Purdue University ∙ Department of
Agricultural Economics
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Instructor: |
656 Krannert Bldg. |
494-4218 (o) |
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Secretary: |
Angie Flack |
565 Krannert Bldg. |
494-4301 (o) |
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Class Meetings: |
T Th noon-1:15 in Rawls 1071 |
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Office Hours: |
MWF noon-1:00 in my office; drop-ins welcome at other times |
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Also… |
Download this syllabus in PDF format if desired |
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OVERVIEW
In this
course we analyze how the agricultural sector changes over time, interacting with
government policies in both the farm and nonfarm sectors. Our goal is to
explain and predict major trends and differences across countries, using
economic theory to explain and predict what governments will do and how agents
operating in the food and farm sectors are likely to respond. Lectures
and homework assignments are used to provide insights into economic aspects of
a wide range of issues affecting the agricultural sector.
OFFICE HOURS
Note that I am generally available
during the times listed above, and more generally on class days. I maintain an
"open door" policy regarding office hours. However, I have a number
of commitments other than AGEC 640, so I strongly recommend that you make an
appointment to see me to guarantee that I will be available when you come to my
office. Use of email for questions and scheduling of appointments is strongly
encouraged. To schedule an appointment, contact my secretary, Angie Flack
(phone: 494-4301, email amflack@purdue.edu).
PREREQUISITES
The course is
designed for first-year graduate students. There are no specific
prerequisites, but more advanced students with stronger backgrounds in
economics will be able to apply that knowledge in the context of this course.
Readings are intended to be accessible for all graduate students, and can be
interpreted at various levels of depth.
LEARNING OBJECTIVES
1.
Provide students with an understanding of the agricultural sector,
its evolution, and the role of policy in shaping the sector.
2.
Provide students with analytical tools relevant to the study of
the agricultural sector.
3.
Provide students with a classroom environment that is conducive to
learning and skill development, which is supportive of student expression of
ideas and opinions.
CLASS PROCEDURE
This course follows a lecture
format with homework assignments and exams used to reinforce understanding of
class material. Student participation in class discussion is expected. All information
regarding the course, including assignments and the class schedule is available
via the course home page at: http://www.agecon.purdue.edu/academic/agec640/
COURSE
STRUCTURE
The course
begins with a brief overview of the major policy issues and drivers of change
in the food and agricultural sector around the world. We then spend the
bulk of the semester building up the analytical methods and results developed
by economists to explain and predict household choices, market outcomes and
government policies, starting with farm households’ decisions over production,
consumption and trade. We consider the role of biological constraints,
first for nutrition and health, and then for farm productivity, and ask how
those constraints can be overcome through technology and specialization.
We ask how market prices are formed, how market outcomes respond to various
kinds of changes, and what (if anything) we can infer from those outcomes about
changes in the well-being of market participants. We then examine the
evidence on what governments actually do across countries and over time, and
try to explain those interventions in economic terms. The focus of the
course is on these modern “political economy” explanations of policy choices,
in which government actions are explained as the result of equilibrium among
optimizing people in both the public and private sectors. The course
concludes with presentation and discussion of student projects.
READINGS
A complete
course packet is available for purchase at BoilerCopy,
in the Purdue Union; some readings are also on-line, with links provided from
this syllabus and the course website. Others will be distributed, as needed, in
class.
HOMEWORK
ASSIGNMENTS
Links to the
three homework exercises are included in the electronic version of this
syllabus; opening those documents online offers you live links to the data
sources need to complete the assignment.
Your semester-long
project is expected to be an analytical review of the literature on a
researchable question. This will help you get started on a thesis or
other research paper, offering the chance to conduct a deeper analysis of the
existing literature than might otherwise be possible. Some students may
already have access to interesting data and an appropriate method, in which
case it might be possible to use the project as a vehicle to produce an
original research paper instead of a literature review.
I can advise
you on what topics are likely to prove most fruitful. Often I will
encourage you to do this course project on the same topic as other work you are
pursuing so as to specialize and achieve a deeper level of analysis, but
sometimes it is preferable to diversify and start research on something new.
Please read (and re-read) carefully the guidelines for
the course project as you work on it.
The final
result of the project is a written report.
The report has a length limit of 20 double-spaced pages, inclusive of
all charts, tables and references. You will also present your report in
class, using a maximum of five slides. For the class presentation the
five-slide limit will be strictly enforced, to help you practice distilling
results into a very brief message that can be communicated visually and in
person.
To make the
project as productive as possible, we will proceed in stages. First, you
must send as an email to me a title and brief (maximum one-paragraph)
description of your chosen topic. You
must do this by the start of class on Thursday October 6th,
so I can provide feedback in a timely manner. This feedback will allow
you to modify your goals accordingly. The second stage is to submit
a rough first draft to me for comments.
A printed copy of this rough draft will be due in class on Thursday, November
10th). This is well before you will be scheduled to present the
results in class (on November 29th, December 1st and December 6th). The
final report will be due in my office by 5pm on the Friday before finals week (December
9th). You will be
required to submit your final paper in both hard copy
(printed) and electronic (pdf) formats.
EXAMINATIONS
Two exams will be given. A mid-term exam will be held in class immediately
prior to October break. A final exam will be given during the regular final
exam period. These exams are designed to test understanding of concepts and course
material. Each exam will have equal point value. The two exams will cover
material from both the readings and the lectures, for which slides will be
posted online on the day of each lecture. The final exam will be
comprehensive, covering both halves of the course.
GRADING POLICY
The final course grade will be
computed from points earned from homework assignments, examinations and a
course project, as follows:
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Homework assignments (3@ 10% each) |
30% |
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Course project |
30% |
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Exams (2 @ 20% each) |
40% |
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Total |
100% |
COMMUNICATION
Please note
that my primary out-of-class method of communication will be via email to your Purdue
email address. I will not generally attempt to contact you at email addresses
other than your Purdue email address. It is your responsibility to check for
mail on a regular basis. I recommend checking your Purdue email account at
least once every 24 hours.
SPECIAL NEEDS
If
you have a disability that requires academic adjustments, please make an appointment
to meet with me during the first week of classes to discuss your needs. Please
note that university policy requires all students with disabilities to be
registered with Adaptive Programs in the Office of the Dean of Students before classroom accommodations
can be provided.
ACADEMIC INTEGRITY
University policy on academic
dishonesty is clear: academic dishonesty in any form is strictly prohibited.
Anyone found to be cheating or helping someone else cheat will be referred
directly to the Dean of Students for disciplinary action. Penalties are severe
and may include dismissal from the University. The risks associated with cheating
far outweigh the perceived benefits. Academic dishonesty includes citing
someone else's work as your own, using "cheat sheets" or sharing your
answers with someone else. If you are unsure whether your planned action
constitutes academic dishonesty, seek clarification from your instructor. Other
information regarding your rights and responsibilities as a student is
contained in the Purdue University Code
of Conduct. Writing assignments
for this course will be checked for originality using the iThenticate
software.
CAMPUS EMERGENCIES
In the unusual event of a major
campus emergency, course requirements, deadlines and grading percentages are subject
to changes that may be necessitated by a revised semester calendar or other
circumstances. To get information about changes in this course visit the course
home page, contact me by email at shivelyg@purdue.edu, or call me at my office
(494-4218) or at home (743-6439).
CLASS
TOPICS AND READINGS
Optional
Background Material (not
required, not in readings packet)
World Bank, World Development Report 2008:
Agriculture for Development. Washington, DC: World Bank.
Week
1. Introduction and background
8/23
What’s
ahead? Introduction to Agricultural Development and Policy
8/25 Some context: The world food and financial crises of
2007-09 [+ class profile]
Readings:
Abbott,
Philip C., “Development
Dimensions of High Food Prices.” Paris: OECD, May 2009 (95
pages).
Masters, W. 2008. “Beyond the Food Crisis in Africa.”
African Technology Development Forum, 5(1-2): 3-13.
Week
2. Introduction to agricultural policy
8/30 Farm and food
problems: the development paradox and structural transformation
9/01 Mouths to
feed, farmers to employ: population growth and demographic transition
Readings:
Norton, G.W.,
J. Alwang and W.A. Masters (2006), “Economic Transformation and Growth”,
chapter 6 in Economics of Agricultural Development (Abingdon: Routledge), 20 pp.
Tomich,
Thomas P., Peter Kilby and Bruce F. Johnston (1995),
"Poverty and the Rural Economy" and "Structural
Transformation" (excerpts), in Transforming Agrarian Economies (Ithaca,
NY: Cornell University Press), pp. 9-19 and 35-48.
Montgomery,
Keith (2000), “Notes on the Demographic Transition.” Also available
online, http://www.uwmc.uwc.edu/geography/Demotrans/demtran.htm.
Homework
#1: Drivers of Change (due Thursday 9/8 in class)
Week
3. Farm households, the “industrialization” of agriculture, and
technology
9/06
Does
agriculture industrialize?
9/08 Input use,
R&D and technology adoption
Readings:
Allen, D.W.
and D. Lueck, The Nature of the Farm: Contracts,
Risk and Organization in Agriculture (Cambridge: MIT Press, 2002),
excerpts: “Farming in North America” (pages 17-26), “Farm Organization and
Vertical Control: Historical and Current Case Studies” (pages 181-191).
Alston, J.M,
M.C. Marra, P.G. Pardey and
T.J. Wyatt, "Research returns redux: a
meta-analysis of the returns to agricultural R&D." Australian
Journal of Agricultural and Resource Economics, 44 (2, June 2000): 185-215.
Week 4. Nutrition and food markets
9/13
Input use,
R&D and technology adoption (continued from 9/08) [+feedback on hw #1]
9/15 Nutrition,
health and human capital (previously 9/13)
[ no
class coverage of “Imperfect
information and food demand” ; look
at the slides on
your own – much of this is review material on price and income elasticities,
etc. ]
Readings:
Haddad, L. et
al., “Nutrition Trends and Implications,” chapter 2 in The Fifth
Report on the World Nutrition Situation: Nutrition for Improved Development
Outcomes. UN Standing Committee on Nutrition, March
2004.
Masters, W.A. and D. Sanogo,
(2002) “Welfare Gains
from Quality Certification of Infant Foods: Results from a Market Experiment in
Mali” American Journal of Agricultural Economics, 84(4):
974-989.
Homework
#2: Food prices, nutrients and the least-cost diet (due Tues. 9/27 in
class)
Week
5. Market equilibrium and social welfare
9/20
Market
equilibrium with trade and policy (slides 1-21)
9/22 Policy
incidence and social welfare: value and limitations of economic surplus
(slides 22-40)
Readings:
Schmitz, A.,
H. Furtan and K. Baylis, “Theoretical
Considerations” and “Trade and Macroeconomic Effects”, chapters 4 and 5 in Agricultural
Policy, Agribusiness and Rent-Seeking Behavior. Toronto: University
of Toronto Press, 2002), pages 83-118 and 119-153.
Hines, James R., Jr., "Three Sides of Harberger Triangles." Journal
of Economic Perspectives 13(2, Spring, 1999): 167-88.
Week
6. Policies and their impacts
9/27
Measuring policies:
distortions and investment (slides 1-26)
9/29 Nominal and
effective protection (slides 28-42)
Readings:
Masters,
W.A., "Guidelines on National Comparative Advantage and Agricultural
Trade," APAP III Methods and Guidelines Paper No.
4001 (Bethesda, MD: Abt Associates, 1995), pages
1-29.
Mid-term
Exam (to be given Thursday 10/6 in class)
Week 7. Protection, concluded; mid-term exam
10/04
Aggregate
measures of support (slides 44-71)
10/06 Mid-term exam (an example of a previous exam is linked
here).
For 10/04:
Tsakok,
I. (1990) “Single-Market Analysis: Calculating the Impact of Price Policy,”
chapter 6 in Agricultural Price Policy (Ithaca: Cornell University
Press), pages 158-182.
OECD (2008) “Agricultural Policies in OECD
Countries at a Glance 2008” (Paris: OECD), pages 33-58.
Project
Assignment #1: topic for the course project (due in class, Thurs. 10/06)
Week
8. October break
10/11 Oct.
break -- no class
10/13 No class meeting; individual work on course project
Week 9. Feedback
10/18 Feedback:
midterm exam results and review
10/20 Course project planning and
notes on effective writing
Week
10. Measuring Impacts using Household Survey Data
10/25
Impact evaluation in theory and
practice
10/27 Indirect and
unintended consequences
Readings:
For 10/25:
Coming soon – will be distributed in class.
For 10/27:
Homework
#3: Markets, market failures and policy failures (due 11/03)
Week 11. Explaining policies: economics of the
public sector
11/01 Markets: how
far reaches the invisible hand?
11/03 Policy:
how well can market failures be remedied?
Readings
Hillman, A.,
“Private Solutions for Externalities” and “Public Policy for Externalities,” ch. 4.1 and 4.2 in Public Finance and Public Policy:
Responsibilities and Limitations of Government (New York: Cambridge
University Press, 2003), pages 228-294.
Week 12. Rent-seeking and political economy
11/08 Political
economy and public choice
11/10 The stylized facts of agricultural policy
Readings
Hillman, A. (2003) “Political Behavior and
Public Policy” and “Public Policy and Rent-Seeking Behavior,” ch. 6.2 and 6.3 in Public Finance and Public Policy:
Responsibilities and Limitations of Government (New York: Cambridge
University Press), pages 416-460.
Masters, W.A. and A. Garcia (2010) “Price
Distortion and Stabilization: Stylized Facts and Hypothesis Tests,” in K.
Anderson, ed., The Political Economy of
Agricultural Price Distortions. Washington, DC: The World Bank.
Anderson, K. (1995) "Lobbying
Incentives and the Pattern of Protection in Rich and Poor Countries." Economic Development and Cultural
Change 43(2): 401-424.
Cadot, et al. (2004) “Lobbying, Counterlobbying
and the Structure of Tariff Protection in Poor and Rich Countries.” World
Bank Economic Review 18(3): 345-366.
Yao, Yang (2011) “From
production-oriented to welfare-oriented government.” East Asia Forum Quarterly 3(2): 6-7. (not
in packet, linked here and distributed in class).
Project
assignment #2: First draft of the literature review (due Thursday 11/10 at
start of class)
Week 13. Political economy of agricultural policy
(continued)
11/15
Class cancelled
11/17 Political
economy theories and hypothesis tests
Week 14. Thanksgiving break
11/22
Feedback on drafts and World Food
Crisis of 2007-08
11/24 Thanksgiving (no class)
Project
assignment #3: in-class presentation with slides (coming soon!)
Week 15. Project presentations
11/29
Student presentations: Group A
12/01 Student presentations: Group B
Week 16. Wrap-up
12/06 Student
presentations: Group C
12/08 Presentation feedback
12/09 Final paper due in KRAN 656 by 5:00 pm
12/13 Final exam, 8-10am in RAWLS 1071