Theses and Dissertations from UMD
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New submissions to the thesis/dissertation collections are added automatically as they are received from the Graduate School. Currently, the Graduate School deposits all theses and dissertations from a given semester after the official graduation date. This means that there may be up to a 4 month delay in the appearance of a give thesis/dissertation in DRUM
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Item Self-regulation, productivity, and nonlinear pricing. Three essays on quality production in agricultural markets(2006-05-16) Zago, Angelo; Chambers, Robert G.; Agricultural and Resource Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)In this dissertation I analyze the quality choices of a group of producers. In the first essay I use mechanism design to study the interaction of asymmetric information and the democratic process in the quality choices of a group of heterogeneous producers facing an opportunity to gain from establishing a reputation for their quality products. I find an asymmetry in the possible equilibria between the high and the low quality majorities. The quality level provided by the group with a low quality majority is lower than the first best, and the minority producers get rents. With high quality majority, if demand and group conditions are favourable, the quality level provided by the group is higher than the first best and the minority's type left with rents. Otherwise, the quality level provided by the group is first best and no rents are left to the low-quality producers in the minority. The second essay proposes a methodology to measure the characteristics of intermediate products when quality is multidimensional. It uses a general representation of the multioutput technology via directional distance functions and constructs quality indicators based on differences. The quality indicators may be used to evaluate firms' output taking into account the whole set of quality attributes. I explore the relationships among the different quality attributes and the yields by a systematic investigation of the disposability properties of the technology. In addition, I show how aggregate quality may vary with the production level. The third essay designs an optimal payment system for a group of producers implementing it empirically. In the essay I show how to implement the first best through higher prices for better quality commodities, deriving the optimal pricing schedule. I take into account producers' heterogeneity by modelling inefficiency and illustrating how technical efficiency interacts with producers' ability to produce output for a given level of inputs and hence affects revenues. The technology and the technical efficiency of producers are then estimated with a stochastic production function model. The estimation results are then used to simulate the pricing scheme.Item A Least-Cost Mechanism to Achieve Agricultural Income and Conservation Targets under Asymmetric Information(2004-11-23) Sheriff, Glenn David; Chambers, Robert G; Agricultural and Resource Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)Two policy goals dominate United States' agricultural programs: voluntary land retirement for environmental purposes and countercyclical income support. Traditionally, these goals have been pursued with separate policies. This policy separation is efficient with perfect information regarding farm productivity. A more realistic assumption, however, is that farmers have better information regarding their own productivity than the government. The focus of the dissertation is to analyze least cost agricultural policy with this type of asymmetric information. I first use a mechanism design framework to show that it is optimal to have a combined income support-land retirement program rather than separate programs. For land retirement, farmers have an incentive to overstate productivity in order to receive a higher rental payment. For income support, farmers have an incentive to understate productivity to receive a higher income support payment. With high output prices, the first effect dominates. With low prices, the second dominates. Farmers' ability to use private information to their advantage increases the cost to the government of reaching its targets. If contract commitment takes place when output prices are uncertain, the two incentives can countervail each other, reducing the cost of the policy to the government. In the second part of the dissertation, I extend the literature by showing how one can implement the policy using actual data. I conduct a numerical simulation to determine the exact payment and land set aside for each farmer. To calibrate the simulation, I apply stochastic frontier analysis to a data set of US farmers. I thus obtain consistent estimates of the key determinants of the contracts: the farm profit function and the probability distribution of profitability levels across the sector. Simulation results show that unlike current programs, the least cost contract is likely to involve pooling. Farmers with different profitability levels receive identical expected payments for idling identical acreage. The countervailing incentives created by the least-cost policy almost eliminate the information advantage of farmers, significantly reducing cost relative to current programs.