Kauffman N.,Federal Reserve Bank of Kansas City |
Dumortier J.,Indiana University - Purdue University Indianapolis |
Hayes D.J.,Iowa State University |
Brown R.C.,Iowa State University |
Laird D.A.,Iowa State University
Biomass and Bioenergy | Year: 2014
A partial solution to problems associated with anthropogenic greenhouse gas (GHG) emissions could be the development and deployment of carbon-negative technologies, i.e., producing energy while reducing atmospheric carbon dioxide levels. Biofuels have been considered a possibility but have faced limitations due to competition with food production and GHG emissions through indirect land-use change (ILUC). In this article, we show how emissions from ILUC can potentially be reduced by producing food and bioenergy from biochar amended soils. The possibility of yield improvements from biochar would reduce the land requirement for crop production and thus, lead to a reduction in emissions from ILUC. In our application, biochar and bio-oil are produced via fast pyrolysis of corn stover. Bio-oil is subsequently upgraded into a fuel suitable for use in internal combustion engines. Applying the U.S. regulatory method used to determine biofuel life cycle emissions, our results show that a biochar-induced yield improvement in the U.S. Midwest ranging from 1% to 8% above trend can lead to an ILUC credit between 1.65 and 14.79tCO2-equivalentha-1year-1 when future emissions are assessed over the next 30 years. The model is generalizable to other feedstocks and locations and illustrates the relationship between biochar and crop production. © 2014 Elsevier Ltd.
Wang Z.,Federal Reserve Bank of Kansas City
International Journal of Industrial Organization | Year: 2010
This paper provides a new theory to explain empirical puzzles regarding payment card interchange fees. Our model departs from the existing two-sided market theories by arguing that the extensive margin of card usage is less important in a mature card market. Instead, we focus on card issuer entry, elastic consumer demand and the role of card transaction value. Our analysis suggests that card networks demand higher interchange fees to maximize member issuers' profits as card payments become more efficient and convenient. At equilibrium, consumer rewards and card transaction values increase with interchange fees, while consumer surplus and merchant profits may not. Based on the theoretical framework, we discuss pros and cons of policy interventions. © 2009 Elsevier B.V. All rights reserved.
Briggeman B.C.,Federal Reserve Bank of Kansas City
Agricultural Economics | Year: 2011
One hypothesis explaining the persistence of farm programs in the United States is the public's altruism toward farmers. We utilize economic experiments to identify the motivations of selfishness, altruism, and inequality aversion toward anonymous members of the general population and toward different types of farmers. We find that people are generally less selfish and more altruistic toward small farmers than other members of the population. We also find that (i) people are more averse to inequality in a market-like setting as compared to a nonmarket setting, (ii) there is significant heterogeneity across people in terms of other-regarding preferences, and (iii) experimental choices accurately predict preferences for "real-world" income re-distribution policies that entail giving up one's own money to benefit farmers, but fail to predict preferences for policies that redistribute others' incomes. © 2010 International Association of Agricultural Economists.
Briggeman B.C.,Federal Reserve Bank of Kansas City |
Lusk J.L.,Oklahoma State University
European Review of Agricultural Economics | Year: 2011
Consumers have shown an increasing interest in not only how their food is produced, but also who benefits from their food purchase. In some cases, such as organics, food is marketed as being produced in an 'equitable' food system. But are consumers willing to pay for a fair food system? Using a model of inequality aversion and a set of real-money experiments, we find that about 15 per cent of consumers' willingness-to-pay a premium for organic foods is attributable to altruism and inequality aversion. The fairness premium is significantly influenced by who receives this premium, how much the consumer earns, and how the experiment is framed. © 2010 Oxford University Press and Foundation for the European Review of Agricultural Economics; all rights reserved.
Kauffman N.S.,Federal Reserve Bank of Kansas City |
Hayes D.J.,Iowa State University
Energy Policy | Year: 2013
Agricultural biofuels require the use of scarce land, and this land has opportunity cost. We explore the objective function of a social planner who includes a land constraint in the optimization decision to minimize environmental cost. The inclusion of this land constraint in our optimization model motivates the measurement of emissions on a per-hectare basis. Switchgrass and corn are modeled as competing alternatives to show how the inclusion of a land constraint can influence life cycle rankings and alter policy conclusions. With land use unconstrained, ethanol produced from switchgrass is always an optimal feedstock relative to ethanol produced from corn. With land use constrained, however, our results show that it is unlikely that switchgrass would be optimal in the midwestern United States, but may be optimal in southern states if carbon is priced relatively high. Whether biofuel policy advocates for one feedstock over another should consider these contrasting results. © 2012 Elsevier Ltd.