This paper analyzes the optimal production and hedging decisions for firms facing futures price, basis, and production risk, assuming futures and options can be used. Using constant absolute risk aversion utility and normal distributions, the authors derive an exact solution and show that joint...

The quest for biorenewable energy sources is held to justify a number of government interventions, including support policies for biofuels such as those responsible for the recent rapid growth of US ethanol production. This article provides an analytical assessment of such policies. We construct...

A quality certification standard in a competitive setting can improve welfare but may affect consumers and producers differently. In a competitive model with quality preferences of the vertical product differentiation type, we find that producers prefer a higher (lower) quality standard than...

An open-economy equilibrium model is derived to investigate the effects of energy policy on the U.S. economy, with emphasis on corn-based ethanol. A second best policy of a fuel tax and ethanol subsidy is found to approximate fairly closely the welfare gains associated with the first best policy...

We review intellectual property rights in agriculture and outline a modeling framework that accounts for relevant institutional features of agricultural R&D. The analysis emphasizes vertical market linkages whereby agricultural innovations adopted by farmers are produced upstream by input...