Gregory M. Perry

The On-Farm Costs of Reducing Groundwater Pollution

Agricultural chemicals ate a source of groundwater pollution in some areas. Regulatory options to reduce such nonpoint pollution imply costs to producers. By integrating plant simulation, hydrologic, and economic models of farm-level processes, this study evaluates on-farna costs of strategies to reduce nitrate groundwater pollution. The empirical focus is on intensively managed, irrigated farms in the Columbia Basin of Oregon. Results suggest that changes in timing and application rates of nitrogen and water reduce nitrate pollution with little loss in profits. Once such practices are adopted, further reductions in nitrates can be achieved only at increasing costs to producers.

Depreciation Patterns for Agricultural Machinery

A flexible functional form model is used to estimate remaining-value equations for eleven major types of farm machinery. Data used in estimation were obtained from ten years of machinery auctions. Remaining values were found to be influenced by machinery condition, use, manufacturer, and age. Macroeconomic variables were significant explanatory variables for most types of machinery. Estimated depreciation patterns varied by machinery type, demonstrating the need for updated machinery-specific remaining-value equations. Reduced-form equations are presented for use in applied economic analysis.

Evaluating the Influence of Personal Relationships on Land Sale Prices: A Case Study in Oregon

Land transactions typically involve substantial personal interaction between buyer and seller. Despite this fact, researchers have made little attempt to determine how personal relationships influence the terms of trade for a property. In this study, Linn County, Oregon, farm land sales from 1992–1997 were examined to better understand and quantify the influences of personal relationships. Transactions between relatives and neighbors involved special considerations with greater frequency than did those between strangers and acquaintances. Transactions between parent and child and between neighbors brought significantly less than sales between strangers. Transactions resulting from a realtor or advertisement sold at a significant premium. (JEL Q24).

The effect of usage and size on tractor depreciation.

An econometric model was estimated to explain prices for tractors sold at auction. Tractor age, hours of use, size, and condition were statistically significant explanatory variables. Real tractor depreciation most closely approximated a sum-of-the-years digits pattern. Tractors sold at consignment and bankruptcy auctions brought a lower price than tractors sold by retiring farmers. High levels of usage did not greatly reduce tractor value, but tractors with low annual usage brought substantial premiums in the auction market.

Remaining Value Functions for Farm Equipment

Depreciation is a significant cost associated with farm equipment ownership. Remaining value functions established as ASAE standards have provided a popular means of estimating depreciation costs, but these functions are becoming outdated, are available for a limited number of farm equipment types, and are not responsive to equipment condition, hours of annual use, or the condition of the agricultural economy. This study presents new remaining value functions for 12 types of farm equipment, based on recent auction sales data. A double square root functional form was found to be the best form to model changes in equipment values over time. The estimated remaining value functions are recommended for updating the ASAE standards.

Ranking M.S. and Ph.D. Graduate Programs in Agricultural Economics

About 90 agricultural economists in eight fields of specialization were surveyed to identify the top Ph.D. and M.S. programs in the United States, as well as top departments in particular fields. The University of California at Berkeley and Davis (UC-Berkeley and UC-Davis, respectively), and Minnesota were considered best for Ph.D. programs. Minnesota and Montana State were the top-ranked M.S. programs. Historical rankings and current output in the American Journal of Agricultural Economics (AJAE) were identified as the best predictors of current rankings for Ph.D. programs.

Modeling Government Program Participation Decisions at the Farm Level

Changes in the U.S. farm economy during the 1980s have caused many farmers to give careful consideration to participation in the government farm program. Analytical techniques to identify optimal participation and resulting crop mix strategies at a whole-farm level can aid farmers faced with these decisions. This paper presents a mathematical programming approach adaptable to farm-level decision analysis. An empirical example involving a Texas farm suggests that resource levels, base acreage endowments, limited cross compliance, and returns outside the program can influence participation decisions.

Estimating Farm Equipment Depreciation: Which Functional Form Is Best?

Farm equipment depreciation has been the focus of research in economics and engineering for more than 60 years. Using data from 16 years of auction sales, depreciation functions were estimated for 17 types of equipment, including tractors, combines, swathers, planters, discs, and trucks. The Box—Cox function did the best job of explaining variability in these various sales data bases and in forecasting prices in an out-of-sample data set. Nevertheless, the much less complicated double square root and sum-of-years digits functions performed nearly as well. Simplified double square root estimates are provided for practitioners interested in forecasting equipment depreciation. Copyright 2004, Oxford University Press.

Individual versus social discount rates in allocating depletable natural resources over time

Abstract This paper demonstrates that individuals express different preferences with respect to intertemporal allocation of depletable natural resources. Those who obtain direct private control of these resources may be relatively less likely to conserve than society in general.

Cost‐Effective Abatement of Multiple Production Externalities

This article explores the issue of multiple externalities through a case study of irrigated agricultural production in eastern Oregon. A mathematical programming model is used to demonstrate the manner in which a policy directed at one externality (soil erosion) may influence the incidence of another externality (groundwater pollution). A key determinant of multiple externality outcomes is interdependence in the processes producing agricultural commodities and externalities. Potential benefits from coordinating a policy to address multiple environmental objectives are discussed.