Jeffrey H. Dorfman

Modeling Multiple Adoption Decisions in a Joint Framework

A multinomial probit (MNP) model is applied to the modeling of adoption decisions by farmers facing multiple technologies which can be adopted in various combinations. This model allows for full investigation of the interactions between decisions to adopt or not adopt several technologies. Estimation is carried out in a Bayesian framework employing Gibbs sampling to circumvent past difficulties encountered in maximum likelihood estimation of the MNP model. The model is estimated for a sample of U.S. apple growers with four possible sustainable production technology bundles. The results show that adoption decisions are most significantly influenced by off-farm labor supply. Copyright 1996, Oxford University Press.

Confidence Intervals for Elasticities and Flexibilities: Reevaluating the Ratios of Normals Case

Many important hypotheses in applied economics depend upon the magnitude of estimated elasticities or flexibilities. However, their statistical properties are unknown for many popular models, making standard statistical inference impossible. This problem is addressed in the present paper which analyzes and evaluates alternative methods of constructing confidence intervals for elasticities and flexibilities. The methods studied include three bootstrap-based approaches, an approximation based on a Taylors series expansion, and approaches proposed by Fieller and Scheffe. Results show that all methods except Scheffes worked reasonably well, but the simpler Fieller and Taylors series methods modestly outperformed the various bootstrapped-generated intervals.

Determinants of Teaching Quality: What's Important to Students?.

A method for using student evaluations to help faculty improve their teaching performance is presented. A survey of current methods of student evaluations of teaching identified a need to improve the statistical information obtained from these evaluations. An ordinary least squares framework is used to identify the factors that students feel are important in teacher and course ratings. This framework is used to estimate weights that students assign to various teacher and course attributes and to test whether students apply these weights consistently across teachers and courses. About 81 percent of the explained variation in teacher ratings was associated with attributes that contribute to student enjoyment of the learning process. Over 90 percent of the explained variation in course ratings was associated with attributes that measure how much a student learned in the course. Students were found to apply these attributes or weights consistently across teachers and courses. Implications for developing effective teaching strategies, faculty recruitment, and curriculum reform are discussed.

ESTIMATING THE BENEFITS OF GROUNDWATER CONTAMINATION CONTROL

In this paper, a conceptual model for estimating option price for groundwater quality protection is developed, and the effets of subjective demand and supply uncertainty and other variables on option price are estimated. A contingent valuation study to measure option price for groundwater quality protection was conducted in southwestern Georgia. Valuation results suggest that the monetary benefits to citizens of protecting groundwater supplies from agricultural chemical contamination are quite large.

Penalty Functions for Environmental Violations: Evidence from Water Quality Enforcement

We empirically estimate a penalty function for water quality violations of private firms in Georgia. We find that seriousness of infraction and historical compliance records strongly influence penalty levels, while the intentionality of violations and the method of discovery do not. The size of the polluting company is also an important determinant of financial penalties. Overall the results support the plausibility of modeling assumptions used in much the theoretical enforcement literature but indicate the need for caution in interpreting models that assume penalty amounts are invariant to violation characteristics.

Qualitative Forecast Evaluation: A Comparison of Two Performance Measures

Agricultural producers and marketers often have access to several sets of forecasts on the same series. Decision makers must be able to evaluate the relative accuracy of the forecasts. The ability to evaluate whether a series will move up or down is important for series related to futures, options, other asset prices, and situations where processes can be modified according to changing economic conditions. A measure of qualitative forecast accuracy from Naik and Leuthold is compared to a probability-based measure developed by Henriksson and Merton. The Henriksson-Merton measure is shown to provide additional, and more accurate, information concerning a models qualitative forecasting ability.

Estuary management and recreational fishing benefits.

Recognition of the benefits to society supported by estuary ecosystem functions and services, and threats to these benefits posed by human activities, has led to various public programs to restore and protect estuaries at the federal, state, and local levels. As available budgets shrink, program administrators and public elected officials struggle to allocate limited restoration and protection funds to the highest priority areas. Economic benefit and cost information can provide useful inputs into this decision-making process by quantifying estuary restoration and protection benefits and costs in commensurate terms. In this paper, a combined actual and intended travel behavior model is described that can be applied to estimate the recreational fishing benefits of estuary restoration and protection. The model was estimated for recreational fishing in the Lower Atchafalaya River Basin estuary along the Gulf of Mexico, Louisiana, USA coast. Changes in freshwater flows into this estuary may affect redfish and speckled trout game fish populations. The model indicates that changes in catch rates of these two species would have a relatively minor affect on annual fishing trips per angler. However, because total effects may be large when effects per angler are aggregated across total anglers, resource management agencies should consider these changes in recreation benefits when evaluating projects that influence the ecology of coastal estuaries, fish populations, and catch rates. Moreover, in other coastal areas or situations, the responsiveness of angling trips to changes in catch rates may vary because of differences in user populations, environmental conditions, fish populations, and fishing experiences.

Maximizing profit in broiler production as prices change: A simple approximation with practical value

Time-varying energy and protein levels in broiler feed raise profit considerably above feeding at constant levels. To accurately set profit-maximizing levels of feed ingredients, nonlinear biological response functions are employed. Nonlinear programming allows solution for optimal energy, protein, and ingredient levels for given prices, but may be too complex for industry-wide use. However, separable linear programming can approximate the optimal solution without significant loss of profit. Linear programming is common in broiler feed formulation, so producers can adopt this technique with existing technology. The potential increase in profits might well ensure the economic survival of marginal firms. ©1994 by John Wiley & Sons, Inc.

A numerical bayesian test for cointegration of AR processes

Abstract Bayesian Monte Carlo techniques are used to develop a posterior odds ratio test for cointegration which centers directly on the system dynamics implied by the model parameters — in particular on the number of nonstationary roots in the system. The procedure accounts for prior information concerning the probability of cointegration, the order of integration of the individual series, and the lag length necessary to model the series. An empirical example is provided using a set of foreign exchange rates. The posterior odds show little support for cointegration among the exchange rates tested.

Commodity Information and Willingness-to-Pay for Groundwater Quality Protection

The potential sensitivity of environmental resource valuations to information concerning the resource is of interest to researchers and decision-makers involved in estimating and applying these numbers. An analysis of the impact of characteristic and service information on the economic value of groundwater quality is described. Characteristic information details the objectively measurable traits of a resource, while service information describes the consumption services provided by the resource. The analysis provides insight into the impact of information on environmental resource valuation decisions. Hypothesis tests suggest that changes in the joint levels of information may cause significant changes in groundwater quality valuation behavior. More theoretical and empirical research is required before firm conclusions can be drawn concerning the effects of information on groundwater value estimates (e.g., estimated willingness-to-pay for groundwater protection).