Economic analysis of drought risks: an application to irrigated agriculture in Spain

Abstract This paper describes a two-part methodology for managing the risk posed by water supply variability to irrigated agriculture. First, an econometric model is used to explain the variation in the production value of irrigated agriculture. The explanatory variables include an index of irrigation water availability (surface storage levels), a price index representative of the crops grown in each geographical unit, and a time variable. The model corrects for autocorrelation and it is applied to 16 representative Spanish provinces in terms of irrigated agriculture. In the second part, the fitted models are used for the economic evaluation of drought risk. In flow variability in the hydrological system servicing each province is used to perform ex-ante evaluations of economic output for the upcoming irrigation season. The model?s error and the probability distribution functions (PDFs) of the reservoirs? storage variations are used to generate Monte Carlo (Latin Hypercube) simulations of agricultural output 7 and 3 months prior to the irrigation season. The results of these simulations illustrate the different risk profiles of each management unit, which depend on farm productivity and on the probability distribution function of water in flow to reservoirs. The potential for ex-ante drought impact assessments is demonstrated. By complementing hydrological models, this method can assist water managers and decisionmakers in managing reservoirs.

The determinants of the quality of Sales-Marketing Interface in a Multinational Customer Brand Focused Company: The Latin American Branches

Customer evolution and changes in consumers, determine the fact that the quality of the interface between marketing and sales may represent a true competitive advantage for the firm. Building on multidimensional theoretical and empirical models developed in Europe and on social network analysis, the organizational interface between the marketing and sales departments of a multinational high-growth company with operations in Argentina, Uruguay and Paraguay is studied. Both, attitudinal and social network measures of information exchange are used to make operational the nature and quality of the interface and its impact on performance. Results show the existence of a positive relationship of formalization, joint planning, teamwork, trust and information transfer on interface quality, as well as a positive relationship between interface quality and business performance. We conclude that efficient design and organizational management of the exchange network are essential for the successful performance of consumer goods companies that seek to develop distinctive capabilities to adapt to markets that experience vertiginous changes