agreement. Although the 2013 suspension agreement has boosted the prices of U.S. tomatoes, simulation analysis shows that the Mexican industry reaps most of the benefits from increased prices under the 2013 suspension agreement. The findings in this study could inform future trade negotiations.