Agribusiness & Applied Economics Masters Theses

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Trade disruption and commodity-program payments: a panel GARCH model
(North Dakota State University, 2024) Asante, Bismark
Trade disruption has reduced the economic gains countries enjoy from great trade relationships. This disruption stems from trade wars, exchange rate volatility, and rare events. However, the gravity model, mainly used to investigate this problem, is plagued with heteroscedasticity, omitted variables, and zero trade flow. This makes it difficult for farmers, policymakers, and investors to predict how the international market behaves. The study assesses how commodity-program payments help mitigate shocks from trade disruptions using a panel GARCH model. Hence, the study examines the source of trade disruption, the intensity of trade disruption on soybean and corn export, the risk associated with trade disruption, and how effectively existing farm payments have mitigated the risk. The results indicated that the price loss coverage effectively mitigates the risk of trade disruption for soybean and corn.
Applications in Harnessing the Power of Behavioral Nudge Theory
(North Dakota State University, 2024) Tasnim, Ayesha
This research encompasses two experimental studies aimed at exploring the potential of behavioral nudges to instigate positive change. The first experiment evaluates the use of visual cues, such as posters and footprints, to nudge individuals towards choosing stairs over elevators, promoting physical activity. The second delves into the psychological impact of personalized praise on college students' motivation, efficacy, and confidence, correlating these factors with academic performance. By integrating quantitative and qualitative research methods, the studies intend to assess the effectiveness of these behavioral nudges in directing behavior toward desirable outcomes. Contributing to the expanding discourse on behavioral economics and nudge theory, this research underscores the transformative potential of strategic nudges in not only encouraging healthier physical habits and academic engagement but also in broader applications for behavioral modification. These findings illuminate the versatility and efficacy of nudges as tools for positive behavioral intervention across diverse contexts.
The Spillover of US Monetary Policy on EU Agricultural Prices: A Panel VARX Analysis
(North Dakota State University, 2024) Roy, Mishuk
This research examines the nexus between US monetary policy shocks and agricultural prices of the EU. Utilizing monthly prices of beef, wheat, and barley of 21 EU countries, we estimate the impact of US monetary policy shocks on these three agricultural prices in a Panel Vector Autoregression with Exogenous Variables (PVARX) framework. We find that a contractionary monetary policy shock in the US has heterogeneous effects across the storable and non-storable commodity prices in the EU. Specifically, a contractionary monetary policy shock in the US reduces EU wheat and barley prices and increases EU beef prices. However, the estimated impulse response functions of dynamic multipliers reveal that these three commodity prices return to equilibrium within two months.
Farm Operator Preferences Regarding Site Specific Weed Control Adoption
(North Dakota State University, 2024) Schwarzrock, Devon
An increasingly popular use for unmanned aerial systems (UAS) is drone applied site specific weed control (SSWC). Site-specific herbicide application allows applicators to target previously mapped weed clusters and spot sprays the targeted weeds individually. This benefits farmers by generating cost savings from reducing herbicide usage and limits overapplication of herbicide. This study aims to identify characteristics of spray drones that are desirable amongst farmers. A discrete choice experiment is used to identify attributes which farmers deem more valuable than others. This study finds that price, herbicide reduction rate, and application rate significantly impact a farmer’s decision to rent or purchase a spray drone for SSWC use.
International grain origin switching: contract washouts and embedded switching options
(North Dakota State University, 2024) Hauck, Caleb
Changing dynamics in the international grain trading industry have led to a rise in two new contracting practices colloquially termed washouts and switching options and formally defined as contract washouts and embedded origin switching options. When spatial arbitrage opportunities exist, grain buying firms switch from one origin to another. This thesis documents the increased frequency with which these contract practices have been used and examines the factors that incentivize firms to use them. Using data from 2018 to 2023, two models are developed with a binomial lattice that value these contracting terms. The results indicate that these practices have significant value, which is largely driven by price volatility and the correlation between prices at different international origins. This explains the observed increase in contract washouts and origin switching options in recent years, as grain prices have been characterized by higher price volatility.
Decision Tree and Real Options to Value Agtech Startup Growth
(North Dakota State University, 2022) Kallman, Dylan
Agtech startups face multiple uncertainties and have limited flexibility when it comes to growing their business. Companies that are growing ultimately need to take on new capital. This new capital can be from many different sources like strategic partners, investors, angels, VC, grants, and debt. What source is best for the entrepreneur and what will lead to the highest probability of success or the ideal outcome for shareholders can vary depending on the tradeoffs of each funding round. This paper has developed a model to analyze the returns and risks of alternative funding decisions for a prototypical ag-tech startup. By incorporating real options and integrating them within a decision tree, entrepreneurs will be able to see what growth strategy will lead to the most desired outcome. This paper uses one case study of an agtech startup and can be applied to multiple different startups in different sectors.
Economic Benefits of Precision Agricultural Technologies
(North Dakota State University, 2022) Jahan, Mohsina
The purpose of this research was to build a model of profitability that can be used by individual farmers to calculate the net benefits of using precision agricultural technologies on their farms. Three case farms were selected. Partial budgeting analysis is used to calculate the net profit effect of adopting precision agricultural technology bundles. Two scenarios were compared: farms adopting precision agricultural technologies and farms not adopting. Revenues and costs that differ between the two scenarios are included in the model. A six-step process was employed and @Risk was used to account for risk. Results show that adopting PA is profitable for farms with moderate input use variability and this is amplified with higher input prices.
Farmers' Preference to Precision Agriculture Data Management: A Discrete Choice Experiment
(North Dakota State University, 2022) Idowu, Abiodun
There is no legal or regulatory framework that protects a farmer’s right to control the data generated from their use of precision agriculture. This may impede the adoption of new precision agricultural technologies. Using a choice experiment, we show that factors contributing to willingness to enroll in a data management contract include the discount received from a service provider, whether data ownership rights are retained, data privacy guarantees, and whether the data is transferred manually or automatically between systems.
Mapping the Unconventional Monetary Policy of the Fed with Financial Market
(North Dakota State University, 2022) Gupta, Proma Sen
The value of currency in circulation and the value of the assets side of the balance sheet has become a choice variable for implementing policy under the monetary policy framework introduced by Ben Bernanke during the 2008 financial crisis. While policy responses to changing economic conditions are obvious, the macroeconomy's response to these policy changes requires more thought. To evaluate, directed acyclic graphs (DAGs) have been used to analyze the monetary policy's reaction to shifting economic indicators. I am also interested in mapping the effects of changes as well as to find out the interdependencies among the policy variables along with the financial markets. I have assessed the causal relationships in each DAG by taking into account the relevant marginal effects as estimated by seemingly unrelated regressions. Also, I have conducted Granger Causality test in order to assess our profitability analysis with the policy variables.
Impacts of the Covid-19 Pandemic on Housing Markets
(North Dakota State University, 2022) Chowdhury, Tuhinur Rahman
Efficient housing markets are critical for economic stability in the United States. Over one million people died in the United States from COVID-19. One method employed to halt the spread of the virus were stay-at-home orders. The effects of stay-at-home orders on different distributions of housing prices in 101 housing markets were investigated in this study. To estimate the effects of executive orders on house prices, an unconditional quantile regression model was employed for analysis. Results suggest that lower-priced houses experienced a larger price increase while the executive order was in effect. Following the expiration of the executive order, larger price increases were observed in both lower and higher priced house markets. Using a binary logit model, we examined whether socioeconomic or demographic characteristics affect executive orders. Results suggest that more black individuals and democrats make home price increases more likely under an executive order at certain quantiles.
Reservoir Recreation Analysis: The Effect of Reservoir Management Agency on Recreation Participation
(North Dakota State University, 2022) Boateng, Mary Mena
Dams and reservoirs are created to provide flood control, water storage for irrigation and water supply, recreation, and hydroelectric generation. Most US reservoirs provide recreation in some form. However, there are concerns that certain reservoir/dam managers do a better job in providing recreation than others. Some agencies that manage land riparian to US reservoirs, such as the National Park Service (NPS), are dedicated to recreation development. Other agencies such as the Army Corps of Engineers (USACE) might not be interested in catering to the additional demands of recreators as a stakeholder group. Management actions such as boat access, waterfront land, campsite management, safety, aesthetics, and water levels have direct and indirect effects on anglers, swimmers, boaters, and other recreators. The objective of this study is to analyze recreation participation for different reservoirs based on different management agencies due to the fact these agencies have different institutional objectives.
A Meta-Analysis of Studies Addressing the Impact of GBH on Human, Animal Health and the Environment
(North Dakota State University, 2022) Barnor, Kodjo
The herbicide glyphosate has been tested and approved by both the FDA and the USDA, as evidenced by many published research papers, i.e., they are deemed safe for humans, animals, and the environment. However, evidence is mounting that glyphosate interferes with many metabolic processes in plants and animals, and glyphosate residues have been detected in both. The factors that influence the outcomes of previous scientific research on the potential adverse effects of GBH on human and animal health and the environment were investigated. Using DAGs and Granger causality tests, the study found that while private and public organizations were more likely to generate research indicating that GBH was not harmful, public funding and universities were more likely to produce research indicating that GBH was hazardous. Policy actions should be guided by independent research comprised of actors from major stakeholders and research organizations.
Natural Disasters, Institutions, and Economic Recovery: Effects of Hurricane Katrina
(North Dakota State University, 2022) Clark, Corbin Carl Thomas
This study analyzes the effects of Hurricane Katrina on formal and informal institutions in Louisiana, Florida, and Mississippi to provide insights into the recovery trajectories of the states. I use the synthetic control method to construct counterfactual states. I find that the hurricane had large and lingering effects on population and per capita income in all three states, with differing impacts on formal and informal institutions. In Louisiana, the hurricane led to increases in labor market freedom, minimum wage freedom (i.e. deregulation), and property tax freedom (i.e. tax reduction), along with permanent increases in government spending and the government employment. In Florida, it led to decreases in the above three economic freedom indicators, whereas government spending increased. Results for Mississippi indicate a consistent increase in government spending. Moreover, we find that social capital remained robust to the shock in Louisiana, with no pre-treatment fit in Florida and Mississippi.
Effect of Contract Attribute Levels on Willingness to Participate in a Working Wetlands Program
(North Dakota State University, 2021) Coffield, Haley
Wetlands are an integral part of duck habitat in the Prairie Pothole Region, which covers three Canadian provinces and five U.S. states. They often overlap with cropland, creating issues for farmers. A program that provided funding to farmers who agree to not alter wetlands and continue to farm the land was introduced in North Dakota called the Working Wetlands Program. After four years, participating farmers were surveyed. A choice experiment was used to investigate the effect of program contract attributes including payment, length, and whether the contract is binding, on willingness to enroll. A random parameters logit model was estimated. Nonbinding contracts are preferred to binding regardless of other attributes. If it is important that the contract be binding, notable for policymakers is that shorter lengths have a higher participation rate than longer lengths. This information is valuable to policymakers as they continue to build a national program.
The Effect of Property Tax Relief on K-12 Education Expenditures in North Dakota
(North Dakota State University, 2021) Nichols, Kole Allen
North Dakota implemented two pieces of legislation in 2009 and 2013 to reduce property tax burdens. These policies encouraged local school districts to lower their property-tax mill rates and provided intergovernmental grants to school districts to replace the missing revenue. In this study I examine the effect of this change in policy on total school district expenditures. I employ panel econometric methods to analyze the effect that these property tax relief interventions had on county education expenditures in North Dakota. Though there were mixed results for the effect of the 2009 legislation, this study finds that the property tax relief that occurred in 2013 led to increases in expenditures where a one-mill reduction in local school district mill levies increases per pupil education expenditures by $40 - $65. This validates my hypothesis that property tax relief led to the occurrence of fiscal illusion and subsequently increased expenditures on education.
Optimization of Coverage Ratios for Basis and Freight Trading Portfolios
(North Dakota State University, 2021) Kroll, Adam Joseph
Changing commodity prices create opportunities for traders to profit or experience substantial losses if risk is not managed. Extensive research has been presented regarding optimal hedging strategies using futures markets to mitigate price risk of holding a physical commodity, but the literature has not introduced a method for optimizing basis or rail coverage ratios. This study introduces coverage ratios to manage basis and transportation risk. Coverage ratios are optimized for a portfolio of basis and rail positions consistent with expected utility theory using Monte Carlo simulation at various risk aversion levels. The results indicated that as risk aversion increased, optimal coverage levels increased while profit and standard deviations of profits decreased. Sensitivity analysis is used to demonstrate the effects of changing intermarket correlations, standard deviations of individual markets, and time to liquidation. This study provides insight into managing basis and rail portfolios and presents implications for traders and risk managers.
Ethanol Policy, Commodity Revenue, and Import Quantity Demand: The United States and Brazil
(North Dakota State University, 2021) Diffely, Bree Lyn
Brazil and the United States have been major players in the ethanol industry for over a decade. Both countries have a strong policy backing to push the production and use of the renewable fuel while other parts of the world seem to fall short in comparison. These two nations can be used to determine how an ethanol policy affects ethanol producing commodities as well as the factors that drive import quantity demanded based on export statistics.
Marijuana Legalization Effect on Opioid Abuse: A Synthetic Control Approach
(North Dakota State University, 2021) Denkyirah, Elisha Kwaku
The opioid epidemic constitutes one of the worst drug crises in the history of U.S. State-level policies, in general, have done little to prevent prescription opioid abuse. A noteworthy exception to other clinical efforts to curb opioid abuse is marijuana. Despite preliminary evidence, many states are hesitant to introduce legislation to expand access to medicinal marijuana or liberalize laws on the recreational use of marijuana, fearing additional research is needed. Utilizing a synthetic control method and annual state-level data from 2006 to 2018, this study examines the effect of recreational marijuana legalization on opioid abuse. The findings strongly indicate marijuana legalization is not a statistically significant factor in reducing opioid abuse in Colorado State. This provides important implications for states designing policies to provide opioid addicts with marijuana substitutes and states hoping to address concerning rises in opioid abuse. Further research needs to be done to develop a robust understanding.
Ex-Ante Temporal Optimization in Soybean Origination: An Overdetermined Approach Through Deep Learning
(North Dakota State University, 2021) Carlson, Noah Joseph
Digitization is influencing commodity trading and agricultural markets and as they transition towards extreme liquidity, agribusiness risk exposures increase, and traditional competitive advantages diminish. In commodity origination, logistics and destination basis comprise the most volatile and determinant influences of margin. To capture a consistently higher margin and represent narrowed interior basis, agribusiness firms must manage these risks by optimizing transformations. To accomplish this, ex-ante decision-making is often necessary as forward price clairvoyance is not always prevalent, is risky, or contains premium. Modeling this spatial equilibrium is difficult through traditional reductionist and essentialist application as the overdetermined and convoluted system presents bidirectional and simultaneous price discoveries. Developments in neurobiology, technology, and Artificial Intelligence expand capabilities to represent brain behavior and unconscious inference in computational modeling. The use of Recurrent Deep Machine Learning could improve ex-ante decision accuracy within commodity trading through its nonlinear, nonlocal, nonstationary, and sequential capabilities.
The United States and Brazil - Spatial and Logistical Interdependence for Soybean Shipments to China
(North Dakota State University, 2021) Scheresky, Gwen Marie
Analyzing the United States/Brazil competition for market share of Chinese soybean imports requires a detailed, stochastic approach. Using data from 2013 to 2019, this thesis attempts to model and explain the change in market share for each producing country as different variables fluctuate or enter the equation. Using five origins in each country, the PNW, USG, Santos, Paranaguá, and the northern arc of ports in Brazil, various transportation routes from origin to port, congestion and quality metrics, and ocean freight, a least-cost optimized Monte Carlo simulation is performed using time-series forecasting distributions for monthly variables. A distribution of outcomes for changes in market share over the crop year demonstrates that Chinese importers favor U.S, soybeans from December to March and Brazil soybeans the alternate months. In the base case Brazil captures almost two-thirds of China’s soybean imports. Sensitivity analyses include trade disputes, quality discounts, improved infrastructure, and congestion costs.

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