Scholarship & Research
Permanent URI for this communityhttps://scholarworks.montana.edu/handle/1/1
Browse
4 results
Search Results
Item The costs of cooperation: the effects of section 199 on basis for farm cooperatives in the midwest(Montana State University - Bozeman, College of Agriculture, 2019) Swanson, Andrew Chase; Chairperson, Graduate Committee: Anton BekkermanThe 2004 American Jobs Creation Act created Section 199, a tax provision for producers of domestic goods. During the ensuing decade, Section 199 became especially important for agricultural cooperatives, partly because of a series of favorable Internal Revenue Service private letter rulings for marketing cooperatives. I analyze the impacts of Section 199 on agricultural markets by assessing differential effects on the pricing behavior of grain marketing cooperatives and non-cooperatives in Nebraska and Kansas. I first develop a model for the agricultural cooperatives pricing behavior that incorporates a tax on the qualified patronage received by cooperative patrons. This model produces several testable predictions. First, Section 199 will lower the spot prices offered by cooperatives while increasing the spot prices offered non-cooperatives that compete with cooperatives for agricultural commodities. Second, the widening of prices between cooperatives and non-cooperatives will be mitigated by increased spatial competition. I empirically test the predictions of this model using a difference-in-difference empirical strategy and winter wheat basis data. The results indicate that the series of IRS letter rulings in 2008 widened the basis differential between cooperative and non-cooperative firms by almost 5 cents per bushel on average. Furthermore, these market distorting effects are greater for elevator locations that do not have a competing location within 10 miles of their location. While the benefits of Section 199 have been widely touted by cooperative lobbying groups, the results of this thesis show the importance of also considering the costs of policy interventions directed at specific agricultural firm types.Item Price competition in the hard spring wheat market : a market specific analysis(Montana State University - Bozeman, College of Agriculture, 2002) Mastel, Michael Kenneth; Chairperson, Graduate Committee: David E. Buschena.Price competition between the United States and Canada in the hard spring wheat markets of Japan, South Korea, and Indonesia are examined using annual data over a thirty year period. A four-equation system of supply and demand functions is used to estimate parameters that measure the price relationship of U.S. and Canadian hard spring wheat in each market. The models were estimated with three stage least squares procedures. Besides the parameters measuring price movement of hard spring wheat in the South Korean and Indonesian markets, results are generally not statistically different from zero. Supply and demand equations in the Japanese market have common estimated parameters that are the correct sign and statistically significant. Econometric results of the Japanese market indicate that the United States and Canada are acting as noncolluding oligopolists. Comparing the mixed results of the South Korean and Indonesian markets with those of the Japanese market suggest that the United States and Canada are not competing as strongly in the Japanese market as they are in South Korea and Indonesia.Item An economic analysis of the wild horse and burro program(Montana State University - Bozeman, College of Agriculture, 2011) Elizondo, Vanessa Valentina; Chairperson, Graduate Committee: Randal R. Rucker; Timothy Fitzgerald (co-chair)In 1971 Congress enacted Public Law 92-195, known as the Wild Free-Roaming Horse and Burro Act, as a result of public concerns about wild horse abuse and population declines. As a consequence, the Wild Horse and Burro program was created to manage these animals under the administration of the Bureau of Land Management (BLM). In recent years as more wild horses have gone into long-term holding facilities, the costs of the program have increased to levels that are not likely to be politically sustainable. Two aspects of the Wild Horse and Burro program are analyzed in this thesis. First, the BLM's decisions regarding when to conduct a gather of excess animals and how many animals to remove are studied. A political economy analysis is developed to estimate the effects of interest groups on these decisions. Second, this thesis analyzes the relevance of horse characteristics in determining both the likelihood of a wild horse being disposed of and the price paid by adopters and buyers. To estimate the marginal value for each wild horse characteristic a hedonic price regression is estimated. The hedonic regression results are then used to estimate the benefits and costs of various modifications in the BLM's disposal program. The results obtained from the political economy analysis suggest that the decisions made by the BLM with respect to the removal of excess animals are responsive to the interests of grazing holders. The greater the level of overlap between grazing allotments and a herd management area, the higher the likelihood of the BLM conducting a gather and the more animals will be removed in a given year. The results obtained from the hedonic pricing model show that characteristics such as sex, color, training, and age are statistically significant in explaining the variation observed in fees paid by adopters and buyers. In addition, it is found that reductions in the standard minimum adoption fee would increase the number of wild horses the BLM is able to dispose of to private parties, and would save the taxpayers substantial sums by reducing the costs of keeping wild horses in long-term holding.Item Pipeline constraints in wholesale natural gas markets : effects on regional pricing and market integration(Montana State University - Bozeman, College of Agriculture, 2012) Avalos, Roger George; Chairperson, Graduate Committee: Randal R. Rucker.Natural gas markets in the United States depend on an extensive network of pipelines to transport gas from production fields to end users. While these pipelines are essential for the operation of natural gas markets, their capacity sets a physical limit on the quantity of gas that can be moved between regions. Taking advantage of a rich data set of daily pipeline capacities and flows, this thesis tests the effects of binding pipeline constraints directly. It is found that these constraints affect the citygate prices for the Florida and Southern California markets. The Law of One Price is tested using cointegration techniques and found to hold when pipeline flows are not constrained, and break down during constrained periods. It is also shown that cointegration techniques may not identify bottlenecks between regions when bottlenecks are not severe, or when they only occur for limited periods of time. Contrary to earlier results, Southern California markets are found to be integrated with the national market. Cointegration tests using data from 14 market points suggest that regional wholesale natural gas markets in the United States are generally integrated into a national market.