James Kliebenstein

Valuing Food Safety in Experimental Auction Markets

In this paper, we value food safety in a nonhypothetical setting - experimental auction markets. First, subjects underestimate the relatively low probabilities of food-borne illness. Second, measures of value are within a relatively fiat range across a wide range of risks, even with repeated market experience and full information on the objective probability and severity of illness, suggesting subjects rely on prior perceptions. Third, marginal willingness to pay decreases as risk increases, suggesting that the perceived quality of new information can affect the weight the individuals place on the information. Finally, pathogen-specific values seem to act as surrogates for general food safety preferences.

CVM-X: Calibrating Contingent Values with Experimental Auction Markets

We design and implement a method, CVM-X, to calibrate hypothetical survey values using experimental auction markets. We test the procedure using consumer willingness-to-pay for irradiated/nonirradiated meat. Our results show that calibration factors for those who favor the irradiation process (0.67–0.69) are less severe than for those with an initial dislike of the process (0.55–0.59), suggesting that calibration may be commodity specific. Copyright 1998, Oxford University Press.

Modeling Dynamic Agricultural Production Response: The Case of Swine Production

Crop and livestock production processes are typically dynamic and involve growing biological assets which are eventually marketed. This study presents a production model of biological growth based on a differential equation specification. Economic implications for optimal input use and optimal replacement policy are discussed in this context. The approach is applied to the growing-finishing phase of a swine production enterprise. The results demonstrate that the knowledge of the growth function is crucial in evaluating dynamic production decisions.

Bid Sensitivity and the Structure of the Vickrey Auction

A research study explored a version of economist W. Vickreys second-price, sealed-bid auction used for the valuation of nonmarket goods. The sensitivity of revealed values generated by this variation were examined. A standard second-price auction with repeated market trials was compared to a random nth-price auction and a combinatorial private-collection auction with sequentially-revealed values. Results showed the consistency of revealed values in a low probability risk scenario.

Describing and Identifying the Complete Set of Target MOTAD Solutions

For some Target MOTAD applications, only enterprise mixtures associated with a single target level are of interest. However, in most cases knowledge of other Target MOTAD enterprise mixtures provides useful information. The complete set of Target MOTAD enterprise mixtures is the union of a finite number of closed convex subsets. It can be identified by parametric programming. For well-behaved problems, only two parameters, target income level (T) and expected deviations (λ), need to be varied to identify the set of Target MOTAD mixtures. Data from a problem by Hazell are used to illustrate this technique.

The Structure of Wages and Benefits in the U.S. Pork Industry

Pork production has evolved from relatively small, family-run operations toward large-scale operations with several employees. Important questions about the structure of compensation in this rapidly changing labor market are answered using probit and ordered probit models and data from a national survey of pork producers and their employees. The results suggest (i) the structure of wages in pork production is consistent with more developed labor markets; (ii) employees earn a wage premium for using advanced technology and working in larger operations; and (iii) employees are willing to accept lower wages in exchange for better benefits and working conditions. Key words: benefits, compensation, earnings functions, hog production, technology, wages.

An Analysis of Occupational Health in Pork Production

The rapid expansion of large-scale pork production has been accompanied by increasing concerns regarding potential detrimental consequences of environmental hazards on the health of producers. This study makes use of health indicators obtained from attendees at the World Pork Expo between 1991 and 1995 to evaluate the impact of pork production generally and of confinement production, specifically, on producer health. The analysis expands existing studies because the larger number of participants allows for detailed analysis, both nonfarmers and non-pork farmers are used as controls, both objective as well as self-reported health measures are considered, and personal characteristics such as height, weight, age, gender, smoking habits, and years of exposure to confinement operations and swine operations are controlled. The analysis shows that pork producers are more likely to report nagging respiratory symptoms (cough, sinus problems, sore throat) than are other farmers. Confinement operators have increased incidence of some symptoms relative to other pork producers. However, there was no evidence of permanent loss of pulmonary function associated with pork production or confinement operation. Farmers suffered from a greater incidence of hearing loss and loss of dominant hand strength relative to nonfarmers. Pork producers had even greater incidence of lost hand strength than other farmers but had no added incidence of hearing loss. On the plus side, farmers had lower blood pressure than did nonfarmers.

Reducing ammonia emissions from laying-hen houses through dietary manipulation.

Feed additives can change the microbiological environment of the animal digestive track, nutrient composition of feces, and its gaseous emissions. This 2-yr field study involving commercial laying-hen houses in central Iowa was conducted to assess the effects of feeding diets containing EcoCal and corn-dried distillers grain with solubles (DDGS) on ammonia (NH3), hydrogen sulfide (H2S), and greenhouse gas (CO2, CH4, and N2O) emissions. Three high-rise layer houses (256,600 W-36 hens per house) received standard industry diet (Control), a diet containing 7% EcoCal (EcoCal) or a diet containing 10% DDGS (DDGS). Gaseous emissions were continuously monitored during the period of December 2007 to December 2009, covering the full production cycle. The 24-month test results revealed that mean NH3 emission rates were 0.58 ± 0.05, 0.82 ± 0.04, and 0.96 ± 0.05 g/hen/day for the EcoCal, DDGS, and Control diet, respectively. Namely, compared to the Control diet, the EcoCal and DDGS diets reduced NH3 emission by an average of 39.2% and 14.3%, respectively. The concurrent H2S emission rates were 5.39 ± 0.46, 1.91 ± 0.13, and 1.79 ± 0.16 mg/hen/day for the EcoCal, DDGS, and Control diet, respectively. CO2 emission rates were similar for the three diets, 87.3 ± 1.37, 87.4 ± 1.26, and 89.6 ± 1.6 g/hen/day for EcoCal, DDGS, and Control, respectively (P = 0.45). The DDGS and EcoCal houses tended to emit less CH4 than the Control house (0.16 and 0.12 vs. 0.20 g/hen/day) during the monitored summer season. The efficacy of NH3 emission reduction by the EcoCal diet decreased with increasing outside temperature, varying from 72.2% in February 2009 to −7.10% in September 2008. Manure of the EcoCal diet contained 68% higher ammonia nitrogen (NH3-N) and 4.7 times higher sulfur content than that of the Control diet. Manure pH values were 8.0, 8.9, and 9.3 for EcoCal, DDGS, and Control diets, respectively. This extensive field study verifies that dietary manipulation provides a viable means to reduce NH3 emissions from modern laying-hen houses. Implications This work demonstrated that dietary manipulation can be used to reduce NH3 emissions from high-rise laying-hen houses with no adverse effect on the hen production performances (to be presented separately). The NH3 reduction rates could vary with different climates and hence geographic locations. The dietary manipulation to lower NH3 emissions should be applicable to all egg production systems. The results of this study also contribute to the baseline data for improving the national air emissions inventory for livestock and poultry production facilities.

Nonsolar energy use and one-hundred-year global warming potential of Iowa swine feedstuffs and feeding strategies.

Demand for nonsolar energy and concern about the implications of fossil fuel combustion have encouraged examination of energy use associated with agriculture. The United States is a global leader in pig production, and the United States swine industry is centered in Iowa. Feed is the largest individual input in pig production, but the energy consumption of the Iowa swine feed production chain has yet to be critically examined. This analysis examines nonsolar energy use and resulting 100-yr global warming potential (GWP) associated with the swine feed production chain, beginning with cultivation of crops and concluding with diet formulation. The nonsolar energy use and accompanying 100-yr GWP associated with production of 13 common swine feed ingredients are estimated. Two diet formulation strategies are considered for 4 crop sequence x ingredient choice combinations to generate 8 crop sequence x diet formulation scenarios. The first formulation strategy (simple) does not include synthetic AA or phytase. The second strategy (complex) reduces CP content of the diet by using L-lysine to meet standardized ileal digestibility lysine requirements of pigs and includes the exogenous enzyme phytase. Regardless of crop sequence x diet formulation scenario, including the enzyme phytase is energetically favorable and reduces the potential excretion of P by reducing or removing inorganic P from the complete diet. Including L-lysine reduces the CP content of the diet and requires less nonsolar energy to deliver adequate standardized ileal digestible lysine than simply feeding soybean meal. Replacing soybean meal with full-fat soybeans is not energetically beneficial under Iowa conditions. Swine diets including dried distillers grains with solubles and crude glycerol require approximately 50% more nonsolar energy inputs than corn-soybean meal diets or corn-soybean meal diets including oats. This study provides essential information on cultivation, processing, and manufacture of swine feed ingredients in Iowa that can be coupled with other models to estimate the nonsolar energy use and 100-yr GWP of pig production.

Test marketing new food products using a multitrial nonhypothetical experimental auction

A nonhypothetical experimental auction is used to replicate point-of-purchase decisions made by consumers encountering new food products in retail stores. Several applications of the procedure are discussed, with emphasis on the case-specific adjustments required to make the auction work. Participants in the experiments paid their own money to consume or avoid consuming livestock products produced with four yet-to-be-commercialized technologies. The results show promise for widespread adoption of nonhypothetical auctions for evaluating new food products prior to test marketing.