https://onlinelibrary.wiley.com/toc/14678276/2023/105/1
The US farm credit system and agricultural development: Evidence from an early expansion, 1920–1940
The influence of the Environmental Quality Incentives Program on local water quality
Pengfei Liu, Yu Wang, Wei ZhangGender and mechanization: Evidence from Indian agriculture
Farzana Afridi, Monisankar Bishnu, Kanika MahajanAgglomeration bonus and endogenous group formation
François Bareille, Matteo Zavalloni, Davide ViaggiSchool breakfast and student behavior
Andres Cuadros-Meñaca, Michael R. Thomsen, Rodolfo M. Nayga JrA dynamic analysis of the distribution of commodity futures and spot prices
Jian Li, Jean-Paul ChavasCollective investment in a common pool resource: Grower associations and food safety guidelines
Aaron Adalja, Erik Lichtenberg, Elina T. PageMarkups and export behavior: Firm-level evidence from the French food processing industry
Yaghoob Jafari, Maximilian Koppenberg, Stefan Hirsch, Thomas HeckeleiSwitching cost and store choice
Timothy J. Richards, Jura LiaukonytėMeasuring the American farm size distribution
Katherine Lacy, Peter F. Orazem, Skyler SchneeklothWhen does voluntary coordination work? Evidence from area-wide pest management
Sergio H. Lence, Ariel SingermanProductive Workfare? Evidence from Ethiopia's Productive Safety Net Program
Jules Gazeaud, Victor StephaneUnintended environmental consequences of place-based economic policies
Maoyong Fan, Qu Tang, Jianxin Wu, Junji XiaoThe impact of India's demonetization on domestic agricultural trade
Nidhi Aggarwal, Sudha NarayananModeling transaction costs in household adoption of landscape conservation practices
Robert J. Johnston, Tom Ndebele, David A. Newburn
The US farm credit system and agricultural development: Evidence from an early expansion, 1920–1940
Abstract: I explore the impact of the Production Credit Associations (PCAs), an arm of the early Farm Credit System, on agricultural yield and input use following the farm crisis of the 1920s. Like many low- and middle-income countries today, farmers in the early 20th century United States found it difficult to access credit. The PCAs were established in 1933 and significantly increased the supply of short-term credit available to farmers. Using distance from the serving PCA as a proxy for credit access, I find that counties within 30 km of a PCA had 7% to 14% higher crop revenue per acre and 9% higher corn yields than counties more than 60 km from a PCA. These areas also had a small but statistically significant increase in the use of tractors (1% to 2%). These results provide crucial evidence of the impact of government-sponsored enterprises on the early US agricultural economy and its use as a cost-effective tool to address market frictions.The influence of the Environmental Quality Incentives Program on local water quality
Pengfei Liu, Yu Wang, Wei ZhangAbstract: The Environmental Quality Incentives Program (EQIP) is the primary conservation program on working agricultural land. The United States Department of Agriculture obligated over $15 billion through EQIP cost-sharing contracts during the fiscal years 2009–2019. The voluntary nature of the program and the lack of performance assessment have led to speculations regarding the effectiveness of the program in delivering environmental benefits, in particular for improving water quality. This study provides quantitative estimates of the influence of EQIP payments on local water quality at a national scale. We link monitoring station level water quality readings with EQIP contract data and exploit the direction of river flow for identification. The estimated effects of EQIP vary across water quality measures. Estimates indicate that EQIP payments have significantly reduced biochemical oxygen demand and nitrogen, indicating improvements in water quality, but increased total suspended solids, fecal coliform, and phosphorus, suggesting that the implementation of certain conservation practices might have increased soil erosion and pathogen transfer, especially in watersheds with more agricultural production.Gender and mechanization: Evidence from Indian agriculture
Farzana Afridi, Monisankar Bishnu, Kanika MahajanAbstract: Technological change in production processes with gendered division of labor across tasks, such as agriculture, can have a differential impact on women's and men's labor. Using exogenous variation in the extent of loamy soil, which is more amenable to deep tillage than clayey soil and therefore more likely to see adoption of tractor-driven equipment for primary tilling, we show that mechanization led to significantly greater decline in women's than men's labor on Indian farms during 1999–2011. Reduced demand for labor in weeding, a task often undertaken by women, explains our findings. The estimates suggest that a 10% increase in mechanized tilling led to a 5% fall in women's farm labor use, with no accompanying increase in their non-farm sector employment. Our results highlight the gendered impact of technological change in contexts where there is task based gender division of labor with limited opportunities for women to diversify their workforce participation.Agglomeration bonus and endogenous group formation
François Bareille, Matteo Zavalloni, Davide ViaggiAbstract: Agglomeration bonus schemes are envisioned to incentivize the connectivity of habitat conservation across landowners. Assuming full cooperation among landowners at the landscape scale, the bulk of the literature theoretically finds that agglomeration bonus schemes are more cost effective in achieving biodiversity conservation than spatially homogenous payments. However, it may be rational for landowners not to cooperate all together but, rather, to cooperate within smaller groups. Here, we analyze the cost effectiveness of agglomeration bonus schemes when such partial cooperation is allowed, that is, when cooperation is endogenously chosen. We introduce a spatially explicit ecological-economic model within a coalition formation game to assess how landowners form stable coalition structures and how this affects biodiversity conservation under a wide range of (i) degrees of spatial cost autocorrelation, (ii) bonuses and flat-rate payments, (iii) species dispersal rates, and (iv) coordination costs. We find that agglomeration bonus schemes are more cost effective than homogenous payments only for low public expenditures. This condition is not identified if full cooperation is assumed. We find, however, that full cooperation never emerges and hence that such an assumption leads to an overestimation of the cost effectiveness of agglomeration bonus schemes. Moreover, we find that the cost effectiveness of agglomeration bonus schemes increases when the spatial cost autocorrelation and species dispersal rate decrease. Finally, coordination costs do not affect the cost effectiveness of the agglomeration bonus scheme but they have implications for its design because of their impact on coalition formation.School breakfast and student behavior
Andres Cuadros-Meñaca, Michael R. Thomsen, Rodolfo M. Nayga JrAbstract: The School Breakfast Program (SBP) is one of the largest nutrition assistance programs serving school-aged children in the US. It provides reimbursement to states for the operation of breakfast programs in schools. Student participation in the SBP is, however, much lower than the National School Lunch Program (NSLP). Because missing breakfast could result in hunger that could then influence children's interpersonal relations and classroom behavior (i.e., disciplinary infractions), some schools have implemented breakfast after the bell (BAB), which encompasses alternative breakfast delivery methods that make breakfast available to children after the school day commences. We use a difference-in-differences design with variation in BAB exposure across grades to study the effect on children's behavior. We find that infractions drop after schools adopted BAB. Moreover, the impact of BAB on behavior is more pronounced among minority children and those eligible for free and reduced-price meals.A dynamic analysis of the distribution of commodity futures and spot prices
Jian Li, Jean-Paul ChavasAbstract: This paper investigates the role of futures markets and their dynamic effects on the stability of commodity prices. The analysis is based on combining two econometric approaches: a quantile vector autoregression (QVAR) model of the marginal distributions of futures and spot prices, and a copula of their joint distribution. Applied to the US soybean and corn markets over the period of 1980–2019, the econometric investigation finds evidence of nonlinear price dynamics that depend on the maturity of the futures contract and documents how marginal price distributions and associated moments evolve over time. Based on the estimates of the QVAR model, we provide evidence of local instability in the upper tail of the price distributions. We find that the futures market helps stabilize the market under nearby futures contract maturity. We document the presence of nonlinear cointegration relationships between futures and spot price. Relying on a copula, we find a positive contemporaneous codependence between futures price and spot price across all quantiles, codependence that varies with the futures contract maturity. We also present evidence of a time-varying basis that affects the convergence properties of the futures and spot price. Our findings shed new light on the joint determination of futures and spot price in commodity markets.Collective investment in a common pool resource: Grower associations and food safety guidelines
Aaron Adalja, Erik Lichtenberg, Elina T. PageAbstract: Common pool resources often face overexploitation, but collective action can counteract that tendency. We investigate collective investment in reputation for produce food safety, a common pool resource because of limited branding and traceability, by U.S. commodity organizations. We use a unique dataset constructed with data from U.S. Department of Agriculture, Food and Drug Administration, Centers for Disease Control and Prevention, and industry to provide novel evidence on collective investment in common pool resources. Notably, only large shocks to reputation such as foodborne disease outbreaks resulting in hospitalization increase the likelihood of food safety guideline adoption. Adoption of food safety guidelines by government-backed organizations results in improvements in some food safety outcomes.Markups and export behavior: Firm-level evidence from the French food processing industry
Yaghoob Jafari, Maximilian Koppenberg, Stefan Hirsch, Thomas HeckeleiAbstract: The relationship between a firm's markups and its export behavior is highly relevant to individual firms' strategic decisions as well as to governments' policies regarding competition. We investigate the impact of markups on firms' decisions to export and resulting export intensity in the French food processing industry. Moreover, we assess the effect of entry into and remaining in the export market on firms' markups and evaluate differences in markups between exporters and non-exporters. Our results suggest that higher markups lead to both increased participation in the export market and greater export intensity. In addition, we find that firms obtain higher markups by entering and remaining in the export market. Finally, our results suggest that exporters generate higher markups, on average, than non-exporters. Similar results are found when controlling for differences in firms' productivity. Our findings suggest that trade policies designed to increase firms' participation in export markets, such as limits to border restrictions, may counteract domestic competition policies targeted at price–cost margins.Switching cost and store choice
Timothy J. Richards, Jura LiaukonytėAbstract: Switching costs are generally regarded as anticompetitive as firms can raise prices to “locked-in” consumers, at least up to the cost of switching to a lower-priced alternative. However, there is some evidence, both theoretical and empirical, that tends to show the opposite. Namely, suppliers, anticipating the pool of rents potentially available, compete aggressively to acquire non-switching consumers. Moreover, fixed shopping costs and uncertain prices imply that there is a “real option” value embedded in consumers’ shopping behavior, and which must be priced in and compensated if consumers are to switch stores. We argue that retail prices are lower when retailers use programs designed to increase customer retention, or “stickiness.” We test our theory using a panel of household-level, store-choice data. Contrary to the conventional wisdom, we find that loyalty is pro-competitive and leads to lower prices than would otherwise be the case. We also find that approximately 50% of the cumulative loyalty effect is attributable to the existence of a real option due to price uncertainty and that switching costs are substantial and comprise around 12% of the average cost of a basket of groceries.Measuring the American farm size distribution
Katherine Lacy, Peter F. Orazem, Skyler SchneeklothAbstract: This paper develops a measure of farm size as a share-weighted sum of farm sizes, called the Share Weighted Size Index (SWSI), which introduces new evidence of farm consolidation from 1959 to 2017. Our Share Weighted Size Index provides more reasonable estimates of the entire farm size distribution than simple averages and is useful for comparing farm size across crops at one point in time or for comparing farm sizes for a given crop over time. Although previous measures have relied on confidential or hard-to-access farm-level records, the Share Weighted Size Index is derived exclusively from publicly available Census of Agriculture data. Unlike average farm size, the Share Weighted Size Index reveals consistent evidence of rising farm size, the importance of returns to scale for most commodities, and the rising importance of specialization on a small number of crops within farms. Contrary to past studies that argued rising off-farm wages increase farm size, we find evidence that proximity to off-farm opportunities results in smaller farms.When does voluntary coordination work? Evidence from area-wide pest management
Sergio H. Lence, Ariel SingermanAbstract: We introduce the “coordination frontier” (CF), a simple practical tool to assess the likelihood of success of voluntary coordination in situations where, ex ante, the collective action solution provides an appealing alternative (e.g., for pest and disease control). We demonstrate the value of information conveyed by the CF, explain how to construct the CF from experimental data, and show how to apply the CF in practice. We illustrate the concept with an application to data from a framed field economic experiment, which was designed to elicit the preferences of Florida's citrus growers regarding their willingness to coordinate actions to combat citrus greening disease. This is a highly relevant case study not only because of the significant impact caused by citrus greening on Florida's citrus industry but also because a voluntary area-wide pest management program to control it had been established in 2010 and eventually failed; a similar program is now in place in California, where the disease spread is at an earlier stage. Had the CF been available in Florida, estimates of the (aggregate) chances of successful coordination could have been shared with growers to update their beliefs regarding the chances of successful coordination to help reduce strategic uncertainty. Policymakers in California could use the CF in such way and devise ways to encourage participation to increase the chances of reaching a desired coordination threshold.Productive Workfare? Evidence from Ethiopia's Productive Safety Net Program
Jules Gazeaud, Victor StephaneAbstract: Public works programs have long been a popular policy tool to reduce poverty and build productive infrastructure. Although an extensive literature has documented the effect of these programs on poverty, there is virtually no evidence on the productive effect of the infrastructure. This paper attempts to start filling this gap in the context of the Productive Safety Net Program—a large-scale public works program implemented in Ethiopia since 2005. Under the program, millions of beneficiaries received social transfers conditional on their participation in activities such as land improvements and soil and water conservation measures. We examine the value of these activities using a satellite-based indicator of agricultural productivity and (reweighted) difference-in-differences estimates. Results show that the program is associated with limited changes in agricultural productivity. The upper bound of the main estimate is equivalent to a 2.2% increase in agricultural yield. This contrasts with existing narratives and calls for more research on the productive effects of public works.Unintended environmental consequences of place-based economic policies
Maoyong Fan, Qu Tang, Jianxin Wu, Junji XiaoAbstract: We examine the environmental consequences of two regional economic development (RED) policies that aimed to develop the economy of the relatively underdeveloped upper Pearl River (UPR) regions in Guangdong Province, China. Applying the triple-difference analysis to annual county-industry-level data, we find that the two RED policies caused higher growth in industries with high water pollution than in industries with less water pollution in the UPR regions. The second RED policy with environmental regulations was effective in restraining the new entry of firms in high-pollution industries into the UPR regions but failed to drive existing high-pollution firms out of the UPR regions. Firms' location decisions were driven by the more favorable tax regimes and less stringent pollution regulations in the UPR regions.The impact of India's demonetization on domestic agricultural trade
Nidhi Aggarwal, Sudha NarayananAbstract: We examine the impact of an extreme monetary shock, India's demonetization of 2016, on domestic agricultural trade. Using data from around 3000 regulated markets for 35 major crops, we find that trade value fell by 16.3–16.8% in the short run, settling at 11.8–12.1% after eight months, driven primarily by a decline in prices. Triple difference estimates suggest sharpest impacts for kharif crops, perishables and crops with minimal government intervention. Markets far away from banks fared worse. Our results suggest that the implosion of value of agricultural trade domestically persisted two growing seasons beyond the one that coincided with the shock, whereas existing findings suggest that the negative impact on the economy as a whole dissipates in that time.Modeling transaction costs in household adoption of landscape conservation practices
Robert J. Johnston, Tom Ndebele, David A. NewburnAbstract: Many conservation programs provide economic incentives for landscape best management practices adopted by households. These programs typically include multiple administrative procedures that impose transaction costs, such as requirements for project design and inspections. The literature provides little insight on the relative influence of common transaction costs such as these on best management practice adoption. This paper develops a model to estimate the simultaneous effects of multiple transaction costs linked to common administrative requirements within residential cost-share incentive programs. The model decomposes the magnitudes and effects of different transaction costs that vary across agents and programs, as a function of requirements for project design, contracting, inspections, and payments. It further identifies the types of program changes that would cause the greatest increases in efficiency due to transaction cost attenuation, measured as reductions in agents’ willingness to accept to adopt best management practices. The model is implemented using a discrete choice experiment on cost-share programs that incentivize urban stormwater best management practices in the Baltimore metropolitan region, focusing on landscape conservation practices that reduce nonpoint source pollution. Results find large and heterogeneous transaction costs that are sufficient to eliminate much of the incentive provided by typical cost-share payments. These findings suggest mechanisms whereby cost-share programs can be designed to optimize enrollment when multiple transaction costs are relevant.
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