Data on costs and benefits of the major environmental laws passed during the 1970s are reviewed. The winners in terms of benefit-cost analysis include: getting lead out of gasoline, controlling particulate air pollution, reducing the concentration of lead in drinking water, and the cleanup of hazardous waste sites with the lowest cost per cancer case avoided under Superfund. The losers include: mobile source air pollution control, water pollution control, and many of the regulations and cleanup decisions taken under the Federal Insecticide, Fungicide, and Rodenticide Act, the Toxic Substances Control Act, the Safe Drinking Water Act, and Superfund.

Selfishness of preferences alone will not support the coordination necessary for the industrialization of the food system. Social capital relationships of mutual sympathy (caring) yield socio-emotional goods that are important in the more personal business world of evolving incomplete contracts and alliances involving input suppliers, processors, and labor. Relationships are also critical when consumers are buying image as well as physical products. Management and policy alternatives constitute investment in social capital that can affect opportunism, risk, loyalty, and trust.

I found this paper to be quite interesting and thought provoking, which is the norm when Allan Schmid is involved. For years, he has provided our discipline with considerable intellectual stimulation. There is a lot of “meat” in the paper, and I will not be able to address all of it in the limited space. What I would like to do is (a) put this issue in the context I use in a graduate class to show where I think social capital fits in the standard economic concepts, and (b) emphasize some of Schmid's points.

Using farm data from three dairy-dependent communities in Wisconsin, this study addresses the question: Do small farms spend more locally than large farms? The work develops a theoretical model of farm cost functions with transaction costs varying between local and distant input sources. This model is then tested econometrically, describing farm costs and where they were spent as a function of transaction/search costs and farm characteristics. The results suggest that scale does matter to farm spending patterns.

Policy makers often face the problem of evaluating how water quality affects a region's economic well-being. Using water clarity as a measure of the degree of eutrophication levels (as a lake becomes inundated with nutrients, water clarity decreases markedly), analysis is performed on sales data collected over a six-year period. Our results indicate that water clarity has a significant effect on prices paid for residential properties. Effects of a one-meter change in clarity on property value are also estimated for an average lake in four real estate market areas in New Hampshire, with effects differing substantially by area. Our findings provide state and local policy makers a measure of the cost of water quality degradation as measured by changes in water clarity, and demonstrate that protecting water quality may have a positive effect on property tax revenues.

The number of meat recalls has increased markedly in recent years. This research examines the impact of beef and pork recall announcements on nearby daily live cattle and lean hog futures market prices, respectively. Results indicate medium-sized beef recalls that are of serious health concerns have a marginally negative impact on short-term live cattle futures prices. However, results are not robust across recall size and severity. This research suggests that if there is any systematic change in cattle and hog demand due to meat recalls, it likely occurs over an extended period of time and only in certain cases does it noticeably affect daily futures prices.

This study examines the effectiveness of price versus nonprice promotion programs for U.S. poultry exports. A comparative static simulation framework is specified for this purpose. The elasticities needed for the simulation model are estimated using seemingly unrelated regression and time-varying parameter regression techniques. Results from this study indicate that a price subsidy is more effective than nonprice market promotion programs in raising export demand for U.S. poultry.

Consumption of lowfat and skim milk has increased substantially over the past decade. This study investigates whether the change is due to price and expenditure effects or to a more fundamental preference change in milk demand. Parametric and nonparametric analytical approaches provide a comprehensive analysis of structural change in milk consumption in New York State. A nonparametric approach first finds evidence of structural change. A parametric likelihood-ratio test then confirms the existence of structural change using a Kalman filter specification. The value of this technical analysis of milk preferences is its implication for labeling initiatives. Milk fat labels have allowed consumers to act on a new set of preferences, thereby improving consumer welfare.

The method of computing wealth shares accruing to lowest and highest quintiles, along with the concepts of the Lorenz curve and the Gini coefficient, are used in conjunction with data from the 1996 and 1999 Agricultural Resource Management Study (ARMS) survey to measure the distribution of wealth among U.S. farm operator households. Findings show that the distribution of wealth in 1996 was slightly more concentrated than in 1999, with the farm wealth component contributing significantly more toward measured concentration in both years than the nonfarm wealth component. The robustness of the findings under varied value judgments concerning society's level of aversion to wealth concentration is also examined.

U.S. soybean producers have been cooperatively investing in both production research and demand promotion for nearly four decades to enhance the profitability and international competitiveness of their industry. Have producers benefitted from their contributions to soybean checkoff program activities over the years? How has the return to investments in soybean production research compared to that of soybean demand promotion investments? The overall positive returns to producers over the study period resulted primarily from promotion activities. Production research contributed negatively to overall producer returns from soybean checkoff investments.

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.

The objective of this analysis was to identify the production practices used by farmers to change seasonal production. Production practices included milk production per cow, proportion of cows milking, number of first lactation animals entering the herd, number of cows leaving the herd, number of days to first breeding, and calves born. Farms that participated in a seasonal pricing plan during 1993, 1994, and 1995 decreased production practice seasonality in response to price premiums, which caused a decrease in production seasonality compared to nonparticipating farms. Participating farms showed a preference for adjusting entering first lactation animals and number of calves born, but did make adjustments in other practices as well.