Search

Recent research shows that about 2.5 million people have no access to financial services worldwide. The research also shows that Africa, the home to 70 percent of the world’s least developed countries, has 80 percent of its population unbanked. These statistics are particularly disturbing as they have direct implications for economic growth. This is because, financial inclusion, including savings, has been shown to have a positive impact on economic growth and development. However, recent empirical research is limited in explaining the determinants of the choice of the savings option in Africa. By using survey data obtained from the World-Global Financial Inclusion (Global Findex) Database, 2014, we investigate how household’s characteristics affect their choice of a saving option. We use the multinomial probit model due to its ability to account for issues of independence of irrelevant alternatives (IIA). Our results indicate that there is a strong disconnect between female entrepreneurs and the formal banking sector.

This study investigates the producer/farm characteristics that influence the adoption and extent of adoption of georeferenced grid soil sampling technology, using the two-part model, among cotton producers in the southern US. The extent of adoption is defined as the number of acres managed with the technology. Soil sampling is seen as the foundation of precision agriculture. The study uses a 2013 survey data on active cotton producers in 14 southern US states conducted by Cotton Incorporated. The study identified producers’ awareness of a cost-share reimbursement program, percentage of income from cotton production, the use of yield map, ownership of livestock, land acreage devoted to other crops, and cotton productions in Mississippi and Tennessee as important variables that influence the adoption and the extent of adoption of georeferenced soil sampling technology.

Irrigated agriculture on the Southern High Plains of Texas relies heavily on water extracted from the Ogallala Aquifer, which is functionally non-renewable. Concerns about depletion of the aquifer have led to the implementation of policies designed to slow water extraction and increase the usable life of the resource. Policies have not been uniform across the aquifer, however, leaving some farmers in regions where no effective groundwater extraction policy exists yet, but are only a short distance away from regions where farmers do face regulatory limits on extraction. This paper investigates the effects of policy uncertainty on the extraction of groundwater in those areas where farmers must make irrigation decisions without knowing whether they will be restricted in their irrigation decisions in the future. We build a production model of the major crops in 6 counties in Texas, and use the quantity of corn (an irrigation-intensive crop) produced as a proxy for irrigation use. We find that corn acreage has increased significantly in years in which a policy was in place, but was officially unenforced in 5 of the 6 counties. After controlling for price and climate effects, we conclude that there is strong evidence that policy uncertainty increases groundwater extraction.

This study investigates the behavior of individuals in the US regarding the amount of student loans they might borrow with a two-part model. The model was estimated using the 2013 Survey of Consumer Finance (SCF) data, collected by the Governors of the Federal Reserve System, US, in collaboration with the Statistics and Income Division of the Internal Revenue Service, US. The sampling and imputation errors that are associated with the SCF data were accounted for in the model estimation process to ensure reliable inferences. Old age (41 years and older), previous experience with bankruptcy, attitude towards borrowing to finance education, being Hispanic, employment status, and wage salary were found to be significant variables that can influence the likelihood that a student will borrow a student loan and the amount he/she would borrow. This study also found out that using the SCF data without accounting for the inherent imputation and sampling errors, could lead to biased estimates and incorrect model inferences. The results of this study could help students’ loan managers and other relevant stakeholders such as the Federal Government understand the behavior of potential borrowers of student loans to effectively manage the program.

Texas High Plains (THP) is a major cotton producing region in the US with low rainfall and decreasing irrigation water availability. Hence stochastic rainfall poses considerable production risk in the region and developing strategies to maximize the average profit and minimize the year to year variability in profits is an important concern. In this study, Cotton2K, which is a process based cotton growth simulation model, was used along with an economic optimization model to identify the optimal strategies for temporal allocation of irrigation water for center pivot irrigated cotton in THP. The study analyzed different strategies to allocate irrigation water during one growing season among three different growth stages of cotton (planting to first bloom, first bloom to first open boll, and first open ball to 60% open boll) at four different sub-optimal levels for irrigation water availability (6, 9, 12, and 15 acre-inches). The results showed that the profit and utility maximizing strategy was to apply all available irrigation water during stage II when six, nine, and twelve acre-inches of irrigation water were available. When fifteen inches of irrigation water was available, the optimal strategy was to use 90% of the available irrigation water in stage II and the rest in stage III. The sensitivity analysis indicated that these optimal decisions were not sensitive to variations in price of cotton lint and farmer’s attitude towards risk.

We analyzed data obtained from the 2009 Southern Cotton Precision Farming Survey of farmers in twelve states (Alabama, Arkansas, Florida, Georgia, Louisiana, Missouri, Mississippi, North Carolina, South Carolina, Tennessee, Texas, and Virginia) to identify reasons for adoption/nonadoption of precision farming technologies. Farmers provided cost, time constraint, satisfaction with the current practice and other as reasons for not adopting precision farming technology. Profit, environmental benefit and to be at the forefront of agricultural technology are main reasons for adopting precision farming technology. Results from a nested logit model indicated that formal education, farm size, and number of precision farming meeting attend by farmers have positive effect on adoption of PF technologies. Moreover, spatial yield variability increases probability of adopting precision farming technologies for profit reasons.

A nested logit model was applied to the 2009 Southern Cotton Precision Farming Survey to study the influence of farmer and farm characteristics on the adoption of Variability Detection Technologies (VDTs) and Variable Rate Application Technology (VRT). The results reveal that farm size, ownership of the land, and exposure to Extension activities are important factors affecting the choice of VDTs. Also, the farmers adopting both soil- based and plant-based VDTs were found to be more likely to adopt VRT. The probability of adoption of VRT was found to be lower for Texas cotton farmers compared to those in other surveyed states, regardless of the type of VDT adopted.

We used the 2009 Southern Cotton Precision Farming Survey data collected from farmers in twelve U.S. states (Alabama, Arkansas, Florida, Georgia, Louisiana, Missouri, Mississippi, North Carolina, South Carolina, Tennessee, Texas, and Virginia) to understand why farmers do not adopt seemingly profitable precision farming technology. Farmers provided cost, time constraint, satisfaction with the current practice and other as reasons for not adopting precision farming technology. Results from a multinomial logit regression model indicated that manure application on field, more formal education, larger farm size, participation in conservation easement or agricultural easement generally decreases the probability of nonadoption of precision agriculture in cotton production.

The establishment of new biorefineries in an effort to increase energy security in the United States has generated positive impacts by creating jobs and generating economic output. However, communities and local and state leaders are concerned about whether ethanol production is an effective use of limited water resources. Input-output analysis is used to determine if locating ethanol plants in the Southern High Plains of Texas is an effective use of water resources relative to current irrigated crop production in terms of socioeconomic impacts. Results indicate ethanol production generates impacts above and beyond that of crop production utilizing an equivalent amount of water.

The effectiveness of sources of information on adoption of precision farming technologies (PFT) by US cotton producers is evaluated. The conceptual framework considers information flows as production inputs with derived demand from the demand for PFT’s and output. By using multivariate probit regression, it’s found that the use of university publications and attendance to events organized by universities had more consistent and significant positive effects on adoption of PFT’s. Information from farm dealers impacted significantly the adoption of zone soil sampling technologies and soil survey maps. In conclusion, sources of information have positive and asymmetric effects on adoption of PFT’s., Replaced with revised version of paper 02/16/11.

We used survey data collected from cotton producers in eleven U.S. states to address the issues of correlated events and individual heterogeneity in multiple precision technologies adoption. Results from a conditional frailty model indicated that younger, better educated cotton producer adopted precision technology quickly once those technologies were available. Further, farm size and farm income have positive influence on a chance of technology adoption by the cotton farmers. Moreover, the conditional frailty model addresses for both heterogeneity and event dependence allowing different baseline hazards for each group of precision technology adopters.

A nested logit model was used to analyze the 2009 Southern Cotton Precision Farming Survey to study the impact of farmer and farm characteristics on the adoption of Variability Detection Technologies (VDT) and the adoption of Variability Rate application Technology (VRT) conditioned on the type of the VDT chosen. The results showed that the farm size and exposure to extension activities are important factors affecting the choice of VDTs. The farmers adopting both soil and plant based VDTs are more likely to adopt VRT. The probability of adoption of VRTs was lower for Texas cotton farmers irrespective of the type of VDT adopted. In general, younger, more educated farmers who use computers for farming operations are more likely to adopt VRT when they choose soil based or both soil and plant based VDT.

Precision Farming by Cotton Producers in Twelve Southern States: Results from the 2009 Southern Cotton Precision Farming Survey

This paper studies the optimal management of groundwater resources when agronomic and hydrologic constraints bind the use of groundwater for irrigation. The binding constraints lead to a perfectly inelastic demand for groundwater. In the case of symmetric agents the social and private rates of groundwater extraction coincide with one another and commonality is completely innocuous; in the case of asymmetric agents the rate of extraction remains the same in the social and private setting, yet irrigation is abandoned by the same agent at different times. The model offers one way to rationalize the empirically found peculiarities of sticky water demand and Gisser-Sanchez Effect which defy conventional theory. The situations described in the model also challenge conventional corrective measures for management of groundwater as a common property resource. Policy recommendations are provided.

Due to declining water levels in the Ogallala Aquifer, policy alternatives for extending the life of the aquifer for irrigation and other purposes are evaluated. The study concludes that blanket water conservation policies for the region are likely to be inefficient because of economic and hydrologic differences in the region.

Water scarcity has been a significant issue for several decades in the Texas High Plains, with agriculture identified as the main activity contributing to this scarcity. To address this issue, much effort has been devoted to developing and encouraging adoption of sophisticated irrigation systems with high levels of water application efficiency, such as the low energy precision application (LEPA) system, subsurface drip irrigation (SDI), and variable rate irrigation (VRI). In this study, the economic feasibility of these irrigation systems is evaluated in cotton farming in the Texas High Plains using a real options approach. Results find that only the LEPA system is profitable under current conditions. The VRI system is profitable with high cotton prices (above $0.72/lb), while SDI is not profitable under any conditions explored.

This paper develops a management zone delineation procedure based on a spatial statistics approach and evaluates its economic impact for the case of Texas cotton production. With the use of an optimization model that utilizes a yield response function estimated through spatial econometric methods, we found that applying variable N rates based on the management zones delineated would result in higher cotton yields and higher net returns, above Nitrogen cost, relative to uniformly applying a single N rate for the whole field. In addition, a variable rate N application using the delineated management zones produced higher net returns, above Nitrogen cost, relative to a variable N rate system where the zones are based solely on landscape position. This is indicative of the potential economic value of using a spatial statistics approach to management zone delineation.

Irrigated agriculture has played a vital role in the development and growth of the Great Plains Region of the United States. The primary source of water for irrigation in this region is the Ogallala Aquifer. The Southern portion of the Ogallala Aquifer is considered exhaustible due to the low level of recharge relative to the quantities of water pumped. Analysis and evaluation of water conservation policies which could extend the economic life of the Ogallala Aquifer in the Southern High Plains of Texas and Eastern New Mexico, and which could contribute to maintaining the viability of the regional economy is important. This study evaluates the impacts of water conservation policies which limit drawdown of the Ogallala Aquifer. County level dynamic optimization models maximizing net present value of net returns to land, management, groundwater, and irrigation systems over a sixty year planning horizon were formulated to evaluate three aquifer drawdown restrictions. The results of this study indicate that because of the differences in hydrologic characteristics and current irrigation levels across counties in the study area, blanket water conservation policies for the region as a whole are likely to be inefficient. This study concludes that for this region, water conservation policies that focus on counties that would deplete the aquifer to less than 30 ft. of saturated thickness possess the lowest implicit cost of conserving saturated thickness.

The department began producing formal reports of research activities in 1995/96 in conjunction with the establishment of the Cotton Economics Research Program; reports on Cotton Economics Research have been done annually since then. As our research programs expanded and diversified, we initiated a separate Departmental Research Report in 1998/99. With this annual report we are combining all research reporting into the single report, with more compartmentalization of research programs. This report highlights research activities in the Department of Agricultural and Applied Economics during fiscal year 2003/04. The overall program has been characterized by its flexibility in addressing varied issues of economic significance and is applied in nature, although there are some other disciplinary elements within it. We are allocating approximately 46% of its full-time faculty resources to research (about 6 FTE on a 12-month basis), including our 48% research appointment with the Texas Agricultural Experiment Station. Research projects in the department cover a range of subject matter areas: production economics (including finance and risk management), market economies, natural resource (including environmental) economics, international economics, economic policy analysis, and consumer economics. Fiscal year 2003/04 was another productive research year for the Department of Agricultural and Applied Economics. Overall, 32 different research projects were active during the year. Appendix A contains the individual annual reports of each active research project. While we are increasing our level of research activity in cotton economics, an increasing proportion of the research is in other subject-matter areas. The research program is becoming more diverse as per our strategic plan. Also, the program continues to become relatively more nationally and internationally focused, as opposed to state focused. These changes are occurring in part because of our relatively greater federal funding compared to state funding. Total funding secured by faculty in the Department for the research projects during fiscal year 2004/04 was $1,608,000 (Table 1). More details on research funding in 2003/04 are provided in Appendix B. The specifics with respect to the funding generated under the different projects is outlined in the individual projects' annual reports. Of the $1.6 million generated, 16% came from State funding sources, 78% came from Federal funding sources, and 6% came from Private funding sources. It is important to point out that of the $256,145 coming from State funding sources, approximately 62% ($159,453) came to the Department under the Applied Economics Research Fund (a combination of the former Cotton Economics Research Special item and a portion of the former CASNR Plant Stress funding). From the total internal funding base, the faculty generated $6.58 of external funding for each $1.00 of departmental funding. The total amount of research funding generated by the faculty in fiscal year 2003/04 was the highest level in the history of the Department (Table 1). In the last five years, total research funding increased by 156%; the largest increase has been in federal funding (896% increase).

Three alternative groundwater conservation policies were examined for their impact on the regional economy of the Southern High Plains of Texas using nonlinear optimization models and an input-output model. Restriction of drawdown of the aquifer was found to be more effective than proposed water use fees.