Calibration of shadow values in constrained optimisation models of agricultural supply

Garnache, Cloé; Mérel, Pierre; Howitt, Richard E.; Lee, Juhwan

doi:10.1093/erae/jbx005

Cited by 18 publications

(21 citation statements)

References 33 publications

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“…The SWAP model is a regional agricultural production and economic optimization model that simulates the decisions of growers across 93% of agricultural land in California. The SWAP model is calibrated using Positive Mathematical Programming (PMP) [ Howitt , 1995; Merel and Howitt , ; Garnache et al ., ]. Crop production is modeled using Constant Elasticity of Substitution (CES) production functions, with primary inputs of land, labor, water, and other supplies.…”

Section: Embedded Hydrologic Response Function: Swap and C2vsimmentioning

confidence: 99%

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Hydroeconomic modeling of sustainable groundwater management

MacEwan¹,

Cayar²,

Taghavi³

et al. 2017

Water Resources Research

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In 2014, California passed legislation requiring the sustainable management of critically overdrafted groundwater basins, located primarily in the Central Valley agricultural region. Hydroeconomic modeling of the agricultural economy, groundwater, and surface water systems is critically important to simulate potential transition paths to sustainable management of the basins. The requirement for sustainable groundwater use by 2040 is mandated for many overdrafted groundwater basins that are decoupled from environmental and river flow effects. We argue that, for such cases, a modeling approach that integrates a biophysical response function from a hydrologic model into an economic model of groundwater use is preferable to embedding an economic response function in a complex hydrologic model as is more commonly done. Using this preferred approach, we develop a dynamic hydroeconomic model for the Kings and Tulare Lake subbasins of California and evaluate three groundwater management institutions—open access, perfect foresight, and managed pumping. We quantify the costs and benefits of sustainable groundwater management, including energy pumping savings, drought reserve values, and avoided capital costs. Our analysis finds that, for basins that are severely depleted, losses in crop net revenue are offset by the benefits of energy savings, drought reserve value, and avoided capital costs. This finding provides an empirical counterexample to the Gisser and Sanchez Effect.

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Section: Embedded Hydrologic Response Function: Swap and C2vsimmentioning

confidence: 99%

“…[], and Garnache et al . [], with calibrated parameters

γ_{g i}

and

δ_{g i}

. The third term accounts for labor and other supply costs across all regions and crops, with unit costs

ω_{g i j}

.…”

Section: Embedded Hydrologic Response Function: Swap and C2vsimmentioning

confidence: 99%

Hydroeconomic modeling of sustainable groundwater management

MacEwan¹,

Cayar²,

Taghavi³

et al. 2017

Water Resources Research

Self Cite

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“…By relating effort to catch, the scale parameter is analogous to a vessel-specific catchability parameter in traditional fishery production models. The returns to scale coefficient is defined using a myopic definition ( [4]) relating returns to scale to supply elasticity (η)…”

Section: Model Specificationmentioning

confidence: 99%

“…[6] and [16] provided comprehensive reviews of regional agricultural models currently using the PMP framework and recent developments in the PMP literature. There has also been significant work on developing the economic foundations of PMP, emphasizing accurate estimation of supply elasticities to be used as priors ( [15]), structurally consistent estimation of shadow values ( [7]), and improved calibration methods ( [4]). …”

Section: Introductionmentioning

confidence: 99%

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How do fishery policies affect Hawaii's longline fishing industry? Calibrating a positive mathematical programming model

Sweeney

Howitt

Chan

et al. 2017

Natural Resource Modeling

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We present a vessel and target-specific positive mathematical programming model (PMP) for Hawaii's longline fishing fleet. Although common in agricultural economics, PMP modeling is rarely attempted in fisheries. To demonstrate the flexibility of the PMP framework, we separate tuna and swordfish production technologies into three policy relevant fishing targets. We find the model most accurately predicts vessel-specific annual bigeye catch in the WCPO, with an accuracy of 12% to 35%, and a correlation between 0.30 and 0.53. To demonstrate the model's usefulness to policy makers, we simulate the economic impact to individual vessels from increasing and decreasing the bigeye catch limit in the WCPO by 10%. Our results suggest that such policy changes will have moderate impacts on most vessels, but large impacts on a few generating a fat tailed distribution. These results offer insights into the range of winners and losers resulting from changes in fishery policies, and therefore, which policies are more likely to gain widespread industry support. As a tool for fishery management, the calibrated PMP model offers a flexible and easy-to-use framework, capable of capturing the heterogeneous response of fishing vessels to evaluate policy changes.

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Towards Econometric Mathematical Programming for Policy Analysis

Frahan

2019

Natural Resource Management and Policy

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Calibration of shadow values in constrained optimisation models of agricultural supply

Cited by 18 publications

References 33 publications

Hydroeconomic modeling of sustainable groundwater management

Hydroeconomic modeling of sustainable groundwater management

How do fishery policies affect Hawaii's longline fishing industry? Calibrating a positive mathematical programming model

Towards Econometric Mathematical Programming for Policy Analysis

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