Most recent papers:

• Measuring postharvest losses at the farm level in Malawi.
  Kate Ambler, Alan Brauw, Susan Godlonton.
  Australian Journal of Agricultural and Resource Economics. October 11, 2017
  This article measures farm‐level postharvest losses for maize, soya and groundnuts among 1,200 households in Malawi. Farmers answered a detailed questionnaire designed to learn about losses during harvest and transport, processing and storage and which measures both complete losses and crop damage. The findings indicate that fewer than half of households report suffering losses conditional on growing each crop. Conditional on losses occurring, the loss averages between 5 and 12 per cent of the farmer's total harvest. Compared to nationally representative data that measure losses using a single survey question, this study documents a far greater percentage of farmers experiencing losses. We find that losses are concentrated in harvest and processing activities for groundnuts and maize; for soya, they are highest during processing. Existing interventions have primarily targeted storage activities; however, these results suggest that targeting other activities may be worthwhile.

  October 11, 2017   doi: 10.1111/1467-8489.12237   open full text
• Achieving environmental flows where buyback is constrained.
  David Adamson, Adam Loch.
  Australian Journal of Agricultural and Resource Economics. September 25, 2017
  Theory suggests that the development of common property increases national welfare, and consistent with this thinking Australia's Murray–Darling Basin (MDB) Plan uses a common property approach to recover environmental water rights in the national interest. Two water recovery instruments are used: purchasing water rights (buyback) from farmers, and saving water by subsidising irrigator adoption of technically efficient technology. A moratorium on buyback has focused environmental recovery on subsidised technically efficient technology adoption. Economists argue that national welfare is maximised via buyback and highlight the limitations of efficiency savings to recover sufficient environmental water. A risk is that water recovery targets may be reduced in future, limiting welfare gains from water reform. This article evaluates possible welfare trade‐offs surrounding environmental water recovery outcomes where arbitrary limits on buyback are imposed. Results suggest that, on average, strategies which attempt to obtain >1500 gigalitres (GL) of water from on‐farm efficiency investments will only provide sufficient resources to meet environmental objectives in very wet states of nature. We conclude that reliance on technically efficient irrigation infrastructure is less economically efficient relative to water buyback. Importantly, the transformation of MDB irrigation will significantly constrain irrigators' future capacity to adapt to climate change.

  September 25, 2017   doi: 10.1111/1467-8489.12231   open full text
• On the rebound: estimating direct rebound effects for Australian households.
  Bianca Peters, Stephanie F. McWhinnie.
  Australian Journal of Agricultural and Resource Economics. September 25, 2017
  Reducing dependence on fossil fuels by decreasing energy consumption is a common environmental policy. One mechanism used to achieve this is to encourage increased energy efficiency. However, improving efficiency may have an opposing effect and cause an increase in energy consumption if the intensity of use changes. This phenomenon is known as the rebound effect. We estimate direct rebound effects for energy use in Australia based on both aggregate residential energy use data and on household energy expenditure data. Our approach implements a new methodology developed by Hunt and Ryan (2014, Catching on the rebound: Why price elasticities are generally inappropriate measures of rebound effects. Surrey Energy Economics Discussion Paper Series SEEDS 148; 2015, Energy Economics 50, 273) that explicitly relates energy service use with energy source demand and directly incorporates measures of efficiency changes. The results indicate that the rebound effect is relatively high for energy use by Australian households. Due to the unique nature of our household data set, we can examine the influence of demographic and housing characteristics. We find that low‐income households and households with vulnerable members have the largest rebound effects. The relatively large rebound effects found here suggest that consumers gain from efficiency by improved energy services, and thus, policy targeting energy efficiency is not likely to be successful at reducing energy consumption.

  September 25, 2017   doi: 10.1111/1467-8489.12230   open full text
• What determines the efficiency of Australian mining companies?
  Ahmad Hosseinzadeh, Russell Smyth, Abbas Valadkhani, Amir Moradi.
  Australian Journal of Agricultural and Resource Economics. September 25, 2017
  We examine the firm‐specific determinants of technical efficiency in Australian mining companies using data envelopment analysis (DEA). To do so, we employ panel data sourced from individual mining companies listed on the Australian Securities Exchange (ASX) over the period 2010–2014. To ensure valid statistical inference in the presence of serial correlation between DEA efficiency scores, we apply Simar and Wilson's two‐stage bootstrap method. We find that ownership concentration, firm size, firm age, product portfolio, product diversification and growth status significantly contribute to efficiency gains. However, other firm‐specific factors, such as capacity utilisation, financial risk and overseas operations appear to have limited impact on the technical efficiency of mining firms.

  September 25, 2017   doi: 10.1111/1467-8489.12232   open full text
• Why small farms persist? The influence of farmers’ characteristics on farm growth and development. The case of smaller dairy farmers in NZ.
  Victoria Westbrooke, Peter Nuthall.
  Australian Journal of Agricultural and Resource Economics. September 05, 2017
  Human capital is an important resource in primary production impacting on farmers’ decisions and actions. Given their current and expected economic environment, farmers must use their human capital in mapping out a trajectory for their farm. This study considers particular aspects of farmers’ human capital and its influence on farm growth, or lack of it. Farmers’ characteristics as expressed through their personality, intelligence and objectives are the main human capital aspects considered in a sample of smaller NZ dairy farms. They are somewhat typical of western farmers working on smaller farms. They can be broadly classed into Expanders, Maintainers and Retractors. It is hypothesised each group will have distinct and different personal characteristics and these influence the farmers’ choice of trajectory. This is in addition to purely economic factors. It is also hypothesised the characteristics influence the farmers’ choice of development strategy and how challenges to the strategy are viewed. The data collected from the small dairy farms support the hypotheses suggesting the design of policy and extension programs must allow for these human capital drivers. Using past data, it is also shown aspects of human capital are different in large farms emphasising the same conclusion.

  September 05, 2017   doi: 10.1111/1467-8489.12227   open full text
• Balancing economic revenue and grazing pressure of livestock grazing on the Qinghai–Tibetan–Plateau.
  Wei Huang, Bernhard Bruemmer.
  Australian Journal of Agricultural and Resource Economics. August 30, 2017
  Treating grazing pressure as an undesirable output of livestock grazing in a directional distance function improves understanding of how economic behaviour affects the environment. Field survey data from 193 livestock grazing households combined with remotely sensed net primary productivity (NPP) data on the Qinghai–Tibetan–Plateau was used to develop a directional output‐orientation distance function. The average efficiency of livestock grazing households is 0.817 when incorporating grazing pressure as an undesirable output, which means that households can achieve 18.3% more output and decrease proportional grazing pressure holding all inputs fixed. The relative shadow price of undesirable grazing pressure to good output grazing revenue is estimated to be between 1.795 and 3.986. According to the Morishima elasticity of substitution between inputs, there is a significant complementary relationship between grassland, labour and capital.

  August 30, 2017   doi: 10.1111/1467-8489.12225   open full text
• How well do conservation auctions perform in achieving landscape‐level outcomes? A comparison of auction formats and bid selection criteria.
  Md Sayed Iftekhar, Uwe Latacz‐Lohmann.
  Australian Journal of Agricultural and Resource Economics. August 29, 2017
  This paper studies the performance of auction design features regarding pricing mechanisms and bid selection criteria for securing wildlife zones across different holdings. We compare two pricing mechanisms: a discriminatory‐price auction and a uniform‐price ascending auction, and four bid selection criteria on the basis of: total bid, bid‐per‐value ratio, bid‐per‐area ratio and a mixed criterion where bids are formed on the basis of cost but they are selected based on the bid‐per‐value ratio. We develop a best‐response group‐bidding model for a discriminatory‐price auction where bidders form optimal group bids for individual wildlife zones. In the uniform‐price ascending auction, individual landholders respond to prices, which are successively raised by the auctioneer and whenever all the landholders from a single zone agree to participate (i.e. the first zone is formed), the auction stops. Based on numerical simulations using a bio‐economic model of malleefowl conservation, we observe that the discriminatory‐price auction is more cost‐effective than the uniform‐price ascending auction. However, the budgetary cost‐effectiveness of a discriminatory‐price auction is sensitive to bidder uncertainty about the number of competing bidder groups and the highest cost of establishing a wildlife zone among these groups. In terms of bid selection, the mixed bid selection criterion performs best. We discuss the policy implications of these findings.

  August 29, 2017   doi: 10.1111/1467-8489.12226   open full text
• Household nutrition and income impacts of using dairy technologies in mixed crop–livestock production systems.
  E. G. Kebebe.
  Australian Journal of Agricultural and Resource Economics. August 29, 2017
  Technologies like improved breeds of dairy cows and improved forages have the potential to significantly increase dairy cow productivity and farmers’ profits in developing countries. However, adoption of such technologies has been low in Ethiopia, despite numerous efforts to disseminate the technologies in the past. Some studies argue that adoption of technologies is low because welfare effects of the technologies could be insignificant or negative to certain groups of farmers. This article employed propensity score matching and inverse probability weighting estimator with regression adjustment to examine the difference in household nutrition and income between adopters and nonadopters of dairy technologies in rural Ethiopia. We find that adoption of cross‐bred dairy cows and improved forages increases household nutrition and income. The significant household nutrition and income impact for adopters support the notion that many Ethiopian smallholders have not adopted dairy technologies because adopters and nonadopters of dairy technologies have inherent differences in welfare outcome potentials. The results suggest that interventions that enhance access to farm resources and address barriers to input and output value chains could improve adoption of dairy technologies.

  August 29, 2017   doi: 10.1111/1467-8489.12223   open full text
• Optimal surveillance against foot‐and‐mouth disease: the case of bulk milk testing in Australia.
  Tom Kompas, Pham Van Ha, Hoa Thi Minh Nguyen, Iain East, Sharon Roche, Graeme Garner.
  Australian Journal of Agricultural and Resource Economics. August 24, 2017
  Previous foot‐and‐mouth disease (FMD) outbreaks and simulation‐based analyses suggest substantial payoffs from detecting an incursion early. However, no economic measures for early detection have been analysed in an optimising framework. We investigate the use of bulk milk testing (BMT) for active surveillance against an FMD incursion in Australia. We find that BMT can be justified, but only when the FMD entry probability is sufficiently high or the cost of BMT is low. However, BMT is well suited for post‐outbreak surveillance, to shorten the length of time and size of an epidemic and to facilitate an earlier return to market.

  August 24, 2017   doi: 10.1111/1467-8489.12224   open full text
• Spatial price premium transmission for Meat Standards Australia‐graded cattle: the vulnerability of price premiums to outside shocks.
  Luis Emilio Morales, Nam Hoang, Eric Stuen.
  Australian Journal of Agricultural and Resource Economics. July 27, 2017
  Studies of market integration show that price changes are transmitted spatially through arbitrage. Transmission across differentiated agricultural products is important to investigate, but it has not been explored given its complexities for assessment. Using data from Australian cattle markets, we examine the dynamics of Meat Standards Australia price premium transmission between states. An impulse response function analysis using Bayesian vector autoregression with sign restriction identification shows that shocks to prices and price premiums are partially transmitted contemporaneously between markets and it takes several weeks to complete transmission. In addition, we find an asymmetry of price and price premium shocks originating in Southern Queensland that have an inverse immediate impact in New South Wales, and take months to transmit the usual price response. This outcome may be explained by differences in cattle availability in each state, which can be related to forage availability due to weather conditions. Based on these results, producers can forecast fluctuations on price premiums and adjust their cattle supply accordingly.

  July 27, 2017   doi: 10.1111/1467-8489.12221   open full text
• The influence of farm input subsidies on the adoption of natural resource management technologies.
  Stefan Koppmair, Menale Kassie, Matin Qaim.
  Australian Journal of Agricultural and Resource Economics. July 27, 2017
  Farm input subsidies are often criticised on economic and ecological grounds. The promotion of natural resource management (NRM) technologies is widely seen as more sustainable to increase agricultural productivity and food security. Relatively little is known about how input subsidies affect farmers’ decisions to adopt NRM technologies. There are concerns of incompatibility, because NRM technologies are one strategy to reduce the use of external inputs in intensive production systems. However, in smallholder systems of Africa, where the average use of external inputs is low, there may possibly be interesting complementarities. Here, we analyse the situation of Malawi's Farm Input Subsidy Program (FISP). Using panel data from smallholder farm households, we develop a multivariate probit model and examine how FISP participation affects farmers’ decisions to adopt various NRM technologies, such as intercropping of maize with legumes, use of organic manure, water conservation practices and vegetative strips. As expected, FISP increases the use of inorganic fertilizer and improved maize seeds. Yet, we also observe a positive association between FISP and the adoption of certain NRM technologies. For other NRM technologies, we find no significant effect. We conclude that input subsidies and the promotion of NRM technologies can be compatible strategies.

  July 27, 2017   doi: 10.1111/1467-8489.12220   open full text
• Financial activity in agricultural futures markets: evidence from quantile regressions.
  Elina Pradkhan.
  Australian Journal of Agricultural and Resource Economics. July 17, 2017
  This study analyses the relationship between financial activity and price returns in 12 US agricultural futures markets. It contributes to the existing research by exploring the forecasting power of trading activity for returns from the perspective of conditional quantiles. Quantile regressions detect Granger‐causal effects from positions of speculators and index traders to price returns in a wide range of commodity markets such as cocoa, coffee, corn, sugar and SRW wheat.

  July 17, 2017   doi: 10.1111/1467-8489.12222   open full text
• Early evacuation is the best bushfire risk mitigation strategy for south‐eastern Australia.
  Tyron J. Venn, John Quiggin.
  Australian Journal of Agricultural and Resource Economics. June 27, 2017
  Given the large and increasing bushfire threat to lives and property in Australia, there is a need for economic evaluation of risk mitigation policies that can be implemented by governments and homeowners. Three broad policies applicable for existing at‐risk communities are evaluated: expanded use of landscape‐scale prescribed fire; home ignition zone treatment (bushfire defence sprinklers); and early evacuation when a bushfire is burning on extreme or catastrophic fire danger days. Early evacuation is the only option that yields net economic benefits relative to existing policy.

  June 27, 2017   doi: 10.1111/1467-8489.12215   open full text
• Are returns to research quality lower in agricultural economics than in economics?
  John Gibson, Ethan Burton‐McKenzie.
  Australian Journal of Agricultural and Resource Economics. June 15, 2017
  We compare effects of research quality and quantity on the salary of academics in agricultural economics and economics departments of the same universities. Agricultural economists get a significantly lower payoff to research quality, whether measured by quality‐weighted journal articles (based on nine different weighting schemes) or by citations. Instead, salary depends on the quantity of journal articles, while article counts have no independent effect on economist salaries. These differences in the reward structure for research are not due to either the extension focus of agricultural economists or to disciplinary differences in publishing with students and instead may reflect institutional factors that govern incentives within universities. One‐third of academics in the agricultural economics departments studied here have doctoral training in economics; the very different disciplinary reward structures may cause frustration for these faculty due to the muted returns to research quality that agricultural economics departments seem to offer.

  June 15, 2017   doi: 10.1111/1467-8489.12216   open full text
• Price premiums for ecolabelled seafood: MSC certification in Germany.
  Frank Asche, Julia Bronnmann.
  Australian Journal of Agricultural and Resource Economics. June 09, 2017
  Whether ecolabelled seafood actually provides incentives to improve the management of fisheries remains a controversial issue. A number of stated preference studies indicate a substantial willingness to pay for ecolabelled seafood. Early evidence from actual market data supports the existence of a premium, while more recent papers provide a more nuanced picture. In this paper, a hedonic price model for whitefish species on the German market is estimated that includes information on Marine Stewardship Council (MSC) labelling, the leading seafood ecolabel in Germany. The model also allows the potential premium to vary by species. Results indicate that MSC premiums in Germany vary substantially between species, from a hefty 30.6 per cent for the high‐end species cod, to a 4 per cent premium for Alaska pollock, and no premiums for saithe.

  June 09, 2017   doi: 10.1111/1467-8489.12217   open full text
• Estimating shadow price for symbiotic nitrogen and technical efficiency for legume‐based conservation agriculture in Malawi.
  Robertson R. B. Khataza, Atakelty Hailu, Marit E. Kragt, Graeme J. Doole.
  Australian Journal of Agricultural and Resource Economics. May 28, 2017
  Determining the value of legumes as soil fertility amendments can be challenging, yet this information is required to guide public policy and to incentivise prescribed land‐management practices such as conservation agriculture. We use a directional input distance function (DIDF) to estimate shadow prices for symbiotic nitrogen and the technical efficiency for mixed maize‐legume production systems in Malawi. The shadow prices reflect the trade‐off between fertiliser nitrogen and symbiotic nitrogen required to achieve a given quantity of output. Our results reveal considerable technical inefficiency in the production system. The estimated shadow prices vary across farms and are, on average, higher than the reference price for commercial nitrogen. The results suggest that it would be beneficial to redesign the current price‐support programs that subsidise chemical fertilisers and indirectly crowd‐out organic soil amendments such as legumes.

  May 28, 2017   doi: 10.1111/1467-8489.12212   open full text
• Innovation and networks in New Zealand farming.
  Philip Brown, Simon Roper.
  Australian Journal of Agricultural and Resource Economics. May 10, 2017
  The New Zealand government seeks to dramatically increase the value of agricultural exports while concurrently protecting the natural environment. Thus, farmers are expected to adopt pro‐environmental management practices and novel farm technologies. We show that farmers are more likely to adopt new practices and technologies after seeing them demonstrated, but earlier evidence indicates that demonstration is most effectively undertaken within farmer networks. We use multivariate regression to identify the traits of livestock farmers who are innovative by focusing on adoption of pro‐environmental management practices (managing nutrients, soils and pugging) and novel farm technologies (e.g., windmills, computer‐based management systems, automatic sensors and specialised grasses), considering both numbers adopted and timing. We find that dairy farmers are more innovative than other livestock farmers and that higher education levels and stronger environmental norms within the family are strongly associated with innovativeness. In addition, we find that innovators and early adopters have larger networks than other farmers. Moreover, the composition of these networks is much more varied than the networks of less innovative farmers. These findings imply that innovative farmers in New Zealand may also act as connectors for the diffusion of new ideas in farming.

  May 10, 2017   doi: 10.1111/1467-8489.12211   open full text
• Changes in grain handling catchments in Australia: an historical perspective.
  Ross Kingwell.
  Australian Journal of Agricultural and Resource Economics. March 21, 2017
  This paper explores some of the important issues that influence the magnitude of receival site grain catchments in Australia. Changes in grain harvests, transport and grain handling technologies and costs; changes in farming systems, crop yields and harvesting capacity; investments in roads and on‐farm storage and economies of size in grain receival infrastructure are shown in combination to affect the size of grain catchments in major grain‐growing regions of Australia over the last 30 years. The size of grain catchments that minimise growers’ costs of road transport of their harvested grain and their receival point charges in various time periods are determined. Differently shaped grain catchments are considered. The main finding is that the size of grain catchments that minimise farmers’ grain transport, off‐farm storage and handling costs since the mid‐1980s has consistently increased, principally due to lessening real costs of road transport, more on‐farm storage and economies of size in grain receival, despite higher grain yields and a greater intensity of cropping. These findings are consistent with the observed reduction in the number of receival sites in many grain‐growing regions of Australia. Site rationalisation is less evident in states where the receival network is owned and operated by a grower cooperative.

  March 21, 2017   doi: 10.1111/1467-8489.12206   open full text
• Trade diversion and antidumping effectiveness: insights from a residual demand model.
  Henry W. Kinnucan, Nguyen Duc Minh, Dengjun Zhang.
  Australian Journal of Agricultural and Resource Economics. March 20, 2017
  A residual demand model is developed to predict the likely effects of an antidumping duty in the presence of trade diversion. A key insight is that the ability of an AD duty to increase the welfare of producers in the country imposing the duty hinges on the import supply elasticity for product from non‐named sources. The only instance in which this is not true is when supply for product from the named source is perfectly elastic. In this case, the welfare gain to domestic producers is maximised irrespective of the supply elasticity for imports from non‐named sources. A comparison of the residual demand model with the Armington model suggests the latter significantly understates both trade diversion and domestic producer gains from the duty.

  March 20, 2017   doi: 10.1111/1467-8489.12203   open full text
• Air pollution and food prices: evidence from China.
  Feifei Sun, Dieter B. A. Koemle, Xiaohua Yu.
  Australian Journal of Agricultural and Resource Economics. March 13, 2017
  Air pollution is one of the top environmental concerns in China. On days with severe air pollution, people (both consumers and producers) often reduce outdoor economic activities in order to avoid possible health damages. This impacts the market trade of fresh food products, at least in a short run. This empirical study sheds light on the impact of air pollution on the short run prices of three major fresh food products (Chinese cabbage, tomatoes and pork) using daily data from the largest outdoor wholesale market in Beijing. With an increase in AQI (Air Quality Index) by 100 units, prices for Chinese cabbage and tomatoes decrease by 1.19 and 0.89 per cent. With an increase in PM2.5 concentration by 100 μg/m3, prices for Chinese cabbage and tomatoes decrease by 0.64 and 0.55 per cent. Air pollution affects vegetable prices, but has no significant impact on prices of pork products.

  March 13, 2017   doi: 10.1111/1467-8489.12204   open full text
• Evolving splines and seasonal unit roots in weekly agricultural prices.
  José Juan Cáceres‐Hernández, Gloria Martín‐Rodríguez.
  Australian Journal of Agricultural and Resource Economics. March 09, 2017
  The univariate statistical properties of agricultural price series need to be examined as a first step in the analysis of price transmission mechanisms. However, in the case of weekly price series, increasingly available, the testing procedures usually applied in this step are not suitable to deal with evolving seasonal effects. In this study, a method of testing for seasonal unit roots in weekly series of agricultural prices is described. When the deterministic seasonal component does not remain constant over time, the restricted evolving spline model (RESM) is shown to be a useful parametric formulation to capture the deterministic seasonal pattern. Therefore, the RESM model should be included as a deterministic component in auxiliary regression for unit root tests at seasonal frequencies. This proposal is applied to three weekly series of Canary Islands banana prices. From the standard seasonal unit root tests, the null hypothesis is failed to be rejected at the 5% or 10% significance level at some seasonal frequencies for each one of the series. Once critical values are obtained by simulation exercises when the RESM model is included, the hypotheses of unit root are rejected at each one of the seasonal frequencies for all of the three series.

  March 09, 2017   doi: 10.1111/1467-8489.12205   open full text
• The public R&D and productivity growth in Australia's broadacre agriculture: is there a link?
  Farid Khan, Ruhul Salim, Harry Bloch, Nazrul Islam.
  Australian Journal of Agricultural and Resource Economics. March 01, 2017
  This paper investigates the dynamic relationships between research and development (R&D) expenditure and productivity growth in Australian broadacre agriculture using aggregate time series data for the period 1953 to 2009. The results show a cointegrating relationship between R&D and productivity growth and a unidirectional causality from R&D to TFP (total factor productivity) growth in Australian broadacre agriculture. Using the dynamic properties of the model, data from beyond the sample period are analysed by employing the variance decomposition and the impulse response function. The findings reveal that R&D can be readily linked to the variation in productivity growth beyond the sample period. Furthermore, the forecasting results indicate that a significant out‐of‐sample relationship exists between public R&D and productivity in broadacre agriculture.

  March 01, 2017   doi: 10.1111/1467-8489.12202   open full text
• Incorporating risk in a positive mathematical programming framework: a dual approach.
  Linda Arata, Michele Donati, Paolo Sckokai, Filippo Arfini.
  Australian Journal of Agricultural and Resource Economics. January 30, 2017
  In this study we develop a new methodological proposal to incorporate risk into a farm‐level positive mathematical programming (PMP) model. We estimate simultaneously the farm nonlinear cost function and a farmer‐specific coefficient of absolute risk aversion as well as the resource shadow prices. The model is applied to a sample of representative arable crop farms from the Emilia‐Romagna region in Italy. The estimation results confirm the calibration ability of the model and reveal the values of the individual risk aversion coefficients. We use the model to simulate different scenarios of crop price volatility, in order to explore the potential risk management role of an agri‐environmental scheme.

  January 30, 2017   doi: 10.1111/1467-8489.12199   open full text
• Eco‐efficiency of high‐yielding variety rice cultivation after accounting for on‐farm environmental damage as an undesirable output: an empirical analysis from Bangladesh.
  Noor‐E. Sabiha, Ruhul Salim, Sanzidur Rahman.
  Australian Journal of Agricultural and Resource Economics. January 26, 2017
  This study computes the eco‐efficiency of high‐yielding variety (HYV) rice production by including an on‐farm environmental damage index (OFEDI) as an undesirable output using data envelopment analysis. It then identifies its determinants by applying an interval regression procedure on a sample of 317 farmers from north‐western Bangladesh. Results reveal that the mean level of the OFEDI‐adjusted production efficiency (i.e. eco‐efficiency) is 89 per cent, whereas ignoring OFEDI adjustment (i.e. with OFEDI = 0) reduces the mean level of efficiency to 69 per cent, implying that the production of undesirable output or on‐farm environmental damage induces an efficiency loss of 20 per cent with significant differences across regions. The proportion of farmers’ income from HYV rice agriculture, land ownership, extension services and socio‐environmental living standard are the significant determinants of improving eco‐efficiency. Policy implications include investments in extension services and land reform measures to increase land ownership, which will synergistically improve eco‐efficiency of HYV rice production in Bangladesh.

  January 26, 2017   doi: 10.1111/1467-8489.12197   open full text
• Australia's consumption‐based greenhouse gas emissions.
  Clinton J. Levitt, Morten Saaby, Anders Sørensen.
  Australian Journal of Agricultural and Resource Economics. January 06, 2017
  We use data from the World Input‐Output Database in a multiregional input–output model to analyse Australian consumption‐based greenhouse gas emissions for the years 1995 to 2009. We find that the emission content of Australian macroeconomic activity has changed over the 15‐year period. Consumption‐based emissions have been growing faster than production‐based emissions since 2001. We show that emissions embodied in Australian imports are increasingly becoming a significant source of emissions. We investigate emissions in Australian imports and find that increased trade with China contributed substantially to the increase in Australia's consumption emissions. China was the largest exporter of emissions to Australia and accounted for almost half of emissions embodied in Australian imports since 2002. The growth of trade with China coincides with the increase in imported emissions as well as the increase in aggregate consumption emissions. Our results suggest that tracking consumption emissions together with production emissions provides a more complete picture of Australian emissions.

  January 06, 2017   doi: 10.1111/1467-8489.12198   open full text
• Measuring the functional efficiency of agricultural futures markets.
  Meliyara Consuegra, Javier Garcia‐Verdugo.
  Australian Journal of Agricultural and Resource Economics. December 15, 2016
  This article presents a method for measuring the functional efficiency of agricultural futures markets in terms of social welfare using a standard futures market structural model. Employing the concept of social surplus, it can be shown that, when futures prices are used to estimate future spot prices, the errors in prediction produce to some degree resource misallocation, which in turn results in welfare losses. Therefore, the social welfare associated with the presence of futures markets can be measured using a Social Loss index. The indicator was calculated for the period 1975–2015 and for several subperiods, which allow us to analyse functional efficiency before and after the 2007–2008 spikes in the prices of agricultural commodities. Futures contracts for 12 products are evaluated. The products are grouped in three different categories: ‘soft products’, ‘livestock’ and ‘grains and oilseeds’. The results indicate that livestock contracts tended to be more efficient than the rest of the contracts during the whole period, but in 2008–2015 their efficiency decreased vis‐á‐vis the rest of the products. Nevertheless, 2008–2015 proved to be the most efficient subperiod, confirming the remarkable development of agricultural futures markets over time.

  December 15, 2016   doi: 10.1111/1467-8489.12196   open full text
• Renewable versus nonrenewable resources: an analysis of volatility in futures prices.
  Arkady Gevorkyan.
  Australian Journal of Agricultural and Resource Economics. October 21, 2016
  This study outlines a new approach for differentiating commodity futures based on their exhaustibility. Various aspects of volatility in the futures prices of renewable resources (palm oil, coffee, soya beans, rice, wheat and corn) and nonrenewable resources (zinc, aluminium, natural gas, gold, crude oil and copper) are studied, exploring whether volatility is greater in the former than in the latter. We use a generalised autoregressive conditional heteroskedasticity (GARCH) model to test our main hypothesis that the volatility in futures prices for renewable resources has recently been equal to or greater than the volatility in futures prices for nonrenewable resources. Our key findings suggest that futures prices for some renewable resources have greater variance than those for benchmark crude oil in a simulated GARCH series. We extend our analysis using a nonlinear vector smooth transition autoregressive (VSTAR) model to test for the existence of a shifting‐mean tendency in the commodity series that we researched. We show that transition from a stable to a volatile regime is more abrupt for renewable resources.

  October 21, 2016   doi: 10.1111/1467-8489.12194   open full text
• State‐contingent analysis of farmers’ response to weather variability: irrigated dairy farming in the Murray Valley, Australia.
  Thilak Mallawaarachchi, Céline Nauges, Orion Sanders, John Quiggin.
  Australian Journal of Agricultural and Resource Economics. September 26, 2016
  The agricultural sector is commonly regarded as one of the most vulnerable to climate change. Current understanding of the impact of climate change on this sector relies on the underlying assumptions about farmers’ possible responses to weather variability, including changes in crop choice, input combinations and land management practices. Many previous analyses rely on the implicit (and restrictive) assumption that farmers operate under a fixed technology set across different states of nature. This assumption, represented through stochastic production or profit functions, is commonly made but seldom tested and may understate farmers’ responses to climate change if state‐contingent production technologies are, in reality, more flexible. The potential for farmers to adapt production technologies in response to unforeseen events is at the core of the state‐contingent approach. Advanced in Chambers and Quiggin (2000), the theory contends that producers can manage uncertainty through the allocation of productive inputs to different states of nature. In this article, we test the assumption that farmers’ observed behaviour is consistent with the state‐contingent production theory using farm‐level data from Australia. More precisely, we estimate the milk production technology for a sample of irrigated dairy farms from the southern Murray–Darling Basin over the period from 2006–2007 to 2009–2010.

  September 26, 2016   doi: 10.1111/1467-8489.12193   open full text
• Evaluating renewable energy policies.
  Ross Cullen.
  Australian Journal of Agricultural and Resource Economics. August 26, 2016
  The merits of renewable energy, of targeted renewable energy policies, and appropriate evaluation methods, are each contested at various levels including national politics and in energy policy literature. Here, first a range of renewable energy goals across countries and the policies directed at achieving those objectives are reviewed. Second, the arguments advanced to support use of renewable energy policies in many nations are critiqued. Third, some principles are proposed for design of renewable energy policies. Context always matters, and it is essential to consider energy, economic, and geography opportunities and constraints before developing renewable energy policies. Fourth, to ensure renewable energy policies contribute towards attainment of high‐level national goals, a decision support approach is outlined that considers the energy context, and asks a series of evaluation questions to aid identification of first best policy measures. Fifth, barriers to and benefits from implementation of appropriate renewable energy policies are briefly reviewed.

  August 26, 2016   doi: 10.1111/1467-8489.12175   open full text
• Antipodean agricultural and resource economics at 60: agricultural adjustment.
  Geoff Edwards, Winton Bates.
  Australian Journal of Agricultural and Resource Economics. August 26, 2016
  Over the last 60 years, Australian and New Zealand agricultural economists have promoted a better understanding of agricultural adjustment pressures and opportunities among farmers and policy makers. They have emphasised that adjustment pressures faced by farmers are linked to economy‐wide growth processes and that adjustment problems have been aggravated by past government policies, including closer settlement and measures distorting markets for agricultural outputs and inputs. Economists who argued that provision of adjustment assistance would be preferable to price support policies helped to change the focus of agricultural policy toward facilitating adjustment. When rural adjustment schemes were established in the early 1970s, the case for them was made largely in terms of impediments to efficient adjustment in capital and labour markets. However, the schemes involved elements of ‘government failure’, especially concessional interest rates. Over the following decades, as economists became increasingly sceptical about market failure rationales, adjustment assistance schemes gradually became decreasingly important. Nevertheless, there is ongoing support for the view that adjustment assistance can sometimes enable less efficient and less equitable polices to be avoided.

  August 26, 2016   doi: 10.1111/1467-8489.12174   open full text
• Antipodean agricultural and resource economics at 60: national and global price‐ and trade‐distorting policies.
  Kym Anderson.
  Australian Journal of Agricultural and Resource Economics. August 25, 2016
  This paper surveys significant contributions made by Australian and New Zealand (ANZ) agricultural and trade economists to our understanding of the extent to which price‐ and trade‐distorting policies affect domestic and international prices and markets for agricultural products and economic welfare. It begins with the theory of policy impacts on producer and consumer prices and value added by farmers. It then surveys efforts to measure the extent of distortions due to such policies, first in Australia and New Zealand and then in other regions of the world. ANZ economists’ efforts to use models to estimate the market and welfare effects of policies nationally and globally are then assessed, before attention turns to their ex ante estimates of the effects of trade agreements. The paper's Supporting Information includes a brief survey of attempts to understand the political economy forces behind those various policies and their recent reforms.

  August 25, 2016   doi: 10.1111/1467-8489.12176   open full text
• Ecosystem impacts of pesticide reductions through Bt cotton adoption.
  Prakashan Chellattan Veettil, Vijesh V. Krishna, Matin Qaim.
  Australian Journal of Agricultural and Resource Economics. August 16, 2016
  This article examines the ecosystem impacts of transgenic Bt cotton technology resulting from reduced chemical pesticide use. Employing unique panel data from smallholder farmers in India, negative environmental and health effects of pesticide use are quantified with the environmental impact quotient (EIQ), with and without Bt technology. An environmentally sensitive dynamic production function is estimated, treating the environmental risk of pesticide toxicity as an undesirable output in the production process. Negative externalities are significantly lower in Bt than in conventional cotton. The reduction in EIQ through Bt technology adoption has increased from 39 per cent during 2002–2004 to 68 per cent during 2006–2008. Bt adoption has also contributed to higher environmental efficiency. Environmental efficiency is influenced by the quality of Bt technology: high‐quality Bt seeds are associated with higher environmental efficiency than lower‐quality seeds.

  August 16, 2016   doi: 10.1111/1467-8489.12171   open full text
• Antipodean agricultural and resource economics – introduction.
  Julian M. Alston, Kym Anderson, Philip G. Pardey.
  Australian Journal of Agricultural and Resource Economics. August 16, 2016
  In February 2016, the 60th Annual Conference of the Australian Agricultural and Resource Economics Society (AARES) was held in Canberra, 20 years since we added ‘and Resources’ to the Society's name and Journal. As one way of commemorating those anniversaries, a pre‐Conference workshop was held to highlight the contributions of the Society's agricultural and resource economists. Papers were solicited with the expectation that they would be presented in a way that is accessible for the broad membership of the Society and that revisions would be published along with reviewer comments in the Australian Journal of Agricultural and Resource Economics (AJARE). This Special Issue is the upshot. This article introduces the Issue and the other articles in it.

  August 16, 2016   doi: 10.1111/1467-8489.12173   open full text
• Antipodean agricultural and resource economics at 60: climate change policy and energy transition.
  Brian S. Fisher.
  Australian Journal of Agricultural and Resource Economics. August 15, 2016
  The Australian and New Zealand agricultural and resource economics profession has made a significant contribution in the field of climate policy and analysis of the energy sector. Much of this contribution has been based on quantitative economic modelling which had its roots in the earlier computable general equilibrium modelling on domestic policy and trade in which the profession was heavily involved from the 1970s onwards. By far the largest share of model development and analysis has been sponsored by government and conducted in the public sector, but in more recent years, there has been some shift into the private sector. However, the trend to the use of much more complex integrated assessment models in assessing the impacts of climate change and responses to new policy instruments raises the issue of whether more government support of quantitative modelling will be required in future.

  August 15, 2016   doi: 10.1111/1467-8489.12156   open full text
• Antipodean agricultural and resource economics at 60: natural resource management.
  David Pannell, Graeme Doole, Jimmy Cheung.
  Australian Journal of Agricultural and Resource Economics. August 08, 2016
  Australian and New Zealand research on the economics of natural resource management (NRM) has a relatively short history. Defining NRM as including water, fisheries, agricultural land, nature conservation and forestry, 65 per cent of all Australasian journal articles in the area have been published since 2005. The most researched NRM issue is water, followed by fisheries and agricultural land. Most of the NRM issues with a high level of economic research are issues that have had major policy initiatives in place at around the time of the studies, highlighting the high policy relevance of most of the research. For each NRM issue, we identify important contributions that have been made by Australian economists. These include the design and implementation of well‐functioning water markets, the provision of strong critiques of agricultural NRM programs, advice on the design and implementation of individual transferable quotas for fisheries and many more.

  August 08, 2016   doi: 10.1111/1467-8489.12172   open full text
• Antipodean agricultural and resource economics at 60: agricultural innovation.
  Julian M. Alston, Philip G. Pardey.
  Australian Journal of Agricultural and Resource Economics. July 19, 2016
  Innovation in agriculture – itself an innovation some 10,000 years ago – is at the centre of many economic and social issues, either as a cause of problems or a solution to them. From the beginning, but especially over the past 150 years, innovation has transformed agriculture and in doing so has contributed to the transformation of whole economies. The consequences have been profoundly important for lives and livelihoods, generally favourable, but almost always with some undesirable consequences for at least some people. Economic and policy issues arise because agricultural research is subject to various market failures, because the resulting innovations and technological changes have important economic consequences for net income and its distribution among individuals and among factors of production, and because the consequences are difficult to discern and attribute among causes. These issues have been studied by economists and documented in the literature on the economics of innovation in agriculture that began as such in the 1950s, around the time of the creation of the Australian Agricultural Economics Society. Members of that nascent society were early contributors to this emerging field of study and have played disproportionately significant roles in it over the ensuing decades.

  July 19, 2016   doi: 10.1111/1467-8489.12162   open full text
• Agricultural markets and marketing policies.
  Garry Griffith, Alistair Watson.
  Australian Journal of Agricultural and Resource Economics. July 11, 2016
  Agricultural markets and marketing policies in Australia have changed markedly in recent years. In part, this has occurred because of conscious deregulation of previous price support and stabilisation schemes. Occasionally, the changes occurred because of poor administration and spectacular default. Previous price and marketing policies schemes provided differential rates of assistance with adverse consequences for resource allocation. Pricing arrangements affected marketing institutions and marketing costs beyond the farm gate, domestically and internationally. The conceptual basis of agricultural marketing analysis was contested. Private and public roles were confused, including between Commonwealth and state governments. Key principles of agricultural marketing and policy development in Australia are illustrated in the paper by reference to commodities with different histories and economic characteristics: wool, wheat, dairying and meat. Special emphasis is given to market information and price discovery. In line with continuing urbanisation and modern logistics, retail marketing of agricultural products has also been transformed. This has become controversial as a policy issue. Competition issues, the economic behaviour and performance of supermarkets, and their effects on farmers and consumers are also introduced in the paper.

  July 11, 2016   doi: 10.1111/1467-8489.12161   open full text
• Antipodean agricultural and resource economics at 60: environmental economics.
  Jeff Bennett, Alan Randall.
  Australian Journal of Agricultural and Resource Economics. July 04, 2016
  Environmental economics has been an increasingly significant focus for AARES and its members. Significant contributions began in the 1960s and 1970s with conceptual insights into the causes for market failure and the design of appropriate policy responses. The practical orientation of the profession led to the development and application of analytical tools in a wide array of contexts. Prominent amongst these have been nonmarket valuation, market‐based policy instruments and the private sector provision of environmental protection. Interaction with natural and social scientists has been a feature. Cross‐fertilisation has resulted to define emergent fields such as behavioural economics and ecological economics. Multidisciplinary endeavours have also grown in areas such as ecosystem service provision and integrated assessment modelling. These areas are likely to expand further with the ongoing contribution of core elements of the economics discipline.

  July 04, 2016   doi: 10.1111/1467-8489.12157   open full text
• Antipodean agricultural and resource economics at 60: booming sector economics.
  John Freebairn.
  Australian Journal of Agricultural and Resource Economics. July 04, 2016
  Contributions of Australian economists to understand the effects of a boom export industry are reviewed. Effects are considered on: the real exchange rate; output, prices and factor incomes of the boom industry, other trade‐exposed industries and nontraded industries; and national income and its distribution. Theoretical models and empirical models are reviewed. Different effects are considered for supply‐side‐ versus demand‐side‐driven booms, and then for the price increase, investment increase and production increase phases of the boom. Evaluations of industry and macroeconomic policy options are canvassed.

  July 04, 2016   doi: 10.1111/1467-8489.12158   open full text
• Antipodean agricultural and resource economics at 60: risk and uncertainty.
  John C. Quiggin, Jock R. Anderson.
  Australian Journal of Agricultural and Resource Economics. July 04, 2016
  Risk and uncertainty issues have been long addressed by members of AARES, reflecting the importance of the issue in agriculture, particularly in Australia. Members have been among the most innovative developers of methods and insights, around the world, as is reflected in the many publications in journals beyond the domestic shores. It seems, given the recent keen attention to such issues in the Australian literature and beyond, that, with high probability, members will continue to make strong contributions to this area of agricultural and resource economics.

  July 04, 2016   doi: 10.1111/1467-8489.12159   open full text
• Antipodean agricultural and resource economics at 60: farm management.
  Bill Malcolm, Vic Wright.
  Australian Journal of Agricultural and Resource Economics. July 04, 2016
  From the beginning Agricultural economics in the Antipodes has encompassed farm management in various guises, from the farm economics of firms to the farm management economics of a firm to farm management research. Theoretical advances in the inter‐disciplinary task of farm management analysis, built on economics as the core discipline, make a sound foundation for farm management to be enriched by related disciplinary areas, which will further enhance analytical and problem‐solving capacities. Nowadays though, as in the past, the potential outstrips the application, meaning farmer advice, policy analysis and research investment evaluation are much the poorer.

  July 04, 2016   doi: 10.1111/1467-8489.12160   open full text
• Antipodean agricultural and resource economics at 60: Trends in topics, authorship and collaboration.
  Maksym Polyakov, Fiona L. Gibson, David J. Pannell.
  Australian Journal of Agricultural and Resource Economics. June 13, 2016
  This study presents results of an analysis of 1060 academic articles published in the Australian Journal of Agricultural Economics and the Australian Journal of Agricultural and Resource Economics from 1957 to 2015. Trends in research topics over time identified by the study include a decline in research on agricultural topics offset by growth in publications related to natural resources, the environment, trade, food and international development. Other trends include an increase in the average number of co‐authors on each paper, a gradual increase in authorship by females, changes in the shares of top contributing institutions, increases in collaboration between institutions and a steady increase in the number of authors from outside Australia or New Zealand.

  June 13, 2016   doi: 10.1111/1467-8489.12152   open full text
• Drivers of transaction costs affecting participation in the rental market for cropland in Vietnam.
  Hoang Trieu Huy, Michael Lyne, Nazmun Ratna, Peter Nuthall.
  Australian Journal of Agricultural and Resource Economics. May 05, 2016
  Farm incomes in rural Vietnam are tightly constrained by very small farm sizes. Stringent limits on the area of cropland that individuals may own means that farmers need a well‐functioning rental market to consolidate land parcels, grow their farm enterprises, adopt new technology and increase incomes. This research investigates the efficiency and equity impacts of the rental market in rural Vietnam and attempts to identify transaction costs impeding the market. A generalised ordered logit model with shifting thresholds allowing transaction costs to impact lessors and lessees differently was specified and estimated using data extracted from the Vietnam Household Living Standards Surveys. The findings show that rental transactions reduced imbalances in factor endowments, transferring cropland to households that were relatively land‐poor but more willing and able to farm. However, the market is constrained by transaction costs that affect lessors and lessees differently. It is recommended that government should complete its land registration program and relax restrictions on the use of wetlands to grow crops other than rice. It should also improve access to all‐weather roads as this encourages participation on both sides of the rental market, whereas better access to communications infrastructure was found to promote only the supply side.

  May 05, 2016   doi: 10.1111/1467-8489.12149   open full text
• Community acceptance of biodiversity offsets: evidence from a choice experiment.
  Michael Burton, Abbie Rogers, Claire Richert.
  Australian Journal of Agricultural and Resource Economics. May 05, 2016
  This study of the community's acceptance of biodiversity offsets in Australia provides insights relevant to future revisions of offset policies of both State and Commonwealth Governments. A choice experiment was used to measure preferences for the general acceptability of offsetting, and for a number of attributes that define how an offset can be implemented. Based on a sample of 204 respondents from Perth, WA, we found that the majority of respondents did not object to the practice of biodiversity offsetting in general. A minority of respondents preferred that offset actions be direct, but most accepted a combination of direct and indirect actions. Individuals generally preferred that the offset be located near the site of impact, and it became more unacceptable the further away that it was located. However, there was heterogeneity in preferences for protecting the impacted species or a more endangered one.

  May 05, 2016   doi: 10.1111/1467-8489.12151   open full text
• Market integration between surplus and deficit rice markets during global food crisis period.
  Sabiha Akhter.
  Australian Journal of Agricultural and Resource Economics. May 05, 2016
  Applying the maximum‐likelihood method of co‐integration, this study analysed spatial market integration between an adjacent rice surplus market (India) and deficit markets (Bangladesh and Nepal). The main focus is on the government policies of these three rice‐producing countries which have been imposed to reduce domestic price volatilities in rice markets during the recent ‘global food crisis’ in 2007–2008. The co‐integration tests find that domestic rice prices of India, Bangladesh and Nepal are integrated both in short‐run and long‐run periods despite the imposition of export restriction policies by India. The reason that prices are transmitted so effectively is most likely to be the widespread informal cross‐border trade through the porous borders among India, Bangladesh and Nepal.

  May 05, 2016   doi: 10.1111/1467-8489.12150   open full text
• Convergent validity in contingent valuation: an application to the willingness to pay for national climate change mitigation targets in Germany.
  Reinhard Uehleke.
  Australian Journal of Agricultural and Resource Economics. April 20, 2016
  This stated preferences survey determines the willingness to pay (WTP) for climate change mitigation policies using a representative sample of the German population. WTP is compared across three valuation question formats in a split sample design: the dichotomous choice (DC) referendum, the dissonance minimizing (DM) referendum and the two‐way payment ladder (TWPL). The influence of multinational cooperation on WTP is assessed by variation in the hypothetical scenarios. We demonstrate that the DM referendum and the TWPL, two question formats that induce similar response incentives, yield equal mean WTPs. Multinational cooperation did not change WTP in any of the question formats. Implications for current contingent valuation practice are discussed.

  April 20, 2016   doi: 10.1111/1467-8489.12148   open full text
• Price linkages in the international skim milk powder market: empirical evidence from nonparametric and time‐varying copulas.
  Panos Fousekis, Christos Emmanouilides, Vasilis Grigoriadis.
  Australian Journal of Agricultural and Resource Economics. March 22, 2016
  The objective of this article is to assess the integration of the international skim milk powder (SMP) market. This is pursued using monthly data over 2001 to 2014 from the three principal SMP‐producing regions (the EU, the USA and Oceania) and nonparametric kernel‐based and time‐varying copulas. The empirical results point to a strong and an increasing degree of overall price co‐movement and to statistically significant probabilities for joint price crashes and booms. While the EU and Oceania have been the regions with the highest degree of integration, the USA has been catching up with them.

  March 22, 2016   doi: 10.1111/1467-8489.12147   open full text
• Assessing the impact of price changes and extreme climatic events on sediment loads in a large river catchment near the Great Barrier Reef.
  Taha Chaiechi, Natalie Stoeckl, Diane Jarvis, Stephen Lewis, Jon Brodie.
  Australian Journal of Agricultural and Resource Economics. March 08, 2016
  Ocean turbidity (associated with sediment from rivers) can significantly impact reef health. In Australia, there are many plans to reduce sediment loads by encouraging best management practices; there is also interest in the use of market‐based instruments. But it is exceedingly difficult to assess the potential efficacy of market policies, since that requires one to determine how changes in the socio‐economic system (e.g. price changes) impact the biophysical (e.g. sediment loads). We use historical data (from 1938 to 2011) in a vector autoregression model to simultaneously model interactions between the economic and biophysical systems in the Burdekin River catchment adjacent to the Great Barrier Reef (GBR) lagoon. This allows us to statistically test for the impact of changes in prices on sediment load, while controlling for biophysical influences. We find that extreme events have the most impact on sediment loads, but that prices also impact sediment loads. Evidently market‐based policies may have the potential to reduce sediment loads. Our empirical results provide useful information for those interested in the Burdekin River catchment and the GBR; the modelling approach may have wide applicability in a variety of contexts.

  March 08, 2016   doi: 10.1111/1467-8489.12140   open full text
• The distributional effect of a large rice price increase on welfare and poverty in Bangladesh.
  Syed A. Hasan.
  Australian Journal of Agricultural and Resource Economics. March 04, 2016
  This paper studies the distributional effect of a sharp rice price increase on welfare and poverty in Bangladesh. We employ household consumption data and include the indirect effect of price responses to estimate the welfare loss. Our findings suggest that the estimated welfare effect can be misleading if household responses to rice consumption and production are ignored. This study further supports the hypothesis that the poor are the main victims of such a shock. Our examination also indicates that a higher rice price may increase or decrease the poverty head‐count ratio, depending on the choice of the poverty line, but worsens the country's poverty situation when it is measured by the per capita consumption gap. Our analysis reveals that the government can play a central role to prevent and mitigate such shocks, particularly in the medium to long run. On the methodological side, we observe that consumption provides a more consistent outcome across different methods of analysis than household income.

  March 04, 2016   doi: 10.1111/1467-8489.12141   open full text
• Marginal abatement costs of greenhouse gas emissions: broadacre farming in the Great Southern Region of Western Australia.
  Kai Tang, Atakelty Hailu, Marit E. Kragt, Chunbo Ma.
  Australian Journal of Agricultural and Resource Economics. February 10, 2016
  Broadacre agriculture is a major emitter of greenhouse gases (GHG). To improve efficiency of climate change policies, we need to know the marginal abatement costs of agricultural GHG. This article combines calculations of on‐farm GHG emissions with an input‐based distance function approach to estimate the marginal abatement costs for a broadacre farming system in the Great Southern Region of Western Australia. The results show that, in the study region, the average marginal abatement cost for the 1998–2005 periods was $29.3 per tonne CO2‐e. Farms with higher crop output shares were found to have higher marginal abatement costs. Overall, our results indicate that broadacre agriculture is among the lowest cost sources of GHG mitigation.

  February 10, 2016   doi: 10.1111/1467-8489.12135   open full text
• Input Substitution, Productivity Performance and Farm Size.
  Yu Sheng, Alistair Davidson, Keith Fuglie, Dandan Zhang.
  Australian Journal of Agricultural and Resource Economics. February 04, 2016
  This paper develops a theoretical model to examine the relationship between the input elasticity of (technical) substitution and both farm total factor productivity and size. In the presence of ongoing technical change and its factor bias, the ‘income effect’ arising from farms' cost minimising behaviour enables them to increase productivity by saving inputs or, through the dual equivalent, enlarging farm size. As such, farms with higher elasticities of substitution tend to grow larger and become more productive, which provides a new mechanism through which farm heterogeneity in productivity growth can be examined. Empirical evidence from Australian broadacre agriculture supports this theory and points to important policy implications.

  February 04, 2016   doi: 10.1111/1467-8489.12136   open full text
• Does land lease tenure insecurity cause decreased productivity and investment in the sugar industry? Evidence from Fiji.
  Reshmi Kumari, Yuko Nakano.
  Australian Journal of Agricultural and Resource Economics. December 28, 2015
  Does land lease tenure insecurity cause decreased productivity and investment in the sugar industry? To answer this question, this study examined the impact of weak formal tenure lease arrangements on tenants’ investment and the productivity of sugarcane in Ba province, Fiji. After controlling for potential endogeneity in the choice of lease tenure using instrumental variables (IV), it was shown that tenants under insecure lease tenure (expiring in 0–5 years) achieve significantly lower yields of sugarcane, by 6.5–11 tonnes per hectare, and plant smaller areas of new sugarcane, by 0.14–0.25 hectares on average, than do tenants under secure lease tenure. Insecure lease tenure also negatively affects chemical fertiliser use, although this impact is not statistically significant. An intervention to improve tenure security would likely enhance the production efficiency of and investment in the Fijian sugarcane industry.

  December 28, 2015   doi: 10.1111/1467-8489.12133   open full text
• Resource reallocation and its contribution to productivity growth in Australian broadacre agriculture.
  Yu Sheng, Thomas Jackson, Peter Gooday.
  Australian Journal of Agricultural and Resource Economics. December 28, 2015
  This article uses farm survey data to measure the contribution of cross‐farm resource reallocation to industry‐level productivity growth in Australian broadacre agriculture. We show that resource reallocation between farms mainly occurred between incumbent farms and between farms with different productivity growth. Resource reallocation is estimated to account for around half of the industry‐level productivity growth that occurred between 1978 and 2010, and its contribution appears to have increased over time. Moreover, we also show that resource reallocation effects vary across different inputs, partly due to their different mobility. This analysis improves our understanding of how reforms targeting structural adjustment – and the resource reallocation this generates – can influence aggregate productivity growth.

  December 28, 2015   doi: 10.1111/1467-8489.12137   open full text
• Elicitation of irrigators' risk preferences from observed behaviour.
  Céline Nauges, Sarah Ann Wheeler, Alec Zuo.
  Australian Journal of Agricultural and Resource Economics. December 15, 2015
  Water trading in the Murray–Darling Basin of Australia has developed to the point where it is a common adaptation tool used by irrigators, making it an apt case study to elicit the marginal value of irrigation water and irrigators' risk preferences in two key industries with differing levels of water dependence. Our data come from large‐scale and representative surveys of irrigated broadacre and horticultural farms in the Murray–Darling Basin over a 6‐year period. The marginal contribution of irrigation water to profit is estimated at $547 and $61/ML on average in horticulture and broadacre, respectively. Horticultural irrigators are found to be averse to the risk of large losses (downside risk) while broadacre irrigators are averse to the variability (variance) of profit.

  December 15, 2015   doi: 10.1111/1467-8489.12134   open full text
• Tradable water saving certificates to improve urban water use efficiency: an ex‐ante evaluation in a French case study.
  Jean‐Daniel Rinaudo, Javier Calatrava, Marine Vernier De Byans.
  Australian Journal of Agricultural and Resource Economics. December 15, 2015
  This paper proposes a system of tradable Water Saving Certificates to improve the efficiency of water allocation between Drinking Water Utilities at river basin level. A market institutional set‐up, inspired from recent policy developments in the energy sector, is proposed. An original analytical price‐endogenous model is developed to simulate trade intensity, equilibrium price and efficiency gains in this urban water market. The economic model is implemented in a French case study using mathematical programming. It is used for conducting an ex‐ante evaluation of trade possibilities and efficiency gains, considering different spatial restrictions aimed at controlling environmental externalities. Our modelling exercise provides evidence of the benefits of the proposed Water Saving Certificate scheme.

  December 15, 2015   doi: 10.1111/1467-8489.12132   open full text
• Agriculture, trade openness and emissions: an empirical analysis and policy options.
  Shuddhasattwa Rafiq, Ruhul Salim, Nicholas Apergis.
  Australian Journal of Agricultural and Resource Economics. November 05, 2015
  This article investigates the impact of sectoral production allocation, energy usage patterns and trade openness on pollutant emissions in a panel consisting of high‐, medium‐ and low‐income countries. Extended STIRPAT (Stochastic Impact by Regression on Population, Affluence and Technology) and EKC (Environmental Kuznets Curve) models are conducted to systematically identify these factors driving CO2 emissions in these countries during the period 1980–2010. To this end, the study employs three different heterogeneous, dynamic mean group‐type linear panel models and one nonlinear panel data estimation procedure that allows for cross‐sectional dependence. While affluence, nonrenewable energy consumption and energy intensity variables are found to drive pollutant emissions in linear models, population is also found to be a significant driver in the nonlinear model. Both service sector and agricultural value‐added levels play a significant role in reducing pollution levels, whereas industrialisation increases pollution levels. Although the linear model fails to track any significant impact of trade openness, the nonlinear model finds trade liberalisation to significantly affect emission reduction levels. All of these results suggest that economic development, and especially industrialisation strategies and environmental policies, need to be coordinated to play a greater role in emission reduction due to trade liberalisation.

  November 05, 2015   doi: 10.1111/1467-8489.12131   open full text
• Capitalisation of residential solar photovoltaic systems in Western Australia.
  Chunbo Ma, Maksym Polyakov, Ram Pandit.
  Australian Journal of Agricultural and Resource Economics. September 29, 2015
  Due to government financial incentives and falling prices of photovoltaic (PV) systems, solar power has become the fastest growing renewable energy source in Australia. As financial incentives are being reduced or phased out, there is a possibility that adoption of this technology will slow down, thus creating a need for improved policy instruments targeted at adoption of residential PV systems. One of the factors affecting adoption of solar technology in the residential sector is its capitalisation in property values. Yet, the awareness of the capitalisation of PV investments in the Australian property market is limited. Our data indicate that homeowners who anticipate selling their properties in the near future are reluctant to adopt PV systems. This paper presents the first empirical estimate of the property price premiums associated with residential solar PV systems in Australia using residential property sales data from the Perth metropolitan area of Western Australia. An estimated 2.3–3.2 per cent property price premium associated with the PV systems suggests that homeowners fully recover the costs of PV investments upon the sale of their properties. Effective government policy could use this information to encourage adoption of residential PV systems by homeowners.

  September 29, 2015   doi: 10.1111/1467-8489.12126   open full text
• Ambiguity, learning opportunities and risk‐neutral regulation.
  Alan Randall.
  Australian Journal of Agricultural and Resource Economics. September 06, 2015
  Two current issues in management of public risks, ambiguity and learning, are addressed in the context of managing ecosystems with thresholds, and regulating treatment safety as might apply, for example, to human and animal health, pesticides and herbicides. Reconsidering a recent claim that, in systems that penalise violation of thresholds, learning opportunities induce riskier decision‐making, I find no incentive for ambiguity seeking. But opportunity to benefit from learning may indeed induce riskier decisions, an effect that diminishes and eventually disappears as penalties become larger. A recent claim that a rational regulator of pharmaceutical drugs would be ambiguity preferring – a claim that has obvious applicability to a broader set of treatments – is then examined. Ambiguity‐tolerant patients may indeed prefer a menu of ambiguous treatments and opportunity to learn and switch, rather than a single treatment with known risk. But the source of ambiguity matters. Patient heterogeneity, prior to and independent of policy, generates ambiguity for individuals and motivates preference for a menu of treatments. However, expanding the menu does not justify approving treatments that are generally riskier. Finally, I challenge the perennial claim that the regulator of risks to human health and safety should seek to maximise expected value.

  September 06, 2015   doi: 10.1111/1467-8489.12124   open full text
• Off‐farm work, land tenancy contracts and investment in soil conservation measures in rural Pakistan.
  Rakhshanda Kousar, Awudu Abdulai.
  Australian Journal of Agricultural and Resource Economics. September 04, 2015
  This study examines the impacts of participation in off‐farm work and land tenancy contracts on the intensity of investment in soil‐improving measures and farm productivity. A multivariate Tobit model that accounts for potential endogeneity between the intensity of investment and the off‐farm work and tenancy contract variables is estimated for 341 rural households in Punjab province of Pakistan. An instrumental variable approach is also used to analyse the impact of tenancy contract and off‐farm work on farm productivity. The empirical results show that participation in off‐farm work and tenure security tends to increase the intensity of investment in long‐term soil‐improving measures. We also find that increases in off‐farm work and tenure security exert significant and positive effects on farm productivity.

  September 04, 2015   doi: 10.1111/1467-8489.12125   open full text
• The impact of latent risk preferences on valuing the preservation of threatened lynx populations in Poland.
  Anna Bartczak, Petr Mariel, Susan Chilton, Jürgen Meyerhoff.
  Australian Journal of Agricultural and Resource Economics. July 28, 2015
  A recent innovation in stated preference environmental valuation surveys is to acknowledge uncertainty associated with scientific predictions about ecological outcomes, complexity of management actions and potential difficulties in implementing environmental programs. Still little is known about how individuals assimilate and respond to outcome uncertainty, particularly in terms of how it affects their stated valuations. In this paper, we focus on the impact of individual risk preferences on willingness to pay for conservation of threatened species. Risk preferences are elicited through a standard incentivised multiple price list and preferences for the conservation of the two main lynx populations in Poland through a discrete choice experiment. To account for the uncertainty associated with imprecise scientific knowledge about environmental outcome, attributes in the choice experiment are presented as conservation status in terms of descriptive, non‐numerical categories. The results from the multiple price list and the choice experiment are jointly analysed in a latent variable model by assuming that the responses to both are driven by the same preferences. We find that the latent risk preferences are linked to choices of the status quo option, which is the riskiest option in terms of the survival of the endangered lynx populations.

  July 28, 2015   doi: 10.1111/1467-8489.12123   open full text
• Testing market integration for Japanese retail seafood markets.
  Kentaka Aruga, Raymond Li.
  Australian Journal of Agricultural and Resource Economics. July 02, 2015
  Although Japan is one of the largest seafood‐consuming countries, with various types of seafood products traded throughout the nation, few studies have explored how this market is integrated from the aspect of market price. Because Japanese consumers in different regions have different preferences for seafood, we focused our study to see how the regional seafood retail markets (Tokyo, Osaka, Nagoya, Sapporo, and Fukuoka) are integrated for 10 major seafood products (horse mackerel, short‐necked clams, yellowtail, scallops, cuttlefish/squid, flounder, tuna, mackerel, saury, and octopus) consumed in Japan. We applied the relatively new Phillips–Sul convergence test for our analysis. For most of the seafood products investigated in this study, our results indicate that the Japanese regional seafood markets cannot be integrated as a whole and that marketing strategies need to consider the peculiar characteristics of the regional seafood markets.

  July 02, 2015   doi: 10.1111/1467-8489.12121   open full text
• Crop price comovements during extreme market downturns.
  David M. Zimmer.
  Australian Journal of Agricultural and Resource Economics. June 25, 2015
  This study develops and estimates mixture models of crop price comovements using copula functions, which allow for departures from normality during extreme market circumstances. The models also account for unique time‐series patterns inherent in crop price data. The results point to two main conclusions. First, mixture models appear to provide an easy‐to‐estimate approach for capturing real‐life crop price movements. Second, mixture models find that, during extreme market downswings, correlations in price movements strengthen by several orders of magnitude. These results suggest that structured securities assembled from different crops tend to lose diversified protection during extreme market downswings, the exact times when such protection is needed most.

  June 25, 2015   doi: 10.1111/1467-8489.12119   open full text
• How training and innovation link to farm performance: a structural equation analysis.
  Vilaphonh Xayavong, Ross Kingwell, Nazrul Islam.
  Australian Journal of Agricultural and Resource Economics. May 12, 2015
  The complexity of modern farm management places great demands on the skill, knowledge and capability of farm managers and their families. Keeping abreast of emerging technologies and innovations that can affect each key farm enterprise, and knowing how best to marshal the resources required for profitable farm production, are key tasks of farm management. This study draws on a longitudinal data set of 240 broadacre farmers to compare and analyse their farm performance over a decade. Using structural equation modelling, we examine relationships between the farm family's involvement in training, their human capital, their use of various innovations and ultimately the linkages of these factors to farm financial and productivity performance. Several statistically significant inter‐relationships are found, and some factors are shown to have significant positive links to farm performance. We find that training undertaken by the farm family, the farm family's human capital and their use of innovations, particularly key cropping innovations, have significant beneficial impacts on farm performance. The farmer's skills in time and organisational management, their engagement in business planning and the unique environmental characteristics of the farm also significantly and positively influence farm performance.

  May 12, 2015   doi: 10.1111/1467-8489.12116   open full text
• Role of communication technologies in broadacre agriculture in Australia: an empirical analysis using panel data.
  Ruhul Salim, Shamsul Arifeen Khan Mamun, Kamrul Hassan.
  Australian Journal of Agricultural and Resource Economics. April 28, 2015
  This paper examines the role of communication technologies (CTs) in Australian broadacre agricultural production using data over the period of 1990–2013. Allowing for cross‐sectional independence in the data, the pooled mean group and augmented mean group techniques are applied to estimate dynamic relationships among variables. The empirical results demonstrate that CTs affect agricultural output positively in the long run. The estimated elasticity is 0.237. This result suggests that government policies that lift investment in telecommunication facilities are shown to contribute to an increase of output in Australia's broadacre agriculture in the long run.

  April 28, 2015   doi: 10.1111/1467-8489.12114   open full text
• Food demand elasticities for Australia.
  Mehmet Ulubasoglu, Debdulal Mallick, Mokhtarul Wadud, Phillip Hone, Henry Haszler.
  Australian Journal of Agricultural and Resource Economics. April 20, 2015
  There is renewed interest in robust estimates of food demand elasticities at a disaggregated level not only to analyse the impact of changing food preferences on the agricultural sector, but also to establish the likely impact of pricing incentives on households. Using data drawn from two national Household Expenditure Surveys covering the periods 1998/1999 and 2003/2004, and adopting an Almost Ideal Demand System approach that addresses the zero observations problem, this paper estimates a food demand system for 15 food categories for Australia. The categories cover the standard food items that Australian households demand routinely. Own‐price, cross‐price and expenditure elasticity estimates of the Marshallian and Hicksian types have been derived for all categories. The parameter estimates obtained in this study represent the first integrated set of food demand elasticities based on a highly disaggregated food demand system for Australia, and all accord with economic intuition.

  April 20, 2015   doi: 10.1111/1467-8489.12111   open full text
• Hedonic wine price functions with different prices.
  Edward Oczkowski.
  Australian Journal of Agricultural and Resource Economics. April 16, 2015
  This study examines the impact that recommended retail prices, actual market prices and the release of a prominent wine guide have on Australian wine hedonic price estimates, for attributes such as sensory quality, winery reputation and grape region. In general, hedonic price estimates appear to be independent of prices employed. The main identified differences in estimates relate to the size of the producer and some regional impacts. For market prices only, increases in producer size are estimated to reduce prices. This implies the existence of supply chain quantity discounting price practices. The impact of an authoritative wine guide appears to have a negligible influence on prices in Australia. In the absence of market transaction prices, the common practice of employing recommended prices for hedonic wine price estimation is defendable.

  April 16, 2015   doi: 10.1111/1467-8489.12112   open full text
• Demand for milk quantity and safety in urban China: evidence from Beijing and Harbin.
  Leilei Cheng, Changbin Yin, Hsiaoping Chien.
  Australian Journal of Agricultural and Resource Economics. June 03, 2014
  Urban households account for most of the milk consumption in China, but their consumption is hampered by safety concerns. Using survey data collected in Beijing and Harbin in 2010, this paper simultaneously analyses urban households' milk consumption using a multiple linear model and their willingness‐to‐pay for milk safety using an ordered choice model. The results of this study show that as income increases, urban households consume more milk and are willing to pay a higher premium for milk safety. Modern food marketing channels play a positive role in stimulating milk consumption and building consumers' confidence in milk safety. The growth in the elderly population influences milk consumption positively, but their demand for milk safety is negatively affected by higher price. The combined analysis of households' demand for milk quantity and safety may be useful to the Chinese government in promoting the development of the domestic milk industry and to dairy firms in exploring the milk market in China.

  June 03, 2014   doi: 10.1111/1467-8489.12065   open full text
• Productivity and farm size in Australian agriculture: reinvestigating the returns to scale.
  Yu Sheng, Shiji Zhao, Katarina Nossal, Dandan Zhang.
  Australian Journal of Agricultural and Resource Economics. May 27, 2014
  A positive relationship between farm size and farm productivity is often considered to be largely due to increasing returns to scale in farm production. However, using farm‐level data for the Australian broadacre industry, we found that constant or mildly decreasing returns to scale is the more typical scenario. In this study, the marginal returns to various farm inputs are compared across farms with different sizes. We found that large farms achieved higher productivity by changing production technology rather than increasing scale alone. The results highlight the disparity between ‘returns to scale’ and ‘returns to size’ in the industry, suggesting that productivity improvement among smaller farms can be made through increasing their ability to access advanced technologies, rather than simply expanding their scale.

  May 27, 2014   doi: 10.1111/1467-8489.12063   open full text
• A laboratory assessment of the choice of vessel size under individual transferable quota regimes.
  Kenta Tanaka, Keisaku Higashida, Shunsuke Managi.
  Australian Journal of Agricultural and Resource Economics. May 21, 2014
  This paper examines the effect of individual transferable quota regimes on technology choice, such as choice of vessel size, by using the laboratory experiment method. We find that even if vessel sizes change over time, the quota price can converge to the fundamental value conditioned on the vessels chosen. We also find that subjects choose their vessel type to maximise their profits based on the quota trading prices in the previous period. This result implies that the efficiency of quota markets in the beginning period is important because any inefficiency in quota markets may affect vessel sizes in ensuing periods. Moreover, we find that the initial allocations may significantly influence vessel sizes through two channels: first, a higher initial allocation to a subject increases the likelihood that the subject invests in a large‐sized vessel; second, the quota price may be higher and more unstable under unequal allocation than under equal allocation; thus, whether the allocation is equal influences subjects' choice of vessel type.

  May 21, 2014   doi: 10.1111/1467-8489.12064   open full text
• Payoffs from research and development along the Australian food value chain: a general equilibrium analysis.
  Brent Borrell, Tingsong Jiang, David Pearce, Ian Gould†.
  Australian Journal of Agricultural and Resource Economics. May 06, 2014
  The payoffs and distribution of payoffs from research and development (R&D) along the food value chain depend on many interacting economic factors. To quantify these, we have developed a general equilibrium model of the Australian economy with detailed farming, processing and marketing information. We use the model to assess potential payoffs and distributions from various R&D scenarios that lead to demand expansion and productivity improvement. We find that productivity improvement caused by R&D is unambiguously beneficial to the whole economy while the benefits of export or domestic market demand expansion mainly accrue to the primary producers and processing industry, when the economy is at full employment. Also, productivity improvement from R&D on‐farm may benefit processors while improvements postfarm may benefit farmers.

  May 06, 2014   doi: 10.1111/1467-8489.12062   open full text
• Individual fishing quotas and fishing capacity in the US Gulf of Mexico red snapper fishery.
  Daniel Solís, Julio Corral, Lawrence Perruso, Juan J. Agar.
  Australian Journal of Agricultural and Resource Economics. May 06, 2014
  Overcapacity (OC) and excess capacity (EC) are serious obstacles affecting the sound management of commercial fisheries around the world. The use of individual fishing quotas (IFQs) has been proposed as a promising management tool to cope with these challenges. However, the empirical evidence on the efficacy of this instrument is scarce. Drawing on a stochastic distance frontier analysis, we investigate the impact of the US Gulf of Mexico red snapper IFQ program on fishing capacity, capacity utilisation (CU) and OC. The paper also offers an alternative approach to compute species‐specific capacity measurements for multispecies fisheries. Our findings show that following the introduction of the IFQ program, fishing capacity decreased, primarily due to the exit of a large number of fishing vessels. CU increased marginally indicating modest decreases in EC. Conversely, we find that OC remains high. Our estimates suggest that about one‐fifth of the actual fleet could harvest the entire quota.

  May 06, 2014   doi: 10.1111/1467-8489.12061   open full text
• Drinking cheaply: the demand for basic wine in Italy.
  Luigi Cembalo, Francesco Caracciolo, Eugenio Pomarici.
  Australian Journal of Agricultural and Resource Economics. April 10, 2014
  The wine market has evolved dramatically over the last three decades. The premium wine segment has expanded significantly to the detriment of basic wines. Nevertheless, in traditional wine producing and consuming countries, inexpensive wines still account for a large market share, both in volume and value. Marketing strategies for such wines are changing in an attempt to tap this increasingly crowded market segment. Despite its importance, the basic wine segment has not been studied in‐depth and is often assumed to have no product differentiation. This paper tried to ascertain the existence of a possible degree of heterogeneity within nonpremium wines and to measure, by means of elasticity computation, the relationships among categories of wines aggregated with criteria that go beyond price. A demand system (censored QUAIDS) was estimated, using a statistically representative panel of 6,773 Italian households, to see to what extent, if any, substitution occurs in home consumption of basic wines, which is the main channel of distribution of inexpensive wines in Italy. Although price is an important lever in supply policies, our results also suggest the importance of packaging, such as carton as an alternative to glass.

  April 10, 2014   doi: 10.1111/1467-8489.12059   open full text
• Capturing social network effects in technology adoption: the spatial diffusion of hybrid rice in Bangladesh.
  Patrick S. Ward, Valerien O. Pede.
  Australian Journal of Agricultural and Resource Economics. April 10, 2014
  In this paper, we demonstrate a method for measuring the effect of spatial interactions on the use of hybrid rice using a unique, nationally representative data set from Bangladesh. In order to circumvent the ‘reflection problem’, we consider an identification and estimation strategy employing a generalised spatial two‐stage least squares procedure with near‐ideal instruments to effectively identify causal influences. Results indicate that neighbour effects are a significant determinant of hybrid rice use. Further, using two specifications of spatial network systems, one based on same‐village membership (irrespective of distance) and the other based on geographical distance (irrespective of village boundary), we demonstrate that a network including nearby hybrid rice adopters is more influential than a network of more distant hybrid rice adopters, and merely having a network with a large number of adopters may be relatively meaningless if they are far away. Furthermore, we show that these network effects are much more important to hybrid cultivation than interactions with agricultural extension officers.

  April 10, 2014   doi: 10.1111/1467-8489.12058   open full text
• Efficiency analysis under uncertainty: a simulation study.
  Sriram Shankar.
  Australian Journal of Agricultural and Resource Economics. April 09, 2014
  We model production technology in a state‐contingent framework assuming that the firms maximise ex ante their preference function subject to stochastic technology constraint; in other words, firms are assumed to act rationally. We show that rational producers who face the same stochastic technology can make significantly different production choices. Further, we develop an econometric methodology to estimate the risk‐neutral probabilities, efficiency scores and the parameters of stochastic technology when there are two states of nature and only one of which is observed. Finally, we simulate noiseless data based on our state‐contingent specification of technology. Our state‐contingent estimator recovers technology parameters and other economic quantities of interest without any error. But, when we apply conventional efficiency estimators to the simulated data, we obtain biased estimates of technical efficiency.

  April 09, 2014   doi: 10.1111/1467-8489.12055   open full text
• Factors influencing hybrid rice adoption: a Bangladesh case.
  Khondoker A. Mottaleb, Samarendu Mohanty, Andrew Nelson.
  Australian Journal of Agricultural and Resource Economics. April 09, 2014
  As rice constitutes the major share in cereal consumption in South and East Asian countries that ranges from as low as 40 per cent in India to 97 per cent in Myanmar, to ensure food security, governments in these countries are encouraging farmers to adopt hybrid rice. This is mainly because hybrid rice provides a yield gain of 15–20 per cent over conventionally bred varieties in general. Yet, despite strenuous government efforts, farmers’ adoption rates have remained low in India, Bangladesh and Vietnam compared with China. Although studies often claim that higher seed costs and inferior grain quality are the major factors limiting hybrid rice adoption, very few studies examine the importance of socio‐economic factors and infrastructure in the adoption of hybrid rice. Using Bangladesh as a case, a comparative analysis has been made on the adoption of hybrid and modern varieties relative to traditional rice varieties and land allocation to these varieties. Econometric results indicate that general land characteristics, loan facilities and general infrastructure, such as roads, irrigation facilities and the availability of government‐approved seed dealers, significantly influence the adoption of hybrid and modern rice varieties and land allocation to these varieties compared with traditional varieties.

  April 09, 2014   doi: 10.1111/1467-8489.12060   open full text
• Optimising seed portfolios to cope ex ante with risks from bad weather: evidence from a recent maize farmer survey in China.
  Junfei Bai, Zhigang Xu, Huanguang Qiu, Haiyan Liu.
  Australian Journal of Agricultural and Resource Economics. April 07, 2014
  Using 4‐year panel data collected from surveying 640 farmers from leading maize producing provinces in China, this study analyses how maize farmers cope with anticipated risks from bad weather by strategically adjusting variety portfolios, with particular interest in farmers' strategies in choosing and combining new and old varieties. While diversification was commonly demonstrated to be an effective means to reduce risk in most previous studies, our empirical results indicate that, in facing anticipated risks from bad weather, Chinese maize farmers tend to use fewer new varieties and allocate more land to old varieties. The lack of knowledge about weather tolerance of new varieties might be the major reason for this practice. As new varieties often have higher yield potential relative to old varieties due to technological progress, this finding suggests that Chinese maize farmers might be trading yield potential against risk reduction from bad weather. Furthermore, this study shows that maize farmers' variety adoption is significantly related to farmers' land conditions as well as their access to credit markets and technique extensions, suggesting that a well‐designed policy intervention could offset or partially offset the anticipation of adverse weather impacts on farmers' variety choices and therefore on maize production.

  April 07, 2014   doi: 10.1111/1467-8489.12056   open full text
• Investing in irrigation development in North West Queensland, Australia.
  Glyn Wittwer, Onil Banerjee.
  Australian Journal of Agricultural and Resource Economics. April 07, 2014
  This study uses a dynamic multi‐regional Computable General Equilibrium model of the Australian economy to examine the impacts of developing irrigated agriculture in remote North West Queensland. A potential investment and operational scenario is implemented using three alternative forecast baselines. In the first run using a business‐as‐usual baseline, there is a welfare loss from irrigation development, even with an optimistic shift in farm productivity and factor endowments in North West Queensland. In the second run, baseline demand for Australia's exports is assumed to grow at a faster rate and there is a small welfare gain. Simulating climate change impacts on crop yields, the forecast baseline of the third run includes a gradual reduction in farmland productivity in southern Australia. The simulations show the impacts of both supply and demand shifts on the welfare outcome, but on balance, clear welfare gains do not arise from the potential irrigation development.

  April 07, 2014   doi: 10.1111/1467-8489.12057   open full text
• Use of positive mathematical programming invalidates the application of the NZFARM model.
  Graeme Doole, Dan Marsh.
  Australian Journal of Agricultural and Resource Economics. April 02, 2014
  There is no abstract available for this paper.

  April 02, 2014   doi: 10.1111/1467-8489.12052   open full text
• A response to Doole and Marsh () article: methodological limitations in the evaluation of policies to reduce nitrate leaching from New Zealand agriculture.
  Adam Daigneault, Suzie Greenhalgh, Oshadhi Samarasinghe.
  Australian Journal of Agricultural and Resource Economics. April 02, 2014
  A recent paper by Doole and Marsh (2013), questioned the validity of using the New Zealand Forest and Agriculture Regional Model (NZFARM) for New Zealand agri‐environmental policy analysis. We respond to their critique by clearly describing the model structure, explaining the NZFARM parameterisation, calibration, and validation procedure, and presenting estimates from a series of nutrient reduction policy scenarios to highlight the utility of the model. In doing so, we demonstrate that NZFARM generates logical and intuitive results that can be used for robust agri‐environmental policy decision‐making.

  April 02, 2014   doi: 10.1111/1467-8489.12051   open full text
• The role of the commonwealth environmental water holder in annual water allocation markets.
  Tiho Ancev.
  Australian Journal of Agricultural and Resource Economics. March 18, 2014
  In recent years, the Government of Australia has bought back a significant amount of water entitlements in the Murray‐Darling Basin (MDB) through its Commonwealth Environmental Water Holder (CEWH) agency. This has been a welcome development, as it is an efficient way of securing water for the environment in the basin. However, the question of how to best manage water holdings held by the government is as yet unresolved. In particular, the question of whether and how should the CEWH engage in water markets is still grappling the government and academia alike. This paper addresses that question by evaluating total benefits to a range of water users, including the environment, under a variety of hydro‐climatic conditions. This is approached through running simulations based on environmental benefit function that varies with prevailing hydro‐climatic conditions. The findings indicate that the benefits are greater when CEWH actively participates in annual water allocation market and that such participation enables the CEWH to secure most water when it is needed the most by the environment. This suggests that policy should encourage the CEWH to further explore opportunities to engage with the water markets to the benefit of communities and the environment in the MDB.

  March 18, 2014   doi: 10.1111/1467-8489.12054   open full text
• Agri‐environmental auctions for phosphorus load reduction: experiences from a Finnish pilot.
  Antti Iho, Jussi Lankoski, Markku Ollikainen, Markku Puustinen, Jonne Lehtimäki.
  Australian Journal of Agricultural and Resource Economics. March 08, 2014
  We examine environmental auctions on working agricultural lands. We organized a discriminatory auction where farmers were asked to make bids on spreading gypsum on their fields to reduce phosphorus loads to surface waters. The parcel‐specific bids were ranked based on their load reduction–compensation ratios. To assess load reductions, we built an environmental benefit index (EBI) based on three factors: P‐status of the soil (phosphorus available for crops), field slope and location with respect to waterways. As the per tonne price of gypsum delivery from the factory was higher for small quantities, the auction format allowed bundling of field parcels to reduce transportation costs. We evaluate auction's ability to target the environmental (or abatement) measures to field parcels with the highest load reduction potential and analyse the economic efficiency of the auction by comparing the pilot auction with simulated bidding behaviour and with hypothetical flat rate payment schemes. The pilot auction targeted the environmental measures effectively. It was also more efficient than a flat rate payment, even when the flat rate scheme was combined with an EBI eligibility criterion.

  March 08, 2014   doi: 10.1111/1467-8489.12049   open full text
• Global food security in 2050: the role of agricultural productivity and climate change.
  Uris Lantz C. Baldos, Thomas W. Hertel.
  Australian Journal of Agricultural and Resource Economics. March 05, 2014
  In this paper, we examine how the complexities introduced by trends in agricultural productivity and climate change affect the future of global food security. We use a partial equilibrium model of global agriculture incorporating a food security module that links changes in the average dietary energy intake to shifts in the full caloric distribution, allowing us to compute changes in the incidence, headcount and average depth of malnutrition. After validating the model against an historical period, we implement a series of future scenarios to understand the impacts of key exogenous drivers on selected food security outcomes. Our results show improvements in global food security for the period 2006–2050. Despite growing population and increased biofuel demand, baseline income growth, coupled with projected increases in agricultural productivity lead to a 24 per cent rise in global average dietary energy intake. Consequently, the incidence of malnutrition falls by 84 per cent, lifting more than half a billion people out of extreme hunger. However, these results hinge heavily on agricultural productivity growth. Without such growth, there could be a substantial setback on food security improvements. Climate change adds uncertainty to these projections, depending critically on the crop yield impacts of increasing CO2 concentrations in the atmosphere.

  March 05, 2014   doi: 10.1111/1467-8489.12048   open full text
• Assessing the returns to R&D on perennial crops: the costs and benefits of Pierce's disease research in the California winegrape industry.
  Julian M. Alston, Kate B. Fuller, Jonathan D. Kaplan, Kabir P. Tumber.
  Australian Journal of Agricultural and Resource Economics. February 26, 2014
  Several complicating issues arise in evaluating the returns to research into varietal improvements for perennial crops compared with annual crops. We elucidate and address these issues in the context of a case study of research aiming to develop varieties that are resistant to Pierce's disease (PD) of grapevines. PD imposes costs of over $100 million per year on the California grape industry, even with public PD control programs in place. Research projects to develop PD resistant varieties of grapevines are at various stages of completion. We describe the economic problems posed by PD, document the research programs undertaken to address the disease and present an economic assessment of the returns to the investment, which are conditional on other policies. Using a simulation model of the market for California winegrapes, we estimate the benefits from research, development and adoption of PD‐resistant vines as ranging from $4 million to $129 million annually over a 50‐year horizon, depending on the length of the R&D lag and the rate of adoption. In addition to these specific quantitative results the paper offers insight into the broader question of economic evaluation of damage‐mitigation technology for perennial crops.

  February 26, 2014   doi: 10.1111/1467-8489.12045   open full text
• Mining booms and the exchange rate.
  John Freebairn.
  Australian Journal of Agricultural and Resource Economics. February 26, 2014
  The balance of payments identity linking the current account to net domestic investment and foreign capital inflows is used as a framework to assess the effects of a mining boom on the exchange rate. The exchange rate response is found to vary with whether the boom is generated by an increase in global demand or an increase in domestic supply, and the response varies over time as the boom moves through investment and production stages. Also, the exchange rate response depends on the mix of resident and nonresident investment funds, the share of the investment domestically sourced and the distribution of windfall income and its expenditure. A key result is the absence of a simple relationship between the terms of trade and the exchange rate.

  February 26, 2014   doi: 10.1111/1467-8489.12046   open full text
• A modified production possibility frontier for efficient forestry management under the New Zealand Emissions Trading Scheme.
  Todd Hale, Viktoria Kahui, Daniel Farhat.
  Australian Journal of Agricultural and Resource Economics. February 26, 2014
  Carbon sequestered through increased forest biomass provides a low cost means to curb emissions and has become a major focus of New Zealand's Emissions Trading Scheme. We present a forest planning optimisation model where land use is governed by forest owners maximising the returns to both timber harvest and carbon sequestration. By varying carbon prices, we model efficient trade‐offs between the two forest activities along a modified production possibility frontier for four distinct wood supply regions in New Zealand. Results show that while more productive regions such as the Central North Island (CNI) and Northland have a greater capacity as a carbon sink, it is the less productive regions that have a comparative advantage in carbon sequestration in terms of a lower cost of wood production revenue foregone. However, moderate increases in carbon uptake can be achieved in the CNI at low opportunity cost by subtle changes in forestry management. The implication for policy‐makers is that initial increases in carbon sequestration will be achieved at the lowest cost to society by favouring high volume timber production in some productive woodland areas and/or by more carbon farming in less productive areas.

  February 26, 2014   doi: 10.1111/1467-8489.12047   open full text
• Valuing seasonal climate forecasts in a state‐contingent manner.
  Jason Crean, Kevin Parton, John Mullen, Peter Hayman.
  Australian Journal of Agricultural and Resource Economics. February 03, 2014
  We applied state‐contingent theory to climate uncertainty at a farm level to assess the value of seasonal climate forecasts in the Central West region of NSW. We find that modelling uncertainty in a state‐contingent manner results in a lower estimate of forecast value than the typical expected value approach. We attribute this finding to a more conservative long‐term farm plan in the discrete stochastic programming (DSP) model, which is better balanced for climate uncertainty. Hence, a climate forecast, even though it still revises probabilities held by farmers, does not call forth such large changes in farm plans and associated farm incomes. We then use the DSP model to assess how attributes of a hypothetical forecasting system, particularly its skill and timeliness, as well as attributes of the decision environment, influence its value. Lastly, we assess the value of current operational forecast systems and show that the value derived from seasonal climate forecasts is relatively limited in the case study region largely because of low skill embodied in forecasts at the time when major farm decisions are being made.

  February 03, 2014   doi: 10.1111/1467-8489.12041   open full text
• Broadacre farm productivity and profitability in south‐western Australia.
  Nazrul Islam, Vilaphonh Xayavong, Ross Kingwell.
  Australian Journal of Agricultural and Resource Economics. January 29, 2014
  This paper examines broadacre farm performance in south‐western Australia. This region has experienced pronounced climate variability and volatile commodity prices since the late 1990s. Relationships between productivity and profitability are explored using panel data from 47 farms in the study region. The data are analysed using nonparametric methods. By applying the Fare‐Primont index method, components of farm productivity and profitability are measured over the period 1998–2008. Growth in productivity is found to be the main contributor of profitability. Gains in efficiency and technical change are identified as jointly and similarly important in their contribution to total factor productivity for the farm sample in the region from 1998 to 2008. However, across environments, efficiency gains play an increasingly important role in influencing productivity as growing season rainfall increases. We conclude that R,D&E that delivers further improvement in technical efficiency and technical change is needed to support the profitability of farms across the study region.

  January 29, 2014   doi: 10.1111/1467-8489.12040   open full text
• Local economic impacts of an unconventional energy boom: the coal seam gas industry in Australia.
  David A. Fleming, Thomas G. Measham.
  Australian Journal of Agricultural and Resource Economics. January 29, 2014
  Complementing the scarce economic literature about local impacts of energy extraction booms, this paper empirically investigates economic outcomes related to the new coal seam gas (CSG) industry located across southern Queensland. This Australian state has seen an unprecedented inflow of investments into the extraction of this previously unexploited unconventional natural gas over the last decade. We analyse census data to study income and employment effects associated with the CSG boom, exploiting the quasi‐experimental conditions provided by CSG extraction areas (treatment regions) and regions without this development (control regions). Findings show that treatment regions have higher income growth than control areas during 2001–2011 for families residing locally and for individuals present on census night. Employment in the mining sector also shows higher growth as has non‐mining employment in some areas. We include comparisons between CSG areas with no major mining history (the Surat basin) and CSG areas where mining was important before the CSG boom (the Bowen basin), to better understand boom effects in areas with different initial mining industry importance in their economies. Local job multipliers are also analysed for Surat basin CSG areas, where positive impacts (job spillovers) are restricted to construction and professional services jobs, while agricultural jobs have decreased.

  January 29, 2014   doi: 10.1111/1467-8489.12043   open full text
• Australia and resources in the Asian century.
  Ross Garnaut.
  Australian Journal of Agricultural and Resource Economics. January 16, 2014
  The Australian Government's White Paper ‘Australia in the Asian Century’ is the first large‐scale official look in the twenty‐first century at economic change in Asia and how it affects Australian opportunities and challenges. This paper comments on the analysis embodied in and the objectives defined by the White Paper, especially as it relates to Australian resources. This paper generally endorses the aspirations of the White Paper and notes that their achievement is going to require efforts and changes beyond those that are currently contemplated. It comments briefly on six things: the development context of twenty‐first century Asian growth; growth and structural change in Asia and Australia's terms of trade; macroeconomic management of a resource‐intensive Australian economy; restoring productivity growth; excellence in education; and linking Australia to Asian opportunity.

  January 16, 2014   doi: 10.1111/1467-8489.12042   open full text
• Emerging economies, productivity growth and trade with resource‐rich economies by 2030.
  Kym Anderson, Anna Strutt.
  Australian Journal of Agricultural and Resource Economics. January 08, 2014
  Rapid economic growth in some emerging economies in recent decades has significantly increased their global economic importance. If this rapid growth continues and is strongest in resource‐poor Asian economies, the growth in global demand for imports of primary products also will continue, to the ongoing benefit of natural resource‐rich countries. This paper explores how global production, consumption and trade patterns might change over the next two decades in the course of economic development and structural changes under various scenarios. We employ the GTAP model and version 8.1 of the GTAP database with a base year of 2007, along with supplementary data from a range of sources, to support projections of the global economy to 2030. We first project a baseline assuming that trade‐related policies do not change in each region but that factor endowments and real GDP grow at exogenously estimated rates. That baseline is compared with two alternative scenarios: one in which the growth rates of China and India are lower by one‐quarter and the other in which this slowdown in emerging economies leads to slower productivity growth in the primary sectors of all countries. Throughout the results, implications are drawn out for natural resource‐abundant economies, including Australia and New Zealand.

  January 08, 2014   doi: 10.1111/1467-8489.12039   open full text
• Do Japanese consumers care about sustainable fisheries? Evidence from an auction of ecolabelled seafood.
  Hirotsugu Uchida, Cathy A. Roheim, Hiroki Wakamatsu, Christopher M. Anderson.
  Australian Journal of Agricultural and Resource Economics. December 24, 2013
  This paper investigates Japanese consumers' willingness to pay for Marine Stewardship Council (MSC) ecolabelled seafood using a sealed bid, second price auction. Participants in an experiment in Tokyo were provided varying degrees of information about the status of world and Japanese fisheries and the MSC program in sequential rounds of bidding on ecolabelled and nonlabelled salmon products. A random‐effects tobit regression shows that there is a statistically significant premium of about 20 per cent for MSC‐ecolabelled salmon over nonlabelled salmon when consumers are provided information on both the status of global fish stocks and the purpose of the MSC program. This premium arises from a combination of an increased willingness to pay for labelled products and a decreased willingness to pay for unlabelled products. However, in the absence of experimenter‐provided information, or when provided information about the purpose of the MSC program alone without concurrent information about the need for the MSC program, there is no statistically significant premium.

  December 24, 2013   doi: 10.1111/1467-8489.12036   open full text
• An economic model of aboriginal fire‐stick farming.
  Elizabeth A. Wilman.
  Australian Journal of Agricultural and Resource Economics. December 21, 2013
  Australian Aborigines faced a resource management problem, which they addressed though burning regimes, referred to as fire‐stick farming. While dynamic economic analysis is clearly applicable, to date there have been no attempts to use it to model burning regimes. This paper develops a delayed‐response optimal‐control model to describe Aboriginal fire‐stick farming. The model explains a collective welfare maximizing burning regime that successfully controlled wildfires, protected the resources essential to survival, and, incidentally, produced a biodiverse landscape and limited greenhouse gas emissions. When the parameters of the model are changed to reflect the current institutional realities of reduced access to the land, and less direct dependence on it, traditional Aboriginal burning is prevented or delayed, fuel loads build up and uncontrolled fires are more likely to occur, damaging previously protected species. If Aboriginal burning is to be used to control fires successfully in a modern resource management context, it is necessary to adjust for changes in the institutional incentive structure. Payments for carbon offsets are an example of replacing lost incentives with new ones.

  December 21, 2013   doi: 10.1111/1467-8489.12038   open full text
• Does China's demand boom curb Australian iron ore mining depletion?
  Creina Allen, Garth Day.
  Australian Journal of Agricultural and Resource Economics. December 16, 2013
  Australia's resources boom is underpinned by increased demand from industrialising China and a rise in export prices. Current depletion rates will soon exhaust currently known reserves of iron ore and coal. This paper presents a dynamic optimisation model of a growing open economy where a social planner chooses the time path for depletion of a non‐renewable resource during a demand‐led resources boom. We find that for particular functional forms and in the absence of extraction and social costs, the optimal depletion rate equals the difference between the price elasticity of export demand times the world interest rate and growth in export demand. In contrast to the existing literature, we show that the optimal depletion rate is unaffected by a temporary increase in price, but reduced by growth in demand which is in turn sustained by offshore steel production and urbanisation. The main theoretical implication is that growth in export demand from China reduces the depletion rate. Australian iron ore exports, simulated using this theory, move together with actual volumes over the period 1995–2011, and the error between simulated and actual iron ore exports is lower for the model in this paper than it is for the model without growth in export demand.

  December 16, 2013   doi: 10.1111/1467-8489.12035   open full text
• Valuing public and private urban tree canopy cover.
  Ram Pandit, Maksym Polyakov, Rohan Sadler.
  Australian Journal of Agricultural and Resource Economics. December 10, 2013
  In this paper, we estimate the effect of tree canopy cover on sales price of urban residential properties in Perth, Western Australia. Using a data set of 5606 single family homes sold in 2009 and a spatial hedonic model with three spatial effects – spatial‐temporal lag on dependent variable, spatial error, and spatially lagged independent variables – we estimated the location‐specific effect of tree canopy cover. Tree canopy cover increases the property value when located on adjacent public space, but decreases the value when it is on own property and on the adjacent property within 20 m of property boundary. The results are suggestive that council urban tree planting programs provide significant private benefits to homeowners.

  December 10, 2013   doi: 10.1111/1467-8489.12037   open full text
• The consequences of using increasing block tariffs to price urban water.
  Hugh Sibly, Richard Tooth.
  Australian Journal of Agricultural and Resource Economics. November 09, 2013
  Increasing block tariffs (IBTs) are currently used to price urban water in many Australian mainland capitals and a great many cities worldwide. This paper provides a systematic analysis of the impact of the adoption of IBTs to price urban water under the common constraints of scarce supply and cost recovery. The key tools available to policymakers using IBTs are the volumetric rate in the low tier and the threshold level of that tier. This paper shows how variations in these tools influence (i) the fixed charge set by the firm, (ii) the deadweight loss from the IBT and (iii) the bill paid by customers for particular levels of demand. Our analysis suggests that IBTs are neither fair nor efficient. We propose a modification to IBTs that, while retaining their perception of fairness, results in the efficient allocation of urban water.

  November 09, 2013   doi: 10.1111/1467-8489.12032   open full text
• The impact of geographic reputation on the value created in Champagne.
  David Menival, Steve Charters.
  Australian Journal of Agricultural and Resource Economics. November 08, 2013
  With asymmetric information, consumers need to rely on the reputation of wine to define quality before the purchasing. Amongst the tools available for underlining reputation, geographic location is considered to offer high potential. Today, some wines benefit from a country's reputation, some from the renown of a region and some from the local reputation of one specific vineyard, whilst conversely some providers suffer from a weak geographic reputation. There can be a split between producers within one vineyard or region based on varying geographic reputation. This kind of split appears in Champagne, with a range of well‐known and less well‐known brands and is particularly significant to the small growers who sell wine. This study used a representative sample of these growers to examine how their location impacts on their reputation. The results show that their selling price is influenced by the local system of grading vineyard quality, their distance from traditional regional centres and the presence in their village of growers cited in a national guide.

  November 08, 2013   doi: 10.1111/1467-8489.12033   open full text
• Nondiscretionary residential water use: the impact of habits and water‐efficient technologies.
  Maria A. Garcia‐Valiñas, Wasantha Athukorala, Clevo Wilson, Benno Torgler, Robert Gifford.
  Australian Journal of Agricultural and Resource Economics. October 25, 2013
  Several studies published in the last few decades have demonstrated a low price‐elasticity for residential water use. In particular, it has been shown that there is a quantity of water demanded that remains constant regardless of prices and other economic factors. In this research, we characterise residential water demand based on a Stone‐Geary utility function. This specification is not only theory‐compatible but can also explicitly model a minimum level of consumption not dependent on prices or income. This is described as minimum threshold or nondiscretionary water use. Additionally, the Stone‐Geary framework is used to model the subsistence level of water consumption that is dependent on the temporal evolution of consumer habits and stock of physical capital. The main aim of this study is to analyse the impact of water‐saving habits and water‐efficient technologies on residential water demand, while additionally focusing attention on nondiscretionary uses. This is informed by an empirical application using data from a survey conducted among residents of Brisbane City Council, Australia. The results will be especially useful in the design of water tariffs and other water‐saving policies.

  October 25, 2013   doi: 10.1111/1467-8489.12030   open full text
• Price integration in the Australian rock lobster industry: implications for management and climate change adaptation.
  Ana Norman‐Lόpez, Sean Pascoe, Olivier Thébaud, Ingrid Putten, James Innes, Sarah Jennings, Alistair Hobday, Bridget Green, Eva Plaganyi.
  Australian Journal of Agricultural and Resource Economics. August 14, 2013
  Rock lobster fisheries are Australia's most valuable wild fisheries in terms of both value of production and value of exports. Different states harvest and export different lobster species, with most of the landings being sent to the Hong Kong market. A perception in the Australian lobster industry is that the different species are independent on the export market, such that a change in landings of one species has no impact on the price of the others. This study investigates the market integration of Australian exports to Hong Kong for the four species and different exporting states. Our results indicate all four species and producers/export states are perceived to be substitutes for one another, so that, in the long run, prices paid to operators in the industry will move together. The integrated nature of the Hong Kong export market for Australian lobster suggests that the potential impacts of alternative fisheries management and development strategies at state and species levels cannot be considered in isolation, at least from an economic perspective. In addition, impacts of external shocks affecting production in one state (e.g. climate change) can be expected to affect all Australian lobster fisheries.

  August 14, 2013   doi: 10.1111/1467-8489.12020   open full text
• Optimal export tax rates of cocoa beans: A vector error correction model approach.
  Risti Permani.
  Australian Journal of Agricultural and Resource Economics. July 17, 2013
  Aiming to support downstream cocoa processing industries, the Indonesian Government announced an export tax on cocoa beans in 2010. This paper investigates whether the Indonesian Government has imposed an optimal tax rate and examines the determinants of cocoa bean export growth using data from Ivory Coast, Ghana and Indonesia for 1970–2011 and applying a vector error correction model. This study highlights the interdependence of major cocoa exporting countries' policy and reveals that Indonesia currently imposes a tax rate that is above its optimal rate.

  July 17, 2013   doi: 10.1111/1467-8489.12011   open full text
• Contemporary food policy challenges and opportunities.
  Per Pinstrup‐Andersen.
  Australian Journal of Agricultural and Resource Economics. July 03, 2013
  The global food system and related government policies are in disarray. In response to expected increasing food prices and greater food price volatility, national governments are pursuing a variety of policies. Some policies amplify price fluctuations while others attempt to prohibit price signals from reaching domestic markets. Extreme weather events, irrational expectations by speculators, sensationalism by the news media, oil price fluctuations and the pursuit of self‐interests by international organisations, NGOs and the private sector, have created a sense of uncertainty and heightened political risks among many governments, pushing governments towards crisis management, short‐term political interventions and bandaid solutions. This paper discusses these interventions, the associated policy challenges and related policies. The paper will argue that food price volatility will continue to be with us, but that real food prices need not increase. It will further show that the main bottlenecks in expanding food production in most low‐income developing countries are found outside the farm and that government intervention in the food system should focus on improvements in rural infrastructure, domestic markets and policies to facilitate efficiency and effectiveness in postharvest value chains and input sectors. Full costing of environmental damage is suggested to be pursued to help assure sustainability.

  July 03, 2013   doi: 10.1111/1467-8489.12019   open full text
• Interfuel substitution in Australia: a way forward to achieve environmental sustainability.
  MD Shahiduzzaman, Khorshed Alam.
  Australian Journal of Agricultural and Resource Economics. June 26, 2013
  This paper examines the possibilities for interfuel substitution in Australia in view of the need to shift towards a cleaner mix of fuels and technologies to meet future energy demand and environmental goals. The translog cost function is estimated for the aggregate economy, the manufacturing sector and its subsectors, and the electricity generation subsector. The advantages of this work over previous literature relating to the Australian case are that it uses relatively recent data, focuses on energy‐intensive subsectors and estimates the Morishima elasticities of substitution. The empirical evidence shown herein indicates weak‐form substitutability between different energy types, and higher possibilities for substitution at lower levels of aggregation, compared with the aggregate economy. For the electricity generation subsector, which is at the centre of the CO2 emissions problem in Australia, significant but weak substitutability exists between coal and gas when the price of coal changes. A higher substitution possibility exists between coal and oil in this subsector. The evidence for the own‐ and cross‐price elasticities, together with the results for fuel efficiencies, indicates that a large increase in relative prices could be justified to further stimulate the market for low‐emission technologies.

  June 26, 2013   doi: 10.1111/1467-8489.12017   open full text
• Representing climatic uncertainty in agricultural models – an application of state‐contingent theory.
  Jason Crean, Kevin Parton, John Mullen, Randall Jones.
  Australian Journal of Agricultural and Resource Economics. June 20, 2013
  The state‐contingent approach to production uncertainty presents a more general model than the conventional stochastic production approach. Here we investigate whether the state‐contingent approach offers a tractable framework for representing climatic uncertainty at a farm level. We developed a discrete stochastic programming (DSP) model of a representative wheat–sheep (mixed) farm in the Central West of NSW. More explicit recognition of climatic states, and associated state‐contingent responses, led to optimal farm plans that were more profitable on average and less prone to the effects of variations in climate than comparable farm plans based on the expected value framework. The solutions from the DSP model also appeared to more closely resemble farm land use than the equivalent expected value model using the same data. We conclude that there are benefits of adopting a state‐contingent view of uncertainty, giving support to its more widespread application to other problems.

  June 20, 2013   doi: 10.1111/1467-8489.12005   open full text
• Cost‐effective strategies to mitigate multiple pollutants in an agricultural catchment in North Central Victoria, Australia.
  Graeme J. Doole, Olga Vigiak, David J. Pannell, Anna M. Roberts.
  Australian Journal of Agricultural and Resource Economics. June 20, 2013
  Strategies to reduce phosphorus and sediment yields are identified for two Australian catchments using a nonlinear optimisation model. This provides novel insight into the cost‐effective management of dual pollutants of water courses in Australia. A strong degree of complementarity between the two pollutants is highlighted, given the adsorption of phosphorus to sediment that augments the value of gully and streambank management for mitigation. However, the relationship between the two pollutants is asymmetric. A 30 per cent reduction in phosphorus yield achieves a 75 per cent reduction in sediment yield in one catchment, while a 30 per cent reduction in sediment yield achieves only a 12 per cent reduction in phosphorus yield. Sediment abatement costs are low given the efficiency of gully and streambank management. A 30 per cent phosphorus reduction lowers profit by 3–7 per cent, while a 30 per cent sediment reduction lowers profit by around 1 per cent. Land‐use optimisation requires spatial heterogeneity in land‐use and gully/streambank management responses. Overall, this research demonstrates the need to determine whether one pollutant is more important than another, while recognising the potential that mitigation practices possess for the reduction of multiple emissions during their evaluation.

  June 20, 2013   doi: 10.1111/1467-8489.12003   open full text
• Modelling agricultural land use allocation in regional Australia.
  Eddie Oczkowski, Yapa Bandara.
  Australian Journal of Agricultural and Resource Economics. June 20, 2013
  An analysis of the drivers of agricultural land use is important for policy makers as the issues of climate change and food security become increasingly prominent in the political landscape. This paper analyses the role of prices, total land holdings and climate on land use in Australia. The analysis relates to a unique comprehensive coverage of commodity types at a regional level. An explicit treatment of missing data and the novel use of cluster analysis is employed within a partial adjustment framework for modelling land allocation. The majority of commodity types across regions exhibit significant degrees of slow partial adjustment for land allocation, the frequency of slow adjustment is greatest with crops and livestock and weakest for vegetables. In general, relative own and cross prices, total land holdings and rainfall only have a minor impact on short‐term land allocations, however numerous individual commodity/regional combinations have identified significant short‐run impacts.

  June 20, 2013   doi: 10.1111/1467-8489.12002   open full text
• Effective use of public funding in the Murray‐Darling Basin: a comparison of buybacks and infrastructure upgrades.
  Glyn Wittwer, Janine Dixon.
  Australian Journal of Agricultural and Resource Economics. June 20, 2013
  Policy instruments designed to increase environmental flows in the Murray–Darling Basin are compared using TERM‐H2O, a detailed, dynamic regional CGE model. Voluntary and fully compensated buybacks are much less costly than infrastructure upgrades as a means of obtaining a target volume of environmental water, even during drought, when highly secure water created by infrastructure upgrades is more valuable. As an instrument of regional economic management, infrastructure upgrades are inferior to public spending on health, education and other services in the Basin. For each job created from upgrades, the money spent on services could create between three and four jobs in the Basin.

  June 20, 2013   doi: 10.1111/1467-8489.12001   open full text
• Farmer responses to changing risk aversion, enterprise variability and resource endowments.
  Adam M. Komarek, T. Gordon MacAulay.
  Australian Journal of Agricultural and Resource Economics. June 20, 2013
  The focus of this article is on assessing how risk aversion, enterprise variability and resource endowments affect farm land‐use decisions and economic returns. A theoretical model of a two‐enterprise, two‐constraint farm is developed, and then, an empirical illustration for an Australian farm is provided. The methodology used builds on previous expected mean‐variance (EV) models by incorporating land and budget constraints. The Kuhn–Tucker conditions of the EV model are examined to highlight that changes in resource endowments have larger effects on economic returns, than do changes in risk aversion or enterprise gross margin variability. It was also found that combinations of enterprise mixes that do not use all available resources can produce higher economic returns, relative to some enterprise mixes that use all available resources.

  June 20, 2013   doi: 10.1111/1467-8489.12010   open full text
• Modelling outcome‐related risk in choice experiments.
  Klaus Glenk, Sergio Colombo.
  Australian Journal of Agricultural and Resource Economics. June 14, 2013
  In this study, we introduce information on outcome‐related risk as an additional attribute in a choice model of preferences for a land‐based climate change mitigation project. We provide a comprehensive comparison of different model specifications arising from different behavioural assumptions about the way that respondents process information on outcome‐related risk within the choice task. We find significant differences between several specifications in terms of both model fit and WTP estimates. The behavioural assumptions made when choosing a particular model specification, and reasons that motivate them should be made explicit, and consequences of using different specifications should not be ignored.

  June 14, 2013   doi: 10.1111/1467-8489.12012   open full text
• Food miles or carbon emissions? Exploring labelling preference for food transport footprint with a stated choice study.
  Vincenzina Caputo, Rodolfo M. Nayga, Riccardo Scarpa.
  Australian Journal of Agricultural and Resource Economics. June 14, 2013
  The ecological footprint of food transport can be communicated using carbon dioxide emissions (CO2 label) or by providing information about both the length of time and the mileage travelled (food miles label). We use stated choice data to estimate conventional unobserved taste heterogeneity models and extend them to a specification that also addresses attribute nonattendance. The implied posterior distributions of the marginal willingness to pay values are compared graphically and are used in validation regressions. We find strong bimodality of taste distribution as the emerging feature, with different groups of subjects having low and high valuations for these labels. The best fitting model shows that CO2 and food miles valuations are much correlated. CO2 valuations can be high even for those respondents expressing low valuations for food miles. However, the reverse is not true. Taken together, the results suggest that consumers tend to value the CO2 label at least as much and sometimes more than the food miles label.

  June 14, 2013   doi: 10.1111/1467-8489.12014   open full text
• The welfare cost of Japanese rice policy with home‐good preference and an endogenous import price.
  James Fell, Donald MacLaren.
  Australian Journal of Agricultural and Resource Economics. June 10, 2013
  The welfare cost of Japanese rice policy is estimated in the context of a large importing country, treating domestically produced rice and imported rice as heterogeneous goods and where there is home‐good preference. Not accounting for this preference will cause the gains from liberalisation to be overestimated. The period that is analysed is 2004–2007, departing from that in previous studies, which do not cover this period of greater deregulation. Rather than use border trade flow data as is customary, we acknowledge the actions of a state trading enterprise and construct and use a unique data set which should better gauge import penetration in the Japanese market for rice. Econometric estimation fails to reject the hypothesis that the Ministry of Agriculture, Forestry and Fisheries prevents imports from affecting the price of domestically produced rice. In the absence of precisely estimated parameter values, simulations of liberalisation are conducted under a range of parameter values and the effects on social welfare calculated. The tariff equivalents of the government's support to rice producers are also estimated with values for the period in excess of 100 per cent.

  June 10, 2013   doi: 10.1111/1467-8489.12013   open full text
• World food prices and poverty in Indonesia.
  Peter Warr, Arief Anshory Yusuf.
  Australian Journal of Agricultural and Resource Economics. June 10, 2013
  Spikes in international food prices in 2007–2008 worsened poverty incidence in Indonesia, both rural and urban, but only by small amounts. The paper reaches this conclusion using a multisectoral and multihousehold general equilibrium model of the Indonesian economy. The negative effect on poor consumers, operating through their living costs, outweighed the positive effect on poor farmers, operating through their incomes. Indonesia's post‐2004 rice import restrictions shielded its internal rice market from the temporary world price increases, muting the increase in poverty. But it did this only by imposing large and permanent increases in both domestic rice prices and poverty incidence. Poverty incidence increased more among rural than urban people, even though higher agricultural prices mean higher incomes for many of the rural poor. Gains to poor farmers were outweighed by the losses incurred by the large number of rural poor who are net buyers of food, and the fact that food represents a large share of their total budgets, even larger on average than for the urban poor. The main beneficiaries of higher food prices are not the rural poor, but the owners of agricultural land and capital, many of whom are urban based.

  June 10, 2013   doi: 10.1111/1467-8489.12015   open full text
• West and Central African iron ore development and its impact on world prices.
  Luke Hurst.
  Australian Journal of Agricultural and Resource Economics. May 26, 2013
  The focus of the paper is on the potential of iron ore supplies from West and Central Africa to enter the export market over the short and medium terms and how this could impact the supply‐side capacity and market price. To assess this, three export development scenarios (low, medium and high risk) are constructed for 17 iron ore mines (over 27 production expansion projects) in West and Central Africa. The projections for African iron ore are compared with the latest medium‐term import forecasts and suggest that the development of West and Central African iron ore has the potential to create significant downward pressure on the price of iron ore exports over the medium term. The increased export capacity could push marginal producers – mainly in China but also in India and elsewhere – out of the market.

  May 26, 2013   doi: 10.1111/1467-8489.12007   open full text
• Measuring technical efficiency of dairy farms with imprecise data: a fuzzy data envelopment analysis approach.
  Amin W. Mugera.
  Australian Journal of Agricultural and Resource Economics. May 26, 2013
  This article integrates fuzzy set theory in the data envelopment analysis (DEA) framework to compute technical efficiency scores when input and output data are imprecise. The underlying assumption in conventional DEA is that input and output data are measured with precision. However, production agriculture takes place in an uncertain environment, and, in some situations, input and output data may be imprecise. We present an approach of measuring efficiency when data are known to lie within specified intervals and empirically illustrate this approach using a group of 29 dairy producers in Pennsylvania. Compared to the conventional DEA scores that are point estimates, the computed fuzzy efficiency scores are interval bound allowing the decision maker to trace the performance of a decision‐making unit at different possibility levels.

  May 26, 2013   doi: 10.1111/1467-8489.12008   open full text
• Economic valuation of recreational fishing in Western Australia: statewide random utility modelling of fishing site choice behaviour.
  Jananee Raguragavan, Atakelty Hailu, Michael Burton.
  Australian Journal of Agricultural and Resource Economics. May 26, 2013
  Allocation of fish resources is a controversial subject. This is partly because of our limited understanding of the values of fishing opportunities. This study investigates fishing site choices in Western Australia using national survey data covering eight major fishing regions and forty‐eight fishing sites. We estimate a random utility model (RUM) of site choice with a supporting negative binomial model of angler‐specific expected catch rates. Value estimates for fish types, fishing site attribute changes and access values are presented and discussed.

  May 26, 2013   doi: 10.1111/1467-8489.12009   open full text
• Exploiting comparative advantage in agriculture and resources: the way forward for Small Island States.
  Renuka Mahadevan, John Asafu‐Adjaye.
  Australian Journal of Agricultural and Resource Economics. February 05, 2013
  Using Papua New Guinea as a case study, this paper investigates the macroeconomic and sectoral impacts of various developments in its agricultural and resource sector. It was found that commodity booms from 2004 to 2009 and the proposed large liquefied natural gas project increase output growth substantially but with Dutch disease consequences. The output expansion of the agricultural and fishery sectors on the other hand has limited positive impacts and the challenge lies in raising the productivity growth in these sectors and the better use of foreign aid. Lastly, the optimal policy strategy for sustainable development in the agricultural, fishery and resource sectors lies in the packaging of appropriate complementary policies (both institutional and economic) that support one another and the coherent implementation of these policies in a timely manner.

  February 05, 2013   doi: 10.1111/j.1467-8489.2012.00618.x   open full text
• Collateral, bank monitoring and firm performance: the case of newly established wine‐farmers.
  Julien Cadot.
  Australian Journal of Agricultural and Resource Economics. February 04, 2013
  The present study aims to learn how collateral affects firm performance in the case of newly established wine producers. The issue is to identify the effects of collateral in situations of asymmetric information when the bank is the main financial partner of the entrepreneurs involved. On one hand, the use of collateral may reduce the risk of overinvestment by entrepreneurs and thereby reduce the risk of repayment default. On the other hand, collateral may induce bad performance linked to a reduced monitoring of the investments by the bank. We herein test both hypotheses in two different cases: when the bank monitors the investments and when the bank does not.

  February 04, 2013   doi: 10.1111/1467-8489.12000   open full text
• Consumer demand for diet quality: evidence from the healthy eating index.
  Zhifeng Gao, Xiaohua Yu, Jonq‐Ying Lee.
  Australian Journal of Agricultural and Resource Economics. February 04, 2013
  Few studies have been performed to use the detailed healthy eating index (HEI) to estimate consumer demand for diet quality. In this article, we apply household production theory to systematically estimate consumer demand for diet quality using the HEI developed by the U.S. Department of Agriculture. The results show that consumers have insufficient consumption of food containing dark green and orange vegetables, legumes and whole grains. Age and education have a significant impact on consumer demand for diet quality, but income does not. The own‐price elasticities of demand for diet quality are inelastic. Simulation of tax scenarios indicates that a tax on sugar‐sweetened beverage may be more efficient than a tax on fats, oils and salad dressing in improving consumer diet quality. This information is critical for policies and programs that are designed to improve healthy food choices, thereby reducing the social cost of public health.

  February 04, 2013   doi: 10.1111/j.1467-8489.2012.00619.x   open full text
• Measuring the risk attitude of decision‐makers: are there differences between groups of methods and persons?
  Syster C. Maart‐Noelck, Oliver Musshoff.
  Australian Journal of Agricultural and Resource Economics. February 04, 2013
  Many studies quantifying individual risk preferences of test persons show that results of different measuring methods may vary. Additional reservations about the reliability of the results regarding the risk attitude measurement arise from the fact that most studies are based on convenience groups, such as students or businessmen in developing countries. With this in mind, we systematically compare different measuring methods to answer the question how the choice of method affects the results. Moreover, we compare the risk preferences of German farmers with those of students and Kazakhstani farmers to investigate whether farmers’ risk preferences can be approximated through those of convenience groups. The methods applied comprise an incentive‐compatible Holt‐and‐Laury‐lottery as well as two psychometric methods. Results show that students respond consistently across all three elicitation methods whereas German and Kazakhstani farmers are more inconsistent. Significant differences exist in the responses of German students and German farmers. The comparison of risk preferences between German and Kazakhstani farmers, however, reveals significant similarities with respect to the psychometric methods.

  February 04, 2013   doi: 10.1111/j.1467-8489.2012.00620.x   open full text