425 research outputs found
NUTRITION AND THE ECONOMICS OF SWINE MANAGEMENT
No full textCurrent methods of formulating animal rations lead to excess nutrient excretion which can potentially lead to excess manure nutrients and an increase in economic costs. These methods do not recognize the impact of diminishing returns. The objective is to simultaneously optimize feed ration composition and replacement. The results, when compared against results from a survey of feed companies, indicate that using a profit maximization rather than live weight growth maximization criterion targets nutrients to an animal's actual needs and, hence, fewer nutrients are excreted and higher returns for producers are obtained.nonlinear growth modeling, pigs, replacement, swine, Livestock Production/Industries,
Gaussian Quadratures vs. Monte Carlo Experiments for Systematic Sensitivity Analysis of Computable General Equilibrium Model Results
No full textCitation: Villoria, N. B., & Preckel, P. V. (2017). Gaussian Quadratures vs. Monte Carlo Experiments for Systematic Sensitivity Analysis of Computable General Equilibrium Model Results. Economics Bulletin, 37(1), 480-+. Retrieved from ://WOS:000398860600043Third-order Gaussian quadratures (GQ) approximate the mean and variance of model results allowing for computationally inexpensive sensitivity analysis to uncertainty in exogenous parameters. Unfortunately, commonly used GQ approaches restrict the marginal distributions of both parameters and results sacrificing valuable distributional information. Using higher order quadratures, or incorporating more uncertain exogenous parameters, rapidly increases the sample size, undermining the rationale for using GQ. In contrast, Monte Carlo methods directly approximate the distribution of model outcomes without restrictive distributional assumptions on exogenous parameters. We argue that current computing capabilities allow for wider use of Monte Carlo methods for conducting stochastic simulations
Implicit Additive Preferences: A Further Generalization of the CES
No full textThe CES is generalized by extension of the work of Hanoch (1975) resulting in implicit, direct and indirect relationships between utility and consumption. Expressions for substitution and income elasticities are developed and observed to be variable, rather than constant as in the CES case.Constant elasticity of substitution, implicit functions, preferences, demand
Modelling the Impact of Credit on Intensification in Mixed Crop-Livestock Systems: A Case Study from Ethiopia
No full textAccess to credit is one strategy for promoting the adoption of yield-enhancing technologies. However, advancing credit to smallholder farmers for encouraging technology adoption is a complex policy issue. The objective of this paper is to identify appropriate and sustainable credit repayment policies to encourage intensification in the Ethiopian Highlands. Using a household model, we analyze the impact of advancing in-kind credit in the form of fertilizer and seed to smallholder farmers in the Ethiopian highlands and alternative credit repayment strategies. The results indicate that in kind input credit of fertilizer and seed provided to farmers in the highland of Ethiopia increased the value of household crop output moderately and hence allowed the household to increase its consumption. This scheme requires borrowers to sell their crop immediately at harvest to repay their credit. An alternative repayment scheme of extending the repayment period to allow households to capture seasonal price variation is proposed. The amount repaid is also tied to yields of wheat.Agricultural Finance,
ESTIMATING THE VALUE OF BT CORN: A MULTI-STATE COMPARISON
No full textBt corn offers a powerful tool to control European corn borers and some other pests. Because pest infestations and farming practices differ across the Corn Belt, economic benefits also differ. This research estimates the value of Bt corn across the Corn Belt. Results identify areas where Bt adoption is economically justified.Crop Production/Industries, Research and Development/Tech Change/Emerging Technologies,
ROBUSTNESS OF NON-PARAMETRIC MEASUREMENT OF EFFICIENCY AND RISK AVERSION
No full textThis paper examines the performance of a risk-adjusted non-parametric approach to measuring efficiency and risk aversion. Prior work is extended to the case where agent behavior is motivated by expected utility maximization. Results indicate the approach significantly outperforms traditional efficiency measurement methods when applied to risk averse agents.Risk and Uncertainty,
A Modified, Implicit, Directly Additive Demand System
No full textA recently developed demand system, nicknamed AIDADS, offers a more general approach to capturing consumption preferences. AIDADS generalizes the LES by assuming marginal budget shares vary indirectly with expenditure. AIDADS is limited by the fact that the subsistence parameters are constant across expenditure. We modify AIDADS by replacing the constant subsistence parameters with a function which varies with utility, and hence expenditure. The modified AIDADS (MAIDADS) allows subsistence levels to vary with expenditure. This model is applied to the 1996 International Consumption Project data. As these data span a wide range of expenditure levels, MAIDADS offers a viable alternative when estimating "global demand systems." Results suggest subsistence values for livestock and other food products vary with expenditure, while those for grain are constant across expenditure.Demand and Price Analysis,
Poverty analysis using an international cross-country demand system
No full textThis paper proposes a new method for ex ante analysis of the poverty impacts arising from policy reforms. Three innovations underlie this approach. The first is the estimation of a global demand system using a combination of micro-data from household surveys and macro-data from the International Comparisons Project (ICP). Estimation is undertaken in a manner that reconciles these two sources of information, explicitly recognizing that per capita national demands are an aggregation of the disaggregated, individual household demands. The second innovation relates to a methodology for post-estimation calibration of the global demand system, giving rise to country-specific demand systems and an associated expenditure function which, when aggregated across the expenditure distribution, reproduce observed per capita budget shares exactly. This leads to the third innovation, which is the establishment of a unique poverty level of utility and an appropriately modified set of Foster-Greer-Thorbecke poverty measures. With these tools in hand, the authors are able to calculate the change in the head-count of poverty, poverty gap, and squared poverty gap arising from policy reforms, where the poverty measures are derived using a unique poverty level of utility, rather than an income or expenditure-based measure. They use these techniques with a demand system for food, other nondurables and services estimated using a combination of 1996 ICP data set and national expenditure distribution data. Calibration is demonstrated for three countries for which household survey expenditure data are used during estimation-Indonesia, the Philippines and Thailand. To show the usefulness of these calibrated models for policy analysis, the authors assess the effects of an assumed 5 percent food price rise as might be realized in the wake of a multilateral trade agreement. Results illustrate the important role of subsistence expenditures at lowest income levels, but of discretionary expenditure at higher income levels. The welfare analysis underscores the relatively large impact of the price hike on poorer households, while a modified Foster-Greer-Thorbecke poverty measure shows that the 5 percent price rise increases the incidence and intensity of poverty in all three cases, although the specific effects vary considerably by country.Markets and Market Access,Economic Theory&Research,Population Policies,Rural Poverty Reduction,Poverty Lines
Welfare Impacts of Optimal Virtual Bidding in a Multi-settlement Electricity Market with Transmission Line Congestion
No full textWith a goal of improving the performance of wholesale electricity markets, virtual financial products have been introduced. Virtual bids are purely financial instruments that may be used to speculate on the differences between prices in the forward and spot markets in a two-settlement electricity market. While there is evidence that price convergence across these markets can be induced by virtual bidding, other research has shown that the impacts on the welfare of market participants are less clear. The problem is that, while virtual bidding may narrow the price gap, if it does so by inflating the prices, then electricity consumers may not be better off. Although some work has been done on the impacts of virtual transactions on welfare for the electricity market participants, that work provides an incomplete assessment because it ignores some important aspects of the electricity market system. In particular, the prior work due to Giraldo (2017) essentially ignores the electricity transmission network as well as the physical laws governing electricity flows. The objective of this research is to understand the effect of virtual transactions on electricity market efficiency (i.e. social welfare) using a model that explicitly includes the network as well as relationships that reflect the physical properties of electricity flows through a network (i.e. loop flow). The core research question is; what impact does network congestion have on the welfare shifts caused by the participation of financial virtual traders? This study employs models with multiple buses to analyze the welfare changes of electricity market participants in a network constrained multi-settlement electricity market. Integrating the network in the model enables a comparison of welfare changes between the simpler network-free models and a network-based model with the possibilities of line congestion and an explicit treatment of loop flow. Using stylized two- and three-bus models, we estimated and compared the differences in welfare impact due to the introduction of virtual transactions between uncongested and congested networks as well as its heterogeneous impact on the different buses due to their location within the network. At the network level, congested lines amplify the welfare change due to introducing virtual transactions. We also found that the results from the simple models are broadly consistent in the complex network using the aggregate model of ISO-NE test case. Results suggest that price convergence occurs with optimal virtual bidding in most cases, which is consistent with existing literature. The prices throughout the network in both forward and spot markets are changed, and there are welfare transfers among producers, consumers, and virtual traders relative to the market equilibrium without virtual bidding. Furthermore, the welfare impacts on market participants are not homogenous throughout the network. These implications should be considered in the design of regulations governing virtual transactions in the electricity market
An assessment of the efficacy and cost of alternative carbon mitigation policies for the state of Indiana
No full textA nation-wide climate policy targeting the power sector might lead to dramatic changes to Indiana\u27s electricity generation system. This is because Indiana relies heavily on coal as its primary source for electricity generation and coal is much more carbon-intensive than other fossil fuels. In the possible event that Indiana will have to take action on carbon mitigation, for example because of a national climate policy in the future, it is important for state policymakers to understand the costs and efficacy of alternative strategies. In addition, assessing the impacts of the policy alternatives on Indiana serves as guidance for the national policy design process regarding the subnational impacts. A linear-programming optimization model was created based on the MARKAL energy system model framework to analyze the impact of a potential national climate policy on the state of Indiana. This model is named IN-MARKAL and is built based on comprehensive research into Indiana\u27s energy-economic system, including primary resource supply, energy conversion sectors and end-use sectors. Alternative scenarios explored in this study include a base case scenario and six renewable portfolio standard (RPS) scenarios, including two without trading in renewable energy credits (RECs) and four with REC trading at various costs. In addition, three carbon tax scenarios and two rate-based carbon cap scenarios are studied. The results of the model show that an RPS is a very cost effective option among the policy tools examined. An RPS can achieve substantial emissions reductions for the power sector of Indiana, but it may also lead to a less reliable generation mix. A carbon tax appears to be the least cost effective tool to reduce carbon emissions for Indiana based on the tax trajectories modeled. The emission cap is effective for realizing deep carbon reductions with moderate cost and leads to a diverse generation portfolio for Indiana, but the intermediate goal for Indiana specified in the current EPA proposal may not be achievable, resulting in a large increase in the marginal cost of electricity during the policy phase in, rather than the smooth electricity cost trajectory observed in some other scenarios
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