Research Briefs from the ISU Department of Economics

pdf fileAgDM Newsletter
July 2014

Alumni Update 2014 now available

The spring 2014 Alumni Update, an annual publication of the Department of Economics at ISU, is now available both online and in hard copy. It features news and information about alumni, faculty, gradu­ate and undergraduate students, and staff of the department.

A downloadable PDF is available here.

Additional hardcopies are available upon request by emailing ksenty@iastate.edu.

 

Department welcomes Assistant Professor Plastina

The Department of Economics wishes to welcome new faculty member, Assistant Professor Alejandro Plastina.

Plastina was previously a senior econo­mist at the International Cotton Advisory Committee (ICAC) in Washington, DC, specializing on market outlook, price analysis, label­ing, and sustainability metrics. His areas of academic focus include industrial organization, production economics, and econometrics. His publications cover a wide range of topics, including country of origin labeling, biotechnology adoption, healthcare reforms, returns to public investments in agricultural R&D, pass-through of prices, the socio-economic impacts of market disintermediation, and the potential effects of eliminating subsidies in the world cotton sector. Plastina received both a PhD in agricultural econom­ics and an MS in statistics from the University of Ne­braska-Lincoln; and both an MA in health economics (ABD) and a BS in economics from the University of La Plata (Argentina).

Contact Plastina at: 478E Heady Hall, 515-294-6160, plastina@iastate.edu.

 

Roy finds evidence of growing polarization in U.S.

To better understand the growing political divide in America, Sunanda Roy, Department of Economics lecturer, and other Iowa State researchers, developed a technique to determine if election results truly represent the "will of the people." Their study of ballot data from the Cambridge, Massachusetts City Council elections provides new evidence of the growing polarization of U.S. voters. Read the full story by Angie Hunt, ISU News Service.

 

Deiter discusses student athlete unionization in Daily article

Professor Ron Deiter teaches a class in the economics of sports. In a June 11 article for the Iowa State Daily, he said that because of the complicated and legal nature of the issue, he does not see mass student-athlete unionization throughout the nation on the horizon, and that includes Iowa State. Read the full article by Max Dible.

 

Census data analysis by Eathington shows majority of Iowa communities are shrinking

Jobs continue to be a driving factor of population growth and shifts in Iowa, which explains the ongo­ing decline in many small towns. An analysis of U.S. Census Bureau data found more than 60 percent of cities lost population since 2010. Liesl Eathington, an Department of Economics assistant scientist for the Iowa Community Indicators Program, says this is a continuation of past trends. Read the full article by Angie Hunt, ISU Service.

 

Singh and Weninger receive grant to improve Gulf fisheries management

Rajesh Singh and Quinn Weninger were awarded a $205,100 grant from the Lenfest Oceans Program, a branch of the Pew Charitable Trust. They will combine ecological and economic models to learn how to better manage Gulf of Mexico commercial and recreational fisheries.

 

Department farewells

Around 200 individuals gathered at Heady Hall on Thursday, May 1, to wish Mike Duffy and Jim Kliebenstein well as they transition into their respective retirements. The department also hosted a farewell reception for Professor Joe Herriges on April 30.

 

Moschini and Lapan awarded NIFA grant

GianCarloMoschini and Harvey Lapan were awarded a $260,000 grant through the USDA National Insti­tute of Food and Agriculture. One long-term goal of their study is to develop a framework to assess biofuel policy tools used by major economies (including the US, Brazil, and the EU) that explicitly accounts for their international ramifications.

 

Beghin receives grant to study free trade between US and EU

John Beghin was awarded a $268,000 grant from the National Institute for Food and Agriculture to study the competitiveness and prosperity of a free trade agreement between the US and EU. Beghin’s study will examine the potential impact of a US/EU free trade agreement on the bio-energy markets, bilateral global trade, and welfare of each region.

 

Hennessy and Feng awarded NIFA grant

David Hennessy and Hongli Feng were awarded a $550,000 grant from the USDA’s National Institute of Food and Agriculture (NIFA) to develop an integrated framework for understanding agro-ecosystem adaptation to climate change in a production system transition zone. They will join other researchers from the University of Wisconsin-Madison and the Universities of North and South Dakota in an interdisciplinary study.


Luvaga and undergrad Premkumar honored with Cardinal Key Award

Ebby Luvaga, senior lecturer in the Department of Economics, and undergraduate economics major Deepak Premkumar  were recently honored with Iowa State University’s Cardinal Key Award.

The award was established in 1926 to honor outstanding leaders among students, faculty, and staff at the university. Awardees demonstrate exemplary leadership in university activities, a high level of scholarship, strength of character, and outstanding service to the university community. The Cardinal Key designation also serves to identify a unifying body of campus leaders who promote “cardinal virtues” within the university community.

 

Duffy and Edwards honored by the Iowa chapter of AFSMRA

William Edwards and Mike Duffy received the Dis­tinguished Service Award to Iowa Agriculture given by the Iowa Chapter of the American Society of Farm Managers and Rural Appraisers on February 6, 2014, at the chapter’s annual meeting in Ames. The award is given to individuals who have made outstanding contributions to Iowa agriculture over their professional careers.

 

Beghin honored for work in international agriculture

Professor John Beghin was recognized for Out­standing Achievement in International Service at the College of Agriculture and Life Sciences’ spring 2014 awards program, held on March 12. The award recognizes Iowa State faculty who have promoted and integrated international perspectives in their research and teaching.

Beghin has provided important insights on international agricultural policy for a quarter century in the areas of international trade in agriculture, economic issues confronting developing countries, and an evaluation of European agriculture. His published work has covered global agriculture with articles focused on Africa, Asia, Australia and Europe, as well as the Americas. Among Beghin’s published work to date, he has sole or joint authorship on 55 journal articles, seven edited volumes and 25 book chapters on various aspects of international agricultural trade and policy. His research has garnered numerous awards from the USDA and academic societies, and has established him as one of the leading authorities on international agriculture worldwide.

 

Working papers

Intergenerational transfers and the fertility-income relationship
Cordoba, Juan Carlos; Ripoll, Marla WP #14013, June 2014
Extensive evidence from cross-sectional data reveals a robust negative relationship between family income and fertility. This paper argues that constraints to intergenerational transfers are crucial for understanding this relationship. If parents could legally impose debt obligations on their children as a way to recover the costs incurred in raising them, then fertility would be independent of parental income. In this case, if the present value of a child’s future income exceeds the cost of raising the child, as the evidence suggests is the case, parents would have incentives to raise as many children as possible in order to maximize rents. A relationship between fertility and income arises when parents are unable to leave debts behind either because of legal, enforcement, or moral constraints. We also derive the conditions under which the fertility-income relationship is negative. Notably, an intergenerational elasticity of substitution larger than one is required. In this case, parental consumption is a good substitute for children’s consumption making it optimal for income-rich parents to have fewer children.
Full text

Optimal insurance for small stakeholders
Frankel, David M. WP #14012, April 2014
We study optimal insurance for consumers who must decide whether or not to buy from a unionized firm that produces a good that is subject to network externalities. The union first announces a wage schedule. The firm then sees a precise public signal of a random economic state and chooses a price. The consumers then see even more precise signals of the state and decide whether or not to buy. The network externality and the union pricing distortion lead them to buy too infrequently. We show that the first best alternative can be costlessly attained by provid­ing countercyclical purchase insurance.
Full text

Altruism, fertility and risk
Cordoba, Juan Carlos; Liu, Xiying WP #14010, April 2014
This paper studies fertility choices and fertility policies when children’s earning abilities are random and parents are altruistic. We characterize equilibrium allocations arising in endowment economies with either complete or incomplete markets. Both models can replicate a number of empirical regularities, such as inequality, social mobility and fertility decreasing with ability, but the incomplete markets model provides a number of more plausible predictions. We find that fertility policies are generally welfare detrimental in our models even when fertility is inefficiently high.
Full text

The relative capital structure of agricultural grain and supply cooperatives and investor owned firms
Li, Ziran; Jacobs, Keri; Artz, Georgeanne M. WP #14007, March 2014
This paper seeks to examine the issue of capital constraints on U.S. agricultural supply and grain cooperatives and investor-owned firms (IOFs). A variant of the DuPont model - a technique that breaks down a firm’s rate of return to equity into measures that relate to profitability, efficiency in asset use, and leverage - permits an empirical comparison between IOFs and cooperatives on their activities, debt structure, equity, and liquidity factors. Using firm-level panel data of financial information for cooperative and IOF agricultural grain and supply firms in Iowa, the two ownership types are compared to identify whether significant differences exists in their investment activities and financial efficiency. Whether capital structure is impacted by firm type and the financial determi­nants which may contribute to such differences is highlighted.
Full text