This dissertation is an essay on evaluating performance of econometric estimators, agricultural input choices under risk preference and welfare analysis with respect to different equilibrium models. In the first chapter, I use simulation methods with independent, relevant, and excluded instrumental variables, wherein they form a complete set of instruments, to quantify finite sample performance of selected estimators. In finite samples, I find that the bias and variance of estimators increase with the exclusion of instrumental variables. I also find that the mean squared error of the parameter estimates increase with the increase of number of omitted instruments in the model. The sensitivity due to the number of omitted instruments is not necessarily eliminated by increases in sample size. The equations containing more endogenous variables appear more sensitive to the omitted instruments. Simulation results also imply that the finite sample performance of 3SLS estimators also suffers under omitted instruments. In the second chapter, I develop a theoretical model to explore the choices of using plastics and pesticides to grow food as well as the potential negative spillover caused by plastic use in production agriculture that is transformed into microplastic pollution in the soil. I show that a growers' risk preference has an impact on the substitution between plastic and pesticides in that restrictions on these inputs do not necessarily trigger substitution for risk averse growers. In the third chapter, I focus on measuring and quantifying impacts of shocks along the supply chain for an agricultural sector in the context of a small economy. I show theoretically that the differences between the change in welfare estimated from GE and PE models are economically significant for a small economy. I show that the changes in consumer surplus predicted by the two models due to a domestic demand shock are statistically significantly different. I show that, the PE model produces larger welfare implication than hybrid model in response to demand shock, markup shock and capital demand shock compared to supply shock, labor demand shock and export shock. Results also show that the PE approach is more sensitive to the parameters of the behavioral equation.

Three demand systems were estimated to examine demand sensitivity and welfare changes for each commodity under study. In the first essay, a Quadratic Almost Ideal Demand System (QUAIDS) was used to examine the effect of the Fukushima Daichi nuclear disaster on the demand for imported pelagic fish in the domestic Japanese market. The effect of the Fukushima Daichi nuclear disaster was measured using changes in demand after the disaster as well as measures of changes in social welfare changes caused by the disaster. A significant effect of the disaster on demand sensitivity measures was found, but no significant changes in welfare. In the second essay, a differential demand system examined the effect of exchange rate fluctuations on the demand for fresh tomatoes in the U.S. Market. It was found that the U.S. Dollar-Mexican Peso exchange rate had a significant positive effect on the demand for Mexican fresh tomatoes. In the third essay, a Hurdle Negative Binomial demand system was estimated for recreational trips to the Boundary Waters Canoe Area Wilderness. This model was estimated using Bayesian methods to obtain parameter estimates that could not be obtained by maximum likelihood. The parameters were used to calculate recreational welfare measures for trips to seventy-two entry points.

The proportion of the world's population that directly interacts with agriculture and natural resources for their daily bread is declining amidst structural transformation (Timmer et al. 2009). Commensurately, the expectations and hopes placed on the remaining food and fiber producers in the world seems to ever increase, not only in terms of the provision of food and fiber, but increasingly in terms of environmental management and the conservation of intersecting natural resources (Blundo et al. 2018, Messerli et al. 2019, Wunder et al. 2020, Baylis et al. 2022). It is not a stretch to declare that there is a lot riding on the welfare of the food and fiber producers of the world (e.g., food security), and on the extent to which conditions that enhance the welfare of the farmer (gatherer) also enhance general welfare in matters beyond the direct provision of food and fiber (e.g., climate change, pollution control, and biodiversity conservation). To manage this state of affairs, the economics underpinning the production behavior of food and fiber producers and associated realized outcomes, are paramount to understand theoretically and to test empirically. In what follows, three applications are studied, each with a focus on a renewable natural resource of concern and an intersecting agricultural production sector where little to no empirical work has be done. The settings and questions are each broadly important and timely: * Do food price shocks cause deforestation, and if so how? * How do farmers decide whether to use managed pollination service markets, and are observed use patterns optimal? * Does the provision of index-based agricultural insurance lead to resource degradation, or improvement? Although on one level these topics are unrelated, the reality is that there are similar archetypal economic problems at the root of each of these questions, where the welfare of an agricultural agent, and the impacts from their production behavior, may or may not coincide with a social optimum. In chapter 2, evidence is presented that food price shocks, particularly for staples, can have significant impacts on deforestation (particularly through increases in price levels), that such shocks can drive smallholders to expand production broadly to address internal shocks to consumption and production, and that such land use change patterns can be casually miss-attributed to cash crop markets. In chapter 3, it is demonstrated that pollination dependent farmer's crop pollination behavior may be less static than has been presumed, that crop pollination behavior and production outcomes are influenced by adjacent land use and landscape heterogeneity, that there are diminishing returns to managed pollination use, and that reliance on pollination service markets is intimately related to the farmers production technology. In chapter 4, the roll-out of a successful index-based agricultural insurance product is studied at-scale, which theoretically might lead to resource degradation, or improvement (in this case for rangeland quality), and evidence is presented that resource degradation concerns may be over-blown, lending credence to the idea that addressing missing financial markets can enhance productivity and agent's welfare without degrading fundamental natural resource stocks.

Compilation of essays in economic theory on the concept of welfare - includes papers on problems of econometrics measurement thereof and on the application of welfare theory to socialist economics. References.