Price discovery and volatility spillovers in index futures markets: Some evidence from Mexico

This paper investigates the hypotheses that the recently established Mexican stock index futures market effectively serves the price discovery function, and that the introduction of futures trading has provoked volatility in the underlying spot market. We test both hypotheses simultaneously with daily data from Mexico in the context of a modified EGARCH model that also incorporates possible cointegration between the futures and spot markets. The evidence supports both hypotheses, suggesting that the futures market in Mexico is a useful price discovery vehicle, although futures trading has also been a source of instability for the spot market. Several managerial implications are derived and discussed. (C) 2004 Elsevier B.V. All rights reserved.

Output price subsidies in a stochastic world

This article studies the comparative statics of output subsidies for firms, with monotonic preferences over costs and returns, that face price and production uncertainty. The modeling of deficiency payments, support-price schemes, and stochastic supply shifts in a state-space framework is discussed. It is shown how these notions can be used, via a simple application of Shephard's lemma, to analyze input-demand shifts once comparative-static results for supply are available. A range of comparative-static results for supply are then developed and discussed.

An empirical investigation of price competition and industry specialisation in NHS audit services

The NHS audit market is regulated by the Audit Commission (AC) and has unique features. We develop a model for audit fees that includes rigorous analysis of the type of auditor. Poor financial standing does not give rise to higher audit fees. Despite regulation the study supports the existence of a Big Five price premium on the audit fee, but only one firm has a premium. We found no premium due to industry specialisation. The removal of performance audit from AC regulation will require improved audit fee reporting and control.

Cross-category demand effects of price promotions

Do promotions in a certain category lead to higher revenues in other categories? If so, to what degree? The answers to these questions are highly relevant for retailers that supply products in different categories. Empirical findings in studies that consider a limited number of categories indicate small promotional cross-category effects. This study develops a framework to determine the impact of price promotions on category revenues that include interdependencies among a substantial number of categories at the category demand level. The own- and cross-category demand effects are moderated by variables such as promotion intensity, category characteristics (own-category effects), and spatial distances between shelf locations (cross-category effects). The empirical results based on daily store-level scanner data show that approximately half of all price promotions expand own-category revenues, especially for categories with deeper supported discounts. There is a high probability (61%) that a price promotion affects sales of at least one other category. The number of categories affected is not greater than two. Moderate evidence supports the existence of cross-promotional effects between categories more closely located in a store.

Asymmetric price transmission in EU petroleum markets

This research investigates the determinants of asymmetric price transmission (APT) in European petroleum markets. APT is the faster response of retail prices to cost increases than to cost decreases; resulting in a welfare transfer from consumers to fuel retailers. I investigate APT at 3 different levels: the EU, the UK and at the Birmingham level. First, I examine the incidence of asymmetries in the retail markets of six major EU countries; significant asymmetries are found in all countries except from the UK. The market share data suggest that asymmetries are more important in more concentrated markets; this finding supports the collusion theory. I extend the investigation to 12 EU countries and note that APT is greater in diesel markets. The cross-country analysis suggests that vertical and horizontal concentration at least partly explains the degree of asymmetry. I provide evidence justifying scrutiny over retail markets’ pricing and structure. Second daily data unveil the presence of APT in the UK fuel markets. I use break tests to identify segments with different pricing regimes. Two main types of periods are identified: periods of rising oil price exhibit significant asymmetries whilst periods of recession do not. Our results suggest that oligopolistic coordination between retailers generate excess rents during periods of rising oil price whilst the coordination fails due to price wars when oil prices are going downwards. Finally I investigate the pricing behaviour of petroleum retailers in the Birmingham (UK) area for 2008. Whilst the market structure data reveals that the horizontal concentration is higher than the national UK average, I find no evidence of APT. In contrast, I find that retail prices are sticky upwards and downwards and that firms with market power (majors and supermarkets) adjust their prices slower than other firms.

Price of unsustainability. Economic impacts of climate change

Global problems, rapid and massive regional changes in the 21st century call for genuine long-term, awareness, planning and well focused actions from both national governments and international organizations. This book wishes to contribute to building an innovative path of strategic views in handling the diverse challenges, and more emphatically, the economic impacts of climate change. Although the contributors of this volume represent several approaches, they all rely on some common grounds such as the costbenefit analysis of mitigation and adaptation, and on the need to present an in-depth theoretical and practical dimension. The research accounted for in this book tried to integrate and confront various types of economics approaches and methods, as well as knowledge from game theory to country surveys, from agricultural adaptation to weather bonds, from green tax to historical experience of human adaptation. The various themes and points of views do deserve the attention of the serious academic reader interested in the economics of climate change. We hope to enhance the spread of good solutions resulting from world wide disputes and tested strategic decisions. WAKE UP! It is not just the polar bears' habitat that is endangered, but the entire human form of life.

Essays on Firm Heterogeneity with Empirical Applications in Economic History and Agricultural Economics

This thesis uses models of firm-heterogeneity to complete empirical analyses in economic history and agricultural economics. In Chapter 2, a theoretical model of firm heterogeneity is used to derive a statistic that summarizes the welfare gains from the introduction of a new technology. The empirical application considers the use of mechanical steam power in the Canadian manufacturing sector during the late nineteenth century. I exploit exogenous variation in geography to estimate several parameters of the model. My results indicate that the use of steam power resulted in a 15.1 percent increase in firm-level productivity and a 3.0-5.2 percent increase in aggregate welfare. Chapter 3 considers various policy alternatives to price ceiling legislation in the market for production quotas in the dairy farming sector in Quebec. I develop a dynamic model of the demand for quotas with farmers that are heterogeneous in their marginal cost of milk production. The econometric analysis uses farm-level data and estimates a parameter of the theoretical model that is required for the counterfactual experiments. The results indicate that the price of quotas could be reduced to the ceiling price through a 4.16 percent expansion of the aggregate supply of quotas, or through moderate trade liberalization of Canadian dairy products. In Chapter 4, I study the relationship between farm-level productivity and participation in the Commercial Export Milk (CEM) program. I use a difference-in-difference research design with inverse propensity weights to test for causality between participation in the CEM program and total factor productivity (TFP). I find a positive correlation between participation in the CEM program and TFP, however I find no statistically significant evidence that the CEM program affected TFP.

Exploring the potential of cassava in promoting agricultural growth in Nigeria

Cassava is one of the major food crops in Nigeria, with multiple uses from human consumption to industrial applications. This study explores the potential of cassava in Nigerian agriculture based on a review of cassava development policies; performs a trend analysis of the cultivation area, production, productivity, and real price of cassava and other competing crops for the period 1961–2013; identifies the sources of growth in production; and examines the production constraints at the local level based on a survey of 315 farmers/processors and 105 marketers from Delta State. The results revealed that several policies and programmes were implemented to develop the cassava sector with mixed outcomes. Although cassava productivity grew at 1.5% per annum (p.a.) during the post-structural adjustment programme period (1993–2013), its real price declined at a rate of 3.5% p.a. The effect of yield is the main source of growth in production, contributing 76.4% of the total growth followed by the area effect (28.2%). The cassava sector is constrained by inadequate market infrastructure, processing facilities, and lack of information and unstable prices at the local level. The widespread diffusion of improved tropical manioc selection technologies and investments in market and marketing infrastructure, processing technologies, irrigation/water provision and information dissemination are recommended to enhance the potential of the cassava sector to support agricultural growth in Nigeria.

Role of microfinance to support agricultural climate change adaptations in Indonesia: Encouraging private sector participation in climate finance

The demands of mitigation and adaptation policies are important to understanding a country’s climate change preparation by providing microfinance in the agricultural sector. This could be seen as a strategy to fight against the challenges of future food security. In 2014, Indonesia established climate change adaptation policies. This legislation aims to pave the way for making actions on climate change adaptation mainstream in national and local development planning. Public and private finance have supported the implementation of the climate actions. However, most funding is still used for mitigation. Adaptation finance needs support, especially in agriculture. This research paper studies opportunities for microfinance to play a role together with existing resources in supporting climate change adaptation in Indonesia. The data was acquired and analysed through a literature review, analysis of case studies and interviews with stakeholders in the climate change-related financial sector. The central findings regarding the opportunity for microfinance to contribute to the existing schemes in Indonesian climate change adaptation finance for agriculture are worthy of the result. This study found that adaptation finance is mostly used for indirect activities. Meanwhile, local communities, and farmers in particular, need directly targeted measures to adapt to climate change. An alternative approach is providing microfinance, insurance and capacity development for farmers to produce high quality agricultural products. This would contribute to optimizing the agri-food value chain, which supports socio-economic development of stakeholders, especially farmers. Hence, microfinance appears to be one potential solution to support direct climate change adaptation actions for the agricultural sector. However, this may not be strong enough to finance the entire needs for agricultural climate actions. Adaptation is contextual, so it has to be grounded in the needs of local communities. Microfinance needs public sectors support as well as other resources from the private sector. In the case of rapid response to disasters, which often destroy the agricultural sector, microfinance should be advantageous in supporting adaptation. However, in reality, it does not work, as it is prevented by regulations. So, this can be an area the public sector can support as a risk-taker as well as by providing initial funds and resources for scaling up efforts.

Assessing the impact of agricultural drought on maize prices in Kenya with the approach of the SPOT-VEGETATION NDVI remote sensing

The high cost of maize in Kenya is basically driven by East African regional commodity demand forces and agricultural drought. The production of maize, which is a common staple food in Kenya, is greatly affected by agricultural drought. However, calculations of drought risk and impact on maize production in Kenya is limited by the scarcity of reliable rainfall data. The objective of this study was to apply a novel hyperspectral remote sensing method to modelling temporal fluctuations of maize production and prices in five markets in Kenya. SPOT-VEGETATION NDVI time series were corrected for seasonal effects by computing the standardized NDVI anomalies. The maize residual price time series was further related to the NDVI seasonal anomalies using a multiple linear regression modelling approach. The result shows a moderately strong positive relationship (0.67) between residual price series and global maize prices. Maize prices were high during drought periods (i.e. negative NDVI anomalies) and low during wet seasons (i.e. positive NDVI anomalies). This study concludes that NDVI is a good index for monitoring the evolution of maize prices and food security emergency planning in Kenya. To obtain a very strong correlation for the relationship between the wholesale maize price and the global maize price, future research could consider adding other price-driving factors into the regression models.

Ensuring community and agricultural resiliency to climate change: Ceremonial practices as emic adaptive strategies

This paper is an analysis of emic versus etic approaches to climate change resiliency, taking as a case study the traditional ceremony performed by farmers in eastern Flores, Indonesia to rid their fields of rats. This paper begins by providing a theoretical framework discussion on the dominant etic and emic academic research on monsoons and climate change impacts on agriculture. The rat ceremony performed in villages throughout East Flores is a local custom used to rid agricultural fields of pests—often rats—that come from the surrounding forests to feed on the agricultural crops when the rains become erratic. This paper argues that analyzing the rat ceremony through an emic lens allows for better future resiliency to monsoon shifts due to climate change. It is argued that the rat ceremony demonstrates a way in which community resiliency is strengthened by an adaptive approach that supports an already existing community ceremony that emphasizes two essential tenets: community solidarity and coexistence with nature. Both tenets directly promote community resiliency. An explicit emphasis on emic approaches to climate change challenges could help re-define how resiliency is understood and supported within vulnerable communities such as rural villages.

PRICE TRANSMISSION ON THE MILK PORTUGUESE MARKET

This paper aims to analyze the milk prices transmission along the food chain in Portugal, temporally and spatially. The results show that the volatility on retail prices is small but happens after 2008. The farm gate price does not change when the price of package milk changes. In mainland, price transmission does not happen but for Azores the transmission is effective. In the intensive systems, the risk to collapse is bigger than in the extensive systems, where the volatility of prices reflects the process of markets adjustment.

Antioxidant And Antiproliferative Activities Of Methanolic Extract From A Neglected Agricultural Product: Corn Cobs.

Neglected agricultural products (NAPs) are defined as discarded material in agricultural production. Corn cobs are a major waste of agriculture maize. Here, a methanolic extract from corn cobs (MEC) was obtained. MEC contains phenolic compounds, protein, carbohydrates (1.4:0.001:0.001). We evaluated the in vitro and in vivo antioxidant potential of MEC. Furthermore, its antiproliferative property against tumor cells was assessed through MTT assays and proteins related to apoptosis in tumor cells were examined by western blot. MEC showed no hydroxyl radical scavenger capacity, but it showed antioxidant activity in Total Antioxidant Capacity and DPPH scavenger ability assays. MEC showed higher Reducing Power than ascorbic acid and exhibited high Superoxide Scavenging activity. In tumor cell culture, MEC increased catalase, metallothionein and superoxide dismutase expression in accordance with the antioxidant tests. In vivo antioxidant test, MEC restored SOD and CAT, decreased malondialdehyde activities and showed high Trolox Equivalent Antioxidant Capacity in animals treated with CCl4. Furthermore, MEC decreased HeLa cells viability by apoptosis due an increase of Bax/Bcl-2 ratio, caspase 3 active. Protein kinase C expression increased was also detected in treated tumor cells. Thus, our findings pointed out the biotechnological potential of corn cobs as a source of molecules with pharmacological activity.

Genetic Variation among Major Human Geographic Groups Supports a Peculiar Evolutionary Trend in PAX9

A total of 172 persons from nine South Amerindian, three African and one Eskimo populations were studied in relation to the Paired box gene 9 (PAX9) exon 3 (138 base pairs) as well as its 5' and 3' flanking intronic segments (232 bp and 220 bp, respectively) and integrated with the information available for the same genetic region from individuals of different geographical origins. Nine mutations were scored in exon 3 and six in its flanking regions; four of them are new South American tribe-specific singletons. Exon3 nucleotide diversity is several orders of magnitude higher than its intronic regions. Additionally, a set of variants in the PAX9 and 101 other genes related with dentition can define at least some dental morphological differences between Sub-Saharan Africans and non-Africans, probably associated with adaptations after the modern human exodus from Africa. Exon 3 of PAX9 could be a good molecular example of how evolvability works.

Conversion to soy on the Amazonian agricultural frontier increases streamflow without affecting stormflow dynamics

Large-scale soy agriculture in the southern Brazilian Amazon now rivals deforestation for pasture as the region`s predominant form of land use change. Such landscape-level change can have substantial consequences for local and regional hydrology, but these effects remain relatively unstudied in this ecologically and economically important region. We examined how the conversion to soy agriculture influences water balances and stormflows using stream discharge (water yields) and the timing of discharge (stream hydrographs) in small (2.5-13.5 km2) forested and soy headwater watersheds in the Upper Xingu Watershed in the state of Mato Grosso, Brazil. We monitored water yield for 1 year in three forested and four soy watersheds. Mean daily water yields were approximately four times higher in soy than forested watersheds, and soy watersheds showed greater seasonal variability in discharge. The contribution of stormflows to annual streamflow in all streams was low (< 13% of annual streamflow), and the contribution of stormflow to streamflow did not differ between land uses. If the increases in water yield observed in this study are typical, landscape-scale conversion to soy substantially alters water-balance, potentially altering the regional hydrology over large areas of the southern Amazon.