In 2009, West Virginia enacted an Alternative and Renewable Portfolio Act (APRA) to broaden its energy use for electricity beyond coal. A choice experiment survey was conducted to assess West Virginians’ willingness to pay (WTP) for 10 percent of electricity generated from wind energy versus natural gas. Results showed that residential consumers preferred electricity generated from wind, with annual per-capita WTP averaging from $19.25 to $26.75. Given the subsequent repeal of the APRA in 2015, we propose implementation of a voluntary green pricing program as an alternative policy to increase the share of renewable energy in West Virginia's energy portfolio.

Anaerobic digesters can provide renewable energy and reduce greenhouse gas emissions from manure management. Government policies that encourage digester adoption by livestock operations include construction cost-share grants, renewable electricity subsidies, and carbon pricing (offset) programs. However, the effectiveness and efficiency of these policies is not well understood. For the U.S. dairy sector, we compare predicted digester adoption rates, carbon emission reductions, renewable electricity generation and sales, and net returns and social benefits of several policies. We find that a carbon pricing policy provides the greatest net social benefit for a range of assumptions about the benefits of carbon reductions and renewable energy.

Matching grants are a prevalent mechanism for funding environmental, conservation, and natural resource projects. However, economists have largely been silent regarding the potential benefits of these mechanisms at increasing voluntary contributions. To examine the behavioral responses to different match levels, this research uses controlled laboratory experiments with generically framed instructions and introduces a general-form matching-grant mechanism, referred to as the proportional contribution mechanism (PCM). Results show that contributions are positively correlated with both the match and the induced value of the public good even when a dominant strategy is free-riding. An implication of this partial demand revelation result is that manifestations of this type of “helping hand” social preference should be counted in benefit-cost analysis.

As the result of Uruguay Round negotiations, Korea and Japan established tariff rate quotas (TRQs) for agricultural imports. Both countries allocate the TRQs with various methods that show different fill rates and welfare implications. The state trading enterprises play important roles in TRQ administration in both countries. The TRQs contributed to increased imports. However, the transparency and commercial consideration in administering the TRQs remain a concern and the access for some commodities seems to be less open than would be the case if quota amounts were made available on a purely commercial basis.

Controversy over the use of genetically engineered (GE) crops may have induced some farmers to disadopt these seeds, making a traditional diffusion model inappropriate. In this study, we develop and estimate a dynamic diffusion model, examine the diffusion paths of GE corn, soybeans, and cotton, predict the adoption of those crops over the next two years, and explore the main determinants of the diffusion rate. Our estimates indicate that future growth of Bt crops will be slower or negative, depending mainly on the infestation levels of the target pests. Adoption of herbicide-tolerant soybeans and cotton will continue to increase, unless consumer sentiment in the United States changes radically.

This paper uses search theory to examine the role that risk preference (RP) plays in farmland preservation. Assuming that the distribution of the offer price is fixed, the analysis indicates that risk-averse agents have lower reservation prices than risk-neutral agents, and that agricultural land held by the former exits farming at a faster rate. The results also show that farmland preservation policies which increase reservation prices have a greater capitalization effect if agents are risk-loving, and that such policies, while effectively protecting the interest of land speculators, may be less effective in serving the needs of farming and farm-held open space.

Compared to other policy instruments that aim to change consumer behavior, information provision is perhaps the least controversial. An important question is how information in the form of carbon labels can contribute to direct food consumption toward reduced climate impact. From a policy guidance perspective, there is a need to identify how the labeling strategy affects consumers’ ability to identify lower emitting food products and the behavioral change due to carbon information. Key aspects of a carbon label are discussed, as well as the implications of different labeling schemes. Drawing on economic and behavioral theories, we propose that, to assist consumers in identifying changes in consumption that contribute to significant reductions in their climate impact, a carbon label must enable comparisons between product groups and not only within narrowly defined product groups. This suggests mandatory labeling, since producers of high-emission products are less likely to display such labels. However, it is important to consider both costs and benefits of labeling schemes and to consider complementing labeling with other policy instruments.

Risk management tools are at the core of farm policy in many developed countries, and their effectiveness relies on the appropriate mechanism design. This study developed a gain-loss framework based on prospect theory to examine the reasons for the declining use of the main risk management tool offered to farmers despite growing volatility in returns. Using the administrative Ontario Farm Income Database (OFID) 2003 to 2013 and taking the beef sector as the example, this study found that the gain-loss framework predicts and explains the dynamic program participation pattern better than the conventional expected utility framework. Farms were found to be more likely to stay enrolled in the program when they experienced either larger gains or losses in revenue compared to previous years, suggesting that they were using the insurance programs both as an investment strategy (to seek government subsidies) and as a risk management tool (to protect against business risks), though the effects of revenue losses and hence risk management needs were stronger than gains. In addition, the program payment history and farm characteristics also shape the dynamic participation patterns. The findings increased the understanding of the drivers of withdrawal behavior associated with government-sponsored business risk management programs.

Overexploitation of coastal aquifers may lead to seawater intrusion, which irreversibly degrades groundwater. The seawater intrusion process may imply that its consequences would not be perceptible until after decades of accumulated overexploitation. In such a dynamic setting, static externalities may enhance the users’ awareness about the resource's common nature, inducing more conservative individual behaviors. Aiming to evaluate this hypothesis, we experimentally test predictions from a dynamic game of substitutable common-pool resource (CPR) exploitation. The players have to decide whether to use a free private good or to extract from one of two costly CPRs. Our findings do not give substantial support to the initial conjecture. Nevertheless, the presence of static externalities does induce some kind of payoff reassurance strategies in the resource choice decisions, but these strategies do not correspond to the optimum benchmark.

Rapid urbanization enhances the desirability of policies for preserving open space but policies intended to preserve open space may extend the urban boundary and create leapfrog development. We investigate this potential conflict between open space preservation and urban sprawl conceptually and empirically using data from the Baltimore-Washington suburbs. In accord with previous theoretical and empirical results, the estimated econometric model indicates that both zoning and forest planting requirements contribute to sprawl by increasing the amount of land needed to accommodate the current number of households. These results point to a conflict between preserving open space incorporated into private building lots or internal to subdivisions and public open space at the urban fringe.

This study examines several aspects of the Environmental Horticulture Industry (EHI) in the northeastern United States. First, the EHI is compared to other agricultural sectors in the region. The sector's growth is found to far outpace growth in traditionally important crops and commodities. The study then takes a closer look at the EHI in Pennsylvania, utilizing survey data and the IMPLAN input-output model to estimate the overall economic contributions of the industry to the state's economy. Results suggest that the EHI generates nearly $3.3 billion in value-added and more than 107,000 state jobs through direct, indirect, and induced effects. Finally, survey data are used to identify and discuss important issues that land grant universities throughout the Northeast can address as they seek to strengthen the sector.

The problem of endogenous stratification associated with on-site sampling has been overlooked in the Contingent Valuation Method (CVM). We find that using on-site samples of visitors overstates visitor willingness to pay (WTP) estimates relative to a household sample of visitors, and substantially overstates the unconditional population values. We provide two methods of correcting WTP of on-site samples. The uncorrected on-site sample CVM yields WTP of $132 per trip, while visitor WTP obtained from a random sample of households had a value of $66 per trip. Adaptation of choice-based sampling correction estimator to the on-site CVM data yields $73 per trip, not statistically different from the visitor value from the household survey, but significantly different from the uncorrected on-site sample value.

This paper examines transferable development rights (TDRs) policies as a way to preserve farmland and change the density of development. Characteristics of TDR markets are described, including why they might promote efficiency, and the difficulties that arise in implementing them. Evidence from an established TDR program in Calvert County, Maryland, is used to assess the potential for TDRs to influence subdivision density, and to achieve local land preservation goals. The Calvert program has succeeded in creating an active and stable TDR market, and has therefore preserved a large amount of farmland in the region. But we find that the demand for additional density permitted with TDRs occurs mostly in rural areas and not in the higher density town centers and residential areas.

This study examines in an empirical comparison how different econometric specifications of stochastic frontier models affect the decomposition of total factor productivity growth. We estimate nine stochastic frontier models, which have been widely used in empirical investigations of sources of productivity growth. Our results show that the relative contribution of components to total factor productivity growth is quite sensitive to the choice of econometric model, which points to the need to select the “right” model. We apply various statistical tests to narrow the range of applicable models and identify additional criteria upon which to base the choice of non-nested models.

This article examines the flexibility of the Johnson system of distributions by assessing its performance in terms of modeling crop yields for the purpose of setting actuarially fair crop insurance premiums. Using data from corn farms in Illinois coupled with Monte Carlo simulation procedures, we found that average crop insurance premiums computed on the basis of the Johnson system provide reasonably accurate estimates even when the data are normal or come from a non-normal distribution other than the Johnson system (i.e., a beta). These results suggest that there is potential for using the Johnson system to rate previously uninsured crops that do not have historical insurance performance data upon which to base premium calculations.

Community-supported agriculture (CSA) operators are becoming more innovative in their efforts to attract consumers to become CSA shareholders. Therefore, CSA operators must understand which attributes consumers value. Using an online survey of Connecticut consumers in conjunction with a choice experiment, we evaluate consumer preference and willingness to pay for various attributes, including risk mitigation. We find younger consumers are more likely to prefer CSAs with organic products, while a greater diversity of products in the CSA share will increase preference for a CSA for some consumers. Further, we find that consumers with and without CSA experience value the risk-mitigation attribute.

This article has used the method of instrumental variables to evaluate the impact of health services on the productivity of rural households’ farming labor in Burkina Faso. The distance from the household's homestead to the Health and Social Promotion Center (HSPC) was considered as an instrumental variable. The results revealed that resorting to a HSPC in case of an unexpected illness in the rainy season significantly improves the farm labor productivity by FCFA 3170.5880 per person-day. For improving agricultural productivity, we suggest that public decision-makers should focus on the availability and the quality of HSPC services in rural areas.

Water-quality markets that allow point-nonpoint trades assume that nonpoint best management practices (BMPs) achieve the targeted reductions as soon as they are implemented. However, changes in water quality in response to BMPs occur over time—from a few months to decades. We simulate emission allocations using static and dynamic-optimization models to determine whether a simple static allocation can produce results comparable economically and environmentally to complex multi-period designs for nitrogen emissions to Chesapeake Bay. We find that static rules provide relatively large cost savings compared to dynamic rules but result in a delay in achievement of water-quality targets.

Asian soybean rust (rust) is an emerging issue in U.S. crop production and was identified in nine states during 2004. Recent farm surveys indicate that many producers are adjusting their management practices to the possibility of a rust infestation. The economic and environmental impacts of such adjustments are not known in the medium run given these new developments. We combine 2005 data on the geographical distribution of the fungal pathogen that causes rust with 2005 information on the availability and material costs of fungicides to analyze three treatment strategies. Our results indicate a higher range of economic impacts than previous research has indicated, but are consistent with earlier findings indicating that rust infestations will likely result in reduced soybean production, reduced exports, and higher prices.

Genetically engineered (GE) soybeans first became available to farmers in 1996. Despite the common questions regarding any new crop technology, the new seeds were rapidly adopted. This study examines the characteristics of adopters, as well as yield and weed control cost changes, using survey results from Delaware farmers at the start of the 2000 season. Duration analysis reveals that earlier-adopting farmers had larger farms and tended to use computers for financial management, while regression analysis shows significantly lower weed control costs and, to a lesser extent, higher yields for GE soybeans.