Peter Berck

University of California, Berkeley, Berkeley, California, United States

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Publications (80)29.48 Total impact

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    ABSTRACT: The last 10 years have seen tremendous expansion in biofuels production, particularly in corn ethanol in the United States, at the same time that commodity prices (e.g., corn) have experienced significant spikes. While supporters claim that biofuels are renewable and carbon-friendly, concerns have been raised about their impacts on land use and food prices. This paper analyzes how US crop prices have responded to shocks in acreage supply; these shocks can be thought of as a shock to the residual supply of corn for food. Using a structural vector auto-regression framework, we examine shocks to a crop’s own acreage and to total cropland. This allows us to estimate the effect of dedicating cropland or non-crop farmlands to biofuels feedstock production. A negative shock in own acreage leads to an increase in price for soybeans and corn. Our calculations show that increased corn ethanol production during the boom production year 2006/2007 explains approximately 27% of the experienced corn price rise.
    Environmental and Resource Economics 01/2012; 53(1). · 1.52 Impact Factor
  • Peter Berck, Jonathan Lipow
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    ABSTRACT: Insurgencies and terrorist activities are often dependent on foreign sources of funding. When this is the case, trade barriers such as import tariffs can prove to be an effective means of combating violence and enhancing social welfare. In this article, we identify the optimal tariff for a country facing an externally financed insurgency.
    Applied Economics Letters - APPL ECON LETTERS. 01/2012; 19(18):1847-1849.
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    Lunyu Xie, Peter Berck, Jintao Xu
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    ABSTRACT: Aiming to alleviate rural poverty, stimulate investment in forests, and improve forest conservation, the Chinese government set forth a policy leading to small private holdings of previously village administered forest lands. Using data collected from 288 villages in eight provinces in three years, this paper measures the effect of the reform on forestation. Villages needed to vote for the privatization for the reform to be effective. To identify the causal effect of taking the reform, we use an IV estimator based on the county wide decision to offer the reform package. We find an increase in forestation of 7.9% of the forest land in the year of the reform.
    12/2011;
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    ABSTRACT: Weather Index Insurance (WII) has recently gained increased attention as a tool to providing farmers coverage against losses from weather shocks. Despite extensive implementations in African and Latin Amercian countries, there is yet little empirical evidence about the effectiveness of WII. This paper is the first to analyze the economic effects of a large scale WII using new administrative data from Mexico. To study the impacts on productivity, income and risk management, our identification strategy takes advantage of the variation across counties and over time in which the insurance was rolled-out from 2003 to 2008. We find that WII significantly increases yields per hectare by 6% and WII increases income by 8%, pointing towards a positive spillover effect. Exploring the potential mechanisms of this spillover effect, we find that WII decreases the planted area of maize (Mexico's main crop) by 8%. This allows farmers to use the gained land potentially more effectively by substituting into other cash crops raising overall farm output. Important credit constraints are likely relaxed as well. Generally, we find that most significant benefits occur in 'medium' income counties, raising productivity by 8%. WII has instead less affects in the very richest counties. Overall, however, we find that Mexico's subsidized WII is cost-inefficient from a societal perspective.
    04/2011;
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    Peter Berck, Jonathan Lipow
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    ABSTRACT: Analyses of optimal government capital structure generally follow Bohn (1990) and Barro (1995) in assuming risk neutrality or an exogenous risk premium. These analyses usually conclude that the optimal government capital structure stabilizes tax rates over time and states of nature to the greatest extent possible, something known as "tax smoothing." In this paper, we show that when an endogenous risk premium is introduced, the optimal government capital structure will no longer smooth tax rates. Under likely conditions, the optimal structure requires a larger short position in risky assets than that implied by tax smoothing.
    03/2011;
  • David A. Newburn, Peter Berck
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    ABSTRACT: Exurbia, the rural area beyond the built-up urban and contiguous suburban area, is being developed rapidly with attendant losses in habitat and ecosystem services. This paper analyzes a spatial dynamic model with two production technologies for residential development - municipal sewer service for suburban development and septic systems for exurban development. In outlying agricultural areas, the additional sewer extension costs can significantly reduce the value of agricultural land in suburban use. Exurban development, while at lower density, can occur immediately and requires only the onsite conversion costs of septic systems. Hence, the willingness to pay for exurban use from households with higher preferences for lot size may exceed the agricultural landowner’s reservation price on future suburban use for a range of distances from the city boundary. This results in a “feasible zone” for exurban leapfrog development and another fundamental reason for scattered development in the urban-rural fringe.
    03/2011;
  • Peter Berck, Lunyu Xie
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    ABSTRACT: California's ‘Scoping Plan’ to reduce greenhouse gas emissions relies on vehicle emissions standards, low carbon fuels, and renewable electricity, as well as a regional cap-and-trade system and other market-based instruments. The process has been guided by a computable general equilibrium (CGE) model, the Environmental Dynamic Revenue Analysis Model (E-DRAM). The model shows that the Scoping Plan measures will result in net benefits for the state economy, measured in gross state product (industrial output), employment, and personal income. Most of the benefits result from reduced energy costs. Despite aggregate net benefits, individual industrial sectors gain or lose differentially.
    Journal of Natural Resources Policy Research 01/2011; 3(1):37-47.
  • Environmental Science & Technology 01/2011; 45(5):1751-6. · 5.26 Impact Factor
  • Peter Berck
    Journal of Natural Resources Policy Research 01/2011; 3(1):1-4.
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    ABSTRACT: California and Sweden are both leaders in green regulations and actions. In both there is a substantial political base for environmental regulation, yet the path to regulation in these two political entities is quite different. California emphasizes command and control regulations while Sweden makes heavy use of taxes. We show that both underlying economic factors and the constraints of the larger systems in which these economies are embedded contribute to their choice of control methods.
    Journal of Natural Resources Policy Research 01/2011; 3(1):49-61.
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    Peter Berck, Jonathan Lipow
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    ABSTRACT: In this article, we develop a model of military manpower mobilization. We use the model to evaluate the efficacy of volunteer- and conscription-based manpower systems within a framework of social welfare maximization. We find that neither conscription nor a volunteer approach is likely to be “first best” because of asymmetries of information and constraints on the military pay structure. We then modify the general model by considering the possibility that recruits with high civilian productivity are also more capable soldiers and find that, under such circumstances, conscription may be a more benign form of manpower mobilization than previously understood. We also consider and evaluate various alternatives available to militaries attempting to minimize the welfare losses associated with manpower mobilization.
    Southern Economic Journal 01/2011; 78(1):95-106. · 0.63 Impact Factor
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    ABSTRACT: Weather shocks are a major source of income fluctuation and most of the world's poor lack insurance coverage against them. In addition, the absence of formal insurance contributes to poverty traps as investment decisions are conflicted with risk management decisions: risk-averse farmers tend to under-invest and concentrate in the production of lower yielding yet safer crops. Recently, weather-indexed insurance has gained increased attention as an effective tool providing small-scale farmers coverage against aggregate shocks. However, there is little empirical evidence about its effectiveness. In this paper we study the effects of the recently introduced rainfall-indexed insurance on farmers' productivity, risk management strategies and per capita income and expenditures in Mexico. Our identification strategy takes advantage of the variation across counties and across time in which the insurance was rolled-out. We find that insurance presence in treated counties has significant and positive effects on maize productivity. Similarly, there is a positive association between insurance presence in the county and rural households' per capita expenditure and income. However, we find no significant relation between insurance presence and the number of hectares destined for maize production. (JEL Cavazos, and participants at the UC Berkeley Development Workshop and the 2010 PacDev for very useful comments. We are also grateful to Victor Manuel Celaya del Toro at the Mexican Ministry of Agriculture for providing data and insights on the program. All remaining errors are ours.
    11/2010;
  • Knut Sydsæter, Arne Strøm, Peter Berck
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    ABSTRACT: The solutions of a homogeneous, linear secondorder difference equation with constant coefficients a and b. C1, C2, and ω are arbitrary constants. If the function ct is itself a solution of the homogeneous equation, multiply the trial solution by t. If this new trial function also satisfies the homogeneous equation, multiply the trial function by t again. (See Hildebrand (1968), Sec. 1.8 for the general procedure.)
    07/2010: pages 63-68;
  • Peter Berck, Jonathan Lipow
    Defense and Security Analysis 06/2010; 26(2):181-188.
  • Peter Berck, Runar Braennlund
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    ABSTRACT: California and Sweden are both leaders in green regulations and actions. In both there is a substantial political base for environmental regulation, yet the path to regulation in these two political entities is quite different. California emphasizes command and control regulations while Sweden makes heavy use of taxes. We show that both underlying economic factors and the constraints of the larger systems in which these economies are embedded contribute to their choice of control methods.
    Department of Agricultural & Resource Economics, UC Berkeley, Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series. 01/2010;
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    ABSTRACT: In this article, we consider the optimal fiscal strategy of a government interested in maximizing expected social welfare in the face of a potential future security threat. While the common wisdom is that countries facing security threats should seek to bolster their fiscal position in order to 'save for a rainy day', we find that the optimization of expected social welfare may require governments to run 'precautionary' fiscal deficits.
    Applied Economics Letters. 01/2010; 17(11):1063-1065.
  • Peter Berck
    Journal of Natural Resources Policy Research 01/2009; 1(1):83-86.
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    ABSTRACT: Due to the open-access nature of the environment we consider an ad hoc adjustment of people’s footprints. People’s environmental concerns are intensified (diminished) as the quality of the environment falls below (rises above) a threshold. Changes in the quality of the environment affect Earth’s carrying capacity. We claim that without technological, social and international progress the interplay between the nonoptimally changing environmental concerns and carrying capacity embarks the world’s environment and human population on a clockwise oscillating course that leads to a unique interior steady state with population similar to the current one residing in a slightly more degraded environment. (JEL O13, Q20)
    Faculty of Commerce - Economics Working Papers. 01/2009;
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    ABSTRACT: Commodity prices have been rising at unprecedented rates over the last two years. The primary objective of this paper is to assess if and how firms pass through upstream cost increases to final good prices. First, we investigate what happens to the shelf prices (the regular prices) of goods that contain significant amounts of a commodity whose price has changed. The objective is to document patterns of price rigidity depending on the share of the commodity in the final good that is sold to consumers. For example, given an abnormal commodity price change in wheat, what happens to the shelf regular price of bread, wheat cereals, and other goods that contain wheat? Commodity pass-through patterns for ready to eat cereal (smallest share of commodity in final product) and fresh chicken (largest share of commodity in final good) are investigated. Second, we also assess what happens to the net prices consumers pay (that is the regular price net of discounts offered). One possible way to pass through a cost increase is to reduce the frequency of promotional discounts, or offer smaller discounts to consumers. Upstream commodity input prices used in our investigation are wheat and corn futures prices, to account for upstream inputs, and flour and chicken feed producer price sub indices for downstream cost shocks. We combine several datasets for this empirical analysis: commodity prices, commodity price indices, and scanner data on prices for a variety of goods, over a four year time period and across several stores in California, belonging to a large retail chain. We construct quantity weighted price indices within two product categories sold in the supermarket, where prices are weighted by pre-determined quantity weights to obtain shelf price indices and net price indices. For each of the commodities, regressions will be run using store-level product (UPC) weekly data. The reduced form regressions consist of projecting the shelf price index, as well as the net price index, o
    Department of Agricultural & Resource Economics, UC Berkeley, Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series. 01/2009;
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    David A. Newburn, Peter Berck
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    ABSTRACT: This study examines the effectiveness of growth management policies on influencing future patterns of exurban and suburban development. We initially estimate a spatially explicit model of residential development with parcel data in Sonoma County, California. This estimated model is then used to simulate the effect of urban growth boundaries (UGBs) versus allowing municipal sewer service expansion. The UGB policy decreases the amount of suburban development but is less effective in managing exurban development. The downzoning policy in agricultural and resource areas reduces the amount of exurban development, but only partially due to the prevalence of grandfathered lots in rural areas.
    Agricultural and Resource Economics Review 01/2008; 40(3).