Over the past fifty years, several different types of publicly sponsored programs have been devised by state and local governments for the express purpose of encouraging owners to maintain land in an agricultural use. Although these units of government can, and do, wield considerable police power or regulatory influence, most attention has been given to voluntary, incentive-based approaches. First-generation programs were developed beginning in the mid-1950s, with state legislation centered on the provision of direct cash benefits via reduced property tax levies on farm real estate (Tremblay et al. 1987).

This paper explores the emerging concept of place-based economic policy. It reviews recent literature on place-based economics policy, especially regional competitiveness policy, and explores the adoption and diffusion of this concept by economic development practitioners and social science researchers. It attempts to answer the question: Are place-based economic policy and the underlying conceptual foundations lasting innovations, or are they fads which economic development practitioners and social scientists will adopt until another fad emerges? The conclusion is that economic development practitioners and social scientists do tend to respond to fads. To ensure that regional economic development policy is not dominated by fads, social scientists must get out in front of economic development practitioners far enough to thoroughly develop and test regional competitiveness and other place-based economic theories.

Many observers have suggested that tax policy can be used to change the relative prices of foods in ways that will produce desirable health outcomes. We briefly review the economic evidence regarding such claims, and discuss several conceptual and pragmatic issues surrounding the use of such interventions to achieve public health objectives.

Biofuels such as ethanol and biodiesel are increasingly promoted as green alternatives to petroleum-derived transport fuels. Scaling up feedstock production to produce enough biofuel to displace a significant portion of current petroleum demand will put pressure on land and water resources both domestically and internationally, however, and could potentially be accompanied by unacceptable changes in landscape-level land use patterns and provisioning of ecosystem services. Ensuring that feedstock production is sustainable and that biofuels provide the social and environmental benefits that are often attributed to them will require a carefully designed portfolio of agricultural, forestry, energy, and trade policies related to biofuels and feedstock production. Despite the difficulties associated with development and application of such policies, they should be in place before further policy incentive is provided for expansion of biofuel industries.

Export base theory, which posits that overall regional growth is a function of external sales of locally produced goods and services, dominates economic development practice. But the consumption base can also serve as a growth driver, especially in small towns and rural areas. Local investments may induce residents to divert expenditures into local purchases, attract new and footloose residents and tourists, and revitalize aging town centers. A consumption base approach is not reducible to import substitution, but seeks to serve latent demand and alter the broad portfolio of goods and services purchased locally. I present the analytics for a consumption base theory and demonstrate how cultural investments prompt regional growth, emphasizing the role of artists as catalysts. Three types of arts and cultural investments are explored: artists’ centers, artists’ live/work spaces, and performing arts facilities, with examples from rural and small town settings. I conclude with rural cultural strategy recommendations.

This study uses locally weighted regression to identify county-level characteristics that serve as drivers of creative employment throughout the southern United States. We found that higher per capita income, greater infrastructure investments, and the rural nature of a county tended to promote creative employment density, while higher scores on a natural amenity index had the opposite effect. We were also able to identify and map clusters of rural counties where the marginal effects of these variables on creative employment density were greatest. These findings should help rural communities to promote creative employment growth as a means of furthering rural economic development.

A proposed Yield Reserve Program designed to compensate farmers for any reduced yields resulting from nitrogen (N) application rates reduced to below recommended rates is evaluated. Assuming that farmers currently follow Extension recommendations for applying N, Yield Reserve Program participation reduces expected net revenue by $10 to $13/ha. The Yield Reserve Program reduces expected net revenue by $17 to $20/ha for farmers who apply N to maximize expected net revenue. Farmers' costs of participation increase with lower probabilities of inadequate rainfall and higher corn prices and decline with higher N prices. The Yield Reserve Program can significantly reduce N applications to cropland, which may reduce N content of surface waters, but the costs to taxpayers and farmers will depend on how the program is implemented.

Using data from a survey of Pennsylvania food processors, we investigate what firm-level characteristics make a processor more or less likely to buy agricultural inputs and ingredients though contracts. We find that over 20 percent of Pennsylvania processors use contracts, and over 44 percent of agricultural inputs (based on value) are purchased under contract. We also analyze the two related questions of what firm attributes, attitudes, or other factors make a firm more likely to use contracts at all, and what factors lead a processor who does contract to use them more intensively.

While historians believe that preserving a historic building in its original location is important to maintain its historic integrity, the general public's opinion is unknown. Survey data were gathered from local residents regarding a proposed relocation of a historic mill in rural West Virginia. Only a minority of the sample population supported preserving the mill at its original location. Willingness to pay for preservation was estimated at $8.45 for a one-time donation for the sample and $2.29 after adjusting for non-respondents using characteristics of the local population.

Nearly all applied research on arts activity has examined phenomena in metropolitan areas. Findings from this past research confirm an arts specialization in a limited number of cities. This paper finds a similar pattern in nonmetropolitan areas, where a limited number of counties maintain or develop a distinct specialization in the arts. We document the emergence of these “rural artistic havens” and identify county characteristics associated with the attraction of performing, fine, and applied artists. The implications of these findings for rural development strategies focusing on the arts are discussed.

This paper focuses on estimating the effects of the real FDI-weighted exchange rate on real U.S. foreign direct investment (FDI) in the global processed food industry. We use a straightforward production possibility framework as our theoretical basis to demonstrate the shift of production between countries on the basis of exchange rate fluctuations. The log-log regression model, derived from the theoretical model, gives statistically robust results to show that for the years 1983 to 2002, the exchange rate fluctuations, the level of fixed capital in the U.S. food industry, and the cost of materials in both the United States and abroad were major determinants of the stock of U.S. FDI in the global processed food industry. As the dollar appreciated, U.S. FDI increased. An overall conclusion is that countries with an undervalued exchange rate will experience increased FDI. Countries with overvalued exchange rates incur costs from lost export opportunities for domestic firms as well as discourage FDI.

This paper examines the effects of local workforce creativity on county-level earnings. Descriptive analysis of the data shows that most of the high-creativity counties in the United States are part of metropolitan areas, and that employee earnings are high in these places. Regression results indicate that, other things being equal, workforce creativity enhances county-level labor earnings. However, the returns to creativity that we found can be confirmed only in the urban context. An extension of the analysis suggests that the creative workforce wage premium may be capturing the effects of “technical workforce creativity” on earnings.

Nonparametric techniques are frequently applied in recreation demand studies when researchers are concerned that parametric utility specifications impart bias upon welfare estimates. A goal of this paper is to extend previous work on nonparametric bounds for welfare measures to allow for measurement errors in travel costs. Haab and McConnell (2002) state that issues in travel time valuation continue to be topical in the recreational demand literature. This paper introduces a bootstrap augmented nonparametric procedure to precisely bound welfare when price data contains measurement error. The technique can be extended and becomes more convenient relative to other approaches when more than two site visits are made by a single recreationist. These techniques are demonstrated in a Monte Carlo experiment.

E-commerce represents both threats to and opportunities for rural communities. This study addresses one element of the issue: farmers’ willingness to substitute online merchants or national farm input stores for local businesses. Results of a conjoint analysis of contingent choice experiments suggest that farmers are willing to purchase from online or national stores outside their communities if compensated with lower prices or greater services. Results also demonstrate that the context of the input purchase, such as time constraints, was very important not only in valuing these services, but, more broadly, in terms of the farmer's loyalty to a local merchant.

A fixed-effects panel data demand model for five New York State markets is estimated to determine the differential impacts of generic fluid milk advertising by media type. Empirical results indicate that among the four media outlets, television advertising has the largest impact on per capita demand, followed by radio, outdoor, and print. Based on the estimated media-specific elasticities, media reallocation of advertising expenditures suggests that milk sales could increase significantly. The results indicate that cooperative media plan strategies developed between the New York regional advertising program and the national advertising programs would achieve the greatest benefits.

The search for engines to power rural economic growth has gone beyond the traditional boundaries of the food and fiber sector to industries such as tourism and to schemes such as attracting metropolitan workers to commuter communities with rural amenities. A group that has been somewhat overlooked is retirees, who may wish to trade in urban or suburban lifestyles for a more peaceful rural retirement. An industry that has been neglected is the health care industry, which is the most rapidly growing industry nationally and of particular interest to retirees and aging populations. This paper examines the importance of rural health care services in attracting migrants age 65+ to rural counties in Michigan. Results indicate that the number of health care workers has a positive effect on net in-migration, and that this effect is large and statistically significant for the 70+ age group. Implications for rural development strategies are discussed.

This paper presents the methodology, assumptions, and data used to generate regional and national environmental benefit estimates of the USDA's Conservation Reserve Program (CRP). It's assumed that, without the program, production and conservation practices on CRP lands would be the same as those used on surrounding lands. When range and forest lands are (are not) included as land-use options, 54 (71) percent of the CRP land would be in crop production—which is consistent with past analyses. Soil erosion would be 222 to 248 million tons per year—about 11 percent—higher than the current level. Benefits are estimated by applying environmental benefit models, estimated in previous analyses, to the CRP's estimated effect on erosion and wildlife habitat. Nationally, the CRP is estimated to provide $1.3 billion in annual benefits, which represents 75 to 80 percent of the program's cost. In seven of the 10 USDA Farm Production Regions, the CRP's environmental benefits exceed costs. Thus, reallocating acreage to these regions could increase net program benefits. However, because many benefits could not be estimated, one cannot conclude that regional and national benefits do not exceed costs.

This paper presents a model of economic behavior that explicates the phenomenon known as “orderly marketing,” which was a main objective of the Marketing Orders agricultural program introduced early in the New Deal. Recent analyses of marketing orders start with an implicit assumption that there is no market failure—thus, that price regulation can cause only deviations from the first-best market solution. However, historical evidence suggests that disorderly marketing might refer to a kind of market imperfection. In the model presented here, a monopsonist processor sets a price to be paid, and an aggregate quantity to be purchased. In some states of the world, some farmers are excluded from the market. In other words, nonprice rationing can occur, and changes in consumer expenditure for the final product are absorbed by the processor rather than passed along to the farmer. The classified price and pooling provisions of federal orders can lead to a Pareto improvement in welfare.

Patterns of economic growth in rural Appalachia are examined with a focus on natural and built amenities. While the literature is clear that rural areas endowed with scenic beauty, lakes, forests, and wildlife, among other natural amenities, and coupled with built amenities such as golf courses, are experiencing robust economic growth. It is not clear if these patterns extend to rural Appalachia. In this applied research study we use data for rural U. S. counties. We estimate an augmented Carlino-Mills growth model with specific attention to growth patterns of Appalachia. We also build on the empirical modeling by adopting a Bayesian Modeling Average (BMA) approach to address the problem of model specification. We find that while there are some commonalities across the whole of the United States, the country is sufficiently heterogeneous that impact of amenities or other policy variables may be significantly different depending on where one is within the country. Our results suggest that while non-metropolitan Appalachia tends to follow national trends, there are sufficient differences that warrant special attention.