http://hdl.handle.net/2142/397 http://www.ideals.illinois.edu:80/retrieve/2499 http://hdl.handle.net/2142/397 http://hdl.handle.net/2142/14285 Rural Eutopia: Can We Learn from Persistently Prosperous Places? Rahe, Mallory L. rural communities prosperity case study http://hdl.handle.net/2142/14284 Farm-Level Impacts of Alternative Spatial Water Management Policies for the Protection of Instream Flows Palazzo, Amanda Margaret ground water tradable permits abatement water market watershed water use http://hdl.handle.net/2142/14283 Household Adoption of Green Technologies: The Case of Chicago Rain Barrels Freitas, Luiz stormwater site selection technology adoption econometrics economics http://hdl.handle.net/2142/14282 Improving the Accuracy of Outlook Price Forecasts: An Application to Livestock Markets Colino, Evelyn Del Valle The performance and economic value of public outlook forecasts has been of continuing interest to agricultural economists and market participants. This dissertation provide new and powerful evidence on the performance of outlook forecasts relative to futures prices in hog and cattle markets over the last three decades and evaluates numerous time-series models and combinatory procedures as forecasting techniques to improve the predictive accuracy of hog price outlook forecasts. Many of these forecasting techniques have never been applied to livestock markets. Quarterly data from the mid- to late-1970s through 2007 for up to three-quarter ahead is available from four prominent outlook programs: University of Illinois/Purdue University, Iowa State University, University of Missouri, and the Economic Research Service of the U.S. Department of Agriculture (USDA). Overall, results show that in general, futures outperform outlook with some differences statistical significant. However, a combination of futures and outlook forecasts generally provide lower forecast errors than futures alone, and therefore, outlook forecasts of hog and cattle prices provide incremental information relative to futures prices. When compared to numerous time-series models, Iowa’s estimates are in general outperformed with statistical insignificant differences. However, even with the use of simple time-series models, findings from the encompassing tests highlight the efficacy of improving Iowa’s price forecasting performance via composite procedures. Finally, given the potential benefits of forecast combination, numerous combinatory techniques are evaluated in a true out-of-sample context. A true out-of-sample evaluation of composite forecasts is an issue not always carefully considered in the literature. Results show that significant forecast error reductions can be obtained from the combination of outlook, futures and two simple time-series models under most of the methods considered. More interesting, the simple average composite shows an outstanding performance that tends to increase at longer horizons, a result consistent with previous literature. In addition, evidence says that the accuracy of futures prices is stellar at the first horizon, but weaker at distant horizons, suggesting that the value of market forecasts lies primarily in the short-run. price forecast outlook futures time-series forecast combination http://hdl.handle.net/2142/14279 Water Demand in the Chicago Metropolitan Area Mieno, Taro Illinois faces a legally de ned quota for the amount of water that it is allowed to pump from Lake Michigan. Separately, in Northeastern Illinois, the ground water level has fallen due to pumping pressure. Together, these constraints on water supply could limit economic and population growth in the Chicago Metropolitan area. There are two alternatives to meet the area's growing demand: pumping water from distant sources, or using the available water more e ciently. The former will require huge investments in infrastructure, while the latter could postpone or circumvent those investments. In light of these facts, curbing water demand, rather than expanding water supply, seems like a promising option. The objective of study is to understand water demand in the Chicago area by examining the e ects of water price, weather conditions, and socio-demographic characteristics on water use in Chicago Metropolitan Area. Economic theory tells us that water demand should be responsive to water price. For policy makers, consumer responsiveness to water price changes will be invaluable information when considering long term strategies to ensure the e cient and conservative use of Chicago's water resource. water demand price elasticity http://hdl.handle.net/2142/14278 Evaluating Sampling Biases in Policy Analysis of Environmental Markets Li, Hongshuang sampling strategies sampling biases water permit market Monte Carlo http://hdl.handle.net/2142/14277 Live and Feeder Cattle Options Markets: Returns, Risk, and Volatility Forecasting Brittain, Lee options live cattle feeder cattle returns risk volatility forecasting http://hdl.handle.net/2142/14272 Empirical Analysis of Farm Credit Risk Under the Structure Model Yan, Yan The study measures farm credit risk by using farm records collected by Farm Business Farm Management (FBFM) during the period 1995-2004. The study addresses the following questions: 1) whether farm’s financial position is fully described by the structure model, 2) what are the determinants of farm capital structure under the structure model, 3) how to estimate and test farm asset correlation, 4) what drives farm default, and 5) how to predict farm default and joint default. In the first part of the empirical study, a seemingly unrelated regression (SUR) model is proposed to investigate the predicting capability of the structure model and test applicability of theories of financial structure to farm business. The model considers dynamic property of the structure model and farm characteristics. A semi-parametric three-stage least squares (3SLS) estimation method is proposed to obtain the estimates and test the model. In the second part, a farm’s ability to meet its current and anticipated financial obligations in the next 12 months is predicted by the SUR model connected with credit rating models. In the third part of the study, copula approaches as an alternative are applied to measure farm credit risk under the structure model. Results indicate that the empirical dynamic model is stable, and the structure model is applicable in explaining most farms’ choice of financial structure. In addition, the farms adjust to long-run financial targets for asset-to-debt ratio with additional financing needs following both pecking order and agency theories that is stronger for farms with greater asymmetric information problems. Application of the SUR model for measuring credit risk indicates that some key financial ratios in credit risk assessment such as liquidity should enter the model; these variables have significant influence on a farm’s ability to meet its current and anticipated financial obligations in the next 12 months. The estimated average asset correlation is 20% while the average default correlation is around 1.2% across farms in the pool. The estimated average asset correlation is clearly higher than the reported average asset correlation of 16% by KMV’s risk classing (Lopez 2002). The result indicates that the systematic risk plays a more important role in agricultural production in contrast to other industries. Estimated average asset correlation from Gaussian and t copula is 11%, similar to that by using a single factor model (Katchova and Barry 2005). The estimated average default correlation from Gaussian copula is less than 1% while it is 3% from t copula. Test results indicate that Gaussian copula is more proper for asset distribution as implied from the FBFM data than t copula. Results indicate that asset correlation is on average much higher than default correlation, which is consistent with previous findings by Crouchy et al (2002) and Akhavein and Kocagil (2005). Results indicate that mean asset correlation from multi-factor model is clearly higher than that from Gaussian copula. This is also true for default correlation. Higher asset correlation and default correlation from the multi-factor model lead to relatively higher predicted probability of default and expected loss at portfolio level. Apart from difference in methodology for estimating asset correlation, the relatively lower estimated asset correlation under the copulas approach is more likely due to short time series observations for each involved farm. Overall, the predicted default rate and expected loss from the multi-factor model at one-year horizon are 0.77% and 0.19% respectively. These values are similar to those reported by FDIC for agricultural loans issued by commercial banks in Illinois for 1995-2004. Finally, the results illustrate that the methods used in the study can be also applied to agricultural lending using available farm records, which provides a solution to the two major issues in risk assessment for agricultural lending, i.e. lack of long-time loss data and limited information of macroeconomic factors on changes of farm assets. credit risk econometric model structure model copula capital structure http://hdl.handle.net/2142/14270 Three Essays on Crop Insurance: RMA's Rules and Participation, and Perceptions Umarov, Alisher The purpose of this dissertation is to examine further the factors that influence farmers’ decisions to participate in crop insurance programs. The factors considered are RMA rules and farmers’ yield perceptions. In particular, the first paper examined the role of Risk Management Agency’s (RMA) APH calculation rules on the performance, participation, and risk protection level of actual producer history (APH) insurance. The second and third papers examined the presence of behavioral biases, such as miscalibration and better-than-average (BTA) effect in farmers’ perceptions, and related these biases to the participation. Examination of RMA rules that omit trend and sample size variability revealed that the current rules create a significant lag in yields, leading to the lower protection levels under APH yields. Results from the second and third papers showed presence of the BTA effect in directly elicited yields while revealing no such relationship for yield elicited under probabilistic framework. However, the econometric results showed no relationship between subjective yields and crop insurance purchase, suggesting that the BTA effect could be due to the elicitation format. crop insurance overconfidence RMA rules http://hdl.handle.net/2142/14269 Defining and Measuring Entrepreneuship for Regional Research: A New Approach Low, Sarah A. In this dissertation, I develop a definition and regional measure of entrepreneurship that will aid entrepreneurship research and economic development policy. My new indicators represent an improvement over current measures of entrepreneurship. The chief contribution of these new indicators is that they incorporate innovation, which others ignore. These indicators represent a significant contribution to the literature and can stimulate discussion among entrepreneurship scholars about how we conceptualize and measure entrepreneurship. Chapter 1 motivates the need for a different regional measure of entrepreneurship. Chapter 2 posits a three-part definition of entrepreneurship, with roots in the work of early entrepreneurship scholars including Schumpeter, Knight, and Say. Chapter 3 assesses widely used measures of entrepreneurship and their relevance to the proposed definition. The lack of a clear definition and measure of entrepreneurship hinders the research informing entrepreneurial support policies (Bruyat and Pierre-Andre, 2000). Chapter 4 develops new indicators of entrepreneurship that capture all three components of the proposed definition. The identification of innovative industries, industries with high level of skill, technology, patents, churn, and employment growth, using detailed NAICS (North American Industrial Classification System) industry data, represents an important contribution of this dissertation. By applying the innovative industries to single-unit employer establishment birth and self employment data, I create indicators that are available annually for all counties. Using the reduced-form model of entrepreneurship developed by Goetz and Rupasingha (2008), Chapter 5 assesses the determinants of the new entrepreneurship indicator. In Chapter 6, I use a growth model recently developed at the U.S. Department of Agriculture’s Economic Research Service (McGranahan, Wojan, and Lambert, 2009) to examine the relationship between my new indicator of entrepreneurship and economic growth. I find a positive and robust relationship between growth and my new indicator of entrepreneurship. Chapter 7 reviews the results and addresses policy-implications, problems, and future work. entrepreneurship economic development defining entrepreneurship economic growth entrepreneurial industries innovative entrepreneurship