Purdue
University ∙ Department of Agricultural
Economics
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Instructor: |
656 Krannert Bldg. |
494-4218 (o) |
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Secretary: |
Carmen Turner |
688 Krannert Bldg. |
494-5794 (o) |
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Class Meetings: |
T Th
noon-1:15 in KRAN G007 |
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Office Hours: |
MWF noon-1:15 in my office;
drop-ins welcome at other times |
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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, Carmen Turner (phone: 494-5794, email turne148@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 11th, 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 Tuesday, November 13th).
This is well before you will be scheduled to present the results in class (on November
29th, December 4th and December 6th). The final report will be due in
my office by 5pm on the Friday before finals week (December 7th). 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 following
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:
|
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
Week 1. No class meetings
8/21 No class
8/23 No class
Optional
review of Background Material (not in readings packet; available
online)
World Bank, World Development Report 2008:
Agriculture for Development. Washington, DC: World Bank.
New background reading (added 8/28)
– hot off the press:
Otsuka, K. (2012) “Food Insecurity, Income Inequality, and the Changing
Comparative Advantage in World Agriculture.”
Presidential Address at the 27th International Conference of
Agricultural Economists, Foz do Iguaçu, Brazil. (hyperlinked here).
Week 2. Introduction and background
8/28 What’s ahead?
Introduction to Agricultural Development and Policy
8/30 Some
context: The world food and financial crises of 2007-09
Class profile (from introduction sheet)
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 3. Introduction to agricultural
policy
9/04 Farm and food problems: the
development paradox and structural transformation
9/06 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 9/6 in class)
Week 4. Farm households, the
“industrialization” of agriculture, and technology
9/11 Does agriculture industrialize?
9/13 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 5. Nutrition and food markets
9/18 Nutrition, health and human capital
9/20 Imperfect
information and food demand
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.
Homework
#2: Food prices, nutrients and the least-cost diet (due Thursday
9/27 at start of class)
Week 6. Market equilibrium and social welfare
9/25 Market equilibrium
with trade and policy (slides 1-21)
9/27 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 7. Policies and their impacts
10/02 Measuring
policies: distortions and investment (slides 1-26)
10/04 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.
Week 8. Protection, concluded
10/09 Oct. break -- no class
10/11 Aggregate measures of support
(slides 44-71)
Readings:
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.
Reminder:
mid-term exam to be given Tuesday 10/16 in class
Week 9. Mid-term exam
10/16 Mid-term exam
(an example of a previous exam is
linked here).
10/18 Feedback:
midterm exam results and review
Week 10. Measuring Impacts using Household
Survey Data
10/23 Impact
evaluation in theory and practice
10/25 Indirect and
unintended consequences
Readings:
For 10/25:
Homework
#3: Markets, market failures and policy failures (due 11/06)
Week 11. Measuring Impacts using
Household Survey Data
10/30 project planning and
notes on effective writing
11/01 No class meeting; individual
work on course projects
Week 12. Explaining policies: economics
of the public sector
11/06
Markets: how far reaches the invisible hand?
11/08 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 13.
Rent-seeking and political economy
11/13 Political economy and public choice
11/15 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 Tuesday 11/13 at start
of class)
Week 14. Political economy of
agricultural policy (continued)
11/20
Political economy theories and
hypothesis tests
11/22 Thanksgiving (no class)
Week 15. Wrapping up and project
presentations
11/27 Feedback
on drafts and revisiting the World Food Crisis of 2007-08
11/29 Student presentations: Group A
Project assignment #3: in-class presentation with slides (coming
soon!)
Week 16. Project presentations
12/04 Student presentations: Group B
12/06 Student presentations: Group C
12/07 Final paper due in
KRAN 656 by 5:00 pm
12/10 Final exam, 1:00-3:00pm, KRAN G007