Agricultural and Resource Economics Commons^™

An Expected Value Of Sample Information (Evsi) Approach For Estimating The Payoff From A Variable Rate Technology, Pedro Vertino De Queiroz, Richard Perrin, Lilyan E. Fulginiti, David S. Bullock

Department of Agricultural Economics: Faculty Publications

This paper examines the payoff to variable rate technology (VRT) using a Bayesian approach following literature on the expected value of sample information (EVSI). In each cell within a field, we compare the expected payoff from an optimal variable rate conditioned on a signal from that cell, with the expected payoff from a uniform rate technology (URT) that is optimal for all cells in the field. This comparison, when evaluated across the theoretical distribution of signals, provides an estimate of the expected gross benefit from VRT relative to URT. Under plausible assumptions, a closed-form algebraic solution relates this expected benefit …

Pesticide Usage Is Compromising People’S Health In The United States: Ideas For Reducing Damages, Terence J. Centner

Department of Agricultural Economics: Faculty Publications

The development of synthetic pesticides has provided new tools for addressing troublesome pests. A review of parts of the registration process for pesticides in the United States identifies an outdated evaluation system that undervalues health damages. Registration fails to adequately consider co-formulants and effects of exposure to multiple chemicals. Frustration with failures to protect people and property from damages accompanying pesticide usage has led injured plaintiffs to resort to tort lawsuits to secure relief. However, litigation involves compensating injured persons after they are injured rather than preventing injury. A more proactive approach would be to prevent situations that injure people. …

What Determines The Success And Failure Of Environmental Crowdfunding?, Takahiro Kubo, Diogo Veríssimo, Shinya Uryu, Taro Mieno, Douglas Macmillan

Department of Agricultural Economics: Faculty Publications

Online crowdfunding can help address the perennial financial shortfalls in environmental conservation and management. Although many online crowdfunding campaigns fail to collect any funds due to not achieving their targets, little is known about what drives success. To address this knowledge gap, we applied a mixed-methods approach to data from 473 successful and failed campaigns hosted on the online crowdfunding platform Readyfor. We found that fundraising performance varied by topic, with campaigns on pet animal management outperforming those focussed on landscape management and sustainable use. We also found that marketing strategies associated with online findability and increased reach through social …

Relative Valuation Of Food And Non-Food Risks With A Comparison To Actuarial Values: A Best–Worst Approach, Kayode Ajewole, Elliott James Dennis, Ted C. Schroeder, Jason Bergtold

Department of Agricultural Economics: Faculty Publications

This study empirically tests the relative importance that U.S. consumers place on immediate and long-term food and non-food risks. We use a best–worst survey method to elicit relative rankings and weights for each risk in terms of its perceived cost and likelihood. Immediate food risks are perceived to be more costly but less likely than long-term food risks. Immediate non-food risks are perceived to be both more costly and likely than long-term non-food risks. Overall, food risks are perceived to be less expensive than non-food risks. The combination of perceived cost and likelihood is used to define a measure of …

The Relationship Between Bodyweight Status And Weight Perception Explains Differences In Calories Ordered In A Food Choice Exercise, Jean-Claude Mbarushimana, Christopher Gustafson, Henriette Gitungwa, Eliana Zeballos

Department of Agricultural Economics: Faculty Publications

Understanding food choice is critical to be able to address the rise in obesity rates around the globe. In this paper, we examine the relationship between measured (BMI, using self-reported height and weight) and perceived weight status with the number of calories ordered in a controlled online food choice exercise. A total of 1044 participants completed an online food choice exercise in which they selected ingredients for a sandwich from five categories: meat/protein, cheese, spread/dressing, bread, and vegetables. We examine the number of calories ordered by participants and use linear regression to study the relationship of BMI category relative to …

High Bmi Predicts Attention To Less Healthy Product Sets: Can A Prompt Lead To Consideration Of Healthier Sets Of Products?, Christopher Gustafson, Kristina Arslain, Devin Rose

Department of Agricultural Economics: Faculty Publications

While the food environment has been implicated in diet-related health disparities, individuals’ ability to shape the food environment by limiting attention to a subset of products has not been studied. We examine the relationship between BMI category and consideration set—the products the individual considers before making a final choice—in an online hypothetical shopping experiment. Specifically, we focus on the healthiness of the consideration set the individual selected. Secondly, we examined the interaction of a health prompt (versus a no-prompt control) with BMI category on the healthiness of the consideration set. We used linear probability models to document the relationship between …

Determinants Of Gluten-Free Diet Adoption Among Individuals Without Celiac Disease Or Non-Celiac Gluten Sensitivity, Kristina Arslain, Christopher Gustafson, Pratiksha Baishya, Devin Rose

Department of Agricultural Economics: Faculty Publications

Objectives: Gluten free (GF) foods are typically less nutritious and more expensive than their gluten-containing variants, yet people without a diagnosed gluten sensitivity continue to adopt this diet. There is a lack of research about what factors drive people without Celiac disease or non-Celiac gluten sensitivity to follow the GF diet. Methods: A nationally representative sample of 2982 US residents without a diagnosed gluten sensitivity were surveyed about their attitudes, perceptions, and experiences with the GF diet. Logistic regression was used to compare respondents who were currently avoiding or had avoided gluten previously (GF consumer) to respondents who had never …

The Potential Cost Of Methane And Nitrous Oxide Emissions Regulation In U.S. Agriculture, Tshepelayi Kabata, Lilyan E. Fulginiti, Richard Perrin

Department of Agricultural Economics: Faculty Publications

Most studies on the impacts of agriculture on the environment have devoted efforts to measure the environmental impacts of the sector rather than to assess its ability to reduce or mitigate such impacts. Some have addressed the environmental efficiency of the sector (Reinhard, et al., 1999, Ball et al., 1994 and 2004; Rezek and Perrin, 2004 and Serra et al., 2011) but only few have examined greenhouse gas emissions (Njuki and Bravo-Ureta, 2015; Dakpo, Jeanneaux and Latruffe, 2016) from the sector. This paper analyzes the agricultural performance of states in the U.S. in terms of their ability to reduce emissions …

A Half Century Of Yield Growth Along The Forty-First Parallel Of The Great Plains: Factor Intensification, Irrigation, Weather, And Technical Change, Federico J. Trindade, Lilyan E. Fulginiti, Richard Perrin

Department of Agricultural Economics: Faculty Publications

In this study, we explain a half-century of crop yield growth along an 800-mile transect of the forty-first parallel North in the U.S. Great Plains. Using 101 county-level observations from 1960-2008 we jointly estimate a biomass production function with cost shares for fertilizer and chemicals while controlling for environmental factors. The main contributors to yield increases in this region were non-specific technical change +62%, irrigation +17%, fertilizer +13% and chemicals +11%. Environmental changes had a minor impact on regional yield changes. The wide range of agroclimatic conditions present along this transect produced significant sub-regional deviations from the aggregate estimates. While …

Food Policy: Stability, Sustainability, And Safety, Gary D. Lynne

Department of Agricultural Economics: Faculty Publications

Everyone needs to eat, and eat well, as it is essential to the process of slowing down the pace to and time of our death, the point of maximum entropy for each person. As a result, it is perhaps the best example of the need to seek one’s Self-interest. It also puts us in the position, however, to more easily Empathize, walk-in-the-shoes of someone who may not have enough food, or the best kind of food, and help in forming a shared Other-interest, too. As a result, we might choose to support, with our tax money, some kind of a …

Is The World Converging To A ‘Western Diet’?, Azzeddine Azzam

Department of Agricultural Economics: Faculty Publications

Objective: To test the nutrition transition hypothesis of global dietary convergence to a ‘Western diet’.

Design: Consumer-waste-adjusted FAO Food Balance Sheets are used to construct for each country a Western Diet Similarity Index (WSI), expressed as a ratio of calories from animal-sourced foods, oils, fats and sweeteners to total per capita calories. β-Convergence and associated speed are estimated by growth regressions using 1992–2013 panel data. Speed of convergence, a non-linear function of income per capita, globalisation and urbanisation, determines the steady-state or long-term global WSI. The long-term global WSI is compared with the WSI of the group of countries with …

Net Return Distributions When Metaphylaxis Is Used To Control Bovine Respiratory Disease In High Health-Risk Cattle, Elliott James Dennis, Ted C. Schroeder, David G. Renter

Department of Agricultural Economics: Faculty Publications

This study’s objective was to estimate net returns and return risk for antimicrobial metaphylaxis options to manage bovine respiratory disease (BRD) in high health-risk feedlot cattle. The effectiveness of antimicrobials for metaphylaxis varies by cattle population. How differing antimicrobial effectiveness translates to net return profitability for heterogeneous cattle populations is less understood. Net returns and return risk were assessed using a net return simulation model adapted to allow for heterogeneity in high health-risk cattle placement characteristics and antimicrobial choice to control BRD. The net return model incorporated how antimicrobials modify BRD health and performance outcomes. Health and performance outcomes were …

The Effect Of Presenting Relative Calorie Information On Calories Ordered, Christopher Gustafson, Eliana Zeballos

Department of Agricultural Economics: Faculty Publications

In this research, we tested the effect of a novel method of presenting calorie information—highlighting relative differences in calories among ingredients. We conducted an online hypothetical food choice experiment where 633 participants selected the ingredients for a sandwich from five categories: meat/protein, cheese, spread/ dressing, bread, and vegetables. Each participant was randomly assigned to one of four calorie information conditions: 1) a condition in which no information about calories was provided, 2) a condition in which calorie information was provided for each ingredient, 3) a condition in which calorie information was presented relative to the highest calorie item, and 4) …

Tax Policy: Pay The Price, Gary D. Lynne

Department of Agricultural Economics: Faculty Publications

Taxes are the price we pay in order to obtain many of the outcomes pursued in the shared Other-interest. So, Metaeconomics in contrast to Microeconomics gives a substantive analytical system for dealing with the tax question, because of recognizing the Other-interest. Metaeconomics clarifies that taxation is about paying for, and thus bringing forth the payoffs from that which we share, like recording deeds and titles to private property; enforcing property rights, which is essential to a Market; licensing, registering, and enforcing patents; military, police, and fire services; road and harbor construction and maintenance; dams and reservoirs to provide for water …

Health Policy: Universal Pre-Existing Conditions, Gary D. Lynne

Department of Agricultural Economics: Faculty Publications

Next to food policy, perhaps no domestic policy issue has raised the ire of more people than that related to the healthcare system. The US Affordable Care Act, which was based in and otherwise formulated with a heavy orientation towards the shared Other-interest in health, has been rejected outright by many who see the healthcare system is only to facilitate maximizing one’s own Self-interest. The latter perspective is easily understood, as there is perhaps nothing more in one’s own Self-interest then taking care of one’s health. So, it would be easily expected that many people would consider mainly their own …

Introduction To Metaeconomics, Gary D. Lynne

Department of Agricultural Economics: Faculty Publications

Metaeconomics is fundamentally about the problem of having too much emphasis on the Market or too much emphasis on the Government. It is about the essential need to bring empirical reality and ethics into finding balance: It is essential to achieving a good capitalism. Why? Well, because of the natural tendency to excessive Greed. As DeWaal (2009) would have it, we live in an age of Empathy: Ego based Greed is out. The Greed needs to be tempered, balanced, and perhaps bounded, with Empathy-based ethics. And, as Metaeconomics makes clear, it is because there is a dual nature of human …

The Increasing Opportunity Cost Of Sequestering Co2 In The Brazilian Amazon Forest, Felipe De Figueiredo Silva, Lilyan E. Fulginiti, Richard Perrin, Marcelo J. Braga

Department of Agricultural Economics: Faculty Publications

Bush fires raged across the Brazilian Amazon in 2019. The CO₂ that was sequestered in those forests is now in the atmosphere, adding to the rate of global warming. The burned-over land will likely be converted to agriculture. Possible contributors to these events include climate change itself, creating hotter, drier conditions, and what is reportedly a reduction in the vigor of forest preservation efforts under a new government. But here we explore a third possible contributor: technical change may have been increasing the incentives to convert forests to agriculture. We examine the nature of technical change from 2003 to …

Consumer Reactions To E. Coli And Antibiotic Residue Recalls: Utility Maximization Vs. Regret Minimization, Elliott James Dennis, Kayode Ajewole, Jason S. Bergtold, Ted C. Schroeder

Department of Agricultural Economics: Faculty Publications

Food safety remains a major issue to many consumers. Previous studies examining the economic impact of food safety recalls have focused on Class I recalls. Antibiotic residue in meat products, a Class II recall, has increased in consumer importance yet little is known about how much research and development expenditure should be allocated to reduce antibiotic residue pre- and post-harvest. This study compares demand elasticities and the decrease in willingness to pay in response to either an E. coli (Class I) or antibiotic residue (Class II) recall. We compare and contrast two competing behavioral frameworks, Random Utility and Regret Minimizing. …

The Influence Of Crop Insurance Agents On Coverage Choices: The Role Of Agent Competition, Nathan Delay, Hayley Chouinard, Cory Walters, Philip Wandschneider

Department of Agricultural Economics: Faculty Publications

We examine how competition among crop insurance agents affects coverage choice in the federal crop insurance program. Agents may influence producers’ insurance decisions to maximize their total compensation. We develop a theoretical model of producer–agent interaction to examine how loss potential, agent compensation mechanisms, and market competition affect the coverage level selected. Using crop insurance unit-level datasets from five states, we find evidence that agent market concentration and agents’ market share matter in the insurance coverage decisions of producers but that the economic significance of the influence is relatively small. Agent influence over coverage level, premium, and liability choice is …

The Effects Of Irrigation And Climate On The High Plains Aquifer: A County-Level Econometric Analysis, Felipe De F. Silva, Lilyan E. Fulginiti, Richard K. Perrin, Karina Schoengold

Department of Agricultural Economics: Faculty Publications

The High Plains Aquifer (HPA) underlies parts of eight states and 208 counties in the central area of the United States (U.S.). This region produces more than 9% of U.S. crops sales and relies on the aquifer for irrigation. However, these withdrawals have diminished the stock of water in the aquifer. In this paper, we investigate the aggregate county-level effect on the HPA of groundwater withdrawal for irrigation, of climate variables, and of energy price changes. We merge economic theory and hydrological characteristics to jointly estimate equations describing irrigation behavior and a generalized water balance equation for the HPA. Our …

The Cost Of Forest Preservation In The Brazilian Amazon: The “Arc Of Deforestation”, Felipe De Figueiredo Silva, Lilyan E. Fulginiti, Richard Perrin

Department of Agricultural Economics: Faculty Publications

We estimate the trade-off between agricultural production and forest preservation for the municipalities in Brazil’s agricultural frontier, the so-called “arc of deforestation,” using census and deforestation data for 2006. We use a nonparametric directional output distance function that allows us to identify the gradients of the production possibility frontier, which are the trade-offs of interest. We found that, on average, $979 is forgone in annual livestock, timber, and grain revenues to conserve 1 hectare of forest. This translates, ceteris paribus, to an average present value of costs to permanently sequester CO2 of $16.36/t, higher than most previous estimates.

The Opportunity Cost Of Preserving The Brazilian Amazon Forest, Felipe De Figueiredo Silva, Richard Perrin, Lilyan E. Fulginiti

Department of Agricultural Economics: Faculty Publications

We estimate the trade-off between forest preservation and agricultural production for the Legal Amazon region, using census and deforestation

data for municipalities in 2006.We use a directional distance function to represent the production possibility frontier, and then calculate the shadow

price of reducing deforestation in terms of agricultural income foregone. Results indicate that, on average, to preserve 1 ha of forest, $797 in annual

agricultural GDP must be foregone. Using a discount rate of 10% and average forest carbon density of 132 tons per hectare, these results imply an

average shadow price of $16 per ton of CO2 permanently sequestered.

What Is The Use Value Of Irrigation Water From The High Plains Aquifer?, Federico García Suárez, Lilyan E. Fulginiti, Richard K. Perrin

Department of Agricultural Economics: Faculty Publications

This study provides an estimate of the gross value of irrigation water from the U.S. High Plains

Aquifer. We estimate a yield function for aggregated crop biomass production, based on countylevel

observations for 1960–2007. This study found that irrigation increases total biomass yield in this

region by an average of 51%. We estimate the average gross annual value of irrigation as of 2007 to

be $196 per acre, for a total of about $3 billion across the aquifer. We also estimate that on average

across the aquifer, exposure to 24 hours of temperatures above 33C (one degree day) reduces biomass …

Wildlife Viewing: The Impact Of Money-Back Guarantees, Takahiro Kubo, Taro Mieno, Koichi Kuriyama

Department of Agricultural Economics: Faculty Publications

Wildlife sightings are not always guaranteed. To address this risk, tour operators often offer a money-back guarantee as a refund mechanism. However, studies have overlooked the influences of such refund mechanisms on tourists' tour participation decisions and tourism revenue. We conducted choice experiments to examine the impact of such mechanisms using a case of Amami rabbit tourism in Japan. We found that the guarantee significantly influences the tourists’ decision-making and tour revenue. In particular, we found that the expected tourist participation rate and tour guide revenue vary drastically depending on the probability of the rabbit encounter. The maximum expected revenue …

Sweet Sorghum As Feedstock In Great Plains Corn Ethanol Plants: The Role Of Biofuel Policy, Richard Perrin, Lilyan E. Fulginiti, Subir Bairagi, Ismail Dweikat

Department of Agricultural Economics: Faculty Publications

This research examines whether sweet sorghum, a crop considered more drought-tolerant and suitable for semi-arid areas than corn, could result in an economically viable sweet sorghum ethanol pathway in the Great Plains. We find that that if the D5–D6 RIN price spread exceeds the $0.35/gal recently experienced, the benefits of the pathway would be equivalent to about $90/acre of sweet sorghum, or $0.38/gal of ethanol. Because of sparse cultivation potential, only four the six existing plants in the Nebraska–Colorado High Plains area might expect transportation costs to be low enough for economic feasibility.

Input Use Under Crop Insurance: The Role Of Actual Production History, Taro Mieno, Cory Walters, Lilyan E. Fulginiti

Department of Agricultural Economics: Faculty Publications

The impact of crop insurance on changes in input use has attracted much attention by economists. While there are a number of studies on this topic, they frame moral hazard in inputs use in a static model. However, when agricultural producers are forward-looking, they would make input allocation decisions realizing that their decisions would affect their future actual production history. This, in turn, affects the probability and size of future indemnity payments. Thus, moral hazard should be framed in a dynamic input use decision model. We first show theoretically that under certain feasible conditions, a static analysis always results in …

Value Of Arrival Metaphylaxis In U.S. Cattle Industry, Elliott James Dennis, Ted C. Schroeder, David G. Renter, Dustin L. Pendell

Department of Agricultural Economics: Faculty Publications

Although several studies have estimated economic impacts of antimicrobials for growth promotion, little is known about economic impacts of the common animal health management strategy known as metaphylaxis: administering antimicrobials to groups of animals to prevent disease. This article develops a new framework to map animal disease to producer profitability and determine societal economic impacts surrounding metaphylactic use of antimicrobials in beef cattle production. Results indicate the direct net return value of metaphylaxis to the U.S. fed cattle industry is at least $532 million. Beef producer surplus losses of $1.8 billion would be associated with eliminating metaphylaxis.

A Nonparametric Frontier Measure Of Marketing Efficiency: An Illustration With Corn Ethanol Plants, Lilyan E. Fulginiti

Department of Agricultural Economics: Faculty Publications

This article extends nonparametric measures of efficiency to accommodate the concept of marketing efficiency, which measures changes in net revenues brought about by firms’ use of marketing channels other than spot markets. The measure is appropriate for firms operating under atomistic competition with imperfect information. The proposed measure displays two important features: (a) it uses the alternative of a spot price-based counterfactual to distinguish marketing from allocative efficiency, and (b) it allows for the fact that firms operate in different spot markets and have access to diverse sets of prices. We illustrate this approach with a unique dataset from ethanol …

Benefits Of Public R&D In U.S. Agriculture: Spill-Ins, Extension And Roads, S L. Wang, A Plastina, Lilyan E. Fulginiti, E. Ball

Department of Agricultural Economics: Faculty Publications

This paper uses panel data for the 1980-2004 period to estimate the contributions

of public research to US agricultural productivity growth. Local and social

internal rates of return are estimated accounting for the effects of R & D

spill-in, extension activities and road density. R & D spill-in proxies were constructed

based on both geographic proximity and production profile to examine

the sensitivity of the rates of return to these alternatives. We find that

extension activities, road density, and R & D spill-ins, play an important role

in enhancing the benefit of public R & D investments. We also find …

Measurement Of Commodity Price Risk: An Overview Of Brazilian Agricultural Markets, Daniel Henrique Dario Capitani, Fabio Mattos

Department of Agricultural Economics: Faculty Publications

This study explores different procedures to estimate price risk in commodity markets. Focusing on Brazilian agricultural markets, the paper proposes to assess both dispersion and downside risk measures using five different approaches (volatility, coefficient of variation, lower partial moments, value at risk and conditional value at risk). Results suggest that some commodities have large price variability but small downside risk, while other commodities show small price variability and large downside risk. Thus, there is no single answer to the question of which commodity exhibits more price risk, but rather distinct answers depending on how risk is perceived by different individuals. …