Over the past three decades or so, emissions trading has evolved from an idea that was little more than an academic curiosity to its current role as the centerpiece of the U.S. program to control acid rain and international programs to control greenhouse gases. This essay identifies some of the key milestones of this evolution, describes how that evolution was shaped by economic analysis, elicits some of the lessons about the design and effectiveness of emissions trading that have emerged from analysis of that evolution, and points out a few of the barriers that lie in the path of achieving a truly global carbon market.

This paper surveys the literature on pollinator declines and related concerns regarding global food security. Methods for valuing the economic risks associated with pollinator declines are also reviewed. A computable general equilibrium (CGE) approach is introduced to assess the effects of a global catastrophic loss of pollinators. There appears to be evidence supporting a trend towards future pollinator shortages in the United States and other regions of the world. Results from the CGE model show economic risks to both direct crop sectors and indirect noncrop sectors in the economy, with some amount of regional heterogeneity.

The notion of industrialized agriculture has been a dominant theme in the applied economics literature. More recently, the debate has entered the realm of organic agriculture, with some suggesting that the organic sector has strayed from its agrarian roots. The terms “industrial” and “agrarian” are widely used, yet few have given precise definitions of what the terms mean. This paper puts forth testable hypotheses for agrarian and industrial agriculture. Then, using census data from the 2008 Organic Production Survey, we examine the evidence to assess whether the organic farm sector fits an agrarian or industrial model. Overall the evidence is mixed, yet suggests that the organic sector is less agrarian than expected.

During the farm crisis of the 1980s we began to better understand the inherent faults of an industrialized food system. Despite large gains in productivity, efficiency, and economies of size, thousands of farms were in foreclosure. Many farmers were overly extended in debt. Others were in trouble because of a combination of factors such as drought, low crop prices, high input prices, and the lack of competition in the marketplace. The end result was the loss of thousands of farmers and a subsequent decline in many rural communities.

At the same time, a new vision of an enduring agriculture emerged. It was called sustainable agriculture. This new paradigm became attractive because it focused on solutions to the problems of the day. Sustainable agriculture offered hope to farmers that were willing to differentiate their product and add value to it, deal with ecological costs by using sustainable best management practices, and work to create equity in food system employment. Forming new links with consumers is enabling farmers to set their prices, and consumers are willing to pay to know more about their food.

The extent of forage purchasing behavior in milk production and its impact on profitability are analyzed using data from the 2000 and 2005 dairy versions of the Agricultural Resource Management Survey. Forage outsourcing is more common with hay than with silage and haylage, and is more prevalent in the western United States. Though silage and haylage outsourcing is found to impact profitability, the major profitability drivers appear to be farm size and efficiency. Evidence of significant forage contracting is found in the western United States.

Using an augmented profit function framework designed to account for externalities related to chemical use in agriculture, this paper explains the chemical use choices of farmers in an urban fringe farming environment. It further estimates empirical logit models of reduced insecticide, fungicide, herbicide, and fertilizer usage. Results suggest that farmers who perceive their regulatory environment to be strict, who have experienced right-to-farm conflicts, and who have farms larger in size are more likely to reduce their chemical use over time, vis-à-vis other farmers. The results also suggest the importance of other farm structural and business climate factors in determining chemical use reduction choices.

The primary objective of this study was to assess the impact of catfish imports and tariffs on the U.S. catfish industry, with particular focus on the U.S. International Trade Commission ruling on Vietnam in 2003. Given the importance of Vietnam to the U.S. catfish market, it was assumed that catfish import prices would increase by 35 percent if the maximum tariff was imposed on catfish from Vietnam. With the tariff, domestic catfish prices at the wholesale level would increase by $0.06 per lb, and farm prices by $0.03 per lb. Processor sales would increase by 1.66 percent. Total welfare at the wholesale level would increase from $69.2 million to $71.7 million, an increase of about 3.63 percent, and processor and farm revenue would increase by 4.4 percent and 5.8 percent, respectively. These results represent the greatest possible benefit and suggest modest gains for the U.S. catfish industry.

Using agricultural preservation priorities derived from an analytical hierarchy process by 23 conservation experts from 18 agencies in the state of Delaware, this research uses weighted benefit measures to evaluate the historical success of Delaware's agricultural protection fund, which spent nearly $100 million in its first decade. This research demonstrates how these operation research techniques can be used in concert to address relevant conservation questions. Results suggest that the state's sealed-bid-offer auction, which determines the yearly conservation selections, is superior to benefit-targeting approaches frequently employed by conservation organizations, but is inferior to the optimization technique of binary linear programming that could have provided additional benefits to the state, such as 12,000 additional acres worth an estimated $25 million.

The Livestock Mandatory Reporting Act (MPR) of 1999 was implemented in April 2001. Empirical evidence indicates a significant change in intra-week price dispersion associated with publicly reported fed cattle grid premiums and discounts occurring after MPR implementation.

The research objective is to evaluate the effect of increased market transparency resulting from implementation of MPR, on grid intra-week premium and discount dispersion levels. Empirical results suggest that increased transparency is compatible with intra-week dispersion levels increasing. Increased dispersion suggests that during the pre-MPR period weekly premium and discount data may have been drawn from a non-representative sample. From the empirical evidence, it is concluded that reform of the livestock price-reporting system appears to have been necessary in the case of publically reported grid premiums and discounts.

A growing number of hotels provide “green” lodging for travelers with strong environmental preferences. Twelve states have developed certification programs to regulate these claims. After describing the new market for green lodging, we use data on prices and amenities of “green” and “brown” hotels in Virginia to estimate a hedonic model of hotel room pricing. We find that travelers can expect to pay a significant premium for a standard room in a green hotel. An internal meta-analysis is used to evaluate the robustness of this result to subjective econometric modeling decisions. Our results indicate a premium between $9 and $26.

Hedonic prices are estimated for summer and winter rentals for vacation houses located near a lake and ski-golf resort in rural western Maryland. Regressions for weekly rents are conditioned on house size, quality, and recreation features including lakefront proximity and ski-slope access. Percentage effects and marginal implicit prices indicate that access to recreation is reflected importantly in rental offers. Evaluated at the means, lakefront locations command a premium of $1,100–1,200 per week, and the premium for ski-slope access is $500–600 per week. Unit recreation values are about $18 per person per day for a lakefront location with a private dock and $7 per person per day for a ski-slope location. There are small differences in the unit values for three real estate management agencies. Although there is evidence of spatial correlation in ordinary least squares residuals, estimation of spatial-lag and spatial-error models does not yield substantial changes in the empirical results.

This paper explores the role of managerial ability in determining efficiency in New York dairy farms. Using an unbalanced panel of farm data from 1993 through 2004, we estimate outputoriented technical efficiencies using stochastic distance frontier functions. We find that both lagged net farm income and farmers’ own estimates of the value of their labor and management as proxies for managerial ability impact measured efficiency. Efficiency increases with operator education, farm size, and extended participation in a farm management program, but decreases with operator age.

Had only a farm program like the new ACRE state revenue program existed instead of the authorized 1996–2008 programs for com, soybeans, and wheat, farm support expenditures would have occurred earlier but totaled less. In contrast, at the higher prices forecast for the three crops over the 2009–2012 crop years, spending per acre is expected to be higher for acres enrolled in the ACRE program than for acres enrolled in the traditional programs. These results reflect the different design features of the two programs: revenue versus price assistance and assistance levels that adjust with lagged market revenue versus fixed nominal support triggers. The design issues and policy questions raised for both domestic policy considerations and WTO compliance are discussed.

Using unique panel data on individual transactions between buyers and sellers in the spot market for live hogs, we found a large degree of intra-day price dispersion. Motivated by this empirical puzzle, we offer an explanation which is rooted in the bargaining with search theory. We formulate three hypotheses involving the role of farmers’ search cost, bargaining parties’ patience, and asymmetric information that we believe can explain the observed phenomenon. Empirical analysis shows strong support for all three of the stated theoretical predictions, indicating that the bargaining with search theory explains at least 31 percent of the observed intra-day price variation in this market.

Recent survey data are examined to improve current understanding of the factors that help to determine the value of information reported on a website that serves as the centerpiece of the USDA's “Soybean Rust Integrated Pest Management—Pest Information Platform for Extension and Education.” Respondents’ initial beliefs about their chances of experiencing a rust outbreak are shown to affect the likelihood that soybean producers will visit the website and change their management of fungicide use as a result.

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.

Rural broadband infrastructure and service has received a significant amount of funding through the American Recovery and Reinvestment Act of 2009. These funds should increase broadband availability, but will broadband be used in rural areas and in particular by farmers? This paper uses Agricultural Resource Management Survey data to investigate why the majority of U.S. farmers choose not to use the Internet in their farm business. Although frequently cited by policymakers, concerns about inadequate Internet service or security actually account for a small percentage of responses. This research identifies targeted educational programs that focus on alleviating perceived barriers to Internet use.