VTechWorks Repository :: Browsing by Author "Peterson, Everett B."

Browsing by Author "Peterson, Everett B."

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Adoption and Impacts of IPM for Cambodian Rice Farmers
Jackson, Sydni Blaine (Virginia Tech, 2017-11-15)
This study evaluates the adoption and impacts of Integrated Pest Management (IPM) adoption for rice in Cambodia. Extent of adoption and characteristics of adopters are discovered. Farmers are considered high adopters of IPM if they used two non-pesticide or minimal-pesticide practices to control rice insect, disease, weed, or rodent pests in the last twelve months; farmers are considered low adopters if they used one practice; farmers are considered non-adopters if they used zero practices. IPM practices include pest-resistant variety; stale seedbed (sequential harrowing or harrowing followed by a non-selective herbicide); apply Trichoderma on seeds or seedlings, no insecticide spray for the first 40 days; apply bio-pesticides such as neem, Bt, and metarhizium, and Beauvaria; Sarcocystis bait for rodents; hand weeding at recommended growth stage; and/or another practice specified by the farmer. Out of 394 farmers surveyed, 40 (10.15%) were found to be high adopters, 228 (57.86%) were found to be low adopters, and 126 (31.97%) were found to be non-adopters of IPM. IPM practices currently include mostly hand-weeding and no spray for 40 days; few other practices were adopted. Our study reveals a need for broader education on rice IPM throughout Cambodia. The high frequency of pesticide applications among rice farmers, the finding that adoption of IPM was not found to have a meaningful influence on the number of pesticide applications, and the finding that less than one-quarter of farmers in our study have received training on IPM reveal the need for increased knowledge of IPM in Cambodia, and the need for future education on IPM to focus on reducing pesticide use.
Advances in Applied Econometrics: Binary Discrete Choice Models, Artificial Neural Networks, and Asymmetries in the FAST Multistage Demand System
Bergtold, Jason Scott (Virginia Tech, 2004-04-14)
The dissertation examines advancements in the methods and techniques used in the field of econometrics. These advancements include: (i) a re-examination of the underlying statistical foundations of statistical models with binary dependent variables. (ii) using feed-forward backpropagation artificial neural networks for modeling dichotomous choice processes, and (iii) the estimation of unconditional demand elasticities using the flexible multistage demand system with asymmetric partitions and fixed effects across time. The first paper re-examines the underlying statistical foundations of statistical models with binary dependent variables using the probabilistic reduction approach. This re-examination leads to the development of the Bernoulli Regression Model, a family of statistical models arising from conditional Bernoulli distributions. The paper provides guidelines for specifying and estimating a Bernoulli Regression Model, as well as, methods for generating and simulating conditional binary choice processes. Finally, the Multinomial Regression Model is presented as a direct extension. The second paper empirically compares the out-of-sample predictive capabilities of artificial neural networks to binary logit and probit models. To facilitate this comparison, the statistical foundations of dichotomous choice models and feed-forward backpropagation artificial neural networks (FFBANNs) are re-evaluated. Using contingent valuation survey data, the paper shows that FFBANNs provide an alternative to the binary logit and probit models with linear index functions. Direct comparisons between the models showed that the FFBANNs performed marginally better than the logit and probit models for a number of within-sample and out-of-sample performance measures, but in the majority of cases these differences were not statistically significant. In addition, guidelines for modeling contingent valuation survey data and techniques for estimating median WTP measures using FFBANNs are examined. The third paper estimates a set of unconditional price and expenditure elasticities for 49 different processed food categories using scanner data and the flexible and symmetric translog (FAST) multistage demand system. Due to the use of panel data and the presence of heterogeneity across time, temporal fixed effects were incorporated into the model. Overall, estimated price elasticities are larger, in absolute terms, than previous estimates. The use of disaggregated product groupings, scanner data, and the estimation of unconditional elasticities likely accounts for these differences.
Assessing the Impacts of a Special Safeguard Mechanism for Agriculture in the Doha Development Agenda
Weeks, Heather Ashley (Virginia Tech, 2011-01-28)
The agricultural negotiations in the World Trade Organization's (WTO) Doha Development Agenda (DDA) are calling for a specific Special Safeguard Mechanism (SSM) for developing countries that will protect agricultural producers from import surges or price declines, and could potentially add stability to domestic markets. While most of the parameters of this SSM have been decided upon, the DDA negotiations faltered on the issue of whether or not developing nations should be allowed to exceed their pre-Doha bound tariff rates when invoking the SSM. For developing countries, tariffs on agricultural products are an important policy tool to support domestic prices and protect their smallholder producers from global market shifts. Tariffs, however, distort world prices and create global welfare losses. The purpose of this thesis is to assess the impacts of the SSM on global prices and welfare using a non-spatial, synthetic, stochastic, global, partial equilibrium model of the world soybean market. The SSM is assessed in concert with the currently proposed DDA tariff cutting formulas since the additional duties allowed under the SSM are proportional to prevailing bound tariff levels. This study asserts that the SSM actually decreases global price and welfare stability, decreasing world prices of the commodities on which an SSM is placed, though positively affects tariff revenues for those particular commodities. While the SSM may offer a short-term solution for developing countries, its long-term outlook as a price stabilization tool is a not credible argument.
An Assessment of Technical Barriers in Central American Agricultural and Food Trade
Yamagiwa, Takayoshi Jose (Virginia Tech, 2005-04-21)
This dissertation explores technical regulations (sanitary and phytosanitary (SPS) measures, technical barriers to trade, and geographical indications) in Central American agricultural and food trade. In the first part, a framework to systematically evaluate the broad issues for developing countries is presented. Evaluation of the issues for Central America is based on interviews with about 100 persons in the region and in the United States (US), and on secondary sources. The topic is of significance in Central America, especially when related to SPS measures. The World Trade Organization (WTO) Agreements have had relatively little direct impact in improving Central America's response to technical regulations, while homologous Central American regional institutions may have been more successful, with indirect support from the WTO and the US, in reducing the incidence of illegitimate regulations in intra-regional trade. Central America may implement illegitimate barriers more against others in the region than against the US. Although the Central America Free Trade Agreement (CAFTA) may support Central America's capacity to meet more stringent technical regulations, the improvement may not be sufficiently perceptible. The potential for Central American greenhouse tomato exports to the US is analytically evaluated in the second part. These tomatoes may be admitted as the ban based on the risk of introduction of the Mediterranean fruit fly is partially lifted, due in part on discussions in the CAFTA negotiations. Mature green, vine-ripe and greenhouse tomatoes are heterogeneous in demand, and vine-ripe tomatoes are but greenhouse tomatoes are not heterogeneous by origin. A static partial equilibrium model is constructed for the US tomato market, where demand is based on multi-stage budgeting and supply is a function of own tomato price. When the Central American greenhouse excess supply function is introduced to the model, the region exports to the US, the aggregate greenhouse quantity increases, and its prices decrease. As greenhouse preference increases, greenhouse quantity and prices also increase. Changes are perceptible but small in the mature green and vine-ripe markets in the expected direction. Access by Central America is particularly beneficial when US consumer preferences shift further toward greenhouse over other tomatoes.
Basis variability in the feeder cattle contract before and after cash settlement
Currin, Lisa Carol (Virginia Tech, 1993-06-15)
Relationships between the futures price, cash price, and U.S. Feeder Steer Price in the final eight weeks of trading on the feeder cattle futures contract were analyzed. Models were developed to examine continued problems with basis variability in the feeder cattle futures contract. The results of these models indicated that the change from physical delivery to cash settlement and the use of the U.S. Feeder Steer Price as a settlement index for the contract did not improve problems associated with basis variability.
Bridging the Rural - Urban Digital Divide in Residential Internet Access
Whitacre, Brian E. (Virginia Tech, 2005-09-01)
This dissertation explores the persistent gap between rural and urban areas in the percentage of households that access the Internet at home (a discrepancy commonly known as the "digital divide"). The theoretical framework underlying a household's Internet adoption decision is examined, with emphasis on the roles that household characteristics, network externalities, and digital communication technology (DCT) infrastructure potentially play. This framework is transferred into a statistical model of household Internet access, where non-linear decomposition techniques are employed to estimate the contributions of these variables to the digital divide in a given year. Differences in Internet access rates between years are also analyzed to understand the importance of temporal resistance to the continuing digital divide. The increasing prevalence of "high-speed" or broadband access is also taken into account by modeling a decision process where households that choose to have Internet access must decide between dial-up and high-speed access. This nested process is also decomposed in order to estimate the contributions of household characteristics, network externalities, DCT infrastructure, and temporal resistance to the high-speed digital divide. The results suggest that public policies designed to alleviate digital divides in both general and high-speed access should focus more on the broader income and education inequities between rural and urban areas. The results also imply that the current policy environment of encouraging DCT infrastructure investment in rural areas may not be the most effective way to close the digital divide in both general and high-speed Internet access.
The Challenge Of Increasing Global Trade: How To Address Linkages And Barriers
Orden, David R.; Peterson, Everett B. (Virginia Tech, 2008-02-22)
Two specific cases of trade regulation are examined in this presentation. In the case of avocados from Mexico, the U.S. market has been opened following more than a decade of related rule making. Substantial imports now occur. In a second case, China has expressed interest in exporting fresh apples to the United States. There is not a related regulatory process underway, but China received approval to export fresh apples to Canada in 2004.
Commodity price stabilization and trade liberalization: the case of corn and livestock in the Phillippines
Perez, Nicostrato D. (Virginia Tech, 1995)
This study was conducted to analyze the impacts of different trade and pricing policies on the grains and livestock sector in the Philippines. Four trade policy alternatives were evaluated: (a) base 1990 trade policies; (b) full trade liberalization in the grains and livestock sector: (c) a uniform 20 percent import tariff system for both grains and livestock commodities; and (d) price stabilization of rice and corn. Two price stabilization instruments, buffer-stock and variable import levy, two target prices, and two price band band widths were evaluated. The economic surplus measure of costs and benefits was used as the basis for economic efficiency comparisons among the different trade and pricing policies. The study simulated the operations of grains and livestock markets in the Philippines. Supply and risk response parameters were estimated with profit function approach using time-series data on prices, production, and input usage. Food demand elasticities were adopted from previous works in the Philippines. A separate set of demand functions were estimated for corn as livestock feed with the use of pseudo-data generated by varying the prices of the different feed ingredients in a process model of least-cost feed rations of hog and poultry. The ten-year period simulations were iterated 250 times, using world prices of wheat, rice, and corn drawn from their historical price distributions along the trend projected by the World Bank. Results of the study revealed that most economic gains can be attained by shifting to full trade liberalization of grains and livestock markets. With full trade liberalization, the economy gains by importing lower priced corn and producing higher-valued livestock products for domestic consumption and exports. The effect of a uniform 20 percent tariff is similar to that of full trade liberalization, but with lesser economic benefits. On the other hand, due to positive supply response to stabilized prices, there are small economic gains that could be achieved by the operation of a stabilization scheme for rice and corn over trade liberalization. These benefits, however, are offset by the heavy financial exposure required from the government. The variable import levy that defends rice and com prices at average expected world prices gives the best results among the different price-stabilization schemes.
Composition of traders in live cattle futures contracts: behavior and implications to price discovery
Rowsell, John (Virginia Tech, 1991)
The concepts of risk transfer and price discovery are well developed roles for futures markets. The interaction between traders in futures markets in the transferring and acceptance of price risk contributes to the discovery of price. Interaction of traders in the risk transfer and price discovery processes is examined in this dissertation. Data employed were for live cattle futures at the Chicago Mercantile Exchange developed from the confidential daily records of reporting trader positions maintained by the Commodity Futures Trading Commission. The analysis was for the period February 1983 through September 1987. The nearby futures contract price, volume, and open interest series supplement the daily trader position data base.
Demand Estimation with Differentiated Products: An Application to Price Competition in the U.S. Brewing Industry
Rojas, Christian Andres (Virginia Tech, 2005-09-05)
A large part of the empirical work on differentiated products markets has focused on demand estimation and the pricing behavior of firms. These two themes are key inputs in important applications such as the merging of two firms or the introduction of new products. The validity of inferences, therefore, depends on accurate demand estimates and sound assumptions about the pricing behavior of firms. This dissertation makes a contribution to this literature in two ways. First, it adds to previous techniques of estimating demand for differentiated products. Second, it extends previous analyses of pricing behavior to models of price leadership that, while important, have received limited attention. The investigation focuses on the U.S. brewing industry, where price leadership appears to be an important type of firm behavior. The analysis is conducted in two stages. In the first stage, the recent Distance Metric (DM) method devised by Pinkse, Slade and Brett is used to estimate the demand for 64 brands of beer in 58 major metropolitan areas of the United States. This study adds to previous applications of the DM method (Pinkse and Slade; Slade 2004) by employing a demand specification that is more flexible and also by estimating advertising substitution coefficients for numerous beer brands. In the second stage, different pricing models are compared and ranked by exploiting the exogenous change in the federal excise tax of 1991. Demand estimates of the first stage are used to compute the implied marginal costs for the different models of pricing behavior prior to the tax increase. Then, the tax increase is added to the these pre-tax increase marginal costs, and equilibrium prices for all brands are simulated for each model of pricing behavior. These "predicted" prices are then compared to actual prices for model assessment. Results indicate that Bertrand-Nash predicts the pricing behavior of firms more closely than other models, although Stackelberg leadership yields results that are not substanitally different from the Bertrand-Nash model. Nevertheless, Bertrand-Nash tends to under-predict prices of more price-elastic brands and to over-predict prices of less price- elastic brands. An implication of this result is that Anheuser-Busch could exert more market power by increasing the price of its highly inelastic brands, especially Budweiser. Overall, actual price movements as a result of the tax increase tend to be more similar across brands than predicted by any of the models considered. While this pattern is not inconsistent with leadership behavior, leadership models considered in this dissertation do not conform with this pattern.
Determinants of food stamp program exits
Mills, Bradford F.; Dorai-Raj, Sundar; Peterson, Everett B.; Alwang, Jeffrey R. (University of Chicago Press, 2001-12)
This article examines factors that influence Food Stamp Program exits and finds that families who leave the Temporary Assistance to Needy Families (TANF) program are also more likely to leave the Food Stamp Program. However, the influence of TANF departure is smaller in states with large TANF caseload declines. The results also suggest that many families leaving the Food Stamp Program are still eligible for benefits. These families may have poor information on food stamps eligibility in the face of TANF departure or may view Food Stamp Program reauthorization procedures as too costly relative to program benefits.
Effects of Exchange Rate Misalignment on Agricultural Producer Support Estimates: Empirical Evidence from India and China
Cheng, Fuzhi (Virginia Tech, 2005-10-04)
There have been different degrees of exchange rate disequilibrium in the developing countries during recent transition or reform periods. The level of the exchange rate and its misalignment can have significant impacts on agricultural policy measures such as the Producer Support Estimates (PSEs). However, little efforts have been made to explicitly take into account the issue of exchange rate misalignment. In the conventional PSE studies the prevailing actual (nominal) exchange rates are usually used. There is general agreement that the use of actual exchange rates may introduce a bias in the PSE calculations, and that this bias can be substantial when the actual rates are significantly out of equilibrium, but there is much less agreement on the most appropriate alternative. This dissertation proposes a theoretical and an empirical model for estimating equilibrium exchange rates. Within the context of these models, the equilibrium exchange rates are argued to be determined by a group of real economic fundamentals. These fundamentals within this study include technological progress (Balassa-Samuelson effect), levels of government expenditure, world interest rate, net capital inflows, terms of trade, and openness of the economy. Base on various time series techniques and using data from India and China, sensible long-run relationships are identified between the real exchange rate and these economic fundamentals. The long-run co-integrating relationships are used to derive the equilibrium exchange rates and to gauge corresponding misalignments for the currencies in the two countries. The relevance and usefulness of the exchange rate equilibrium and disequilibrium in the calculation of the PSEs for India and China are then discussed. Results from the commodity-specific measures including the Market Price Support (MPS) and the PSE show that agricultural support levels are quite sensitive to alternative exchange rate assumptions. Specifically, exchange rate misalignments have either amplified or counteracted the direct effect on agriculture from sectoral-specific policies. With a few commodity exceptions such an indirect effect in both countries is relatively small in magnitude and dominated by the direct effect. This is also the case when the indirect effect rises substantially as a result of more misaligned exchange rates. Counterfactual MPS measure calculated assuming the exchange rate is in equilibrium with different exchange rate pass-through is also presented. It is shown that when no exchange rate pass-through to domestic prices occurs, the transfer of the indirect effect of exchange rate misalignment into the counterfactual MPS is full. But when there is exchange rate pass-through, even though partially, the transfer of indirect effect is significantly smaller. Results based on the commodity-specific PSE show that the exchange rate effect also depends on the relative importance of different PSE components. In addition to a positive impact on the direct effects measured by commodity-specific PSE compared to those measured by commodity-specific MPS, the increasing share of budgetary expenditures in India's agricultural support in recent years has resulted in more pronounced indirect effects. For China, the exchange rate effects are more similar between the PSE and the MPS measures at the commodity level because of the dominance of the MPS component relative to the budgetary payments in the PSEs. Moving from commodity-specific to aggregate measures, one can observe a similar pattern of agricultural support. However, the exchange rate effect measured by the total PSE appears to be more important: it becomes several times larger in magnitude than the direct effect in periods of severe exchange rate misalignment. The exchange rate effect when the PSE is "scaled up" from covered commodities to an estimate for the total agricultural sector is also demonstrated even though the assumption imposed by scaling-up may be unrealistic if price support is concentrated among those products included in the analysis. Since the commodity coverage in both countries tends to be incomplete and the scaling-up procedure leads to a total MPS component of greater magnitude, larger exchange rate effects are found in the scaled-up than the non-scaled-up version of the total PSEs. The impact of scaling-up on the indirect effect is proportional to the share of covered commodities in the total value of agricultural production. Again for the PSEs at both the commodity and aggregate levels, the counter factual measures indicate a full transfer of indirect effect of exchange rate when no exchange rate pass-through is assumed. A large portion of the indirect effect disappears when incomplete exchange rate pass-through is assumed resulting in a smaller transfer of the effect to the counter factual PSEs.
Effects of Quantitative Restrictions on U.S. Textile and Apparel Imports over 1995-2010: An Analysis using Gravity Models
Kim, Eun Hee (Virginia Tech, 2014-09-18)
The purpose of this study is to examine the effects on U.S. textile and apparel imports of the quantitative restrictions imposed under the Agreement on Textiles and Clothing (ATC) (1995-2005), the post-ATC U.S. safeguard quotas on 21 categories of Chinese textile and apparel products (2006-2008), and no quantitative restrictions on U.S. textile and apparel imports (2009-2010). Data were sourced from the Office of Textiles and Apparel (OTEXA) in the U.S. Department of Commerce, the GeoDist dataset from the Centre d'Etudes Prospectives et d'Informations Internationales (CEPII), and the United Nations Commodity Trade (U.N. Comtrade) database. In this research, three gravity equations were developed and estimated based on the existing gravity model. The first gravity equation was estimated to assess the effects of the independent variables commonly included in gravity models on the total value of U.S. textile and apparel imports from 187 exporting countries with a scaled dependent variable and from 177 without it. The result of the first gravity equation indicated that distance and the per capita GDPs of the exporting countries, exchange rates, and the total GDPs of the exporting countries are statistically significant and have the expected signs in the model with the scaled dependent variable. The second gravity equation was estimated to access the overall effect of the presence or absence of quotas and VERs on U.S. textile and apparel import quantity from the 187 exporting countries. The results from the second gravity model showed that the presence or absence of quotas or VERs is significant and has an unexpected positive sign because the United States tended to impose quotas and VERs on textile and apparel products that it imported in large amounts. The third gravity equation was estimated to assess trade creation and trade diversion effect of the quota and VER levels of U.S. textile and apparel imports with separate equations by product types considering the endogeneity by applying instrumental variables. The result from the third gravity equation showed that the quota and VER level is significant for fabric, apparel, and made-up products with expected signs but the variable is not significant for yarn products. These findings suggest that U.S. textile and apparel imports from the exporting countries limited by quotas and VERs on U.S. textile and apparel imports increased more than rest of world (ROW) imports from those countries as the quota and VER levels on U.S textile and apparel imports increased. Therefore, trade creation occurred between the United States and the exporting countries as the total SME quota or VER levels on those imports increased during the ATC and safeguard period. However, these findings show the demand of yarn as intermediates does not increase much in the United States; therefore, the increase of the total yarn quota or VER level has less of an effect on the yarn imports than other product types.
Effects of tariffs and sanitary barriers on high- and low-value poultry trade
Peterson, Everett B.; Orden, David R. (Western Agricultural Economics Association, 2005-04)
A competitive partial-equilibrium spatial model with heterogeneous goods is constructed to evaluate effects of the removal of tariffs, tariff-rate quotas, and sanitary regulations on world poultry trade. The model distinguishes between "high-value" (mostly white meat) and "low-value" (mostly dark meat) poultry products and simulates the trade flows among eight exporting and importing countries and regions. Removing all barriers simultaneously has a larger impact on trade than removing only tariffs and tariff-rate quotas. Imposition of sanitary barriers against U.S. products by Russia shifts trade flows, but does not have large net impacts on U.S. producers.
An Empirical Assessment of the Effects of SPS Regulations on U.S. Fresh Fruit and Vegetable Exports
Ramniceanu, Radu (Virginia Tech, 2011-12-06)
A fundamental requirement in agricultural trade is that imported products are safe, and do not pose a risk to human, animal and plant health. To address this issue, all countries maintain measures to ensure that imported food is safe for consumers, and to prevent the spread of disease among animals and plants. These measures, by their nature, can affect competitiveness by increasing the costs of imports or prohibiting them altogether. To ensure that these measures are used for their intended purpose and not as protectionist measures, WTO member countries signed the Agreement on the Application of Sanitary and Phytosanitary measures. A growing number of studies attempt to quantify the effects of SPS regulations on international trade flows. However, precious little research is dedicated to determining the effects of specific phytosanitary regulations on trade flows and, more importantly, questions regarding SPS regulations and their impact as "trade barriers" or "trade catalysts" remain to be settled. This thesis contributes to existing literature in two ways. First, a comprehensive and user friendly database on specific phytosanitary regulations faced by U.S. exports of onions, peas, walnuts, apples, cherries, grapes, peaches/nectarines, oranges and strawberries to 176 countries is developed for the period 1999-2009. Second, this database is used for an empirical investigation to determine how existing SPS regulations affect U.S. fruit and vegetable exports. The results indicate that initially, phytosanitary treatments act as "barriers" to trade. However, as exporters' experience grows, the negative impact of treatments is reduced and eventually eliminated.
Empirical Essays in Industrial Organization: Application in Airline and Automobile Industries
Bhattacharjee, Prasun (Virginia Tech, 2011-05-24)
This dissertation consists of three essays in empirical industrial organization with applications in U.S. airline and automobile industries. Chapter 1 motivates the aim of this dissertation with a brief summary of the main goals and findings of the subsequent chapters. The main focus of this dissertation is to higlight the changing environments in the U.S. airline and automobile industries in recent years and investigate their implications for the nature of industry competitiveness. Following the recession of 2000 and post 9/11 events, the U.S. airline industry has undergone major restructuring which has defined the way airlines compete today. Chapter 2 of this dissertation explores the impact of the presence of Low Cost Carriers (LCCs) on consumer welfare in this newly restructured market environment. Previous studies on LCC competition have not addressed the welfare issue and have only been limited to impact of LCC entry on average airfare. Departing from previous literature, this question is posed using a discrete choice model of demand for differentiated products. In chapter 3 we use a structural oligopoly model for differentiated products similar to chapter 2 to unveil the nature of conduct that exists in markets with endpoints which qualify as hubs of legacy carriers. In contrast to previous literature on airline hub market conduct, this chapter investigates the nature of conduct that exists in markets defined exclusively by network carrier hubs as a whole group incorporating product differentiation in the model framework. Finally chapter 4 uses the same methodological framework outlined in chapter 3 to explore the importance of frequent incidence of manufacturer incentives in shaping market conduct in the automobile industry. Unlike past literature on automobile market conduct, this is achieved using proprietary dealer level average transaction price data obtained from J.D. Power and Associates (JDPA) with a focus on the Big Three automakers. Specifically we use the widely successful Employee Discount Pricing (EDP) promotional program of 2005, the first of its kind, as a backdrop to identify changes in the nature of short run conduct among the Big Three that might be signalled by such promotional programs.
Essays on Risk and Uncertainty in Greenhouse Gas Trading Markets
Grover, Mansi (Virginia Tech, 2005-09-07)
A large number of concepts related to carbon offset trading policy are currently being discussed such as baseline, leakage, permanence, monitoring, verification, enforcement, financial feasibility, and third party verification. Cutting across these concepts are a variety of risks and uncertainties. These risks play a major role in developing effective market designs that achieve aggregate emission caps while encouraging market participation and investment in carbon reduction activities. What are the risks associated with carbon offset policy and how do such risks affect incentives for investing in carbon offsets? A literature review of carbon trading risks is developed. Risks associated with carbon offsets policy can be classified into three major categories: institutional/policy, project level and measurement risks. Institutional/policy risks are related to uncertainties surrounding the future policy decisions and the institutional arrangements established to define baselines, stipulate monitoring/enforcement requirements, and define and estimate leakage. Baseline estimates are necessary to calculate the net carbon reduction of a program or project. Monitoring/enforcement risk is associated with the regulators' ability to detect whether the promised carbon sequestration activities are undertaken. Leakage occurs when carbon sequestration at one site encourages increase in carbon emissions on some other site. Project risk refers to non-performance of a carbon sequestration project in terms of not achieving the requisite target of carbon sequestration. Project risk includes physical risk and financial risk. Physical risks are associated with unexpected carbon emissions due to natural hazards or events such as fire, or hurricanes or changes in the rate of sequestration, which depend on weather and pests. Landowners will not participate in carbon sequestration programs if they expect to incur financial losses by participating. Measurement risk arises because it is difficult to measure actual rates of carbon sequestered due to spatial and temporal heterogeneity of carbon present in agricultural and forest production. Forests are a principal carbon "sink" for sequestering carbon from the atmosphere. The provision of trading emission rights under the Kyoto Protocol will provide forest landowners the opportunity to reap financial gains from sequestering carbon and trading rights to emit carbon in carbon permit markets. However, landowners may be liable for repaying all or some of the proceeds received for sequestering carbon if stored carbon is released during the contract period. Hurricane damage to forests may cause extensive mortality and subsequent emission of carbon dioxide from decomposing biomass. Such liabilities may reduce landowners' incentives to sequester carbon. This research evaluates incentives of an individual forest landowner for sequestering and trading carbon, given the risk of carbon loss from hurricanes. Results of our simulation model reveal that the effect of hurricane risk on landowners' behavior depends on the variability of returns from carbon and timber and the ability of landowners to mitigate risk by diversifying forest holdings across regions with different sequestration rates and different hurricane strike probabilities. Some risk mitigation strategy might be required to create the necessary incentives for landowner participation especially in hurricane prone regions. We evaluate incentives of forest landowners for sequestering and trading carbon, given the risk of carbon loss from hurricanes, and an opportunity to insure their losses. Results of simulation model reveal that the effect of hurricane risk depends on the variability of returns from carbon and timber and landowners' ability to mitigate risk by diversifying forest holdings across regions or transferring risk by purchasing insurance. Although, landowner can spread the risk of carbon loss by diversifying into different regions, insurance has a role to play over and above diversification by reducing landowners' risk (variance) from forestry investments for sequestration and timber purposes, even when timber losses are not insured.
Essays on the Political Economy of Domestic and Trade Policies in the Presence of Production and Consumption Externalities
Schleich, Joachim (Virginia Tech, 1997-08-01)
This dissertation extends the Grossman-Helpman models of endogenous trade policy formation to incorporate local and global production and consumption externalities, and to allow governments to choose domestic production or consumption policies together with trade interventions. The models presented are among the first to allow environmental quality and the structure of industry protection to be simultaneously evaluated in a political economy framework, when some industry groups lobby their governments for higher output prices. The equilibrium tax and subsidy policies are implicitly expressed as the sum of distinct political support, terms-of-trade, and local and global environmental effects. Whether these effects reinforce or counterbalance each other depends on whether an industry is organized, whether the good is imported or exported, whether the externality is caused by production or consumption, and, in the large-country models, on whether governments set policies noncooperatively or cooperatively. The model results imply a political economy version of Bhagwati's normative targeting principle: governments use the most efficient policy available to satisfy the lobbies, to address the externalities, and, in the noncooperative large-country model, to exploit international market power. All of the initial Grossman-Helpman results (for the small-country model and the noncooperative and cooperative large-country models) are shown to be special cases where governments have only trade policy available and there are no externalities. In the small-country model and the cooperative large-country model, when there are production externalities, the lobbying of a polluting industry usually leads to lower environmental quality than socially optimal, but with terms-of-trade effects or for particular preferences cases the equilibrium policies may induce environmental quality higher than socially optimal. When there are consumption externalities, and the government has consumption (or production) as well as trade policy available, environmental quality will be socially optimal (again, unless governments exploit market power). Thus, depending on the policies available, a local or global consumption externality will be fully internalized, even though polluting industries lobby and production may be distorted. This dissertation also shows that--in contrast to standard economic theory--the use of trade policy alone can lead to higher environmental quality than a more direct domestic policy alone.
Ethnicity and Clothing Expenditures of U.S. Households: A Structural Equations Model with Latent Quality Variables
Plassmann, Vandana Shah (Virginia Tech, 2000-08-29)
The main objective of this study was to determine the relationship between household characteristics and the expenditure shares allocated among various categories of women's clothing for U.S. households belonging to different ethnic groups. The study also estimated unobserved latent quality variables based on household characteristics, and examined the effects of the latent quality variables on the expenditure shares for the various apparel categories. A Multiple Indicator-Multiple Cause Model, which is a special case of the general Structural Equations Model, was used to estimate separate Engel equations for 15 expenditure shares for women's clothing categories, for four different ethnic groups. The results of the study showed that household characteristics had a significant impact on the latent quality variables associated with different categories of women's clothing, and the latent quality variables themselves impacted the clothing expenditure shares. Also, for different ethnic groups, household characteristics had differing effects on women's clothing expenditure shares. Of all the characteristics examined, annual total household expenditures and numbers of children and adults in the household had significant effects on the largest numbers of latent quality variables associated with the clothing categories for the four ethnic groups. The socio-economic variables also significantly affected several clothing expenditure shares for the four ethnic groups. These results imply that socio-economic variables impact consumers' quality choices, and presumably prices paid, for women's clothing. The results support the conclusions of Paulin (1998), and Wagner and Soberon-Ferrer (1990), in that different ethnic groups have distinct expenditure patterns possibly due to differences in socio-economic characteristics; such characteristics may signify resources and constraints faced by a household. The distinct expenditure patterns and tastes of the four ethnic groups are reflected in the significantly different effects of annual total expenditures on the expenditure shares for each category of women's clothing, as well as in the significantly different effects of the latent quality variables on several expenditure shares, for the four ethnic groups.
Evaluating the Trade Impacts of Bovine Spongiform Ecephalopathy (BSE) Using Historical Simulations
Peterson, Everett B.; Grant, Jason H.; Sydow, Sharon (Virginia Tech, 2017-10)
In December of 2003, the US Secretary of Agriculture announced the presence of Bovine Spongiform Encephalopathy (BSE) within a cow in the state of Washington. The announcement prompted the stoppage of beef imports by some of the US’s largest traditional beef trading partners, resulting in sizeable losses to industry. While this was the first confirmed case of BSE reported in the United States, the international policy response was significant in nearly every major U.S. beef export market. NAFTA partners Mexico and Canada opened their markets to U.S. beef rather quickly following the announcement. However, other markets, including many of the top US export destinations such as Japan, Korea, Taiwan and China, remained closed for much longer periods and China’s market remained closed until September 2016. In this paper, a partial equilibrium model of global meat production and trade is developed to conduct a series of historical simulations over the period 2001 to 2013 to capture the observed impacts of the BSE outbreak on global meat trade. Then a set of counter-factual experiments are constructed that adjusts the changes in preferences and technical change in the historical simulation to determine what beef meat trade would have looked like if the BSE outbreak had not occurred. Over the 2004-2013 period, total US beef exports would have been approximately 2 million metric tons higher and the total value of beef exports would have been $6.1 billion higher if the BSE outbreak had not occurred. Canadian beef exports would also have been 350,000 metric tons higher and with the total value of exports increasing by $1.7 billion if the BSE outbreak had not occurred. Conversely, the value of beef exports from Australia, New Zealand, the EU, and South America would have be substantially lower.

Browsing by Author "Peterson, Everett B."

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