We use contingent behavior analysis to study the effects of pfiesteria-related fish kills on the demand for seafood in the Mid-Atlantic region. We estimate a set of demand difference models based on individual responses to questions about seafood consumption in the presence of fish kills and with different amounts of information provided about health risks. We use a random-effects Tobit model to control for correlation across each observation and to account for censoring. We find that (i) pfiesteria-related fish kills have a significant negative effect on the demand for seafood even though the fish kills pose no known threat to consumers through seafood consumption, (ii) seafood consumers are not responsive to expert risk information designed to reassure them that seafood is safe in the presence of a fish kill, and (iii) a mandatory seafood inspection program largely eliminates the welfare loss incurred due to misinformation.

This paper examines the possible use of information on the relative marginal costs of point and nonpoint source water pollution abatement to assess the efficiency implications of shifting a greater portion of the burden for water quality protection to nonpoint sources. The inherent uncertainty about the effects of changes in resource allocation for nonpoint pollution abatement on nonpoint pollution loads is recognized in the analysis. This uncertainty is shown to result in significant limitations on the use of marginal cost comparisons even when point and nonpoint pollutants are perfect substitutes.

Agricultural land is being converted into rural residences at an unprecedented rate in the Inter-mountain West. Survey data have been collected for Sublette County, Wyoming concerning preferences for private land use and land use controls. Selected land use controls include zoning, purchase of development rights and cluster development. Local in-migration appears to be driven by the pursuit of open space and environmental amenities. Logit models are estimated for public and private choice co-variates. Private concerns about land use are the chief determinants of land use control approval.

Data from the 2006 Agricultural Resource Management Survey and multivariate regression procedures are used to examine the role of human capital in impacting the incomes of farm households. The paper uses an “adjusted” concept of income where government payments are subtracted from total household income thus allowing for the utilization of government payments as a potential control variable in the regression models. Findings indicate a significant and positive role for higher education except for farm households at the very lower and upper ends of the income distribution.

Most agricultural output in the northeastern United States comes from counties that have experienced significant development. A mail survey, with 300 responses, was conducted in southeastern Pennsylvania to determine farmer adaptation to urbanization in this region. Despite development, traditional agriculture still predominates. Changes in land use were examined using multinomial logit models. Results show that changes in population density and farm preservation policies have an influence, as increased population density reduced total land operated and having land in an agricultural security area increased it. Both differential assessment and agricultural security areas increased the cultivation of traditional, land extensive crops.

In this study it is argued that conflicting empirical results on the relationship between technical efficiency and education may be in part attributable to difficulties in the measurement of key variables. Calculation of technical efficiency with three alternative frontier methods for a sample of Guatemalan corn farms resulted in significant differences both in the average technical efficiency of the sample and the efficiency rankings of individual farms. Furthermore, following two-step procedures where technical efficiency is regressed against a set of explanatory variables, it is shown that the choice of efficiency measurement technique can alter the importance of education as a contributing factor to increased technical efficiency. An alternative approach is presented for investigating the relationship between education and efficiency while accounting for difficulties in the measurement of conceptual variables and measurement errors.

Using yield data for a sample of 123 dryland wheat producers in Montana, the effects of three area yield contracts, including the contract currently offered by the United States Federal Crop Insurance Corporation and two individual yield contracts on individual farm yield variability, are examined. The results indicate that while the Federal Crop Insurance Corporation area yield contract provides all farmers in the sample with some protection against yield variability, a simpler, actuarially equivalent “almost ideal” area yield contract provides substantially larger reductions in yield variability. However, actuarially equivalent individual yield contracts provide levels of protection against yield variability similar to those obtained under the “almost ideal” area yield contract at much lower premiums.

The greater reliance of U.S. farm families on off-farm income has implications for the structure of agriculture and the distribution of income within agriculture. Using annual data on farm households from the Current Population Survey, the degree of income inequality for the U.S. and by region is assessed for 1984. The distribution of income among farm families is decomposed by income source. Off-farm income is shown to contribute to higher average incomes and reduce income inequality at the margin, but only in regions where full-time farming predominates. In the Northeast and South, increases in off-farm income increase regional income inequality.

An advertising-sales response model is extended to include the effects of demographic factors (age and race) as additional determinants of milk demand. Previous research indicates that the age structure of a population and its racial composition are primary factors influencing fluid milk sales. Failure to incorporate these factors in the milk demand model results in a 30 percent downward biased estimate of the advertising effect. Consequently, the economic effectiveness of milk advertising is understated when the effects of demographic variables are ignored. Changes in demographic factors (growing nonwhite population and shrinking teenage market) appear to explain the relatively flat trend in per capita milk sales in the New York City market over the period 1971–80—a period in which dairy producers spent $12 million on generic advertising of milk. Net returns to Federal Order 2 dairy farmers from generic advertising of fluid milk is estimated to average $6.07 per media dollar invested over the 1972–79 period.

Empirical models of commodity prices are potentially important aids to decision-makers, especially as the economy has grown more complex. A typical time series of commodity prices exhibits positive autocorrelation, occasional spikes, and random variability, and conceptual models have been developed to explain this behavior. But, the leap from theory to empirical applications is large because of model specification and data quality problems. When modeling price expectations, for example, should a price series be deflated and if so, by what deflator? The choice can have a large effect on empirical results. Nonetheless, it is possible in some applications to obtain relatively stable estimates of structural parameters that are useful for addressing specific problems. This may not happen often, however, because the incentives in academia do not encourage rigorous, in-depth appraisals of empirical results.

Multicollinearity is one of several problems confronting researchers using regression analysis. This paper examines the regression model when the assumption of independence among the independent variables is violated. The basic properties of the least squares approach are examined, the concept of multicollinearity and its consequences on the least squares estimators are explained. The detection of multicollinearity and alternatives for handling the problem are then discussed. The alternative approaches evaluated are variable deletion, restrictions on the parameters, ridge regression and Bayesian estimation.

Water pollution control policies generally direct sources (i.e., industry, agriculture) to reduce loadings of certain pollutants. Thus, evaluating the relative net recreation benefits of policies to improve water quality requires establishing a linkage between the sources, the resultant water quality degradation at the affected water bodies, and, ultimately, the effect on recreation behavior. This linkage is rarely present in the empirical literature which is, thus, deficient for water pollution control policy assessment purposes. In this paper, we estimate the relative recreational swimming benefits that may result from controlling point and nonpoint sources of pollution, respectively, in New Hampshire's lakes. We use a repeated discrete choice framework to model swimming behavior as a function of each lake's level of eutrophication, bacteria, and oil and grease. For each pollutant, at each affected lake, we identify which source is responsible for the pollution, and we conduct scenarios controlling each pollution source independently, and then, taken together. Seasonal benefit estimates are presented for each scenario. Coupled with information on the most cost effective means of generating the scenarios, these estimates provide a useful starting point for a quantitative assessment of the net recreation benefits of policies to improve the quality of New Hampshire lakes.

This paper is a theoretical and empirical investigation into the impact of the structural adjustment program (SAP) on forest loss in Ghana between the period 1965–95. An optimal control model is used to derive estimable reduced form equations for forest loss, cocoa land, maize land and timber production, which are in turn functions of mainly input and output prices. Piecewise linear and switching regression approaches are used to distinguish between the influence of the post from the pre-adjustment policy impacts on forest land use. The overall results show that cocoa land expansion and timber production, but not maize land expansion, are significant causes of forest loss in Ghana. However, the impact on forest loss in the post-adjustment period was reduced. Changes in the relative output and input prices due to the SAP may have played a significant role in the reduced impact of agricultural and timber related deforestation in the post-adjustment period.

Conservation tillage offers economic and soil quality benefits, yet conventional tillage remains the prevailing system in some regions. The purpose of this study is to identify the effect of profitability factors, risk attitudes, crop rotations, and other farmer and farm characteristics on farmers’ choices to use no-till (NT), strip-till (ST) and reduced/conventional tillage (RCT) in producing dryland corn, wheat, and soybean in Kansas. The results show that factors such as crop yields, risk aversion, crop insurance, baling and grazing of crop residue, crop acreage, and farmers’ approach to adopting new technologies are significant factors in farmers’ choice of tillage practice.

Virginia's growing agritourism industry provides additional income to farms and mitigates risk. This study empirically analyzes the effect of demographic, operational, and financial factors on the profitability of agritourism operations using a primary data set collected from a survey of more than 500 agritourism operations. Results show that greater profitability is associated with operators who are motivated by additional income and have more education, larger operations with a greater percentage of income from agritourism, and visitors who spent more on average. Characteristics having a negative effect on profitability are wineries, locations farther from interstates, and difficulty accessing capital.

We study farm real estate values in the Barnett shale (Texas) and the northeastern part of the Marcellus shale (Pennsylvania and New York). We find that shale gas development caused appreciation in real estate values in both areas but the effect was much larger for the Marcellus, suggesting broader ownership of oil and gas rights by surface owners. In both regions, the greatest appreciation occurred when land was leased for drilling, not when drilling and production boomed. We find evidence that effects vary by farm type, which may reflect correlation between farm type and ownership of oil and gas rights.

The extent of forage purchasing behavior in milk production and its impact on profitability are analyzed using data from the 2000 and 2005 dairy versions of the Agricultural Resource Management Survey. Forage outsourcing is more common with hay than with silage and haylage, and is more prevalent in the western United States. Though silage and haylage outsourcing is found to impact profitability, the major profitability drivers appear to be farm size and efficiency. Evidence of significant forage contracting is found in the western United States.

Pesticide residue has repeatedly been documented as a leading source of food safety concern among consumers. While many studies have presented aggregate, descriptive illustrations of consumer response to Integrated Pest Management (IPM), consumer willingness-to-pay a premium for IPM produce and the factors that determine such willingness have received relatively little research attention. Such information is critical in the marketing of IPM produce.

This study empirically evaluates the demographic characteristics that influence consumers to pay a premium for IPM grown produce. Results indicate that females, those with higher annual incomes, younger individuals, and those who frequently purchase organic produce are all more likely to pay a premium for IPM produce.

Consumers’ willingness to pay for postharvest-processed (PHP) raw oysters—oysters without health risks—is studied in experimental auction markets. The experimental design decomposes the effects of taste, objective risk information, and information on four PHP technologies on consumer valuations. Results show that relatively uninformed consumers are willing to pay equivalent amounts for PHP and traditional raw oysters. However, after a blind taste test, consumers are willing to pay a significant premium for traditional raw oysters, and the premium persists after objective information on risk and processing technologies is provided. The results are robust across PHP technologies.

Using agricultural preservation priorities derived from an analytical hierarchy process by 23 conservation experts from 18 agencies in the state of Delaware, this research uses weighted benefit measures to evaluate the historical success of Delaware's agricultural protection fund, which spent nearly $100 million in its first decade. This research demonstrates how these operation research techniques can be used in concert to address relevant conservation questions. Results suggest that the state's sealed-bid-offer auction, which determines the yearly conservation selections, is superior to benefit-targeting approaches frequently employed by conservation organizations, but is inferior to the optimization technique of binary linear programming that could have provided additional benefits to the state, such as 12,000 additional acres worth an estimated $25 million.