Motivated by repeated price spikes and crashes over the last decade, weinvestigate whether the growing market shares of futures speculatorsdestabilize commodity spot prices. We approximate conditional volatility andanalyze how it is affected by speculative open interest. In this context, wesplit our sample into two equally long subperiods and document whether thespeculative impact on conditional volatility increases. With respect to sixheavily traded agricultural and energy commodities, we do not find robustevidence that this is the case. We thus conclude that the financializationof raw material markets does not make them more volatile.

With the aim of examining the causal structure between foreign directinvestment (FDI) and economic growth, this study derives inductive causalinference using the directed acyclic graph approach, which makes no a prioricausal assumptions. There are three major findings of this study. First,economic growth causes FDI inflows for developing countries, whereas FDIinduces economic growth for developed countries. Second, trade is animportant intermediary to facilitate the interaction between FDI and otherfactors. Third, the stock market is found to be an intermediary thatamplifies the influence on FDI from many causal variables of FDI fordeveloped countries.

Cost-effective extension strategies are needed to promote widespreadadoption of agricultural technologies in developing countries. Integratedpest management (IPM) practices, for example, can offer economic, health,and environmental benefits but remain largely underused. This studyevaluates the current IPM dissemination program implemented by theBangladesh Department of Agricultural Extension and uses a linearprogramming model to examine alternative strategies to improve IPM adoption.Results suggest that technology transfer programs may increase their impactby reallocating funding from intensive but costly interpersonalcommunication methods (i.e., farmer field schools) to less intensive methods(i.e., mass media and field days) that reach broader audiences.

This article analyzes the impacts of microbial inoculant (MI) technology,which is a part of integrated pest management, on the U.S. apple productionusing farm-level data. To test the likely production impacts suggested byagronomic literature, we estimate a pesticide use function and stochasticproduction functions with damage control input specification. The resultsshow that although adoption of the MI technology does not reduce the use ofpesticides, the technology has a significant positive impact on yields andis associated with higher technical production efficiency rates.

Deterministic and stochastic yield response plateau functions were estimatedto determine the expected profit-maximizing nitrogen rates, yields, and netreturns for corn grown after corn, cotton, and soybeans. The stochasticresponse functions were more appropriate than their deterministiccounterparts, and the linear response stochastic plateau described the datathe best. The profit-maximizing nitrogen rates were similar for corn aftercorn, cotton, and soybeans, but relative to corn after corn, the expectedcorn yield plateaus increased by 12% and 16% after cotton and soybeans,respectively. Expected net returns increased for corn after cotton andsoybeans relative to corn after corn.

Production timing is an essential element in fresh vegetable growers'efforts to maximize profitability and reduce income risks. The present studyuses biophysical simulation modeling coupled with a dual crop (tomatoes,sweet corn) whole-farm economic formulation to analyze the effects ofgrowers' risk aversion levels and price consideration (seasonal or annualprice consideration) in expected net returns and production practices. Thefindings indicate that consideration of seasonal price trends results inhigher expected net returns and greater opportunities to mitigate risk.Furthermore, risk aversion levels substantially influence production timingwhen seasonal price trends are considered.

This study examines U.S. crop producers' perceptions of climate change, itseffects on crop agriculture, and likely ways farmers would adapt to weatherextremes. Based on a survey of crop producers in four states, we find that asignificant proportion of farmers do not perceive that climate change hasbeen scientifically proven and do not believe that it will adversely affectaverage crop yields and yield variability. Farmers are likely to diversifycrops, buy crop insurance, modify lease arrangements, and exit farming inresponse to extreme weather caused by climate change.

Using principal component analysis, a climate index is developed to estimatethe linkage between climate and crop yields. The indices based on threeclimate projections are then applied to forecast future crop yieldresponses. We identify spatial heterogeneity of crop yield responses tofuture climate change across a number of U.S. northern and southern states.The results indicate that future hotter/drier weather conditions will likelyhave significant negative impacts on southern states, whereas only mildimpacts are expected in most northern states.

An extension of the Guerrero et al. (2010) net present value (NPV) analysisusing real options analysis (ROA) is offered to improve machineryreplacement decisions. Specifically, the feasibilities of replacing naturalgas irrigation systems with either electric or hybrid (electric/wind)systems are evaluated. Results indicate NPV and ROA criteria can yieldopposite decisions depending on the stochastic nature of the parameters,reversibility of the investment, and flexibility of investment timing. Forpolicy, NPV results indicate that replacing natural gas with a hybrid is onthe cusp of being optimal. However, ROA indicates this NPV implication maynot hold.