Dissertation
Risk, induced innovation, and productivity convergence in U.S. agriculture
Washington State University
Doctor of Philosophy (PhD), Washington State University
08/2007
DOI:
https://doi.org/10.7273/000005715
Abstract
This dissertation empirically analyzes the refutable implications of output price
and quantity risk, price-induced innovation, and factor productivity convergence. The
dissertation is organized following the manuscript format approved by the school and
university, with separate self-contained chapters devoted to each of the three empirical
questions. Refutable implications based on the curvature properties of the indirect utility
function for the competitive firm operating under uncertainty are extended to the case of
both price and quantity uncertainty. Using unit roots and cointegration tests for
heterogeneous panels, a model of U.S. agricultural production is developed based on the
time series properties of a panel of state-level data. Most refutable hypotheses under
output price and output quantity risk are not rejected, but symmetry conditions implied by a twice-continuously-differentiable indirect utility function are rejected. Ad-hoc risk
preference assumptions of either risk neutrality or constant absolute risk aversion are also rejected. The same test conclusions are obtained from a traditional model that presumes stationarity in all variables. The hypothesis of induced innovation is tested for U.S. agriculture using a highquality state-level panel data set and three disparate testing techniques – time series, econometric, and nonparametric. The conclusion of little support for the hypothesis is robust across testing techniques. However, each test maintains the hypothesis that the relative marginal cost of developing and implementing technologies that save one input is the same as for any other input. Lacking data on development and implementation costs of input-saving technologies, nonparametric procedures are used to estimate relative differences required for technological change to be consistent with the induced innovation hypothesis. For consistency with the hypothesis, the marginal cost of developing and implementing land- and capital-saving technology must have been greater than for material-saving technology. Considering dynamic effects of health and inter-state and inter-industry knowledge spillovers, total factor productivity (TFP) convergence in U.S. agriculture is examined using recently developed procedures for panel data and a growth accounting model. Strong evidence is found to support the hypothesis that the TFP converges to a steady-state. Health care access in rural areas and research spillovers from other states and from nonagricultural sectors are found to have significant impacts on the productivity growth rate both in the short-run and long-run. These results suggest richer opportunities for policymakers to enhance productivity growth.
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Details
- Title
- Risk, induced innovation, and productivity convergence in U.S. agriculture
- Creators
- Yucan Liu
- Contributors
- C Richard Shumway (Chair) - Washington State University, School of Economic SciencesDouglas L Young (Committee Member)Robert E Rosenman (Committee Member) - Washington State University, Community HealthH. Holly Wang (Committee Member)V. Eldon Ball (Committee Member)
- Awarding Institution
- Washington State University
- Academic Unit
- School of Economic Sciences
- Theses and Dissertations
- Doctor of Philosophy (PhD), Washington State University
- Publisher
- Washington State University
- Number of pages
- 199
- Identifiers
- 99901054939501842
- Language
- English
- Resource Type
- Dissertation