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The Travel Cost Model, George R. Parsons 2016 University of Delaware

The Travel Cost Model, George R. Parsons

George R. Parsons

Review chapter on travel cost model. This is an updated version of the 2003 chapter in the Primer on Nonmarket Valuation.


The Demand For Agricultural Research By State Governments, Jyoti Khanna, Wallace E. Huffman, Todd Sandler 2016 Iowa State University

The Demand For Agricultural Research By State Governments, Jyoti Khanna, Wallace E. Huffman, Todd Sandler

Wallace Huffman

Public agricultural research in the United States is conducted by state agricultural experiment stations (SAES) and by the research agencies of the USDA. Both have research activities in every state. A vast amount of research and experiments has shown that the performance of plants and to a lesser extent animals, in which new technologies are frequently embodied, is altered by local geoclimatic conditions that differ within and between states. Basic research and livestock research to some extent lead to new knowledge or technologies that spill widely across state boundaries. Thus, public agricultural research produces knowledge that is both state specific ...


Consumer Willingness To Pay For Genetically Modified Food Labels In A Market With Diverse Information: Evidence From Experimental Auctions, Wallace E. Huffman, Jason F. Shogren, Matthew Rousu, Abebayehu Tegene 2016 Iowa State University

Consumer Willingness To Pay For Genetically Modified Food Labels In A Market With Diverse Information: Evidence From Experimental Auctions, Wallace E. Huffman, Jason F. Shogren, Matthew Rousu, Abebayehu Tegene

Wallace Huffman

With the continuing controversy over genetically modified (GM) foods, some groups advocate mandatory labeling of these products, while other groups oppose labeling. An important issue is how GM labels affect consumers' willingness to pay for these food products in the market. Using a statistically based economics experiment with adult consumers as subjects, we examine how willingness to pay changes for three food products - vegetable oil, tortilla chips, and potatoes - when GM labels are intro- duced. Participants in the experiments discounted GM-labeled foods by approximately 14% relative to their standard-labeled counterparts. The evidence also showed that sequencing of food labels affects ...


Consumer Demand For Potato Products And Willingness-To-Pay For Low-Acrylamide, Sulfite-Free Fresh Potatoes And Dices: Evidence From Lab Auctions, Katie Lacy, Wallace E. Huffman 2016 Iowa State University

Consumer Demand For Potato Products And Willingness-To-Pay For Low-Acrylamide, Sulfite-Free Fresh Potatoes And Dices: Evidence From Lab Auctions, Katie Lacy, Wallace E. Huffman

Wallace Huffman

We assess consumer demand for traditional fresh potatoes and processed potato products and willingness to pay for new experimental low-acrylamide and sulfite-free potato products. Demand for fresh potatoes, potato chips, and fries is unaffected by household income or education, but demand for chips and fries is affected by consumer age and exercise habits. Subjects display increased willingness to pay for new potato products after receiving a private company perspective about the technology and risks associated with exposure to acrylamide, a carcinogen, in fried conventional potatoes and a new product, potato dices. We find that consumers are willing to pay for ...


Winners And Losers: Formula Versus Competitive Funding Of Agricultural Research, Wallace E. Huffman, George Norton, Greg Traxler, George Frisvold, Jeremy Foltz 2016 Iowa State University

Winners And Losers: Formula Versus Competitive Funding Of Agricultural Research, Wallace E. Huffman, George Norton, Greg Traxler, George Frisvold, Jeremy Foltz

Wallace Huffman

State Agricultural Experiment Stations (SAESs) were established with federal formula funding by the Hatch Act of 1887. In 1955, the Hatch Act was amended and a number of subsequent formula funding programs were consolidated under the USDA Cooperative States Research Service (CSRS), which today is known as the Cooperative Research, Education and Extension Service (CSREES). Currently, all of the Hatch funds and a small amount of other formula funds go to SAESs. In 1977, CSRS established its first competitive research grant program. However, this program remained quite small until 1990, when it was re-named the National Research Initiative (NRI) Competitive ...


The Value Of Verifiable Information In A Controversial Market: Evidence From Lab Auctions Of Genetically Modified Food, Matthew Rousu, Wallace Huffman, Jason F. Shogren, Abebayehu Tegene 2016 Iowa State University

The Value Of Verifiable Information In A Controversial Market: Evidence From Lab Auctions Of Genetically Modified Food, Matthew Rousu, Wallace Huffman, Jason F. Shogren, Abebayehu Tegene

Wallace Huffman

Two interested parties dominate the current debate on genetically modified (GM) foods: environmental groups and agribusiness companies. For the average consumer to arrive at an informed decision on these new foods, they must rely on information from interested parties. Unfortunately, information from interested parties does not provide an accurate picture of the benefits and risks of new products. This paper examines the effects of information on consumers’ demand for new food products, GM-foods, in an environment where information from one or more interested parties is provided. We design and conduct laboratory auction experiments using randomly chosen adult consumers from two ...


Who Do Consumers Trust For Information: The Case Of Genetically Modified Foods?, Wallace Huffman, Matthew Rousu, Jason Shogren, Abebayehu Tegene 2016 Iowa State University

Who Do Consumers Trust For Information: The Case Of Genetically Modified Foods?, Wallace Huffman, Matthew Rousu, Jason Shogren, Abebayehu Tegene

Wallace Huffman

To be effective, groups that disseminate information need trust. When different groups provide conflicting information on a new product or process like genetically modified (GM) foods, we hypothesize that consumers place different levels of trust in the sources and trust is related to their income, personal and social capital, and prior beliefs. A random sample of adults was asked to state their preferences for sources they would trust to provide verifiable (i.e., objective) information on genetic modification. Their responses were grouped into six categories, and a multinominal logit model used to explain relative trust in information sources. Relative trust ...


Who Do Consumers Trust For Information: The Case Of Genetically Modified Foods?, Wallace E. Huffman, Matthew Rousu, Jason F. Shogren, Abebayehu Tegene 2016 Iowa State University

Who Do Consumers Trust For Information: The Case Of Genetically Modified Foods?, Wallace E. Huffman, Matthew Rousu, Jason F. Shogren, Abebayehu Tegene

Wallace Huffman

During the twentieth century, research and development (R&D) has produced a steady stream of inventions and new consumer goods, many of which have been adopted and proven to be the source of a rising standard of living (Boskin et al.). The introduction of new goods, however, creates a disequilibrium (Hausman), which in turn creates a demand by economic agents for objective information to assist in making decisions on adoption and use (Schultz).1 The consumer's challenge is to sort through the various, competing and sometimes conflicting, sources of information.


The Effects Of Prior Beliefs And Learning On Consumers’ Acceptance Of Genetically Modified Foods, Wallace E. Huffman, Matthew Rousu, Jason F. Shogren, Abebayehu Tegene 2016 Iowa State University

The Effects Of Prior Beliefs And Learning On Consumers’ Acceptance Of Genetically Modified Foods, Wallace E. Huffman, Matthew Rousu, Jason F. Shogren, Abebayehu Tegene

Wallace Huffman

New food products using genetically modified crops appeared in U.S. supermarkets starting in 1996, and consumers’ perceived some risks. This paper examines the role of consumers prior beliefs about genetic modification and of diverse, new information on their willingness to pay for foods that might be genetically modified. We use data from economics experiments and show that participants who had informed prior beliefs discounted GM-labeled food products more highly than those who had uninformed prior beliefs. Uninformed participants were especially susceptible to information from interested and third parties. In contrast, informed participants were generally not affected significantly by new ...


Implications Of Agency Theory For Optimal Land Tenure Contracts, Wallace E. Huffman, Richard E. Just 2016 Iowa State University

Implications Of Agency Theory For Optimal Land Tenure Contracts, Wallace E. Huffman, Richard E. Just

Wallace Huffman

For more than 2 centuries, economists have been interested in agricultural contracts, especially landowner-tenant contracts. The early work by Marshall (1890) argued that share tenancy was inefficient relative to owner cultivation and should not be expected to persist when other arrangements are available. Later D. Gale Johnson (1950) and Cheung (1969) argued that, if landowners can costlessly monitor and enforce tenants’ effort, then share tenancy can compete effectively with owner cultivation or cash rental. Subsequently, Stiglitz (1974) and Newberry and Stiglitz (1979) introduced principal-agent models in the more realistic case where monitoring is costly to study optimal landowner-tenant risk sharing ...


New Econometric Evidence On Agricultural Total Factor Productivity Determinants: Impact Of Funding Sources, Wallace Huffman, Robert E. Evenson 2016 Iowa State University

New Econometric Evidence On Agricultural Total Factor Productivity Determinants: Impact Of Funding Sources, Wallace Huffman, Robert E. Evenson

Wallace Huffman

This paper examines the impact of public and private agricultural research and extension on agricultural total factor productivity at the state level. We test the hypothesis that the composition of agricultural experiment station funding—share of funding from impact of federal competitive grants and contracts and from federal formula and state government appropriations affects the productivity of public agricultural research using data for the 48 contiguous states over 19701999. Our results show not only that sources of funding matter, but that an increase in federal competitive grant funding at the expense of federal formula funding would lower the productivity of ...


Modernizing Agriculture: A Continuing Process, Wallace E. Huffman 2016 Iowa State University

Modernizing Agriculture: A Continuing Process, Wallace E. Huffman

Wallace Huffman

Agriculture in the united states has undergone dramatic technological and social-economic structural change during the past century. Theodore W. Schultz was the first to emphasize the role of science-based technological change as a key force for causing agriculture to undergo a transition from traditional to modernizing conditions.1 It is now well established that institutionalized research, not research under taken by farmers themselves, is the key factor for producing innovations or knowledge leading to new technologies and advances in agricultural productivity under modernization. In the United States, it has taken many decades to develop the legal, political, scientific, and economic ...


Should The United States Regulate Mandatory Labeling For Genetically Modified Foods?, Wallace Huffman, Matthew Rousu, Jason F. Shogren, Abebayehu Tegene 2016 Iowa State University

Should The United States Regulate Mandatory Labeling For Genetically Modified Foods?, Wallace Huffman, Matthew Rousu, Jason F. Shogren, Abebayehu Tegene

Wallace Huffman

Public debate continues over whether the United States should regulate genetically modified (GM) foods by imposing a mandatory labeling policy. This paper develops a model that shows that a voluntary GM- labeling policy results in higher welfare than a regulated mandatory GMlabeling policy, if consumers can accurately read the signals in each market. We then develop an experiment that shows consumers behave as if they can accurately identify signals for GM foods. Our model and results support the perspective that the United States has been prudent in fending off calls for regulations demanding a mandatory GM- labeling policy.


Public R&D, Private R&D, And U.S. Agricultural Productivity Growth: Dynamic And Long-Run Relationships, Sun Ling Wang, Paul W. Heisey, Wallace E. Huffman, Keith O. Fuglie 2016 United States Department of Agriculture

Public R&D, Private R&D, And U.S. Agricultural Productivity Growth: Dynamic And Long-Run Relationships, Sun Ling Wang, Paul W. Heisey, Wallace E. Huffman, Keith O. Fuglie

Wallace Huffman

If accelerated productivity growth is to be an effective policy response for reducing greenhouse gas emissions from agriculture, the appropriate means for raising productivity needs to be addressed. Previous research has shown a close correlation between investments in public agricultural research and total factor productivity (TFP) growth in agriculture (Huffman and Evenson 2006; Alston et al. 2010; Wang et al. 2012, among the most recent, comprehensive studies). Largely neglected from this framework, however, has been the role of the private sector. Private sector spending on agricultural research and development (R&D) has grown more rapidly than public agricultural R&D ...


Effects And Value Of Verifiable Information In A Controversial Market: Evidence From Lab Auctions Of Genetically Modified Food, Matthew Rousu, Wallace Huffman, Jason F. Shogren, Abebayehu Tegene 2016 Susquehanna University

Effects And Value Of Verifiable Information In A Controversial Market: Evidence From Lab Auctions Of Genetically Modified Food, Matthew Rousu, Wallace Huffman, Jason F. Shogren, Abebayehu Tegene

Wallace Huffman

Food products containing genetically modified (GM) ingredients have entered the market over the past decade. The biotech industry and environmental groups have disseminating conflicting private information about GM foods. This paper develops a unique methodology for valuing independent third-party information in such a setting and applies this method to consumers’ willingness to pay for food products that might be GM. Data are collected from real consumers in an auction market setting with randomized information and labeling treatments. The average value of third-party information per lab participant is small, but the public good value across U.S. consumers is shown to ...


Economics Of Intellectual Property Rights In Plant Materials, Wallace Huffman 2016 Iowa State University

Economics Of Intellectual Property Rights In Plant Materials, Wallace Huffman

Wallace Huffman

This paper presents an economic perspective on intellectual property in plant materials, including its value, and summary information on the U.S. seed industry. It first considers intellectual property rights--types, economic incentives that they bestow, and uses across developed and developing countries. Second, it considers the U.S. seed industry-- characteristics for major crops, optimal pricing of a superior variety, and relative size of public and private research expenditures. Some conclusions and implications are presented in the final section.


Determinants Of The Demand For State Agricultural Experiment Station Resources: A Demand-System Approach, Wallace Huffman, Robert Evenson 2016 Iowa State University

Determinants Of The Demand For State Agricultural Experiment Station Resources: A Demand-System Approach, Wallace Huffman, Robert Evenson

Wallace Huffman

We document the decline in traditional federal government support of the state agricultural experiment station system over the 20 years period starting in 1980 and of state government support over the 1990s. This paper presents a model of state government decisions on agricultural research expenditures. The model permits some benefits to be private in the sense that they are state specific and others to be public and spillover to other states. To capture a key aspect of agricultural research, the model includes voluntary and nonvoluntary contributions to a state government’s expenditures on agricultural research. Moreover, we argue that different ...


Dynamic Corn Supply Functions: A Model With Explicit Optimization, Abebayehu Tegene, Wallace E. Huffman, John A. Miranowski 2016 University of Wisconsin - Milwaukee

Dynamic Corn Supply Functions: A Model With Explicit Optimization, Abebayehu Tegene, Wallace E. Huffman, John A. Miranowski

Wallace Huffman

A model of optimal dynamic agricultural supply is derived and fitted assuming farmers have two annual stochastic crop production activities, a joint limitation on production capacity, interdependencies between past acreage utilization and current productivity, and rational expectations. A five-equation specification is fitted to annual data, 1948–80. Estimated parameters are consistent with the theory, and the model simulates well. The long-run price elasticity of corn acreage is 0.2, which is similar to those obtained from ad hoc dynamic models, but our short-run elasticities are different.


Aggregate Private R&D Investments In Agriculture: The Role Of Incentives, Public Policies, And Institutions, Oscar Alfranca, Wallace E. Huffman 2016 University Politecnica de Catalunya

Aggregate Private R&D Investments In Agriculture: The Role Of Incentives, Public Policies, And Institutions, Oscar Alfranca, Wallace E. Huffman

Wallace Huffman

Most observers have come to agree that Research and Development (R&D) is fundamental to the innovations that take place in advanced countries and that drive growth and development around the world. This is equally true for agricultural R&D, which has substantially increased the supply of food and fiber over time. Given the evident importance of agricultural R&D, we look at the forces that determine the amount of privately funded research in this vital sector using a sample of European countries. We construct indicators of private incentives, property rights, and publicly funded research in the various countries. Private research has grown with unusual speed in recent years and offers the prospect of advances in the quality of agricultural goods as well as reductions in their costs. Furthermore, considerable interest exists in knowing how changes in private and public research expenditures are related empirically; for example, are they complements or substitutes?1 If they are substitutes, then additional private agricultural R&D expenditures may not result in larger total agricultural research expenditures.


Estimating The Public Value Of Conflicting Information: The Case Of Genetically Modified Foods, Matthew C. Rousu, Wallace E. Huffman, Jason F. Shogren, Abebayehu Tegene 2016 RTI International

Estimating The Public Value Of Conflicting Information: The Case Of Genetically Modified Foods, Matthew C. Rousu, Wallace E. Huffman, Jason F. Shogren, Abebayehu Tegene

Wallace Huffman

Environmental groups have become the chief antagonists toward agricultural biotechnology innovations. They demonstrate and disseminate private information with the objective of changing the behavior of consumers and producers. We use experimental auctions with adult U.S. consumers and show that this information reduces significantly the demand for genetically modified (GM)-food products and that it has significant public good value—an average of 3 cents per product purchased, or roughly $2 billion annually. We also show that the dissemination of independent third-party information about agricultural biotechnology dissipates most of the public good value of negative GM-product information.


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