Low Opportunity Cost Research Articles

Climate-Smart Agriculture in the Northeast of Brazil: An Integrated Assessment of the Aquaponics Technology

The purpose of this study is to determine if aquaponic systems can reduce food insecurity in the semi-arid regions of Brazil and generate income for the beneficiaries. Aquaponics is a potentially sustainable way to produce food based on gardening, hydroponics and aquaculture. A case study, based on a project called Aquaponova, was developed. The aquaponic systems currently used in the project are non-commercial and designed for households with limited resources. The data based on six existing systems within this project were used to compare the costs and the benefits. The cost–benefit analysis covers four scenarios and three financing options. The results show that aquaponic systems have a large potential and can reduce food insecurity in semi-arid regions while generating income for the beneficiaries. Even if the system only produces 40% of the total estimated production, the system will still be feasible. However, the low opportunity cost of labour is an essential factor for obtaining these positive results. Moreover, the social benefits, such as a community spirit and the health benefits of the system, should not be underestimated.

Economic, pro-social and pro-environmental factors influencing participation in an incentive-based conservation program in Bolivia

• Economic, pro-social and pro-environmental factors can influence household participation in forest conservation programs. • Owning property titles, having large forested land, agricultural equipment and off-farm incomes favour participation. • Social networks, compliance with social norms of reciprocity, and a lack of trust in public institutions may increase participation. • Awareness of environmental problems and perception of the gains associated with conservation may increase participation. • Feeling some individual responsibility for environmental issues may increase participation in more restrictive agreements. The effectiveness of incentive-based conservation programs depends on how they influence and interact with multiple motivations of the participants. Here, we studied an incentive-based program for forest conservation in Bolivia – called “Reciprocal Watershared Agreements” – that mixes material compensations with pro-social and pro-environmental motivations as a way to reduce crowding-out of intrinsic motivations and to increase participation. Based on a sample of 470 households who were offered the program, we studied household characteristics that influenced (i) the probability of participation in the program, (ii) the intensity of the participation, measured as the area allocated in the agreement, and (iii) the modality of participation, measured as the probability of participation in the different types of agreements. We found that owning property titles, having large forested land with low conservation opportunity cost, agricultural equipment and off-farm incomes seem to favour participation. In addition, the probability of participation increases with some pro-social factors, such as a deeper or older integration into social networks, and greater compliance to social norms of reciprocity. We also found that a lack of trust in public institutions can increase both the likelihood and the intensity of participation, as can certain pro-environmental factors, such as awareness of environmental problems, knowledge about potential solutions to solve them and perception of the gains associated with the conservation of ecosystem services. Finally, we found that feeling some individual responsibility for environmental issues and some difficulty in performing pro-environmental options may increase participation into more restrictive agreements. Our results thus highlight the factors that could increase uptake and factors on which programs might focus in order to have a greater impact on pro-environmental behaviours. They also suggest that incentive-based program can be designed to take advantage of pro-social and pro-environmental motivations as strongly as of economic ones.

A Closer Look at Nonparticipants during and after the Great Recession

This paper uses matched individual-level data from the Current Population Survey to determine that around the 2008 recession, there was a significant upward shift in trend of the share of labor force leavers giving Schooling and Other as the reason for absence from the labor market. This trend shift is observed primarily among workers between the ages of 25 and 54 and is widespread across all educational groups with at least a high school degree. In addition, the upward shift in the trend of the schooling reason share occurred among workers previously employed in occupations and industries with varying degrees of job losses during the recession. This shift suggests it was a widespread phenomenon and not isolated among sectors or occupations that suffered the most during the recession. The implication is that the upward shift in the schooling reason share has more likely been a response to lower opportunity costs of schooling during economic downturns rather than the result of workers trying to overcome skill mismatch in the labor market. In addition, since transition rates to the labor force are highest among those giving Schooling and Other as reasons for absence, the decline in labor force participation since 2008 is likely more transitory than permanent.

Evaluating the Impact of the Post-9/11 GI Bill on College Enrollment for Veterans with Service-Connected Disabilities

Background/Context The Post-9/11 GI Bill has provided educational benefits to millions of military service members and veterans since its adoption in August 2009. Recent studies indicate that the bill has significantly improved college enrollment and educational attainment among post-9/11 veterans. A significant proportion of veterans suffer from service-connected disabilities. While provisions of the Post-9/11 GI Bill may render education benefits that are appealing to veterans with service-connected disabilities, little is known with regard to how the bill has affected college participation among this venerable subpopulation of veterans. Purpose/Objective This study examines the effect of the Post-9/11 GI Bill on college enrollment rates among veterans with service-connected disabilities and unpacks potentially heterogeneous impacts across groups with different demographic characteristics (i.e., sex, age, race/ ethnicity, educational attainment, and disability ratings). Population Post-9/11 veterans. Research Design Triple differences. Data Collection and Analysis Secondary data analysis based on American Community Survey 2005–2016. Findings/Results While the Post-9/11 GI Bill has increased college enrollment for veterans without service-connected disabilities by less than 1 percentage point, the increase is much larger—about 5 percentage points—for veterans with service-connected disabilities. Enrollment effects for veterans with service-connected disabilities are consistent and positive across sex, age, race/ethnicity, educational attainment, and disability ratings. Conclusions/Recommendations The results of this study provide strong evidence for the significant enrollment growth among veterans with service-connected disabilities after the adoption of the Post-9/11 GI Bill. While this result is reassuring, it is not clear whether this large effect for veterans with service-connected disabilities is due to favorable provisions in the Post-9/11 GI Bill or due to lower opportunity costs. In the future, researchers may want to identify appropriate sources for data on detailed educational benefits to examine the mechanisms behind the effect.

Ageing Calls For Shorter Full-Time Tertiary Education And Increased Continuing Education

Population ageing requires a better-educated workforce capable of producing more of the goods and services consumed by a fast-rising number of old dependent individuals. At the same time, an ageing society badly needs its educated youth to rapidly become economically productive. In other words, the opportunity cost of educating young adults, particularly on a full-time basis, is on the rise. This paper argues that, in an ageing society, the challenge of policy making is to find ways to foster education while limiting the time young adults spend in full-time tertiary education. In many countries, this probably implies compressing the theoretical duration of degrees (BA in 2 years instead of 3, MA in 4 years instead of 5) and introducing age-based financial incentives to reduce the time to graduation. For instance, the State subsidy (a grant) could be turned into an interest-charging loan beyond the age of 22. In all countries, the challenge is also to rediscover the virtues of massive continuing/part-time/evening education: a formula that enables people who work to acquire/update skills at a very low opportunity cost. The financing of the direct costs of massive continuing education could take the form of State/employer-subsidised educational stipends granted to adults every 5 years beyond the age of 22.

Moral Suasion and the Private Provision of Public Goods: Evidence from the COVID-19 Pandemic

We study how moral suasion that appeals to two major ethical theories, Consequentialism and Deontology, affects individual intentions to contribute to a public good. We use the COVID-19 pandemic as an exemplary case where there is a large gap between private and social costs and where moral suasion has been widely used as a policy instrument. Based on a survey experiment with a representative sample of around 3,500 Germans at the beginning of the pandemic, we study how moral appeals affect contributions with low and high opportunity costs, hand washing and social distancing, to reduce the infection externality as well as the support for governmental regulation. We find that Deontological moral suasion, appealing to individual moral duty, is effective in increasing planned social distancing and hand-washing, while a Consequentialist appeal only increases planned hand-washing. Both appeals increase support for governmental regulation. Exploring heterogeneous treatment effects reveals that younger respondents are more susceptible to Deontological appeals. Our results highlight the potential of moral appeals to induce intended private contributions to a public good or the reduction of externalities, which can help to overcome collective action problems for a range of environmental issues.

Employment Opportunities and High School Completion During the COVID-19 Recession

COVID-19 created major disruptions for young people including health concerns, school closures, reduced social opportunities, and a wilting economy. We examine the effect of COVID-19 on high school completion in the United States. We find that high school completion rates increased considerably in 2020 compared to previous years. We investigate various mechanisms and find that worse employment conditions were the driving force. The lower opportunity costs of schooling because of the pandemic recession encouraged more young people to complete high school. The pandemic created extensive problems in education, but fortunately it did not reduce overall high school completion rates.

Impact of a Severe Drought on Education: More Schooling but Less Learning

From October 2015 to April 2016, Southern Africa experienced one of the severest droughts in history. The drought's intensity varied significantly across locations. This provides a natural experiment to estimate the effect of large, negative agricultural shocks. We consider the impact of this shock on children’s educational outcomes using data from rural Zimbabwe. Those who experienced the drought may suffer from decreases in income and food access. This can affect household resource allocation and schooling decisions while exposing individuals to stress and uncertainty. We find the drought increases the probability that students advance in school, a seemingly positive impact, likely due to lower opportunity costs to education. The drought also led to a significant decline in performance on mathematics assessments and leadership attitudes, suggesting stress or other factors associated with a drought more than offset increases in attendance. This highlights the importance of using multiple indicators in education evaluations.

Determination of Relative Advantages in the Cattle Production of Milk and Meat by Using the Comparative Analysis of Production in the Osijek-Baranja County and Krapina-Zagorje County

The use of relative advantages in practice implies that one area concentrates on the products for which there is lower opportunity cost. The Osijek-Baranja County is rich in arable agricultural land. Compared with the Krapina-Zagorje County, where the agricultural land is less represented, it could be said that the Osijek-Baranja County has an advantage in terms of agricultural production. Using the comparative model of production opportunities, this paper analyses that it is necessary to use natural resources and put them into operation after profit. Free trade increases the overall production and consumption of all participants in trade because it enables production specialization in which specific areas have more relative and not absolute efficiency (products with fewer relative marginal costs). The comparative model of production opportunities is the model that points to the production orientation of the goods achieving maximum benefit.

When women fight: unemployment, territorial control and the prevalence of female combatants in insurgent organizations

ABSTRACT Recent scholarship suggests that the prevalence of female fighters is determined by various demand and supply factors. On one hand, the voluntary supply of female fighters is dependent on women who are driven by various motivations, ranging from grievances to ideology. On the other hand, violent organizations frequently employ female fighters to gain important tactical and strategic advantages. Focusing on insurgent groups, we posit that two situational factors are critical in determining female participation in combat; lower opportunity costs for women to participate, and a high demand for armed fighters by groups. We argue that high levels of unemployment amongst the female labour force within a state result in lower opportunity costs for women to join an insurgency, while territorial control by groups generates a higher need for armed fighters. Both of these conditions generate the optimal conditions for women to participate in combat roles. We test our arguments by using logistical regression models on a sample of 140 insurgent groups globally from 1998 to 2012. Our findings provide support for our hypotheses that both high levels of female unemployment, and territorial control by insurgent groups increase the likelihood of the prevalence of women fighters in insurgencies.

Investigating the Willingness to Participate within a Target Population with Low Opportunity Cost as a Contribution to Historic Monuments Preservation

We present the results of a survey on a population of 200 conscript soldiers, probing their willingness to participate (WTP) voluntarily to the maintenance and beautification of an archaeological site - the Heraion of Samos- during their military service. The evaluation of this good is impossible in market terms; consequently, a modified version of the Contingent Valuation Method (CVM) was applied. The population was divided in two equal groups. The first group received a questionnaire and were asked to reply without any information on the significance of the particular site. The other half were given informative material. Subsequently, the first group was divided in two equal subgroups. One subgroup was asked to re-fill the same questionnaire following an update in the form of the same informative material (post-questionnaire update). The results indicate strong positive correlation between willingness to participate (WTP) and information. Further, WTP shows positive correlation against age, level of education and locality.

The Labor Market Returns to For-Profit Higher Education: Evidence for Transfer Students

Objective: This study examines the labor market gains for students who enrolled at for-profit colleges after beginning their postsecondary education in community college. Method: We use student-level administrative record data from college transcripts, unemployment insurance earnings data, and progression data from the National Student Clearinghouse across full entry cohorts of community college students in two statewide systems between 2001 and 2006. Using regression analysis and fixed effect methods, we calculate the wage gains to attainment across different student transfer patterns. Results: We find significant wage penalties to transfer to a for-profit college instead of to a public or private nonprofit college. For some student groups, earnings are higher if they drop out of community college instead of transferring to a for-profit college. Conclusion: Students in for-profit colleges do have lower opportunity costs in terms of foregone earnings while enrolled in college. However, these do not sufficiently compensate for lower earnings growth after college.

No mere tautology: the division of labour is limited by the division of labour

Abstract We explore the intersection of growth theory and the theory of the firm with an experiment. Economic growth is possible in our experiment when agents specialize to exploit increasing returns. We find that low opportunity costs are sufficient for Marshallian internal economies, but that Marshallian external economies are slow to emerge in four probing treatment conditions. Transaction costs do not hamper external economies as we anticipated prior to collecting data. When external economies falter, it is because new ideas of more extensive specialization fail to emerge. Ideas make further divisions of the division of labour—and thus economic growth—possible. Conversely, a lack of ideas make further divisions of labour and economic growth impossible. Our data reveal how the likelihood of new ideas is inseparably tied to the existing extent of specialization.

High Opportunity Cost Demand as an Indicator of Weekday Drinking and Distinctly Severe Alcohol Problems: A Behavioral Economic Analysis.

Behavioral economic theory views addiction as a reinforcer pathology characterized by excessive demand for drugs relative to alternatives. Complementary to this theory, Lamb and Ginsburg (Pharmacology Biochemistry and Behavior, 164, 2018, 62) describe addiction as a behavioral allocation disorder and predict that decisions to drink under increasingly stringent constraints are a central indicator of addiction. This study used a modified demand-curve paradigm to examine alcohol demand in the context of a next-day contingency (high opportunity cost demand) as a specific indicator of a severe pattern of alcohol problems. Participants were 370 undergraduates (61.1% female, 86.5% white, Mage =18.8) reporting multiple past-month heavy drinking episodes (5/4 drinks per occasion for men/women) who completed 2 versions of an alcohol purchase task (APT), along with measures of past-month alcohol use and problems. In 1 APT (low opportunity cost), students imagined they had no next-day responsibilities, and in the other APT (high opportunity cost), they imagined having a 10:00 am test the next day. Item-response theory analyses were used to determine mild and severe alcohol problems from the Young Adult Alcohol Consequences Questionnaire (Journal of Studies on Alcohol, 67, 2006, 169), and the most and least severe binge drinking days throughout the week. Low opportunity cost demand (β=0.15, p=0.02) significantly predicted beyond high opportunity cost demand for the least severe problems, and high opportunity cost demand (β=0.17, p=0.009) significantly predicted beyond low opportunity cost demand for the most severe problems. Similarly, low opportunity cost demand (β=0.26, p<0.001) was more highly associated with weekend drinking, whereas high opportunity cost demand (β=0.21, p=0.001) was more highly associated with weekday drinking. The current results suggest high opportunity cost alcohol demand is a distinct marker of severe alcohol problems among college student heavy drinkers.

The Great Bee Migration: Supply Analysis of Honey Bee Colony Shipments into California for Almond Pollination Services

AbstractOver the last two decades, the number of honey bee colonies performing pollination services for the California almond industry has grown steadily and now equals a substantial share of all colonies in the United States. Most US beekeeping operations have not expanded their colony numbers at the current levels of almond pollination fees. Thus, as almond acreage has increased, the marginal supplier of colonies has moved further away from California, increasing interstate shipments. We provide a conceptual representation of the supply and demand of U.S. colonies for almond pollination, and utilize the relatively inelastic demand for colonies to explore spatial elasticities of supply. We combine colony shipment data from 2007 to 2018 provided by the California Department of Food and Agriculture with projected prices from the California State Beekeeper's Association pollination fee survey. We use a geographically weighted regression to estimate supply elasticities for each state, and provide supporting regional estimates. The eastern United States, where beekeepers have hesitated to participate in almond pollination due to relatively high transportation costs and the potential for local honey production at the time of almond bloom, have some of the highest price elasticities of supply. This suggests that beekeepers in areas with low transportation and/or opportunity costs have supplied all available colonies, and increases in almond pollination fees have had little effect. We estimate that Florida, Georgia, and Texas had the largest number of colonies that did not participate in almond pollination in 2017, so further increases in supply are likely to come from those states.

Using referenda to improve targeting and decrease costs of conditional cash transfers

Cost-effective allocation of conditional cash transfers (CCT) requires identifying recipients with low opportunity costs who might change behavior. This paper develops a low-cost approach for improving program implementation by using a stated preference, referendum-style survey question to calculate willingness to accept (WTA) for CCT contracts. We illustrate this in the context of Mexico's Payments for Ecosystem Services Program, and find that the estimated social cost based on WTA is substantially lower than actual payments. Simulation of three geographic targeting approaches shows that joint selection using deforestation risk and WTA could increase program impact under the same budget. We also simulate modified payment schedules based on predicted WTA and demonstrate that these could reduce program cost.

Work history, economic resources, and women\u2019s labour market withdrawal after the birth of the first grandchild

Typically, grandmothers are actively involved in the lives of their grandchildren, most frequently as care providers. At the same time, these individuals become grandparents while still employed. These two roles—of active grandparent and worker—might conflict, since both demand time and energy. This study examines whether the birth of the first grandchild leads to labour market withdrawal for women, and whether there are differences between grandmothers according to their work history and household economic resources. We considered the work history of women both as a measure of work–family preferences and a source of opportunities and constraints to labour market behaviour later in life. Our analyses of data from the English Longitudinal Study of Ageing (ELSA) 2002–2017 using hybrid logistic models show that the probability of labour market withdrawal increases after the birth of the first grandchild. Women who had continuous working careers, or short employment interruptions, were more likely to withdraw from the labour market after the birth of the first grandchild than their counterparts with non-continuous careers, as well as women living in wealthy households. The explanation lies in the lower opportunity cost these women encounter in withdrawing from the labour market. Our findings relate to policies aimed at increasing retirement ages all over Europe, advocating that these measures could conflict with grandmothers’ involvement in their grandchildren’s lives.

Land Use and Redistribution in the Arid West: The case of Laingsburg Magisterial District

ABSTRACTData collected during a multi-year study of farming in the district is updated to compile a land register. It identifies 30% of farmland by farm size and type and provides estimates of financial performance in each class. Three redistribution scenarios are considered – proportional redistribution, targeting large bona fide operations and targeting lifestyle land. The basic premise is still willing buyer willing seller. Changing the acquisition rules hardly affects the number of beneficiaries or the cost of redistribution but demonstrates that it is important not to overpay for lifestyle land. A redistribution plan for smallholder and settlement-orientated land users is added to the commercial plan according to Aliber's ratios. Commercial redistribution will involve 33 farms with a combined area of 2113 km2 at a total cost of between R352–384 million (using 2015 prices) and will include scope to provide for 132 commonage farmers and 660 settlement-orientated land users. Two-thirds of the land involved was for sale in January 2019 or could be enticed onto the market relatively easily because it has a low opportunity cost in agriculture and the plan would reach as many beneficiaries as there were indigent households in the district in 2017.

Exploring forestry options with M?ori landowners: an economic assessment of radiata pine, rimu, and m?nuka

Background: A quarter of New Zealand’s land area is currently covered in indigenous forest although only indigenous forests on private land can be harvested. In addition, planted exotic forests (~90% Pinus radiata D.Don) cover a further 7% of the land, and these form the main basis of New Zealand’s forestry industry. However, some landowners are seeking to plant a more diverse range of species (including New Zealand indigenous species) that can be managed in different ways to produce a range of products.&#x0D; Methods: A “cradle-to-gate” life cycle-based economic assessment of three forestry scenarios was undertaken in collaboration with members of Ng?ti Porou, an indigenous M?ori tribe. The three scenarios were: (1) “business as usual” (i.e. intensive management of radiata pine); (2) continuous-cover forestry management of the indigenous coniferous tree species rimu (Dacrydium cupressinum Lamb.); and (3) intensive production-scale forestry of the indigenous scrub species m?nuka (Leptospermum scoparium J.R.Forst. &amp; G.Forst.). Using a 120-year timeframe, discount rates and opportunity costs were applied and a flat- and steep-land comparative analysis was performed (for radiata pine and rimu).&#x0D; Results: The Net Present Value (NPV) was calculated for each scenario and showed that, on flat land, only the m?nuka scenario is profitable. However, applications of discount rates can result in a negative NPV, as is the case with the radiata pine and rimu scenarios. On steep land, both the radiata pine and rimu steep-land scenarios have improved NPV returns due to a lower opportunity cost. On steep land, radiata pine is generally profitable with a discount rate of 6% or lower and a stumpage rate of over $100 m3 and rimu is generally profitable with a discount rate of 2% or lower and a stumpage rate of over $650 m-3.&#x0D; Conclusions: This analysis demonstrates the importance of strategically considering what tree species to plant, what slope of land to plant them on, and what forest management technique to utilise. Furthermore, this analysis highlights the importance of choosing appropriate discount rates and the effect of other inherent assumptions, such as opportunity cost.

Environmental Efficiency of Organic and Conventional Cotton in Benin

Recent years have seen an increasing awareness of the relative advantage of organic and conventional agriculture. This study aims to analyze the environmental efficiency of organic and conventional cotton in Benin. A Translog hyperbolic distance function which allows us to consider the joint production of desirable and undesirable output is used to analyze the environmental efficiency among organic and conventional cotton production farmers. The model includes factors that affect environmental efficiency. Greenhouse gas (GHG) was used as an indicator of undesirable output. Data were collected from 355 cotton producers (180 organics and 175 conventional) randomly selected in the cotton belt of Northern Benin. The results show that although organic cotton producers contribute less to GHG emission, they are environmentally inefficient compared to their conventional counterparts. Producers could improve the quantity of cotton produced by 27% and 17% while reducing emissions by 21% and 14% respectively for both organic and conventional cotton to achieve better environmental performance. However, the analysis of the shadow price revealed that organic cotton producers face lower opportunity cost than conventional producers. These results suggest that there is a need for more technical support and environmental education to improve the environmental efficiency of organic cotton in Benin.