Euan Phimister

Does Capital Market Structure Affect Farm Investment? A Comparison using French and British Farm-Level Panel Data

This article considers whether differences in the structure of agriculture credit markets in France and the United Kingdom alters the investment sensitivity to financial variables particularly cash flow. Using two panel datasets of French and British farms, three approaches are used to test the sensitivity of investment to internal finance, an inventory investment model, a fundamental q-model, and Euler equations for machinery investment. The results suggest that the contrasting capital markets structures do induce differences in overall investment sensitivity to cash flow and its pattern across both farms with varying levels of collateral and between inventory and machinery investment. Copyright 2002, Oxford University Press.

Bayesian and classical estimation of mixed logit: An application to genetic testing

Discrete choice experiments (DCEs) in health economics have recently used the mixed logit (MXL) model to incorporate preference heterogeneity. These studies typically use a classical approach to estimation or have specified normal distributions for the attributes. Specifying normal distributions can lead to erroneous interpretation; non-normal distributions may cause problems with convergence to the global maximum of the simulated log-likelihood function. Hierarchical Bayes (HB) of MXL is an alternative estimation approach that may alleviate problems of convergence. We investigated Bayesian and classical approaches to MXL estimation using a DCE that elicited preferences for a genetic technology. The classical approach produced unrealistic results in one of the econometric specifications, which led to an erroneous willingness to pay estimate. The HB procedure produced reasonable results for both specifications and helped ascertain that the classical procedures were converging at a local maximum.

Farm Consumption Behavior in the Presence of Uncertainty and Restrictions on Credit

Farm consumption behavior has an important indirect role in determining the ability of farms to invest and grow. In this paper I examine the effect on farm consumption behavior of the presence of quantitative restrictions on farm borrowing. Using a form of the life cycle model which allows for both consumption and production by the household, the effect of borrowing restrictions on consumption behavior is tested econometrically for a sample of Dutch farm households. The results suggest that the life cycle model without borrowing restrictions is rejected by the data.

Female Participation and Labor Market Attachment in Rural Canada

This article explores the reasons for differences in female rural-urban participation rates by estimating a dynamic model of participation allowing for unobserved heterogeneity and state dependence using Canadian panel data. The results suggest that overall observed differences in rural-urban participation rates are primarily due to differences in observed socioeconomic characteristics. However, for women resident in low-income households, there is evidence that the operation of rural labor markets effectively lowers their participation rates. Copyright 2002, Oxford University Press.

Panel Estimates of the Canadian Rural/Urban Women's Wage Gap

This article analyzes the female rural-urban wage gap in Canada using longitudinal data from the Survey of Labour and Income Dynamics 1993–96. We estimate a two-step wage equation accounting for unobserved heterogeneity and sample selection. The results indicate that a statistically and economically significant rural-urban wage gap remains after controlling for observed and unobserved characteristics. Further, the results suggest this rural-urban wage difference is not simply induced by immobility between rural and urban markets. Rather, consistent with the effect of thinner rural labor markets, the evidence indicates that rural-urban differences in the impact of a number of explanatory variables are significant. Copyright 2004, Oxford University Press.

Is it Easier to Escape from Low Pay in Urban Areas? Evidence from the United Kingdom

In this paper we compare periods of low-paid employment between urban and rural areas in the United Kingdom. Using the British household panel survey, we estimate the probability that a period of low-paid employment will end, followed by a number of possible outcomes, namely a higher-paid job, self-employment, unemployment, and leaving the labour force. The results show that there are statistically significant differences in the dynamics of low pay across urban and rural labour markets, particularly in terms of exits to higher pay and out of the labour force. After controlling for different personal and job characteristics across markets, urban low-pay durations are somewhat shorter on average, with a higher probability of movement to a higher-paid job. The results suggest that any urban–rural differences in the typical low-pay experience are concentrated among certain types of individuals, such as young workers and women without qualifications.

Low Pay and Income in Urban and Rural Areas: Evidence from the British Household Panel Survey

This paper examines the extent of urban-rural differences in low pay and the link between low pay and low incomes using data on urban and rural residents from the British Household Panel Survey for 1991-98. The results suggest that, overall, urban wages were significantly less than accessible rural but significantly more than remote rural wages even after adjustments were made for differences in observed characteristics. A lower percentage of urban workers who experienced low pay were also resident in low-income households. Lower urban in-employment and in-self-employment poverty were found relative to poor remote rural households even after differences in the characteristics across the different samples were controlled for.

Ex-ante analysis of the regional impacts of the common agricultural policy:a rural-urban recursive dynamic CGE model approach

Abstract A recursive dynamic regional Computable General Equilibrium model is developed to assess the economic impacts of two Common Agricultural Policy (CAP) scenarios in six NUTS-3 (Nomenclature of Territorial Units for Statistics) (NUTS-1: major socio-economic regions, NUTS-2: basic regions for the application of regional policies, NUTS-3: small regions for specific diagnoses) regions of the European Union (EU). The main goal of the analysis is to assess the scenario effects (change in production, prices, income, employment) in the rural and urban parts of these regions as well as on the different sectors. The two scenarios analysed are related to a 30% reduction in Pillar 1 (market measures and direct support to farmers) support and the introduction of an EU-wide flat rate level of Pillar 1 support complemented by a 45% increase in Pillar 2 (Rural Development Policy) funds. Results show that the overall gross domestic product effects are not significant, due to the relatively low importance of both the agricultural sector and CAP spending in the regional economies. However, impacts on the agricultural sector are quite important and differ according to the nature of the policy shock. Also, the structural characteristics of each case study influence the rural–urban and sectoral spillovers, including impacts on region-specific agricultural activity.

Ex-ante Spatial Policy Impact Analysis of the Rural Development policy in European Rural Areas (RURAL ECMOD)

The present study aims at modelling the impact of different CAP (Common Agricultural Policy) scenarios on 6 case study regional economies. The starting point is the construction of a Social Accounting Matrix (SAM) obtained through a combination of mechanical downscaling of higher level input-output data with superior data, followed by a balancing procedure. A number of key elements facilitate the simulation of the policy scenarios: disaggregation of agricultural sector by farm size and the rural-urban disaggregation of activities and households. Policy scenarios focus on the impacts of relatively major changes in agricultural and rural policy (change in the balance between CAP pillars 1 and 2 or redistribution of funding within CAP pillar 2 – rural development policy). Models used are recursive dynamic CGE models, solved one year at a time, over the period 2006 to 2020. Policy measures are modelled on the base of RDP spending mapped for each region into investments in specific SAM sectors Economy wide effects of all scenarios remain limited, but slightly more important and significant when looking at the specifically rural economy. On the base of a limited number of case study areas, it seems that diversification policy mixes for rural development are in all cases beneficial to rural economies, while policy mixes focusing on agriculture competitiveness and public goods is only economically beneficial at short term and in rural, peripheral and agriculture-centred areas.

The Potential Impact of the Minimum Wage in Rural Areas

This article explores the extent to which the potential impact of the national minimum wage might differ in rural areas. Using pre-1999 data from the British Household Panel Survey, a number of dimensions of the policys potential impact in rural areas are considered, in particular, the number of workers affected, their typical characteristics, and the effects on pay inequality and household income distribution. The results show that for the majority of rural areas that are accessible to urban labour markets, the impact is likely to be broadly similar. In contrast, the potential impacts, and particularly the distributional effects, of the national minimum wage are found to be greatest in remoter rural areas.