The dichotomous choice contingent valuation survey format collects inexact information on willingness to pay (WTP), that is, whether WTP is greater or less than the bid price. Sometimes researchers make the precise conjecture that certain respondents have zero WTP using information from follow-up motive questions. But follow-up questions are designed to provide information on respondents’ motives, not refined information on the magnitude of WTP. Assuming that certain respondents have WTP = $0.00 is beyond the design of follow-up questions. The paper's results show that unless information from follow-up questions is utilized within the limitations of survey design, welfare and model parameter estimates are likely to have high standard errors leading to inappropriate policy prescriptions.

A dynamic model of the U.S. apple industry, including relationships for bearing acres, production, utilization, and allocation to the fresh, canned, frozen, juice, dried and other markets, is specified. Demands for each of these markets are modeled. Model coefficients are obtained using Zellner's seemingly unrelated regression procedure and data from 1971 through 1990. Elasticities and flexibilities are compared with other studies. Projections indicate that price fluctuations will continue in the industry when acreage is held at 1990 levels. A ten percent increase in fresh exports strengthens all apple prices. However, a ten percent decrease in the price of juice imports mitigates some of this effect.

Like having a child, a book is labor intensive and, if it survives infancy, it takes on a life of its own. People tell you it looks like you, which is no compliment. You can't disown it when it gets into trouble. Admittedly, Agriculture in An Unstable Economy is a good name to have; it got through six printings and, for all I know, because of its name. Now that it looks as old as its parent, I am asked to talk about it with no assurance that what gets said can be erased.

We utilize the outbreak surveillance data from the Centers for Disease Control and Prevention (CDC) to examine whether consumer demand is impacted by the outbreak of food-borne disease. An additional person sickened due to the ingestion of tainted cheese products at home is found to decrease per capita milk demand in New York State by 0.13 percent (or 0.07 pound), while milk-and ice cream-borne disease outbreaks, occurring at home or in public places, are found to have no impact on fluid milk demand. Our results imply the existence of word-of-mouth effects, which cannot be tested by the popular information/media index approach used to measure food-borne disease outbreaks. We also find that a 7 percent increase in generic advertising expenditures or a 10 percent increase in expenditures on non-advertising marketing activities can offset the negative influence of one ill person in cheese-borne disease outbreaks at home, while holding other demand factors constant.

Bias in estimating recreational values may result if congestion is ignored in the demand model specification. Theoretical and empirical considerations pertaining to recreation congestion are summarized. Empirical results for camping in Western Massachusetts are presented which demonstrate the potential degree of bias from demand model misspecification. The results indicate that recreational values may be strongly influenced by congestion effects and that camping areas with relatively low densities may have a higher economic value than high density areas with similar facilities.

This study develops a simple model to forecast the basis for corn in a specific region. Improved forecasts can improve hedging decisions. Basis behavior, however, depends on explanatory variables that are themselves difficult to forecast with precision. This limits the usefulness of the basis model, but it does offer some benefit over naive forecasts.

Agronomists consider the continuity and nutrient capturing properties of cover crops as important determinants of nutrient cycling in agricultural systems. Managing for these biotic control functions can help limit nutrient loss and groundwater contamination between main crop harvests. This simulation study highlights the potential role of cover crop management in a welfare economics framework. The objective is to find the optimal combination of nutrient input to the main crop, the extent of off-season cover crops, and crop functional diversity to maximize the sum of benefits from agricultural production and groundwater protection.

Zero runoff subirrigation (ZRS) technology can effectively manage fertilizer input while improving greenhouse production efficiency. However, high capital investment costs and inadequate technical information to growers are impediments for adoption. A Monte Carlo simulation was used to compare the profitability and risks of alternative ZRS system investments for greenhouse operations in the northeastern and north central United States. Results showed that the Dutch movable tray system and the flood floor system were most profitable and least risky for small potted plant and bedding crop flat production, respectively. The trough bench system was least favorable because its profitability was low and highly volatile.

We empirically test separation of ownership and control (SOC) and the interaction of SOC with farmer effort on farm success using data from the U.S. Department of Agriculture's Agricultural Resource Management Survey. We use a two-stage least-squares approach with instrumental variables that proxy for participation constraints in binding incentive contracts. We find that the interaction has a significantly positive effect on success for grain farms and an insignificant effect for livestock farms. The results are consistent with hypotheses by Allen and Lueck (1998), but our model predicts that farms with SOC are likely to be more successful than farms without SOC despite exogenous uncertainty and agency costs.

To adequately capture the market structure of vegetables in Japan, it is necessary to develop an oligopolistic model due to the potential market power of producers vs. retailers. We first estimate the market power between producers and retailers by extending the bilateral oligopoly model. Next, we evaluate the role of the wholesale market and its effect on economic welfare. Our results indicate that the wholesale market benefits both producers and consumers through a reduction in retail margins. This study contributes to the industrial organization literature by developing a bilateral oligopoly model and empirically measuring the wholesale market system in Japan.

More accurate prediction of future demand (or needs) for land for outdoor recreational activities would significantly improve land use planning. Unfortunately, prediction of demand (or projected use) is difficult. Most standard predicting measures have little or questionable relevance to outdoor recreation. Straightline projections of past outdoor activities are of limited use as technology, income, leisure time, mobility, and habits are changing so fast that it is doubtful if the past may be used to predict the future. In fact, all methods of predicting (or projecting) future demand (or needs) on the basis of past trends are inoperative in periods when there is rapid change in all the components influencing the trend, as well as in life styles. Surveys and questionnaires are of some use, but their value is limited by the propensity of respondents to give answers which they think are expected and the fact that they cannot appraise their future attitude towards activities with which they are now unfamiliar.

This article considers the political, economic, and environmental factors associated with the allocation of federal LISA (Low Input/Sustainable Agriculture) funds among states. A tobit model is estimated with LISA allocations as the dependent variable. Results indicate that pressure groups are important. LISA funding depends positively on membership in environmental organizations, the number of farms, and the size of the rural-nonfarm population, while it depends negatively on the size of the urban population. States with host LISA institutions receive significantly more funding, as do states with Senators in leadership positions on key congressional agricultural committees.

The public has an abiding interest in land and its use. This interest is reflected in a long list of publicly sponsored programs and policies which directly or indirectly affect land. A segment of the public policy arena deals with the conversion of agricultural land to non-farm uses. Necessary ingredients for policy in farmland conversion include some understanding of conversion trends, the forces influencing these trends, and the likely outcomes of specific policy instruments designed to intervene in the conversion process and register public or communitywide interests in private uses of farmland.

Economic and environmental challenges in the global economy raise significant issues that require public policy and private sector attention over the next decade. Price volatility, invasive species, sustainable biofuels production, and climate change all affect our agricultural and resource base and its future. Agricultural and resource economists must provide analyses of public policy and private sector strategies based on innovative research that integrates insights across disciplinary boundaries. Proactive communication of the results to decision makers can make a difference in how these important societal issues are addressed and help to shape the future.

Expected prices and expected net returns from cropping activities are used to estimate soybean acreage response in the Northeast. Futures prices and lagged cash prices constitute proxies for price expectations. Expected net returns appear as good or better than expected prices for estimating acreage response. Short-run and long-run elasticities of soybean acreage with respect to expected net returns from soybeans are estimated as 0.5 and 1.6 for the northeast region. Soybean acreage appears less responsive to changes in expected net returns than to expected changes in prices.

Transportation costs between production regions affect interregional competitive relations. Rising fuel costs have substantially changed the transfer cost function for motor truck transport. A method for estimating the direct impact on consumer and producer prices of fuel cost increases is presented. Example computations are made for long distance transport of vegetables, eggs, meat, and milk to illustrate the methodology. The implication of markup procedures by marketing firms on consumer prices is shown. Differential impacts on producers depend on the type of food product and scale of operation in New England. Impacts on consumer food budgets are suggested.

A national beekeeping-industry model, assuming rational expectations, is presented.

Consistent and asymptotically efficient estimates are obtained by a modified two-step two-stage least squares method. Based on parameter estimates, elasticities, and likelihood functions, a previously estimated modified adaptive expectations model explains industry behavior better than the rational expectations model. Simulation analyses of the models suggest the direction of the impacts of an ineffective federal honey support program from 1982 through 1985 is similar but the magnitudes are varied. The rational expectations model indicates the decrease in beekeepers’ revenue in this period is larger than the decrease identified by the modified adaptive expectations model.

This paper examines the impact of domestic and foreign macroeconomic variables on U.S. meat exports, including beef, pork, turkey, and chicken, in the context of an open economy. The results show that foreign macroeconomic variables exert more significant and persistent effects on U.S. meat exports than domestic macroeconomic variables. The implication is that the U.S. can increase its meat exports more effectively by expending efforts on international macroeconomic policy coordination rather than on domestic sectoral policy. The results also suggest that macroeconomic models of the agricultural sector should include foreign variables and should not be limited only to domestic ones.

This paper reexamines supply response in the Northeastern fresh tomato market during the 1949–94 period by employing cointegration and error correction technique. It tests whether there has been a long-run equilibrium relationship between Northeastern production and a set of price and nonprice factors that influence it. Findings suggest that wage rate, imports from competing regions, and urban pressure have had significant negative impacts on regional production. The negative relationship between price and production may have resulted from the strong negative effects exerted by the nonprice factors.

We consider private provision of an environmental public good and the link between voluntary pollution-abatement markets and the optimal level of mandatory environmental regulation. We show that voluntary abatement markets react to the level of mandatory abatement imposed and that an optimal regulatory policy must account for that reaction. We consider several assumptions about consumer behavior and find that the voluntary market's reaction to regulation depends on the motivating behavior of consumers. Whether the optimal level of mandatory abatement is higher than the level provided by traditional settings depends on the direction and magnitude of the voluntary market's reaction to changes in mandatory abatement.