We present results of experimental games with smallholder farmers in Tigray, Ethiopia, in 2010, in which participants in the games allocated money across risk management options. One of the options was index insurance that was the same as commercial products sold locally. Participants exhibited clear preferences for insurance contracts with higher frequency payouts and for insurance over other risk management options, including high interest savings. The preference for higher frequency payouts is mirrored in commercial sales of the product, with commercial purchasers paying substantially higher premiums than the minimal, low frequency option available. This combined evidence challenges claims that the very poor universally choose minimal index insurance coverage and supports concerns that demand may outpace supply of responsible insurance products.
New animal welfare policies on the horizon in many states have prompted debates about the cost of achieving happier hens and hogs. A recent policy change in California offers a unique opportunity to measure the economic repercussions of minimum space requirements for egg-laying hens. Using forecasting methods and structural break tests as applied to 16 years of monthly data on egg production and input prices, we find that by July 2016 both egg production and the number of egglaying hens were about 35% lower than they would have been in the absence of the new regulations. Out-of-state eggs were able to compensate for falling California production until around the time of implementation of the new rules, at which point imports of eggs into California fell. For consumers, we estimate price impacts using panel structural break tests and difference-indifferences models as applied to five years of scanner data from the retail market for shell eggs in three California markets and three control markets. We find that the average price paid per dozen eggs was about 22% higher from December 2014 through September 2016 than it would have been in the absence of the hen housing restrictions. The price impact fell over time, from an initial impact of about 33% per dozen to about 9% over the last six months of the observed time horizon. These price increases correspond to welfare losses of at least $117 million for the three California markets over the observed time horizon. Our results suggest that because of the policy change, California consumers can expect to experience annual welfare losses of at least $25 million in future years from higher retail egg prices alone.
Peer reviewed eScholarship.org Powered by the California Digital Library University of CaliforniaThis article appeared in a journal published by Elsevier. The attached copy is furnished to the author for internal non-commercial research and education use, including for instruction at the authors institution and sharing with colleagues.Other uses, including reproduction and distribution, or selling or licensing copies, or posting to personal, institutional or third party websites are prohibited. a b s t r a c tSome have suggested that the US food stamp program (FSP) should be revised with a view to combating obesity among the poor. In this paper, we assess the likely impacts of allowing FSP participants to purchase only healthy foods when using food stamps. Our results indicate that FSP participants would probably increase their consumption of healthy food, but the implications for their purchases of unhealthy food are not clear. Market-wide consequences are even less clear, because changing what may be purchased using food stamps would lead to higher prices for healthy foods and lower prices for unhealthy foods and these price effects would feed back into consumer decisions, with adverse effects on consumption patterns of both participants and non-participants in the FSP. In addition, more restrictive rules on the use of food stamps would discourage participation in the FSP. We conclude that, while reforming the FSP may indeed to lead to better diets among participants, it is likely to be an ineffective and inefficient instrument for bringing about desired nutritional outcomes unless accompanied by additional policy instruments. Ó 2008 Elsevier Ltd. All rights reserved. IntroductionLinks between poverty, policy, and nutritional outcomes are complex. For example, the growing numbers of people who are categorized as obese and overweight are drawn from all socioeconomic, ethnic, and demographic groups, but not uniformly. Several writers have observed that low-income women-including those receiving food stamps-are more likely than the rich to be obese and overweight (Gibson, 2003;Townsend et al., 2001). This observation leads to two questions. First, has the current food stamp program (FSP) contributed to growing obesity among the poor in the United States? Second, could the FSP be redesigned such that it would contribute towards improving diet quality and ultimately reducing obesity?The first of these questions is a question for careful model-driven statistical analysis of the historical data. Several studies in recent years have yielded a range of results, but the overall message from the published work is that, compared with non-participants, FSP participants tend to spend more on food, and more on food away from home, and are more like to be overweight or obese. Details differ among studies regarding the size of these effects among different demographic groups-in particular between male and female participants. 1 This paper explores the second question, which has not been subject to as much study though various...
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