We examine the competitiveness of Hungarian agriculture and food processing, in relation to that of the EU, based on four indices of revealed comparative advantage, using highly disaggregate data for the period 1992 to 1998. Consistency tests suggest that the indices are less satisfactory as cardinal measures, but are useful in identifying the demarcation between comparative advantage and comparative disadvantage. Hungary is shown to have a comparative advantage in a range of agri-food products, including animals and meat. This complements the findings of those studies that have used price and cost based approaches in identifying competitiveness in cereals and crops. Results indicate that the RCA indices, when interpreted as a binary measure, have remained surprisingly stable during the period of transition, although there is evidence of a weakening in the level of comparative advantage as revealed in the Balassa index.

Higher animal welfare standards increase costs along the supply chain of certified animal-friendly products (AFP). Since the market outcome of certified AFP depends on consumer confidence toward supply chain operators complying with these standards, the role of trust in consumer willingness-to-pay (WTP) for AFP is paramount. Results from a contingent valuation survey administered in five European Union countries show that WTP estimates were sensitive to robust measures of consumer trust for certified AFP. Deriving the WTP effect of a single food category on total food expenditure is difficult for survey respondents; hence, a budget approach was employed to facilitate this process.

G orton M., H ubbard C. and H ubbard L. The folly of European Union policy transfer: why the Common Agricultural Policy (CAP) does not fit Central and Eastern Europe, Regional Studies . This paper assesses the appropriateness of the European Union's Common Agricultural Policy (CAP) for meeting rural development challenges in the New Member States (NMS). It argues that while the mitigation of structural problems confronting rural areas in these countries is critical to meeting the challenge of effectively integrating Central and Eastern Europe (CEE) into the European Union, the CAP is poorly suited to this task. Overall, the CAP was insufficiently reformed to accommodate CEE accession effectively and it represents a failure of the European Union to adjust adequately from an exclusively Western European institution into an appropriate pan-European organization.

Models used in neoclassical economics assume human behavior to be purely rational. On the other hand, models adopted in social and behavioral psychology are founded on the “black box” of human cognition. In view of these observations, this paper aims at bridging this gap by introducing psychological constructs in the well‐established microeconomic framework of choice behavior based on random utility theory. In particular, it combines constructs developed employing Ajzen's theory of planned behavior with Lancaster's theory of consumer demand for product characteristics to explain stated preferences over certified animal‐friendly foods (AFF). To reach this objective, a Web survey was administered in the largest five EU‐25 countries: France, Germany, Italy, Spain, and the United Kingdom. Findings identify some salient cross‐cultural differences between northern and southern Europe and suggest that psychological constructs developed using the Ajzen model are useful in explaining heterogeneity of preferences. Implications for policymakers and marketers involved with certified AFF are discussed.

Analyses of size economies in the England and Wales dairy sector have generally been made on the basis of comparisons of input‐output measures. These measures have been classified according to input use and farm size and have led to conclusions about efficiency and structural change. This paper examines the influence of managerial ability on economies of size using econometrically estimated long‐run average cost (LAC) functions from Milk Marketing Board data for 1980/1. The results show that the LAC curve is U‐shaped though skewed to exhibit greater economies than diseconomies of size. Better managed farms are shown to produce any given level of output at lower average cost. Moreover, they have larger optimal levels of output.