Three essays on agricultural and consumer economics

Nava, Noé J.

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Description

Title

Three essays on agricultural and consumer economics

Author(s)

Nava, Noé J.

Issue Date

2021-11-16

Director of Research (if dissertation) or Advisor (if thesis)

Ridley, William

Doctoral Committee Chair(s)

Ridley, William

Committee Member(s)

• Dall'Erba, Sandy
• Xu, Yilan
• Garduno-Rivera, Rafael

Department of Study

Agr & Consumer Economics

Discipline

Agricultural & Applied Econ

Degree Granting Institution

University of Illinois at Urbana-Champaign

Degree Name

Ph.D.

Degree Level

Dissertation

Keyword(s)

• Farm to fork
• QUAIDS
• General Equilibrium
• MGWR.

Abstract

In this dissertation, I employ different methodologies to study current issues that affect the food system in the U.S. and Mexico. From farm to fork, this research explores problems of obesity derived from the consumption of sugary soft beverages, the impacts of supply chain disruptions on the availability of food, and the role of climate change in agriculture. I contribute to a broad literature in agricultural economics by expanding the set of methodologies available to researchers and providing new insights in the existing literature. This dissertation is constituted of three chapters as follows. The theoretical foundations and procedures to estimate demand systems to recover income- and price-elasticities have long been established; however, some streams of the literature do not account for all of the empirical implications of their datasets, leading to inconclusive results. The analysis of sin taxes on sugary soft beverages (SSB) is an exemplary case that has carried controversy in Latin-American countries. In Mexico, for instance, the federal government imposed a 20% price hike on SSB to curb its obesity epidemic in 2014, but obesity has continued increasing. This manuscript revisits the demand estimation applications aim to study the effectiveness of the sin tax with a censored Quadratic Almost Ideal Demand (QUAID) system. Previous studies find that SSB is an elastic good (a 10% price increase is associated with a greater than 10% reduction in quantity) with an own-price elasticity between - 1.11 and -1.61, but our study finds that SSB is an inelastic good (a 10% price increase is associated with a 9.5% decrease in quantity). Our results suggest that SSB taxes are not as effective as previous research indicates, explaining the gap between actual obesity rates and expected obesity rates after the sin tax was imposed in Mexico. This paper expands a Ricardian trade general equilibrium model to assess the U.S. state vulnerabilities to production shocks and supply chain disruptions under the existing food system. We find that the distribution of welfare losses caused by disruption in the existing supply chain depends on the state’s agricultural capacity and its operating expenses. Conversely, the existing supply chain capability to mitigate the impacts from productivity shocks is hindered by reliance on in-state crop production. Our extension of the Ricardian trade formulation is a comprehensive but simple model of the U.S. market of crops. We incorporate the heterogeneity of farmers’ production and isolate food processing plants as the main consumer of domestic crop production. Our general equilibrium model allows us to derive conclusions that are state specific, so they can be employed to craft state level policies to strength the national food system. The Ricardian framework has been widely used to study the impact of climate change on agriculture across US counties over the past few decades. While the spatial heterogeneity of climate change is well-accepted, the literature struggles to reach an agreement on how to model it, hence leading to a wide range of fore- casted impacts. This paper employs Multiscale Geographically-Weighted-Regression (MGWR) to avoid setting an a priori definition of heterogeneity and to generate county-specific marginal effects of climate change impacts. This manuscript tests the predictive power of our MGWR application with other functional forms found in the literature on a homogenized dataset of historical climate, demographic and soil quality controls. Our cross-validation exercise indicates that our MGWR approach has a higher predictive power than studies that cluster spatial units, and that other approaches have a downward bias. We attribute the divergence in results to unspecified heterogeneity. Our place-specific marginal effects will help guide the development of place-tailored mitigation and adaptation strategies to climate change.

Graduation Semester

2021-12

Type of Resource

Thesis

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Copyright 2021 Noé Nava

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