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Staff Papers (Resource Economics & Environmental Sociology)

The purpose of the Resource Economics and Environmental Sociology "Staff Paper" series is to provide a forum to accelerate the presentation of issues, concepts, ideas and research results within the academic and professional community. Staff Papers are published without peer review.
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  1. Export Markets for Canadian Grain: Trends and Market Mix [Download]

    Title: Export Markets for Canadian Grain: Trends and Market Mix
    Creator: Veeman, Michele M.
    Description: This paper overviews the results of three separate, but related economic research projects conducted from 1985 to 1991 and funded by Farming for the Future. The topic of the first two of these concerned export markets for wheat. One might question how such topics relate to the theme of Agri-food Diversification, which is the focus of this Farming for the Future research conference. The three projects do relate to this theme. They focused on the analysis of diverse and distinct market segments for different types or classes of grains and the relative values of different characteristics of grain. Our emphasis on wheat and barley markets also reflects the fact that while other special crops provide very useful production and market alternatives for Alberta farmers, the relatively limited market size for many special crops necessitates continued research on the agronomic and economic characteristics of wheat, barley, and oilseeds. Some basic information on the recent geographic destination of Canada's total grain exports (including oilseeds) and on Canada's share of world grain markets in the last decade is given in Tables 1 and 2. A major concern of the first project was to analyse trends, market shares and values of different types or classes of wheat based on characteristics such as protein pattern of import behaviour by wheat importing nations. For this purpose importers were classified into five broad categories, based on similar socio-economic characteristics of their markets. These categories were the developed or high income market; the centrally planned markets of eastern Europe and the former USSR; the centrally planned Asian market (a market dominated by China); the very substantial but fragmented middle-income developing nation group; and the low-income developing nations, a group that includes the poorest countries in the world. In the second study, we analysed \"importer loyalty\" for different classes of wheat and for wheat from different suppliers. This involved estimating the probability of repeat purchases by the different broad categories of buyers for wheat from different sources and for broad classes of wheat. The final study focused on barley export markets. This study included an analysis of time-series data on barley imported into four selected markets. These analyses complemented a cross-sectional analysis of feedgrain and total grain imports. Overall a number of quantitative methods and economic models were applied in these analyses. Exporter and importer profiles for wheats and barley were based on market share and trend data. Market share models included deterministic constant market share models which enabled us to decompose changes in market shares into world trade, country, commodity, and competitive effects. Econometrics analyses enabled us to make estimates of the value of major characteristics of wheat. These techniques also provided the estimation procedure for analysis of an aggregate cross-sectional analysis of foodgrain demand, and were the means of estimating import demand functions for four major barley markets. Programming analyses were employed in the importer loyalty analysis. Some of the more important results of these varied analyses are outlined below.
    Subjects: international trade, grain markets
    Date Created: 1992
  2. Choice Environment, Market Complexity and Consumer Behavior: A Theoretical and Empirical Approach for Incorporating Decision Complexity into Models of Consumer Choice [Download]

    Title: Choice Environment, Market Complexity and Consumer Behavior: A Theoretical and Empirical Approach for Incorporating Decision Complexity into Models of Consumer Choice
    Creator: Swait, Joffre
    Description: Most empirical models of consumer choice assume that the decision-maker assesses all alternatives and information in a perfect information processing sense. The complexity of the choice environment, the ability of the individual to make complex decisions and the effect of choice context on the decision strategy, are generally not considered in statistical model development. One of the reasons for this omission is that theoretical literature on choice complexity and imperfect ability to choose has not been translated into empirical methods that permit such considerations in econometric analysis. In this paper we outline a theoretical model that considers task complexity, effort applied by the consumer, ability to choose, and choice. We then construct a measure of task complexity and incorporate this in a random utility model. We employ this model in the analysis of a number of data series. Our findings suggest that task complexity does affect inferences about choice model parameters and that context effects, like complexity, have a systematic effect on the parameters of econometric models of choice. Not accounting for complexity or context effects will result in significant bias in the estimated preference parameters.
    Subjects: choice context, choice modeling, random utility
    Date Created: 1999
  3. Farmer Group Development in Kenya: Issues and Recommendations for Service Providers [Download]

    Title: Farmer Group Development in Kenya: Issues and Recommendations for Service Providers
    Creator: Parkins, John R.
    Description: For decades now, there have been grave warnings about the alarming rates of tree and shrub destruction in the tropics. These warnings stressed the disastrous consequences of deforestation and predicted imminent fuelwood deficits across the African continent. However, the reality has been somewhat different from the worst-case scenario promoted by these doom-sayers. In fact, scientists looking at issues of land degradation, deforestation and population dynamics in Africa are now realizing that these alarmist statements were remiss by not taking into account the value and effort that farmers on the continent have put into long-term land care and regeneration. A study published in 1994 reveals that, contrary to popular belief, Kenyan land covered by trees and shrubs increased 4.2% annually from 1986 to 1992 (Holmgren, Masakha, &Sjoholm, 1994). The present study supports these national-level findings at the local level in Mbeere District, Kenya. Amid dramatic changes in land use, this study found that farmer-initiated, small-scale tree nurseries are at the heart of local efforts in reforestation, right on the farms themselves. To the extent that these nurseries represent farmers' efforts to integrate trees on their farmland, they are fundamentally important to the long-term development of farm forestry in the region.
    Subjects: land use, farm forestry, deforestation
    Date Created: 1997
  4. A Socio-Cognitive Basis for Strategic Groups: Cognitive Dissonance in Swine Genetics [Download]

    Title: A Socio-Cognitive Basis for Strategic Groups: Cognitive Dissonance in Swine Genetics
    Creator: Ng, Desmond
    Description: According to socio-cognitive models in organizational theory literature, managers share similar mental models or cognitive maps of the competitiveness of firms in an industry. Managers are increasingly challenged to understand rapidly changing market settings, where their competitive position is continually evolving as competitor initiatives and business dynamics interact complexly. In well managed firms, considerable resources are expended routinely to monitor competitor actions and customer requirements. Over time, this and other information is summarized within the perception of managers as cognitive maps of the rivalry network in which firm operates. More precisely, as Reger and Huff (1993) comment, that \"while cognitive simplification and cognitive elaboration could lead to totally idiosyncratic groupings, strategists who work in the same industry environment are expected to develop shared perceptions of the competitive environment over time.\" Cognitive maps are the result of individuals \"organizing, simplifying, and interpret[ing] the mass of stimuli that constantly confront them.\" According to personal construct theory, cognitive maps or constructs are defined \"in terms of similarities and differences and are organized into systems of meanings which individuals use to develop theories about the environment, to make predictions and guide action.\" Although the cognitive map concept has been explored from the manager's perspective, such marketplace perceptions undoubtedly are not limited to the managers in charge of product sales in the market. It seems logical to expect that customers have perceptions of marketplace rivalry. In addition, intermediaries often exist who provide services associated with the product in question, whose activities naturally lead to the development of competitiveness perceptions. However to date, socio-cognitive models in organizational theory have explored little about the differences in cognitive maps outside these management groups. Given a cognitive approach to the existence of strategic groups, the purpose of this study is the examination of the existence of differences between market participants or \"cognitive dissonance\" at a group level of analysis. More precisely, it involves the study of differences in cognitive maps of market performance (firms (swine genetic companies), intermediaries (veterinarians) and end consumers (farmer)) in the swine genetic firm value chain whereby the cognitive maps of each of these market participant groups refer to the beliefs or cognition of the competitiveness of swine genetic firms in the industry (i.e. firms' competitiveness). Since this study employs a cognitive approach, the notion of \"strategic groups\" is defined as a market participant group's perception of the competitiveness of firms in which firms that are perceived to be similar in certain competitive attributes (i.e. firm size, financial strength, price, consumer relations, and quality of products produced, such as sow productivity, health status of stock, consistency of product) are clustered together, while those that are not grouped with other more similar firms. As a result, the classification of individual perceptions of firms based on similarities and differences comprise one's perceived orientation of \"strategic groups.\" \"Strategic groups\" are in essence cognitive maps.
    Subjects: consumer behavior, swine genetics, cognitive dissonance
    Date Created: 2002
  5. Stated Preference Approaches for Measuring Passive Use Values: Choice Experiments versus Contingent Valuation [Download]

    Title: Stated Preference Approaches for Measuring Passive Use Values: Choice Experiments versus Contingent Valuation
    Creator: Adamowicz, Wiktor
    Description: The measurement of passive use values has become an important element of environmental economics over the past decade. Damage assessment cases in the U.S. and Canada have prompted considerable research activity in this area, yet the topic is quite controversial and debate over the theory and measurement of passive use values has permeated the economics profession (eg. Hanneman, 1994; Diamond and Hausman, 1994). Much of the controversy surrounds the use of the contingent valuation method (CV) in eliciting passive use values and the various \"issues\" that arise when the technique is employed. There is a substantial literature on the CV method (eg. Mitchell and Carson, 1989; Natural Resource Damage Assessment, 1994) and its advantages and disadvantages. We do not review this literature here, rather we explore the use of another stated preference approach for measuring passive use values, the choice experiment, and compare it to CV. Choice experiments have been employed in the marketing, transportation and psychology literature for some time (Batsell and Louviere, 1991; Louviere, 1988a; 1988b, 1991; Hensher, 1994). They arose from conjoint analysis which is commonly used in marketing and has been applied to natural resource damage assessment. Choice experiments (at times called stated preference methods), however, differ from typical conjoint methods in that individuals are asked to choose from alternative bundles of attributes instead of ranking or rating them. Thus choice experiments are consistent with random utility theory and are an alternative to CV as a method of eliciting passive use values. Researchers have achieved positive results using choice experiments to value the effect of environmental improvements on use values (Adamowicz et al, 1994). In this paper we outline the use of choice experiments (CE) for measuring passive use values and present several potential advantages of this approach. We then develop a particular empirical application, the measurement of value associated with enhancing the population of a threatened species, using both CV and CE methods of valuation. We also combine the information from both techniques in order to test for differences in preferences and error variances arising from the two methods. Our results show that choice experiments have considerable merit in measuring passive use values for the following reasons: (1) the method provided a richer description of the attribute tradeoffs that individuals are willing to make, (2) the CV model error variance was not significantly different than the error variance in the choice experiment model, (3) when combined with CV data we found that the marginal utility of income parameters were not significantly different (when variance heterogeneity is taken into account), and (4) the welfare values from the CE generally have smaller variances (relative to their means) than the CV estimates. These results lead us to suggest that choice experiments may outperform CV methods in applied analysis.
    Subjects: choice experiment, passive use values, contingent valuation
    Date Created: 1995
  6. Potato Consumption in Canada: Is It Becoming a Normal Good? [Download]

    Title: Potato Consumption in Canada: Is It Becoming a Normal Good?
    Creator: Yen, Steven T.
    Description: The notion that a potato is an inferior good dates back to the mid-nineteenth century when British economist Robert Giffen (and later Paul Samuelson) asserted that potato constituted a Giffen good in historic Ireland (McDonough and Eisenhauer). Potato has become a leading practical example of an inferior good, if not a Giffen good (Rosen). By definition, consumption of potato would decrease with income, if it is an inferior good. While potato consumption has been found to be negatively related to GNP per capita in OECD countries (Anderson and Senauer), recent consumption trends in Canada and the United States seem to suggest the opposite. Per capital potato consumption in Canada fluctuated between 60 kg and 80 kg during 1978-97, but stabilized around 77 kg after 1993 (Figure 1). During the same period, consumption in the United States increased steadily between 1978 and 1997, rising from 54.3 kg in 1978 to 64.5 jg per capita in 1997 (figure 1). These consumption trends raise an interesting question: is potato still an inferior good in North America? The answer to this question is important because potato remains an important food item in many countries and many domestic agricultural as well as international trade policies are centered on potato. Such policies would be misdirected if they were based on the misbelief that potato is an inferior good, without a rigorous and robust empirical support for that belief. The objective of this paper is to estimate and evaluate the demand elasticities for potato products in Canada. The survey data we use allow investigation of the demand for fresh as well as other forms of potato products.
    Subjects: potato consumption, consumer behavior
    Date Created: 2002
  7. Knowledge Based Competitive Strategies: Strategic Complementarities from an Austrian Economic and Strategic Network Perspective [Download]

    Title: Knowledge Based Competitive Strategies: Strategic Complementarities from an Austrian Economic and Strategic Network Perspective
    Creator: Ng, Desmond
    Description: The concept of knowledge and its related dimensions of information and learning have traditionally received considerable research attention by scholars or organization and strategic management theorists. The increasing role of knowledge as a defining characteristic of the modern knowledge economy has renewed an interest to the importance of knowledge to a firm's competitive advantage. Such interest has raised a significant conceptual issue as to whether the new knowledge economy warrants an alternative framework to understanding competitive strategy. As a result, a conceptual model of knowledge based competitive advantage is proposed. Such a conceptual framework provides a departure from the static perspectives of Resource-based view and Industrial Organizational economic perspectives in accommodating for evolutionary changes of network knowledge. Implicit in this perspective is that sustainable competitive performance is not a realizable outcome. Rather knowledge based competitive performance is transitory in which the extent of such performance is contingent on the management of evolving network relations.
    Subjects: knowledge economy, Austrian economics
    Date Created: 2002
  8. Estimating Price Rigidity in Vertically Differentiated Food Product Categories with Private Labels [Download]

    Title: Estimating Price Rigidity in Vertically Differentiated Food Product Categories with Private Labels
    Creator: Bocionek, Milena
    Description: Due to the rapid development of private labels and their segmentation into quality levels the question arises how they have an effect on price rigidity. There is also much discussion about the impact of private label development on wholesale prices. Based on the roughly availability of appropriate data, questions in regard to the wholesale price are fairly unanswered. This paper fills this research gap by applying two approaches to analyze retail pricing behavior on the basis of weekly scanner data including the wholesale price of a chain distributing in Canada. The results of two case studies indicate higher price rigidities for private labels, especially for premium private labels in the case of salad dressings. Price variability is rather explained by price promotions than changes in the wholesale price. Long-term contracts and stable wholesale prices might be the result of increasing power by retailers due to rising private labels market shares.
    Subjects: private labels, wholesale price, Price rigidity, quality levels
    Date Created: 2012
  9. Niche Markets for Fresh Canadian Pork in the Pacific Northwest: A Case Study [Download]

    Title: Niche Markets for Fresh Canadian Pork in the Pacific Northwest: A Case Study
    Creator: Kuperis, Peter
    Description: The Pacific Northwest of the United States, Washington and Oregon, constitutes a major export market for Western Canadian pork. Exports of fresh pork from British Columbia and Alberta to the Pacific Northwest increased from 16,491 tonnes in 1988 to 19,505 tonnes in 1995. The Pacific Northwest is an area of growing population and represents a significant potential market for increased exports of Western Canadian pork in the future. Increasingly, food marketers are placing an emphasis on niche markets. These markets consist of an identifiable sub-group of consumers with specific needs or preferences. One such niche market is the ethnic Asian market in the Pacific Northwest. The Asian population of Washington and Oregon is projected to increase from 429,000 persons in 1995 to 873,000 persons by the year 2010. Pork is an important component of the Asian diet, and is primarily consumed as fresh meat. Thus, the Asian ethnic market in Washington and Oregon constitutes a sizable niche market for fresh Canadian pork. The objective of this study is to evaluate the Asian ethnic market for fresh pork in the Pacific Northwest. The specific objectives are to: (1) provide an updated background on the Western Canadian pork industry and the market for fresh pork in the Pacific Northwest, (2) identify the perceptions of Asian pork buyers regarding fresh pork from Western Canada, compared with fresh pork from the major competing source of supply, the Midwestern United States, (3) identify the fresh pork cuts commonly sold in the Asian ethnic market and (4) to propose marketing strategies for Western Canadian pork producers and packers to maintain or increase their share of the Asian ethnic market for fresh pork in the Pacific Northwest.
    Subjects: pork market, international trade
    Date Created: 1997
  10. The Inverse Lewbel Demand System [Download]

    Title: The Inverse Lewbel Demand System
    Creator: Eales, James
    Description: Lewbel (1989) offered a demand model which nested both the indirect translog (ITL) of Christensen, Jorgensen, and Lau (1977) and almost ideal demand system (AIDS) of Deaton and Muellbauer (1980a, 1980b). It has the advantage, then of allowing the applied demand analyst to test the restrictions which imply the ITL and AIDS models directly. In terms of parametric analysis of demand, the increased generality of Lewbel's demand system should minimize the impact of maintained hypotheses on the outcome of the statistical analysis. All of these models have appealing theoretical properties, they correspond to a well defined preference structures, which is convenient for welfare analysis. These so-called PIGLOL preferences also have the property of consistent aggregation from the micro to the market level, while allowing nonlinear Engel curves. Second, the functional form of the preferences is \"flexible\" in that it can be thought of as a local second order approximation to an unknown preference structure. Third, homogeneity and symmetry restrictions depend only on estimated parameters and so are easily imposed and/or tested. There are commodities for which the assumption of predetermined prices at the market level may not be viable. Some of the earliest applied work in demand for agricultural products took current supplies as fixed and therefore specified ad hoc inverse demand curves for statistical evaluation. This alternative aggregation story is still employed, especially by those building market models, such as Freebairn and Rausser (1975) and Arzac and Wilkinson (1979). So, for example, if modeling demand for a perishabl commodity, the production of which is subject to long biological lags, the researcher might employ inverse demands. Production lags prevent market-level supply response, while perishability requires the commodity be consumed. Thus, price must adjust. Not all previous studies which have employed inverse demand structures have proceeded in an ad hoc manner. Heien, and Chambers and McConnell developed separable inverse demand systems and applied them to food commodities. Barten and Bettendorf developed an inverse Rotterdam system and applied it to the demand for fish. Christensen, et al. develop the direct translog demand system (as well as the indirect system). Both they and Jorgenson and Lau use the direct translog demand system to test demand restrictions. Huang used the theoretical development of Anderson and the distance function to generate a system of inverse demands, which were applied to composite food and nonfood commodities. Eales and Unnevehr also employed a particular distance function to develop an inverse AIDS model. In the sections that follow a model which nests both the direct translog (DTDS) and the inverse almost ideal demand system (IAIDS) is developed. This system will be referred to as the inverse Lewbel (ILDS). These three demand systems are then compared and contrasted and used to model Canadian demand for meat.
    Subjects: demand systems
    Date Created: 1992