Economic Analysis of Agricultural Markets and Policy

Anthony Ryan Delmond

This dissertation contains three distinct papers examining agricultural markets and policies. The first paper investigates consumers’ preferences for genetically modified (GM) food in Russia, where the government has enacted a ban on GM food production and importation. Based on survey data from Perm, Russia, consumers seem to be primarily focused on the potential health risks of GM foods. This paper estimates that Russian consumers’ mean willingness to pay for GM bread relative to the conventional alternative is particularly low, suggesting that current policy in Russia is fairly well aligned with consumer preferences. The second paper uses panel data on the Washington wine industry to estimate the marginal effects of firm and regional reputations on prices over time as the number of regional designations available to firms increases. The results indicate that as the number of regional designations increases, a collective/regional reputation’s effect on price tends to increase to a point and then decline. This can be explained in terms of information and search costs. When the number of regional designations is low, information about regional reputations is valuable to consumers; they are able to reduce search costs by familiarizing themselves with only a few regional reputations. As the number of regional designations increases, consumers steadily become less familiar with individual regions’ reputations and search costs begin to rise. This has implications for the creation of new regional designations used in the food and agricultural sector. The third paper is applied theory, using a dynamic optimization framework to examine the opposing effects of free ridership and antimicrobial resistance on the socially-optimal levels of antimicrobial use. Much of the existing literature on antimicrobial resistance utilizes an epidemiological framework, considers therapeutic antibiotics, and disregards issues relating to under-provision. This paper combines the externalities associated with free ridership and antimicrobial resistance in a single economic model within the context of prophylactic antimicrobial use. Results indicate that if subsidy programs in developing countries ignore resistance dynamics, they may incentivize the overprovision of antimicrobials for livestock relative to the true social optimum.

Economic Analysis of Agricultural Markets and Policy

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