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Intra-Industry Trade, Multilateral Trade Integration, And Invasive Species Risk, Anh T. Tu, John C. Beghin Dec 2006

Intra-Industry Trade, Multilateral Trade Integration, And Invasive Species Risk, Anh T. Tu, John C. Beghin

CARD Working Papers

We analyze the linkage between protectionism and invasive species (IS) hazard in the context of two-way trade and multilateral trade integration, two major features of real-world agricultural trade. Multilateral integration includes the joint reduction of tariffs and trade costs among trading partners. Multilateral trade integration is more likely to increase damages from IS than predicted by unilateral trade opening under the classic Heckscher-Ohlin-Samuelson (HOS) framework because domestic production (the base susceptible to damages) is likely to increase with expanding export markets. A country integrating its trade with a partner characterized by relatively higher tariff and trade costs is also more ...


Nontariff Barriers, John C. Beghin Dec 2006

Nontariff Barriers, John C. Beghin

CARD Working Papers

Nontariff barriers (NTBs) refer to the wide range of policy interventions other than border tariffs that affect trade of goods, services, and factors of production. Most taxonomies of NTBs include market-specific trade and domestic policies affecting trade in that market. Extended taxonomies include macro-economic policies affecting trade. NTBs have gained importance as tariff levels have been reduced worldwide. Common measures of NTBs include tariff-equivalents of the NTB policy or policies and count and frequency measures of NTBs. These NTB measures are subsequently used in various trade models, including gravity equations, to assess trade and/or welfare effects of the measured ...


Discounting Spotted Apples: Investigating Consumers' Willingness To Accept Cosmetic Damage In An Organic Product, Chengyan Yue, Frode Alfnes, Helen H. Jensen Nov 2006

Discounting Spotted Apples: Investigating Consumers' Willingness To Accept Cosmetic Damage In An Organic Product, Chengyan Yue, Frode Alfnes, Helen H. Jensen

CARD Working Papers

Organic producers have limited methods of avoiding plant diseases that result in cosmetic damage to produce. Therefore, the appearance of organic produce is often less than perfect. We use an experimental auction to investigate how cosmetic damage affects consumers’ willingness to pay for organic apples. We find that 75% of the participants are willing to pay more for organic than for conventional apples given identical appearance. However, at the first sight of any imperfection in the appearance of the organic apples, this segment is significantly reduced. Furthermore, we find that there is a significant effect of interaction between cosmetic damage ...


An Analysis Of The Link Between Ethanol, Energy, And Crop Markets, Simla Tokgoz, Amani E. Elobeid Nov 2006

An Analysis Of The Link Between Ethanol, Energy, And Crop Markets, Simla Tokgoz, Amani E. Elobeid

CARD Working Papers

This study analyzes the impact of price shocks in three input and output markets critical to ethanol: gasoline, corn, and sugar. We investigate the impact of these shocks on ethanol and related agricultural markets in the United States and Brazil. We find that the composition of a country's vehicle fleet determines the direction of the response of ethanol consumption to changes in the gasoline price. We also find that a change in feedstock costs affects the profitability of ethanol producers and the domestic ethanol price. In Brazil, where two commodities compete for sugarcane, changes in the sugar market affect ...


Removal Of U.S. Ethanol Domestic And Trade Distortions: Impact On U.S. And Brazilian Ethanol Markets, Amani E. Elobeid, Simla Tokgoz Oct 2006

Removal Of U.S. Ethanol Domestic And Trade Distortions: Impact On U.S. And Brazilian Ethanol Markets, Amani E. Elobeid, Simla Tokgoz

CARD Working Papers

We analyze the impact of trade liberalization and removal of the federal tax credit in the United States on U.S. and Brazilian ethanol markets using a multi-market international ethanol model calibrated on 2005 market data and policies. The removal of trade distortions induces a 23.2 percent increase in the price of world ethanol on average between 2006 and 2015 relative to the baseline. The U.S. domestic ethanol price decreases by 14.1 percent, which results in a 7.5 percent decline in production and a 3.2 percent increase in consumption. The lower domestic price leads to ...


Social Assistance Programs And Outcomes: Food Assistance In The Context Of Welfare Reform, Sonya Kostova Huffman, Helen H. Jensen Sep 2006

Social Assistance Programs And Outcomes: Food Assistance In The Context Of Welfare Reform, Sonya Kostova Huffman, Helen H. Jensen

CARD Working Papers

Food assistance programs play an important role in meeting the basic needs of low-income households. We consider the complex interactions among food stamps, labor force participation, and food insecurity status of low-income households under different program designs and economic conditions. The analysis uses data from the Survey of Program Dynamics to jointly estimate the role of participation in the Food Stamp Program (FSP), labor market participation and well-being, measured as food security, through the use of a simultaneous equation model. The results of our research suggest that food insecurity has a positive effect on FSP participation while labor force participation ...


Economies Of Feedlot Scale, Biosecurity, Investment, And Endemic Livestock Disease, David A. Hennessy Sep 2006

Economies Of Feedlot Scale, Biosecurity, Investment, And Endemic Livestock Disease, David A. Hennessy

CARD Working Papers

Infectious livestock disease creates externalities for proximate animal production enterprises. The distribution of production scale within a region should influence and be influenced by these disease externalities. Taking the distribution of the unit costs of stocking an animal as primitive, we show that an increase in the variance of these unit costs reduces consumer surplus. The effect on producer surplus, total surplus, and animal concentration across feedlots depends on the demand elasticity. A subsidy to smaller herds can reduce social welfare and immiserize the farm sector by increasing the extent of disease. While Nash behavior involves excessive stocking, disease effects ...


U.S. Universities' Net Returns From Patenting And Licensing: A Quantile Regression Analysis, Harun Bulut, Giancarlo Moschini Sep 2006

U.S. Universities' Net Returns From Patenting And Licensing: A Quantile Regression Analysis, Harun Bulut, Giancarlo Moschini

CARD Working Papers

In line with the rights and incentives provided by the Bayh-Dole Act of 1980, U.S. universities have increased their involvement in patenting and licensing activities through their own technology transfer offices. Only a few U.S. universities are obtaining large returns, however, whereas others are continuing with these activities despite negligible or negative returns. We assess the U.S. universities' potential to generate returns from licensing activities by modeling and estimating quantiles of the distribution of net licensing returns conditional on some of their structural characteristics. We find limited prospects for public universities without a medical school everywhere in ...


Pharmaceutical And Industrial Traits In Genetically Modified Crops: Co-Existence With Conventional Agriculture, Giancarlo Moschini Aug 2006

Pharmaceutical And Industrial Traits In Genetically Modified Crops: Co-Existence With Conventional Agriculture, Giancarlo Moschini

CARD Working Papers

This paper discusses the implications of using genetically modified crops to biomanufacture pharmaceuticals and industrial compounds from the perspective of their co-existence with conventional agriculture. Such plant-made pharmaceuticals and plant-made industrial products rely on exciting scientific and technological breakthroughs and promise new opportunities for the agricultural sector, but they also entail novel risks. The management of the externalities and of the possible unintended economic effects that arise in this context is critical and poses difficult questions for regulators.


Agricultural Production Clubs: Viability And Welfare Implications, Corinne Langinier, Bruce A. Babcock Aug 2006

Agricultural Production Clubs: Viability And Welfare Implications, Corinne Langinier, Bruce A. Babcock

CARD Working Papers

Consumers are in general less informed than producers about the quality of agricultural goods. To reduce he information gap, consumers can rely on standards (e.g., certification) that ensure quality and origin of the goods. These costly standards can be adopted by a group of producers of high-quality goods. We study the formation of such a group that we model as a club. We first investigate under what circumstances a club of a given size is desirable for producers, and for society. We then analyze the optimal size of the club when there exists a direct barrier to entry, and ...


Optimal Design Of Permit Markets With An Ex Ante Pollution Target, Sergey S. Rabotyagov, Hongli Feng, Catherine L. Kling Aug 2006

Optimal Design Of Permit Markets With An Ex Ante Pollution Target, Sergey S. Rabotyagov, Hongli Feng, Catherine L. Kling

CARD Working Papers

In this paper, we examine the design of permit trading programs when the objective is to minimize the cost of achieving an ex ante pollution target, that is, one that is defined in expectation rather than an ex post deterministic value. We consider two potential sources of uncertainty, the presence of either of which can make our model appropriate: incomplete information on abatement costs and uncertain delivery coefficients. In such a setting, we find three distinct features that depart from the well-established results on permit trading: (1) the regulator’s information on firms’ abatement costs can matter; (2) the optimal ...


How To Promote Quality Perception In Wine Markets: Brand Advertising Or Geographical Indication?, Chengyan Yue, Stéphan Marette, John C. Beghin Aug 2006

How To Promote Quality Perception In Wine Markets: Brand Advertising Or Geographical Indication?, Chengyan Yue, Stéphan Marette, John C. Beghin

CARD Working Papers

In the context of the wine industry, we investigate producers' choice between geographical indications and brand advertising to convey information to consumers. Producers also decide whether or not to select an effort level for improving the quality of their products. We show that if this effort level is selected, a producer will prefer to rely on brand advertising for promoting its products and setting up its own reputation. Despite allowing the cost of promotion to be shared, a geographical indication does not sufficiently reward the effort to improve quality. Finally, the selection of both instruments by producers is examined.


A Study Of The Factors That Influence Consumer Attitudes Toward Beef Products Using The Conjoint Market Analysis Tool, Brian E. Mennecke, Anthony M. Townsend, Dermot J. Hayes, Steven M. Lonergan Aug 2006

A Study Of The Factors That Influence Consumer Attitudes Toward Beef Products Using The Conjoint Market Analysis Tool, Brian E. Mennecke, Anthony M. Townsend, Dermot J. Hayes, Steven M. Lonergan

CARD Working Papers

This study utilizes an analysis technique commonly used in marketing, the conjoint method, to examine the relative utilities of a set of beef steak characteristics considered by a national sample of 1,432 U.S. consumers, as well as additional localized samples representing undergraduate students at a business college and in an animal science department. The analyses indicate that among all respondents, region of origin is by far the most important characteristic; this is followed by animal breed, traceability, the animal feed used, and beef quality. Alternatively, the cost of cut, farm ownership, the non-use of growth promoters, and whether ...


U.S. Sugar Policy Options And Their Consequences Under Nafta And Doha, David Abler, John C. Beghin, David Blandford, Amani E. Elobeid Jun 2006

U.S. Sugar Policy Options And Their Consequences Under Nafta And Doha, David Abler, John C. Beghin, David Blandford, Amani E. Elobeid

CARD Working Papers

We analyze the potential impact of continuing the existing U.S. sugar program, replacing it with a standard program, and implementing the standard program with multilateral trade liberalization. Under the North American Free Trade Agreement (NAFTA), duty-free sugar imports from Mexico will undermine the program’s ability to operate on a “no-cost” basis to U.S. taxpayers. As the Mexican beverage industry is likely to expand considerably its highfructose corn syrup use, the sugar thereby displaced will seek a market in the United States. Under these conditions, marketing allotments could not be utilized under current legislation and prices would likely ...


Consumers' Demand For Pork Quality: Applying Semantic Network Analysis, Carola Grebitus, Maike Bruhn May 2006

Consumers' Demand For Pork Quality: Applying Semantic Network Analysis, Carola Grebitus, Maike Bruhn

CARD Working Papers

Consideration of consumers’ demand for food quality entails several aspects. Quality itself is a complex and dynamic concept, and constantly evolving technical progress may cause changes in consumers’ judgment of quality. To improve our understanding of the factors influencing the demand for quality, food quality must be defined and measured from the consumer’s perspective (Cardello, 1995). The present analysis addresses the issue of food quality, focusing on pork—the food that respondents were concerned about. To gain insight into consumers’ demand, we analyzed their perception and evaluation and focused on their cognitive structures concerning pork quality. In order to ...


Westernization Of The Asian Diet: The Case Of Rising Wheat Consumption In Indonesia, Jacinto F. Fabiosa Apr 2006

Westernization Of The Asian Diet: The Case Of Rising Wheat Consumption In Indonesia, Jacinto F. Fabiosa

CARD Working Papers

With sustained income growth and fast urbanization, Indonesia will see a major shift in the growth of grain consumption from rice to wheat products. New demand estimates from consumption survey data give a relatively high income elasticity of demand for wheat-based products, in the range of 0.44 to 0.84, with 26% to 34% of this response coming from the impact of income on the probability of consumption for non-consuming households and the remaining impact coming from the response on the level of consumption for households currently consuming wheat products. Urban location of households also contributes an increase of ...


Vertical Product Differentiation, Entry-Deterrence Strategies, And Entry Qualities, Yong-Hwan Noh, Giancarlo Moschini Apr 2006

Vertical Product Differentiation, Entry-Deterrence Strategies, And Entry Qualities, Yong-Hwan Noh, Giancarlo Moschini

CARD Working Papers

We analyze the potential entry of a new product into a vertically differentiated market. Here the entry-deterrence strategies of the incumbent firm rely on "limit qualities." The model assumes quality-dependent marginal production costs and considers sequential quality choices by an incumbent and an entrant. Entry-quality decisions and the entry-deterrence strategies are related to the fixed cost necessary for entry and to the degree of consumers' taste for quality. We detail the conditions under which the incumbent increases its quality level to deter entry. Quality-dependent marginal production costs in the model entail the possibility of inferior-quality entry as well. Welfare is ...


Quality And Competition: An Empirical Analysis Across Industries, John M. Crespi, Stéphan Marette Mar 2006

Quality And Competition: An Empirical Analysis Across Industries, John M. Crespi, Stéphan Marette

CARD Working Papers

This paper empirically explores the link between quality and concentration in a cross-section of manufactured goods. Using concentration data and product quality indicators, an ordered probit estimation explores the impact of concentration on quality that is defined as an index of quality characteristics. The results demonstrate that market concentration and quality are positively correlated across different industries. When industry concentration increases, the likelihood of the product being higher quality increases and the likelihood of observing a lower quality decreases