Paul V. Preckel

The Conditional Beta Distribution as a Stochastic Production Function

The conditional beta distribution is proposed as a parametric model of the probability distribution of agricultural output. A two-stage maximum likelihood estimation procedure is shown to produce consistent, asymptotically efficient and normal estimates of maximum output and the parameters of the conditional distribution. Application of the procedure to data on corn yield response to fertilizers shows that fertilizers have a significant impact on each of the first three moments of the distribution of corn yield. Corn yield distributions are found to be negatively skewed, implying that above average yields are more probable than below average yields.

Outbound supply chain network design with mode selection, lead times and capacitated vehicle distribution centers

Most distribution network design models considered to date have focused on minimizing fixed costs of facility location and transportation costs. Measures of customer satisfaction driven by the operational dynamics such as lead times have seldom been considered. We consider the design of an outbound supply chain network considering lead times, location of distribution facilities and choice of transportation mode. We present a Lagrangian heuristic that gives excellent solution quality in reasonable computational time. Scenario analyses are conducted on industrial data using this algorithm to observe how the supply chain behaves under different parameter values. 2004 Elsevier B.V. All rights reserved.

Sensitivity analysis revisited: A quadrature-based approach

Abstract Sensitivity analysis for economic equilibrium models is critical for establishing the robustness of model results. A systematic method for parametric sensitivity analysis based on the Gaussian quadrature procedure for numerical integration is presented. The approach is compared to those of Harrison and Vinod and of Pagan and Shannon for the case of a computable general equilibrium model due to Walley and Wigle. The results suggest greater efficiency of the Gaussian quadrature approach.

PROJECTING WORLD FOOD DEMAND USING ALTERNATIVE DEMAND SYSTEMS

Computable General Equilibrium (CGE) models are increasingly being used to project world food markets in order to support forward-looking policy analysis. Such projections hinge critically on the underlying functional form for representing consumer demand. Simple functional forms can lead to unrealistic projections by failing to capture changes in income elasticities of demand. We adopt as our benchmark the recently introduced AIDADS demand system and compare it with several alternative demand systems currently in widespread use in CGE models. This comparison is conducted in the context of projections for disaggregated global food demand using a global CGE model. We find that AIDADS represents a substantial improvement, particularly for the rapidly growing developing countries. For these economies, the most widely used demand systems tend to over-predict future food demands, and hence overestimate future production and import requirements for agricultural products.

Is agricultural productivity in developing countries really shrinking? New evidence using a modified nonparametric approach

This paper analyzes total factor productivity growth in agriculture in Latin America and the Caribbean between 1961 and 2007 employing the Malmquist Index, a non-parametric methodology that uses data envelopment analysis (DEA) methods. The results show that among developing regions, Latin America and the Caribbean shows the highest agricultural productivity growth. The highest growth within the region has occurred in the last two decades, especially due to improvements in efficiency and the introduction of new technologies. Within the region, land-abundant countries consistently outperform land-constrained countries. Within agriculture, crops and non-ruminant sectors have displayed the strongest growth between 1961 and 2001, and ruminant production performed the worst. Additional analysis of the cases of Brazil and Cuba illustrates potential effects of policies and external shocks on agricultural productivity; policies that do not discriminate against agricultural sectors and that remove price and production distortions may help improve productivity growth.

The Economics of Bt Corn: Valuing Protection from the European Corn Borer

Corn that carries a gene from the natural soil bacterium Bacillus thuringiensis kurstaki, or Bt, has given farmers a potentially powerful tool to protect against European corn borer (ECB) damage. European corn borers are responsible for losses of

Decision Technologies for Agribusiness Problems: A Brief Review of Selected Literature and a Call for Research

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Forest resource depletion, soil dynamics, and agricultural productivity in the tropics☆

2 billion per year in the United States. This study analyzed the economic value of Bt corn under Indiana conditions. Results suggest that the value of the protection offered by Bt corn is generally lower than the current seed premiums in Indiana. The economic value of Bt corn may exceed the current premiums for farmers with higher-than-average yields or who have a 40% or greater probability of an ECB infestation.

Changes in the Structure of Global Food Demand

The supply chain in the food and agribusiness sector is characterized by long supply lead times combined with significant supply and demand uncertainties, and relatively thin margins. These challenges generate a need for management efficiency and the use of modern decision technology tools. We review some of the literature on applications of decision technology tools for a selected set of agribusiness problems and conclude by outlining what we see as some of the significant new problems facing the industry. It is our hope that we will stimulate interest in these problems and encourage researchers to work on solving them.

Multiattribute Assessment of Alternative Cropping Systems

Abstract A two-sector dynamic model for agriculture and forestry is proposed. Agricultural yields are a function of the rate of deforestation, the forest stock, and purchased inputs. We examine the impact of changes in the social discount rate, net returns to agriculture, and direct marginal benefits of the forest stock benefits on the optimal deforestation path under the assumption of a quadratic agricultural yield function. Finally, steady-state comparative static analysis is conducted.