The objective of this paper is to illustrate that economic institutions matter, i.e., that different rules of trade present different incentives for bidding, asking, and trading in new markets, and that these different incentives lead to different price discovery patterns, which yield materially different outcomes. In a laboratory tradable fishing allowance system, when trade takes place through a double auction, which parallels an institution common in extant tradable allowance systems, markets are characterized by high volatility, and equilibrium does not obtain. However, when only leases, and not permanent trades, are permitted in the early periods, volatility is significantly reduced and equilibrium obtains. This dependence of equilibration and outcomes on institutions implies policy-oriented economists must consider institutions in designing new market-based management systems.

This study analyzes U. S. consumers' choice of cornflakes under five different labeling statements. Using a nationwide survey and choice modeling framework, results indicate that consumers value labeling statements differently, depending on the information contained on the label. The random parameter logit model results indicated that, compared to cornflakes that have no label information, cornflakes labeled “contains no genetically modified com” have a value of 10 percent more, the label “USDA approved genetically modified com” has a value of 5 percent more, and the label “com genetically modified to reduce pesticide residues in your food” has a value of 5 percent more. The results also suggest that consumers negatively valued the label “contains genetically modified com,” paying 6.5 percent less, and the label “may contain genetically modified com,” paying 1 percent less than the product that has no label information.

As a result of economies of size, food processors are generally large and few in number. These characteristics put processors at a bargaining advantage over independent farmers. Marketing cooperatives were established to counter the uneven bargaining position of individual farmers. This article investigates the relative bargaining strength of one milk marketing cooperative and several fluid milk processors. The Nash bargaining model can be used to analyze the negotiated price in the Florida fluid milk market which acts like a bilateral monopoly. The milk marketing cooperatives have bargained well with the milk marketing processors; The monthly bargaining strength of the Southeast Dairy Cooperative, Inc. (SDC), exceeds the monthly bargaining strength of the processors in all twelve months, ranging from a low of 0.6664 in January to a high of 0.7831 in September. The monthly average bargaining strength across all months for SDC is 0.7326.

Agricultural policymakers place increasing emphasis on developing efficiency measures for organic producers in order to evaluate regulatory strategies and evolving organic market conditions. We develop technical efficiency measures for U. S. organic farmers using a stochastic production frontier. Farm decisions about acquiring and managing organic soil materials from on-farm and local sources are incorporated into the technical efficiency measure. Productivity differences between newer entrants to organic farming and more experienced producers are estimated in order to isolate the impact of learning and management expertise on farm-level technical efficiency.

Using patent statistics related to solar power on a panel of eleven countries from 1990 to 2008, we build a reduced-form model to analyze the role that public policies play in fostering innovation. We conclude that public expenditure on R&D and feed-in tariffs have a significant effect on the development of solar energy. We also find a significant effect of electricity price, attributable to rising energy prices. Using patent citations, we estimate the knowledge flows available to inventors in each country over time and we find that the marginal productivity of R&D has a positive and significant effect on innovation.

The impact of the Supplemental Nutrition Assistance Program (SNAP) on the national economy is examined using a general equilibrium model and comparing measures of the economy from 2010 to a simulation of that economy without SNAP. Without the SNAP program, the overall size of the economy hardly differs—demand for labor increases slightly. However, households that would be eligible for SNAP experience a net loss. They have 5.5 percent less disposable income while ineligible households have approximately 1 percent more income without SNAP, and output of products eligible for purchase with SNAP funds declines approximately one billion dollars.

Ballast water from commercial ships engaged in international trade has been implicated as the primary invasion pathway in over 60 percent of new introductions of invasive alien species (IAS) in the Great Lakes since 1960. Recent policies have recognized that IAS are a form of biological pollution and have become focused on preventing new introductions. Given that emissions-based incentives are infeasible for the case of biological emissions, we investigate the cost-effectiveness of various performance proxy-based and technology-based economic incentives to reduce the threat of new invasions of Ponto-Caspian species in the Great Lakes.

We analyze the impacts of agricultural subsidies on farm-level production decisions and input use under price, yield, and policy uncertainty for a risk-averse farmer. Using U.S. farm-level data and weighted ordinary least squares, we find that decoupled payments had little impact on agricultural chemical expenditures (our proxy for use) when the payments were first introduced in 1996. However, after 2004 there is a positive, significant relationship between decoupled payments and agricultural chemical expenditures. The results suggest that updating, introduced in 2002, and expectations of future updating caused decoupled payments to become coupled to current input use and, ultimately, production.

In this article, we examine the joint influence of land access and gender of household head on household food insecurity by employing a logit model and using data from the 2015/2016 Nigerian General Household Survey. Our results show that female-headed households (FHHs) are more food insecure than male-headed households. However, with a 1-acre increase in their access to land, FHHs are 16 percent less likely to be food insecure. This finding provides policy insights into how improving access to arable land for land-poor FHHs can enhance food security in Nigeria.

We demonstrate an application evaluating carbon sequestration benefits from federal policy alternatives. Using detailed forest inventory data, we projected carbon sequestration outcomes in the coterminous 48 states for a baseline scenario and three policy scenarios through 2050. Alternatives included (1) reducing deforestation from development, (2) afforestation in the eastern United States and reforestation in the western United States, and (3) reducing stand-replacing wildfires. We used social cost of carbon estimates to evaluate the present value of carbon sequestration benefits gained with each policy. Results suggest that afforestation and reforestation would provide the greatest marginal increase in carbon benefit, far exceeding policy cost.

Studies of recreation congestion generally utilize nonmarket valuation techniques to determine the use level and entrance price that maximize aggregate recreation benefits for a specific recreation area. This paper improves upon these previous studies by relaxing the assumption of homogeneous preferences among visitors of the same recreation area and accounting for visitor expectations of congestion. The results indicate that failing to account for heterogeneous preferences for congestion by time of visit leads to overestimates of the benefits of relieving peak-time congestion, while accounting for expectations raises questions about the validity of the standard optimal use model.

U.S. agricultural conservation policy has focused on a range of potential policy instruments centered on voluntary approaches tied into Depression-era commodity programs. Entering the twenty-first century, conservation policy is at a crossroads between more coercive regulatory policies, more costly voluntary programs, and more facilitative market-oriented policies. What are the pitfalls, advantages, disadvantages, and tradeoffs along these paths?

Policies to reduce nitrate leaching are evaluated using a mixed integer linear programming model of a representative Michigan cash grain farm. At spring 1993 prices, elimination of the current deficiency payment program is found to be more efficient at reducing leaching than a nitrogen input tax, a tax credit on biologically fixed nitrogen, a rotation payment, or obligatory use of the Integrated Farm Management Program Option (IFMPO). However, elimination of the deficiency payment program would significantly reduce farm income. Modeling risk management and nitrate leaching dynamics are useful extensions of this research, as is estimating the benefits from averting nitrate leaching.

This research employs an agricultural sector model that links seasonal crop production with disaggregated livestock production sectors, in tandem with observed quarterly data on U.S. drought conditions to assess the long term economic implications of drought for U.S beef cattle producers. Short term impacts show increases in feed costs as well as increases in cattle slaughter resulting from drought-induced culling. The price of live cattle decreases in the short run; however, feed prices remain above baseline levels, and beef cattle breeding inventories decline in the long run, leading to fewer calves moving through the supply chain.

A model of the domestic demand for eggs was estimated from quarterly data over the period 1987 through 1995, incorporating an index of consumer dietary cholesterol concerns and generic advertising efforts by the American Egg Board and the California Egg Commission. Empirical results indicated that most of the observed change in egg demand could be explained by dietary cholesterol concerns. Simulating the model in a constant elasticity supply framework demonstrated that advertising efforts over the past several years have resulted in net benefits to egg producers largely when considering inelastic supply responses. However, considering trade bias reduces these benefit-cost ratios substantially.

This study compares two methods of estimating a reduced form model of fresh tomato marketing margins: an econometric and an artificial neural network (ANN) approach. Model performance is evaluated by comparing out-of-sample forecasts for the period of January 1992 to December 1994. Parameter estimates using the econometric model fail to reject a dynamic, imperfectly competitive, uncertain relative price spread margin specification, but misspecification tests reject both linearity and log-linearity. This nonlinearity suggests that an inherently nonlinear method, such as a neural network, may be of some value. The neural network is able to forecast with approximately half the mean square error of the econometric model, but both are equally adept at predicting turning points in the time series.

We determine how the U.S. ethanol tax credit and import tariff affect the corn-ethanol-gasoline markets and how farm subsidies interact with these policies. We show how the ethanol tax credit and import tariff each uniquely affect the ethanol and gasoline prices. The ethanol import tariff alone increases the terms of trade in ethanol imports and corn exports, but decreases the terms of trade in gasoline imports and the tax costs of farm price supports. With price-contingent farm subsidies in place, the optimal tariff and tax credit will depend on the price level. When farm subsidy expenditures are high, import subsidies for ethanol may increase social welfare due to the substantial size of the fuel market relative to the corn market.

This paper examines heterogeneity in the preferences for OHV recreation by applying the random parameters Poisson model to a data set of off-highway vehicle (OHV) users at four National Forest sites in North Carolina. The analysis develops estimates of individual consumer surplus and finds that estimates are systematically affected by the random parameter specification. There is also substantial evidence that accounting for individual heterogeneity improves the statistical fit of the models and provides a more informative description of OHV riders.

This paper examines the impact of pesticide regulation on the number of new pesticide registrations and pesticide toxicity. Results suggest that regulation adversely affects new pesticide introductions but encourages the development of pesticides with fewer toxic side effects. The estimated regression model implies that a 10% increase in regulatory costs (about $1.5 million per pesticide) causes a 5% reduction in the number of pesticides with higher toxicity.