Séminaires d'automne

 

Antoine Leblois (CIRED – Centre international de recherche sur l’Environnement et le Developpement)

 

 

Matthieu Delpierre (FNRS, ECRU), Catherine Guirkinger & Jean-Philippe Platteau (CRED, University of Namur)

 

In Sub-Saharan Africa, despite a growing land pressure, the individualization of land tenure remains incomplete and extended farm households are still associated with some form of collective production. This paper provides a rationale for the persistence of collective fields based on their interaction with risk-sharing arrangements within the family.

The aim of our model is to determine two fundamental variables, namely the rate of individualization of land and the extent of risk-sharing. Regarding the former, production on the collective parcel is impeded by a moral hazard in team problem. Production efficiency is therefore monotonically and positively related to individualization. As far as the latter is concerned, we assume that household members are faced with idiosyncratic shocks and are allowed to make mutual insurance transfers. We examine the case of imperfect commitment in which an incentive compatibility condition is imposed on the insurance transfers. We show that privatization of land reduces the level of insurance that can be achieved by the distribution of the collective output. We highlight a second negative partial effect of individualization on risk-sharing, namely the fact that it makes incentives to renege on the insurance agreement stronger. Indeed, under the threat of ostracism, someone who deviates may be deprived of his share of the collective output. The cost of deviation therefore decreases with individualization. In other words, collectivization relaxes the ad interim constraint resulting in a tradeoff between production efficiency and insurance. Finally, we show that parameters such as household size and the discount factor are key determinants of the tradeoff between production efficiency and risk-sharing.

 

 

Bertrand Verheyden (CEPS/INSTEAD) & Matthieu Delpierre (FNRS, ECRU)

 

This paper provides a theory of migrants’ decisions to remit and save under uncertainty in connection with future location decisions. We show that the impact of remittances on the risk faced by the migrant is more complex than usually acknowledged. On the one hand, their effect on aggregate risk is non-monotonic. On the other hand, their impact on the geographical location of risk might be counter- intuitive, as remittances increase the migrant’s exposure to risk in the origin country. Also, marginal returns to remittances may be increasing, at least locally, due to the endogeneity of the future location. Interior solutions are therefore not guaranteed, and liquidity constraints faced by migrants may be binding. Finally, undocumented migrants are shown to be more likely to remit than legal migrants.

 

 

Rob Fraser (University of Kent)

 

This paper extends the multi-period agri-environmental contract model of Fraser (2004) so that it contains a more realistic specification of the inter-temporal penalties for non-compliance, and therefore of the inter-temporal moral hazard problem in agri-environmental policy design. On this basis it is shown that a farmer will have an unambiguous preference for cheating early over cheating late in the contract period based on differences in the expected cost of compliance. It is then shown how the principal can make use of this unambiguous preference to target monitoring resources intertemporally, and in so doing, to encourage full contract duration compliance.

 

 

Julian Alston (UC-Davis)

 

Many commentators have claimed that farm subsidies have contributed significantly to the “obesity epidemic” by making fattening foods relatively cheap and abundant and, symmetrically,  that taxing “unhealthy” commodities or subsidizing “healthy” commodities would contribute to reducing obesity rates.  In this paper we estimate and compare the economic welfare effects from hypothetical farm commodity and retail food policies as alternative mechanisms for encouraging consumption of healthy food or discouraging consumption of unhealthy food, or both.  To do this, we develop an equilibrium displacement model that characterizes the linkages among multiple commodities that are vertically linked to multiple retail products, where the commodities and retail products are related in production and consumption.  We simulate the likely effects on food and commodity consumption of several policies that have been proposed as ways of addressing obesity:  (a) eliminating current farm programs including farm subsidies and trade barriers on agriculture, (b) a subsidy on fruit and vegetable retail products, (c) a subsidy on fruit and vegetable farm commodities, (d) a tax on the fat content of food products, (e) a tax on the calorie content of food products, (f) a tax on the sugar content of food products, or (g) a uniform tax on food.  We then translate the changes in food consumption into changes in calorie consumption, adult body weight, and public health-care expenditures, and compare the changes in social welfare for each policy.  We find that, among all these policies, a tax on calories would be the most efficient as obesity policy, having the lowest deadweight loss per pound of fat reduction in average adult weight, and yielding a net social gain once the impact on public health care expenditures is considered, whereas the other policies typically would involve significant net social costs.