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Andersson H.,French National Center for Scientific Research | Hammitt J.K.,Harvard University | Hammitt J.K.,French National Institute for Agricultural Research | Lindberg G.,VTI | Sundstrom K.,AgriFood Economics Center
Environmental and Resource Economics | Year: 2013

Stated preference (SP) surveys attempt to obtain monetary values for non-market goods that reflect individuals' "true" preferences. Numerous empirical studies suggest that monetary values from SP studies are sensitive to survey design and so may not reflect respondents' true preferences. This study examines the effect of time framing on respondents' willingness to pay (WTP) for car safety. We explore how WTP per unit risk reduction depends on the time period over which respondents pay and face reduced risk in a theoretical model and by using data from a Swedish contingent valuation survey. Our theoretical model predicts the effect to be nontrivial in many scenarios used in empirical applications. In our empirical analysis we examine the sensitivity of WTP to an annual and a monthly scenario. Our theoretical model predicts the effect from the time framing to be negligible, but the empirical estimates from the annual scenario are about 70 % higher than estimates from the monthly scenario. © 2013 Springer Science+Business Media Dordrecht.

Waldo S.,AgriFood Economics Center | Paulrud A.,AgriFood Economics Center | Paulrud A.,Swedish Agency for Marine and Water Management
ICES Journal of Marine Science | Year: 2013

Individual transferable quota (ITQ) is a management measure that is widely discussed, not least in the reform of the European Common Fisheries Policy. While the system is expected to reduce overcapacity and improve economic performance, questions are raised concerning the future of small-scale fisheries. This paper uses a model for Swedish fisheries (the Swedish Resource Rent Model for the Commercial Fisheries, SRRMCF) where the economics and fleet structure in a potential Swedish ITQ-system are analysed. The model is an optimization model based on linear programming and data from the European Union's data collection framework. The modelling approach can readily be used by other member states. Three main conclusions can be drawn on how ITQs will affect fisheries: The fishing fleet measured in number of vessels will decrease by approximately 30-50%.Profitability will increase so that the fishing industry will be able to provide competitive wages and make a financial contribution to fisheries management.The system can be designed so that small-scale fisheries are not disadvantaged. © 2012 International Council for the Exploration of the Sea.

Nordin M.,AgriFood Economics Center
Journal of Agricultural Economics | Year: 2014

This study uses aggregated municipality data, for the years 2001-2009, to explore whether direct payments to farmers affect agricultural employment in Swedish municipalities. The decoupling reform in 2005 included a new grassland support payment accompanied by management obligations that had unexpectedly high redistributive consequences as it greatly increased common agricultural policy payments to municipalities with large areas of grassland. In some municipalities, total payments more than doubled. Thus, since the reform seems exogenous to the behaviour of farmers and the regional economy, the reform can be used to identify a subsidy effect. We find that a permanent increase in agricultural employment can be attributed to the new grassland support. Our results indicate that the grassland support generates an additional job at a cost of SEK 250,000, relative to the average agricultural wage of SEK 333,000. However, the subsidy effect is largely keeping jobs in agriculture, i.e. the grassland support may be slowing down the process of structural change in grassland regions. © 2014 The Agricultural Economics Society.

Vagsholm I.,Swedish University of Agricultural Sciences | Hojgard S.,Swedish University of Agricultural Sciences | Hojgard S.,AgriFood Economics Center
Preventive Veterinary Medicine | Year: 2010

Since their discovery more than 70 years ago antibiotic drugs have been efficient tools for treating bacterial infections, and their use has reduced the number of fatalities and the suffering from bacterial diseases. However, the use of antibiotics may lead to resistance to the same or other antibiotics. The risk of resistance appears to be larger in veterinary medicine, since antibiotics have been given as feed-additives in animal production, the amounts given are larger, and the risk of selecting the wrong antibiotic is higher due to lack of diagnostic facilities. Historically, as resistance developed, new classes of antibiotics were developed, but today however, the flow of new substances has slowed. The resistance that arises from antibiotic use is a negative externality or a cost that is not included in the price of antibiotics since it affects the public good of antibiotic sensitivity. The negative externality implies that antibiotic consumption becomes too high. Antibiotic use can be restricted by e.g., prohibiting the use in animal feeding stuffs, prescription only use, or banning the use for animals or by using economic incentives, but restrictions on antibiotic use could have negative effects on the development of new antimicrobials since restrictions might reduce the profitability of such efforts to the pharmaceutical industry. It is therefore of interest to see what economic theory can contribute towards a solution. The objective of this study is to examine if a Pigouvian tax is an option for balancing the externalities and incentives for veterinary drug use. However, as a practical solution, it is suggested to use the costs of developing new antibiotics for determining the tax. The magnitude the tax based on European Union numbers ranges between 29 and 287€ per kilogram active substance or between 9 and 86% of the average price of commonly used antibiotics depending on the foreseen period in years (1-10 years) between the development of a new antibiotic drug. Hence, the sensitivity of bacteria to antibiotics should be managed as a finite natural resource. A tax based on the expected costs of development new antibiotic substances may offer a practical option for balancing the incentives and externalities of antibiotic use and development. © 2010 Elsevier B.V.

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