Kathy Baylis

Policy Risk in the Canadian Dairy Industry

Lia Nogueira et al. — Tue, 24 Jan 2012 12:32:20 PST

Canadian dairy farmers purchase a marketing quota through the Provincial Marketing Boards to sell milk in Canada. That quota captures rents created by regulations and is subject to policy risk. We define policy risk as the farmers' expectation that quota rents will decline or disappear over time. We calculate the effect of perceived policy risk to determine whether the Uruguay Round Agreement affected the amount of protection given to farmers. Calculated policy risk ranged from 14-29%. Policy risk increased in the years leading up to the Uruguay Round Agreement, but decreased after the WTO was established and remains at a historic low.

Spatial Environmental and Natural Resource Economics

Amy Ando et al. — Thu, 22 Dec 2011 10:29:57 PST

Environmental and natural resource economics has long wrestled with spatial elements of human behavior, biophysical systems, and policy design. The treatment of space by academic environmental economists has evolved in important ways over time, moving from simple distance measures to more complex models of spatial processes. This chapter presents knowledge developed in several areas of research in spatial environmental and natural resource economics. First, it discusses the role played by spatial heterogeneity in designing optimal land conservation policies and efficient incentive policies to control pollution. Second, it describes the roles space plays in non-market valuation techniques, especially the hedonic and travel cost approaches which inherently use space as a means to identify values of non-market goods. Third, it explains a set of quasi- or natural-experimental empirical methods which use spatial shocks to estimate the effects of pollution or environmental policy on a wide range of outcomes such as human health, employment, firm location decisions, and deforestation. Finally, it describes spatial models of human behavior including locational sorting and the interaction of multiple agents in a land use/conservation setting. The chapter ends with a discussion of some promising future areas for further evolution of the modeling of space in environmental economics.

Potential for carbon offsets from anaerobic digesters in livestock production

Kathy Baylis et al. — Thu, 22 Dec 2011 10:05:00 PST

Methane from livestock manure accounts for 6.6% of total greenhouse gas (GHG) emissions in the United States, and 1.1% of total emissions in Canada. Methane is 25 times more potent than CO2 as a GHG and is emitted into the atmosphere from enteric emissions and manure. Livestock operators can reduce CH4 emissions and may qualify for credits for its capture by utilizing manure management practices such as anaerobic digesters. Thus, livestock producers can play a role in reducing GHG emissions while also earning C offset credits. This paper has two related objectives. First, using data from Canada, we explore the economics of adoption of anaerobic digesters for Canadian dairy and hog producers. Second, using this example, we explore the institutional framework in place for livestock based GHG emissions and the sources of uncertainties facing both producers and consumers with regard to C offsets. From these two objectives we hope to better understand the potential gains for livestock producers, and consumers of CH4 based offsets, and identify potential institutional innovations needed to allow the offset market to function efficiently.

Empowering Women Through Education and Influence: An Evaluation of the Indian Mahila Samakhya Program

Eeshani Kandpal et al. — Thu, 22 Dec 2011 09:52:06 PST

Mahila Samakhya is an innovative Indian program that attempts to harness local peer networks to change social norms and empower women. While most studies focus on programs that target individuals, only a small number of papers evaluate community-level interventions. This article analyses the effect of this program on women's empowerment outcomes. We attempt to disentangle the mechanisms of the program, separately considering its effect on women who work and those who do not work, where the program affects the latter group solely through their reservation wage. We also consider the program's effect on non-participants, to observe whether there are spillover effects of treatment through information or by altering the social norm. Last, we address selection issues using two methods: first by using matching controlling for truncation and second by instrumenting for participation by exposure to the program. Using both methods we observe a significant effect of Mahila Samakhya on women's employment and household bargaining power.

Standing Together: Peer Networks, Female Empowerment, and Child Welfare

Eeshani Kandpal et al. — Tue, 25 Oct 2011 08:12:54 PDT

We quantify the impact of peer network-based learning and influence on female empowerment and child food intake using primary data on networks in Uttarakhand. We use participation in the Mahila Samakhya program to identify increases in the empowerment of the participant herself and her social network. Using a conceptual framework that combines the Nash bargaining framework, the demographic diusion literature, and identity economics, we characterize three ways in which networks function: social learning, social influence, and identity utility. We then use 3SLS on network-weighted instruments to estimate the relative sizes of these mechanisms on empowerment and child food intake. Results show that female empowerment is significantly affected by social influence and identity through participation, while child food intake benets most from learning.

Expanding Horizons: Can Women’s Support Groups Diversify Peer Networks in Rural India?

Eeshani Kandpal et al. — Tue, 25 Oct 2011 07:57:36 PDT

Peer networks in traditional societies may be homogenous and stratified by income or social hierarchy, therefore reinforcing social norms. Conservative social norms will reinforce current bargaining power, which is often skewed to the male in the household. Diversifying networks may improve female bargaining power of those women in the network by allowing them to connect with role models, facilitating information sharing with women who have a different range of experiences, or challenge the social norms in which they usually find themselves. We ask whether Mahila Samakhya, a women's empowerment program, was able to diversity social networks of women in the northern Indian state of Uttarakhand. Controlling for the participation in Mahila Sakakhya using program roll-out, we find that the program was able to diversify social networks, as measured by having friends outside one’s caste. Thus, we find evidence that government programs may be able to affect social norms through changing peers.

Spread and Backwash Effects for Non-metropolitan Communities in the U.S.

Joanna Ganning et al. — Fri, 16 Sep 2011 14:45:14 PDT

Few studies empirically estimate the effects of metropolitan growth on non-metropolitan communities at a national scale. This paper estimates the growth effects of 276 MSAs on population in 1,988 non-metropolitan communities in the United States from 2000-2007. We estimate the distance for growth spillovers from MSAs to non-metropolitan communities and test the assumption that a single MSA influences growth. This is accomplished by comparing three methods of weighting cities’ influence: nearest city only, and inverse-distance and relative commuting flow to multiple cities. The inverse-distance approach provides slightly more reliable and theoretically supportable results than the traditional nearest city approach.

The distributional effects of NAFTA in Mexico

Kathy Baylis et al. — Fri, 16 Sep 2011 12:56:30 PDT

This paper studies the regional distribution of benefits from trade in Mexico after the North American Free Trade Agreement (NAFTA). Specifically, we ask whether or not NAFTA increased the concentration of economic activity in Mexico. Unlike previous work which uses state-level data, we identify the effect of NAFTA on economic activity at the municipal level allowing us to observe detailed growth patterns across space. To explicitly identify the effect of the trade agreement, we contrast changes in economic activity in regions and sectors more and less likely to be affected by trade. Given the spatial nature of these data, we make use of spatial panel econometric methods. We find that NAFTA caused wealthy regions nearest to the border to grow faster than others, increasing regional disparity. We also find that economic activity in densely populated regions grew less quickly after NAFTA, particularly in the case of traded sectors. Thus, we see evidence that agglomeration lost some of its draw after NAFTA. We also find that regions with a smaller portion of high-school graduates and lower levels of infrastructure saw their growth increase after the trade agreement, decreasing regional disparity. We notice these redistributive effects are strongest in the non-traded sectors.

Something Fishy in Seafood Trade? The Relationship between Tariff and Non-Tariff Barriers

Kathy Baylis et al. — Wed, 13 Jul 2011 10:09:22 PDT

As importing countries honor WTO commitments and lower tariff rates, they may be replacing traditional tariff barriers with non-tariff barriers. Recent literature has found that the implementation of food safety standards, specifically the use of import notifications and rejections, has acted as a significant barrier to trade in both the EU and the US. This article estimates the relation between declining tariff rates and the use of non-tariff barriers, measured by a count of EU seafood import notifications. We divide the motives for the use of import notifications into risk and protectionism. The results show that while non-tariff barriers are driven in part by variables associated with risk, they are also correlated with variables associated with increased demand for protection. We find that when trade agreements force a decrease in tariffs, we observe an increase in the number of import notifications, holding trade constant. This effect is strongest for those products that are rejected at the border for less threatening health reasons. When we calculate the effect on trade, we find that these non-tariff barriers offset nearly one quarter of the gains in trade from tariff reductions.

Fast-Food Consumption and the Ban on Advertising Targeting Children: The Quebec Experience

Tirtha Dhar et al. — Wed, 22 Jun 2011 07:48:53 PDT

Amid growing concerns about childhood obesity and the associated health risks, several countries are considering banning fast-food advertising targeting children. In this paper we study the effect of such a ban in the Canadian province of Quebec. Using household expenditure survey data from 1984 to 1992, we examine whether expenditure on fast food is lower in those groups affected by the ban than in those who are not. We use a novel triple difference-in-difference methodology by appropriately defining treatment and control groups and find that the ban’s effectiveness is due not to the decrease in fast-food expenditures per week but to the decrease in purchase propensity. Overall, we estimate that the ban reduced fast-food consumption by US$88 million per year, which translates to approximately 3.4 billion fewer calories consumed. Our study suggests that advertising bans can be effective provided there is no media-market overlap.

Do our conservation programs work? A Spatially Explicit Estimate of Avoided Forest Loss

Jordi Honey-Roses et al. — Wed, 22 Jun 2011 07:44:55 PDT

With the potential expansion of forest conservation programs spurred by climate-change agreements, there is a need to measure the extent to which such programs achieve their intended results. Conventional methods for evaluating conservation impact tend to be biased because they do not compare like areas nor do they account for spatial relations. We assess the effect of a conservation initiative that combined designation of protected areas with payments for environmental services to conserve overwintering habitat for the monarch butterfly (Danaus plexippus) in Mexico us a spatial-matching estimator which matches covariates among polygons and their neighbors, to. We measured avoided forest loss (avoided disturbance and deforestation) by comparing forest cover on protected and unprotected lands that were similar in terms of accessibility, governance, and forest type . Whereas conventional estimates of avoided forest loss suggest that conservation initiatives did not protect forest cover, we found evidence that the conservation measures are preserving forest cover. We found that the conservation measures protected between 200 and 710 ha (3-16%) of forest that is high-quality habitat for monarch butterflies, but had a smaller effect on total forest cover, preserving between 0 and 200 ha (0-2.5%) of forest with canopy cover >70%. We suggest that future estimates of avoided forest loss be analyzed spatially to account for how forest loss moves across the landscape. Given the forthcoming demand from donors and carbon financiers for estimates of avoided forest loss, we anticipate our methods and results will contribute to future studies that estimate conservation impact .

Food Import Refusals: Evidence from the European Union

Kathy Baylis et al. — Mon, 20 Dec 2010 15:44:10 PST

Do our conservation programs work? Estimating Avoided Forest Loss from the Combined Effect of Protection and Payment

Kathy Baylis et al. — Mon, 19 Jul 2010 05:38:07 PDT

Conservation practitioners are eager to measure the extent to which their programs protect valuable ecosystems. Conventional methods for evaluating conservation policies have been criticized for making biased comparisons between unlike areas and for failing to control for confounding factors that influence conservation outcomes. In this paper we use a spatial matching estimator to assess the impact of an ambitious conservation initiative that deploys traditional protected area designations in conjunction with an incentive-based payment program to protect critical forest habitat for the Monarch Butterfly in Mexico. We create a comparable counterfactual by matching plots targeted by conservation measures with similar untargeted plots based on characteristics that affect forest accessibility, timber value and governance. While conventional estimates suggest that the conservation initiative failed to reduce deforestation, we find evidence that this often maligned conservation program is working to preserve Monarch Butterfly habitat. We find that the conservation measures protected high quality, or dense forest, but show more modest results for total forest cover. We suggest that future estimates of avoided forest loss be analyzed in a spatial environment to account for how forest loss moves across the landscape in practice. Given the forthcoming demand for estimates of avoided forest loss from donors and carbon financiers, we anticipate out results may be of importance in establishing new methods for conservation project evaluation.

Spatial Analysis of Illinois Agricultural Cash Rents

Shannon Woodard et al. — Thu, 06 May 2010 15:23:43 PDT

During the summer of 2008, corn futures prices rose 119.8% compared to the previous year. The resulting nominal prices were the highest in history. Anecdotal evidence implied that much of these benefits accrued to land owners through increased land values and cash rent levels. In this article, we use unique farm-level data and novel spatial econometric tools to determine how farmland rents are affected by changes in commodity prices and government payment levels. Contrary to predictions from the Ricardian rent model, we find that tenant farmers are able to capture the vast majority of price increases and a large fraction of government payments, although this fraction decreased substantially with the 2002 farm bill. We also find that our estimates of pass-through are much larger with individual farm data compared to using county averages, which implies that much important variation is masked when only considering county-level data.

Bridging vs. Bonding Social Capital and the Governance of Common Pool Resources

Kathy Baylis et al. — Sun, 11 Apr 2010 14:16:54 PDT

Social capital can facilitate governance in the absence of more formal institutions, but not all social capital is alike. In this paper, we compare the effect of bridging versus bonding social capital on the management of a common pool resource. We develop a theoretical model and show that bonding social capital increases vulnerability to social sanction, while by giving communities an outside option, bridging social capital can reduce people’s vulnerability, making them less susceptible to social sanction, and reducing the enforcement capability of the community. We then test this finding using household level data on firewood collection and social capital from the Yunnan province in China. We find that bonding social capital improves management of the common pool resource, but that the effect of bridging social capital is mixed. When bonding social capital was low, bridging social capital decreased the amount of resource consumption, however when bonding was high, bridging eroded the effect of bonding. We also found that individuals with higher bridging social capital were less sensitive to the resource capacity. On the other hand, we find that those villagers with few assets, and therefore few options to self-insure against risk, decrease their consumption with higher bridging social capital.

Risk Aversion and Farm Input Choice: Evidence from Field Experiments in China

Yazhen Gong et al. — Sun, 11 Apr 2010 14:12:35 PDT

Overuse of fertilizer and pesticides is a substantial source of water pollution in China, and reducing chemical input use is a government policy objective. Using data on risk aversion from field experiments in the Yunnan Province of southwestern China, we ask how risk attitudes affects farm input choice. Major findings in our paper include: [1] as expected, most of our 300 farmers exhibit substantial risk aversion; [2] risk aversion affects input intensity differently for market-oriented versus subsistence farmers. [3] risk aversion is related with the increased use of pesticides by market-oriented producers, but a reduction of pesticide use by subsistence farmers; and [4] market producers are more concerned with stabilizing income, while subsistence producers are more concerned with stabilizing production.

What Drives Food Import Refusals?

Kathy Baylis et al. — Mon, 05 Oct 2009 16:00:12 PDT

TOWARDS A PLANT-BASED METHOD OF CO2 MANAGEMENT

Diane Edwards et al. — Thu, 16 Jul 2009 07:12:42 PDT

Three plant-based approaches to greenhouse CO2 management were explored in commercial and experimental tomato greenhouses. These were: (1) simulation modelling, (2) a non-destructive analysis of growth and (3) plant carbon status. A cost and benefit analysis using simulation modeling was carried out using grower-collected greenhouse environment and yield data. Simulation modelling was useful in a retrospective analysis for determining the costs and benefits of several CO2 dosing scenarios. However, the analysis was hampered as a CO2 management tool because key data relating CO2 production to the CO2 concentration in the greenhouse was unavailable and also because the yield model was inaccurate. Non-destructive measures of growth are collected by growers and might be useful as plant-based indicators of CO2 response. However, the measures investigated were deemed to be too sluggish to be used for CO2 dosing decision-making. Finally, plants under CO2 enrichment can accumulate substantial amounts of starch in their leaves and excess starch may indicate CO2 over-dosing. Plant carbon status was investigated by determining the distribution of leaf starch in the canopy and diurnally. These profiles led to the identification of canopy strata that are under the influence of both source and sink. The carbon status of this region maybe useful for CO2 dosing decisions and is worthy of further study.

Antidumping and Market Power in the Agriculture Sector

Kathy Baylis et al. — Thu, 16 Jul 2009 07:04:37 PDT

In this article we highlight the anticompetitive nature of antidumping (AD) legislation. Antidumping legislation was set up to protect domestic firms from predatory pricing by foreign firms. We argue that protecting highly concentrated industries drastically reduces competition at home. In cases where the industry consists only of one or two firms, import restriction may breed monopolies at the expense of domestic consumers. This article looks at cases filed by the agriculture sector, and at the market concentration of industries in this sector, to illustrate the above possibility. We study the case of fresh tomatoes in detail to further demonstrate the anticompetitive nature of AD legislation. We show the effect of AD legislation on imports, as well as the change in the Lerner index in the fresh tomato industry.

Agri-Environmental Programs and Trade Negotiations in the United States and the European Union

Kathy Baylis et al. — Thu, 16 Jul 2009 06:55:59 PDT

In both the European Union and the United States, the public has raised concerns over the damaging effects of modern agriculture. Both regions have developed agri-environmental programs (AEPs), but the conceptual background is quite different. We argue that the EU programs treat agriculture and the natural world as complementary, while the US programs primarily treat them as substitutes. As a result, the EU pays farmers for the production of environmental amenities from farming, while many of the US programs generate environmental externalities by limiting agriculture. The US approach is much more site-specific, which may imply larger environmental gains per dollar, but less flexibility to offset reductions in production subsidies. The EU AEPs, by contrast, are very broad, but are adopted by many farmers who do not receive production subsidies, creating a new group of subsidy recipients who may have their own objectives for the trade talks. In part because of these broad-based AEP and rural development programs, the EU appears to have a freer hand in removing trade-distorting price supports. However, by encouraging smaller, remote farmers to produce high-value market goods (e.g. organic), the EU may have created a domestic lobby for protecting these markets from increased international competition.