Tariff Equivalent of Technical Barriers to Trade with Imperfect Substitution and Trade Costs, November 2005

The price-wedge method yields a tariff-equivalent estimate of technical barriers to trade (TBT). An extension of this method accounts for imperfect substitution between domestic and imported goods and incorporates recent findings on trade costs. We explore the sensitivity of this revamped TBT estimate to its key determinants (substitution elasticity, preference for home good, and trade cost). We use the augmented approach to investigate the ongoing US-Japan apple trade dispute and find that removing the Japanese TBT would yield limited export gains to the United States. We then draw policy implications of our findings.

On the Segregation of Genetically Modified, Conventional, and Organic Products in European Agriculture: A Multi-market Equilibrium Analysis, October 2005

Evaluating the possible benefits of the introduction of genetically modified (GM) crops must address the issue of consumer resistance as well as the complex regulation that has ensued. In the European Union (EU) this regulation envisions the “co-existence” of GM food with conventional and quality-enhanced products, mandates the labelling and traceability of GM products, and allows only a stringent adventitious presence of GM content in other products. All these elements are brought together within a partial equilibrium model of the EU agricultural food sector. The model comprises conventional, GM and organic food. Demand is modelled in a novel fashion, whereby organic and conventional products are treated as horizontally differentiated but GM products are vertically differentiated (weakly inferior) relative to conventional ones. Supply accounts explicitly for the land constraint at the sector level and for the need for additional resources to produce organic food. Model calibration and simulation allow insights into the qualitative and quantitative effects of the large-scale introduction of GM products in the EU market. We find that the introduction of GM food reduces overall EU welfare, mostly because of the associated need for costly segregation of non-GM products, but the producers of quality-enhanced products actually benefit.

Managing Quality under Heterogeneous Consumer Demand and Product Quality, October 2005

Based on accepted advances in the marketing, economics, consumer behavior, and satisfaction literatures, we develop a micro-foundations model of a firm that needs to manage the quality of a product that is inherently heterogeneous in the presence of varying customer tastes or expectations for quality. Our model blends elements of the returns to quality, customer lifetime value, and service profit chain approaches to marketing. The model is then used to explain several empirical results pertaining to the marketing literature by explicitly articulating the trade-offs between customer satisfaction and costs (including opportunity costs) of quality. In this environment firms will find it optimal to allow some customers to go unsatisfied. We show that the relationship between the expected number of repeated purchases by an individual customer is endogenous to the choice of quality by the firm, indicating that the number of purchases cannot be chosen freely to estimate a customer’s lifetime value.

ABD e-News November 4, 2005

Weekly Newsletter

ABD e-News October 28, 2005

Weekly Newsletter

State of Iowa HIV and AIDS Surveillance Report, September 2005

This quarter, we received reports for 26 HIV diagnoses. So far this year, there have been 79 HIV diagnoses reported, exactly the same as this time last year. Thirty-five percent received concurrent AIDS diagnoses. There were 57 AIDS diagnoses in the first three quarters of 2005, 20% higher than what we saw at this time last year. Nearly half (47%) of these were persons who had been diagnosed with HIV for at least one year (fifteen years for two persons), and the rest received concurrent HIV and AIDS diagnoses. In surveillance news, Illinois, Maine, and Philadelphia have announced that they will begin HIV reporting by name on January 1, 2006. Currently they use code or name-to-code systems to report new diagnoses of HIV. The Centers for Disease Control and Prevention do not accept information from areas that report HIV cases by code, so no national surveillance data are available for HIV diagnoses. For this reason, Ryan White CARE Act funds cannot be appropriated according to the number of persons living with HIV. Instead, funds are distributed according to the number of AIDS cases reported to surveillance systems. These data are not representative of current trends in the epidemic and may be rewarding areas for having poorer health care systems.

State of Iowa HIV and AIDS Surveillance Report, March 2005

This quarter, we had 33 diagnoses of HIV infection (regardless of AIDS status), which is a little above our usual pace. Fifteen (45%) received concurrent diagnoses of AIDS. There were 8 persons who converted from HIV to AIDS, for a total of 23 AIDS diagnoses, also a little higher than expected. Of note is an increase in the percentage of HIV and AIDS cases diagnosed among Black, non-Hispanic persons during the 1st quarter of 2005. We also saw a bit of an increase in HIV diagnoses among foreign-born persons. It is too early to identify this as a trend; we’ll keep an eye on these numbers through the rest of the year.

State of Iowa HIV and AIDS Surveillance Report,June 2005

This quarter, we saw 17 HIV diagnoses, half the number of persons diagnosed in the first quarter of the year. For the two quarters, there were 50 diagnoses, keeping pace with last year’s number of diagnoses. Nineteen of the 50 (38%) received concurrent AIDS diagnoses. Of concern this year is the high number of persons reported without a risk. Over 40% of new cases were initially reported without a risk. Most of these cases are being investigated by disease prevention specialists. History shows us that a good proportion of these cases will be assigned to a risk category in the coming months as more is learned about their risks and the risks of their partners. Note that only 17% of cases diagnosed in 2004 remain without a known risk. There were 36 AIDS diagnoses in the first two quarters of 2005, just a bit ahead of what we saw last year. Fifteen of these were persons who had been diagnosed with HIV at least one year (fifteen years for two persons), and the rest received concurrent HIV and AIDS diagnoses.

Affirmative Action in Iowa, September 2005

In accordance with 19B.5 of the Code of Iowa, the 2005 Affirmative Action in Iowa report illustrates the progress made during fiscal year 2005 to balance the State's worforce, the challenges that the State must address and the effort that the Department of Administratie Services must lead in order to remove barriers that limit the hiring, retention and advancement of females, minorities and persons with disabilities in the State's workforce. Highlighted in the report are four departments that initiated proactive and innovative measures to address their workplace equal opportunity, affirmative action and diversity programs. Additionally, the Department of Administrative Services-Human Resources Enterprise outlines its plan to build on its past efforts as well as pursue new initiatives to partner with advocacy groups and reach out to the commuity more directely to enhance employment opportunities for females, minorities and persons with disabilities in State of Iowa employment.

The Traveler, December 2005

News from the Iowa Tourism Office

Academic Building Revenue Bond Funds - Parity Bond Letter, Iowa State University of Science and Technology, November 8, 2005

State University Audit Report

Community Colleges for International Development, Inc., Independent Auditor's Reports, Financial Statements, June 30, 2005

Community College Audit Reports

Iowa Soybean Promotion Board, Independent Auditor's Reports, Financial Statements and Supplementary Information, August 31, 2004 & June 30, 2005

State Audit Reports

ABD e-News-Speical Edition, November 17, 2005

Weekly Newsletter

How Much “Safety” Is Available under the U.S. Proposal to the WTO?, November 2005

Critics of the U.S. proposal to the World Trade Organization (WTO) made in October 2005 are correct when they argue that adoption of the proposal would significantly reduce available support under the current farm program structure. Using historical prices and yields from 1980 to 2004, we estimate that loan rates would have to drop by 9 percent and target prices would have to drop by 10 percent in order to meet the proposed aggregate Amber Box and Blue Box limits. While this finding should cheer those who think that reform of U.S. farm programs is long overdue, it alarms those who want to maintain a strong safety net for U.S. agriculture. The dilemma of needing to reform farm programs while maintaining a strong safety net could be resolved by redesigning programs so that they target revenue rather than price. Building on a base of 70 percent Green Box income insurance, a program that provides a crop-specific revenue guarantee equal to 98 percent of the product of the current effective target price and expected county yield would fit into the proposed aggregate Amber and Blue Box limits. Payments would be triggered whenever the product of the season-average price and county average yield fell below this 98 percent revenue guarantee. Adding the proposed crop-specific constraints lowers the coverage level to 95 percent. Moving from programs that target price to ones that target revenue would eliminate the rationale for ad hoc disaster payments. Program payments would automatically arrive whenever significant crop losses or economic losses caused by low prices occurred. Also, much of the need for the complicated mechanism (the Standard Reinsurance Agreement) that transfers most risk of the U.S. crop insurance to the federal government would be eliminated because the federal government would directly assume the risk through farm programs. Changing the focus of federal farm programs from price targeting to revenue targeting would not be easy. Farmers have long relied on price supports and the knowledge that crop losses are often adequately covered by heavily subsidized crop insurance or by ad hoc disaster payments. Farmers and their leaders would only be willing to support a change to revenue targeting if they see that the current system is untenable in an era of tight federal budgets and WTO limits.