A linear probability function permits the estimation of the probability of the occurrence or non-occurrence of a discrete event. Nerlove and Press (p. 3–9) outline several statistical problems that arise if such a function is estimated via OLS. In particular, heteroskedasticity inherent in such a regression model leads to inefficient estimates of parameters (Amemiya 1973, Horn and Horn). Moreover, without restrictions on the conventional OLS model, probability estimates lying outside the unit (0–1) interval are possible (Nerlove and Press). Goldberger and Kmenta suggest two approaches for alleviating the heteroskedasticity problems inherent in the OLS regression model. Logit analysis will also alleviate heteroskedasticity problems and ensure that estimated probabilities will lie within the unit interval (Amemiya 1974, Hauck and Donner, Hill and Kau, Horn and Horn, Horn, Horn, and Duncan, Theil 1970).

Increased attention is being directed to electronic markets in the major agricultural commodities. Electronic markets are characterized by a trading arena that has been centralized via some electronic medium. The medium used may be a conference telephone, teletype, computer system, or some combination of these or other mechanisms. All make possible the sale of a commodity by description without requiring the physical proximity of buyer, seller, and product. In theory, this capability can eliminate or reduce the spatial imperfections and pricing problems now present in many “thin” markets, a topic of increasing concern throughout the food industry (Hayenga).

The U.S. burley tobacco industry faces an important crossroad in this decade. It appears that domestic disappearance of burley tobacco will continue to decrease and U.S. burley tobacco will continue to have stiff competition in foreign markets. The government can influence the U.S. tobacco market in the coming decade through its tobacco program. The alternatives available to government policy makers must be analyzed to help guide policy formulation.

Price risk has been a major problem for cattle feeders during the 1970s. Since 1972, variability in cash cattle prices has increased dramatically as a result of volatility in the feed grain sector, the cyclical liquidation of cattle numbers which began in late 1973, and cyclical moves in hog prices. The increased levels of price risk have prompted increased interest in hedging.

The literature on hedging strategies for cattle feeding operations continues to grow. Results of early studies show hedging has the capacity to reduce risk in cattle feeding as measured by the variance of per head profits (Heifner; Holland, Purcell and Hague). More recent studies have developed and tested strategies which have the potential both to reduce price risk and increase profits. Selective hedging is typically employed. A mathematical model to predict cash price, sell-buy signals based on some technical trading system, or some other approach is used to select when the cash position should be hedged.

Concern has been expressed by many people, from producers to consumers, regarding the adequacy and accuracy of reported wholesale carcass beef prices and their use in pricing slaughter cattle and beef. The controversy has generated numerous government investigations and lawsuits beginning at least as early as the mid-1960s (General Accounting Office, 1977, 1978; National Commission on Food Marketing). Despite the decade and a half of criticisms about cattle and beef pricing and price reporting, and the importance of the carcass beef market to the cattle and beef subsector, agricultural economists have devoted surprisingly few resources to analyzing carcass beef market performance.

The trend toward larger and fewer farms has alarmed many persons who view the small farm as an integral part of American society. Advocates of the small farm have called for policies to halt the continuing decline in the number of small farms in the United States. In evaluating the merits of potential policies, understanding the composition of small farms in the U.S. is critical.

Appropriate public policy would be very different if small farms were operated solely by households with substantial off-farm income and who need no public assistance, solely by households pursuing an alternative to urban-industrial society's lifestyle and who want no public assistance, or solely by households who are aged and disabled and who want and need public assistance to avoid absolute deprivation.

The Food Stamp Act authorizes the distribution of food coupons (stamps) to households which meet certain income eligibility requirements. This legislation enables low-income households to buy more food of greater variety to improve their diet. In fiscal 1979, the cost of the Food Stamp Program amounted to $6.7 billion and the number of persons participating in the program averaged 18.9 million.

Historically, the manufacturing milk sector has been treated as the residual segment of the dairy industry. Milk for fluid consumption has always had first claim on Grade A milk production and any excess milk has been available for manufactured products. The pricing system for milk reflects the dependence on manufactured products as the residual outlet for excess milk. On-farm quality standards for production are lower for manufacturing milk and thus the farm price is lower. The proportion of whole milk produced as manufacturing grade milk is declining as producers shift to Grade A production. The decline in supply has been accelerated to some extent also by the upgrading of on-farm quality standards in recent years. Many small producers left the industry rather than make the necessary expenditures to upgrade on-farm facilities. In addition, the movement of Grade A milk into the expanding fluid milk markets in the South has resulted in a declining quantity of excess Grade A milk. Consequently, there is excess processing capacity in the manufacturing milk sector.

South Carolina producers supply tomatoes on a national scale during an approximately five-week market window centered in June. This market window follows a six-month period dominated by Florida production and to a lesser extent Mexican exports. Even though South Carolina is the major East Coast supplier of tomatoes during its market window, the success or failure of South Carolina marketings depends on the stage set by Florida and Mexico. That is, the price level obtained by South Carolina producers for their tomatoes tends to be influenced by the volume of tomatoes delivered to market prior to South Carolina's harvest. South Carolina, Florida, and Mexico serve many of the same markets (i.e., Northeast terminal markets). As a result, the influence of the volume prior to South Carolina's harvest on the state's average tomato price can be used to provide farmers with a price estimate before planting. Specifically, a model is constructed to forecast the average spring tomato price received by South Carolina producers. This forecast must be available to producers by mid-February if it is to serve as a decision-making tool.

The Food Stamp Act of 1964 (with subsequent amendments) charges the U.S. Department of Agriculture with extending the benefits of the program to all households willing and eligible to participate. This duty was reinforced by a federal court ruling in 1975 (Beckel and MacDonald; Bennett et al. vs. Butz et al.).

Because of the importance of the Food Stamp Program (FSP), numerous studies have been conducted to gauge its intended effectiveness. Areas of study have included nutritional benefits of the program, impact on food expenditures, identification of ways to improve the rate of program participation, and identification of socioeconomic characteristics that may be important indicators of participation or nonparticipation in the program (for example, see Davis and Neenan; Lane; Neenan and Davis 1977, 1978; Salathe; Scearce et al.; Smith and Rowe; West; USDA, 1976, 1978).

Considerable attention has recently been paid (Rhodes, Tomek and Robinson) to the various alternative mechanisms for discovering prices of agricultural products. Alternative mechanisms include organized markets and auctions, individual price negotiations, group bargaining, supply-demand estimation pricing, and formula pricing. One such price discovery mechanism is currently employed by the Florida Celery Exchange, a voluntary marketing cooperative which represents all major Florida celery producers in setting prices. The role and performance of the Exchange in influencing weekly Florida celery harvesting and pricing decisions are of particular interest because the Exchange's price-fixing activities represent, at least a priori, a departure from the traditional competitive price determination process.

Several alternative government programs have been used in the past to achieve policy objectives related to the levels of crop acreage and net farm income. Important questions remain relating to the effectiveness of past programs in achieving selected policy objectives. In particular, what is the relative effectiveness of long-term versus short-term acreage diversion programs? One of the major impacts of government diversion programs is in the allocation of land among competing uses. Several studies (Brandow and Learn; Christensen and Aines; Hathaway) indicate that the use of acreage control on single crops rather than on all crops results in less than proportionate reduction in output from a given reduction in acreage. However, only limited information is available on the interrelationships among major competing uses of crop, pasture, and privately owned forest acreage. Studies of these interrelationships (e.g. Dideriksen et al. and Zeimetz et al.) did not consider the influence of government programs. In particular, how do government programs affect these competing uses?

Tobacco production traditionally has been a highly labor-intensive operation in this country. Although the entire crop is grown on only .3 of 1 percent of the total cropland, tobacco requires more labor than is required for all vegetable crops and about the same amount as needed for cotton and food grains combined (USDA, Agricultural Statistics). However, in recent years a growing trend toward mechanization of harvesting-curing operations has, among other effects, greatly reduced labor usage. During the time period 1949–1976, total man-hours in tobacco production in the United States declined from 747 million to only 275 million—a reduction of more than 63 percent (USDA, Agricultural Statistics). Much of this reduction has been due to the introduction of bulk curing barns and mechanical harvesters (multipass and once-over types), which have replaced tying by hand or machines, conventional barns, and walking or riding primers. Mechanization of tobacco production has been relatively slow because of the special growing, harvesting, and curing requirements. However, the present state of mechanization is not insignificant.

In an effort to circumvent the multicollinearity problems associated with direct estimation of the aggregate agricultural production function, many economists have used indirect estimation procedures. Because in equilibrium the partial production elasticities of an industry composed of perfectly competitive firms are equal to their respective factor shares, the latter have been used as a means of estimating production elasticities. Most researchers have simply assumed that actual factor shares are equilibrium values (e.g., Griliches; Rosine and Helmberger). Substantive contributions recently have been made in explaining the process of factor share adjustment by changes in prices and technology over time (Binswanger; Lianos). However, except for the work nearly 15 years ago by Tyner and Tweeten (1965), agricultural economics literature is largely silent on the measurement of differences between actual and equilibrium factor shares. It is this issue with which we are primarily concerned in this article. Therefore, our point of departure is the work by Tyner and Tweeten.

Fertilizer consumption by the U.S. agricultural sector has increased dramatically for several decades. Nitrogen fertilizer use increased 632 percent between 1952 and 1976. Phosphate and potash fertilizer use increased 138 and 229 percent, respectively, in the same period (USDA 1978). However, the upward trend in fertilizer use was temporarily interrupted during the early and mid-1970s as the real fertilizer price began to increase after many years of decline.

Higher levels of aggregate fertilizer consumption over the 1952–1976 period outweighed the decline in the real price of fertilizer as real dollar expenditures for fertilizer continued to rise. Our study includes an attempt to relate fertilizer use for different crops to relevant economic variables.

Farm planning in developed economies has reached the sophistication level of involving static and dynamic annual or polyperiod decision models. These models or frameworks range from unadorned linear programming to dynamic systems utilizing interdependence among time spans. Goal or criterion decisions range from unrestricted global profit maxamization to local profit comparisons restricted by risk and other considerations.

Systematic farm planning from the micro to the macro level is common in developed economies because of widespread knowledge of the planning tools and the availability of low-cost computational facilities. The potential increase in profits on large commercial farms makes the use of these planning tools profitable whether the farm unit bears the total cost or Extension Services or lending institutions subsidize their use.

The culture of marine invertebrates, collectively termed mariculture, has received much attention as a new and potentially lucrative industry. Much research has been devoted to molluscs (oysters, clams, and mussels) and crustaceans (shrimp, crawfish, crabs, and lobsters) (Bardach, Ryther, and McLarney). In particular, effort has been directed to the development of a technologically and commercially feasible penaeid shrimp mariculture scheme (Broom; Mock and Murphy; Neal and Latapie; Parker and Conte; Wheeler). Results of extensive research efforts show promise that the technological feasibility of penaeid shrimp farming in Gulf coastal regions of the United States is near to being a reality.

The view that the navigable waters of the United States should be toll free originated in the colonial period of U.S. history, and became explicitly stated federal policy in the 1884 Rivers and Harbors Act (Ashton et al.). At that time public expenditures for waterway improvements were small and the freight transportation industry was dominated by railroads. Therefore, public policy promoted water transportation as an inexpensive means of encouraging competition for the railroads.

Since the early years of this century public expenditures for improvements of the waterways have risen while water, motor, air, and pipeline transportation have become effective competitors for the railroads. The conditions which justified a toll-free waterway policy changed, but the policy was not altered. Though every president since Franklin Roosevelt has recommended that Congress levy a charge on inland waterway users, legislators have been reluctant to implement such charges.

We find two reasons to develop an improved management information system for local governments. One is the apparent inability of current local government management information systems to warn of imminent financial collapse or to indicate the degree of financial weakness of a local government. Another reason is the need for information that will promote the most efficient use of resources in providing public services.

During the 1970s certain local governments were unable to meet their obligations. Their current obligations exceeded current revenues. The nation was made aware of the crisis when New York City defaulted on some of its loan obligations and sought federal assistance. Other local governments have faced similar crises. Cleveland, Ohio, was in default for a short period during 1978 until it sold some of its assets (urban land and an electric power generating plant) to obtain cash and reduced its programs to reduce current outlays. The crises in those large cities have brought national attention to the financial problems of many local governments—urban and rural, large and small.

Since the mid-1940s, interest in the interrelationships of subnational economies has been growing. Part of this interest flows from a realization of the need to manage regional growth and mitigate the effects of economically unstable components of regional economies on the welfare of the people within the region. Aggregated macroeconomic models applied at the national level commonly provide insufficient information about their components, the regional economies. This lack has led to the development of state and regional macro models which can provide specific information relevant to state or local decision makers. Such information includes the availability of regional resources necessary to support and expand regional production and the impacts of changes in demand on the welfare of local inhabitants. These models are also useful in estimating the impacts of national policy on regional economies. The development of regional input-output models is an example of the trend toward fuller understanding of regional economies. State or regional input-output models can be constructed either by survey or by estimation from the national input-output model. Time and money constraints have increased the popularity of the latter approach among regional economists.