Review: (Andre and Cardenete, 2009) Defining efficient policies in a general equilibrium model a multi-objective approach

Defining efficient policies in a general equilibrium model a multi-objective approach

Francisco J. Andre´, M. Alejandro Cardenete (Department of Economcs, Pablo de Olavide University, Carretera de Utrera km. 1, 41008 Sevilla, Spain)
Socio-Economic Planning Sciences: 43 (2006), pp. 192-200


Objectives
This research attempted to quantify trade-offs between 2 specific policy objectives, growth and inflation, when designing fiscal policy. The model constructed a frontier of efficient policies involving real growth and inflation. The model is applied practically by offering policy recommendations that COULD have helped Spain during 1995 inefficiencies.


The methodology is claimed to be unique since it is operational and practical while remaining consistent with economic theory. The combination of Multi-objective Programming (MP) and Computable General Equilibrium (CGE) has never been attempted. It is pioneering in its application of the Paretian concept of efficiency to the field of policy design


Key Methods or Approach
The key methods were Multicriteria Decision Making (MCDM), specifically Multi-objective Programming (MP), combined with a Computable General Equilibrium (CGE) model. CGE is consistent with standard economic theory and allows measurement of effect(s) of a specific policy with real data concerning prices, production levels, tax revenues, and income distribution. This set-up allows calculation of relevant macroeconomic indicators as a function of policy instruments within a multicriteria decision problem to be solved by a policy maker.


Important Results or Conclusions
They showed that in 1995 Spain displayed some degree of inefficiency with respect to growth and inflation policy objectives. They used this model to provide two policy recommendations sets. One recommendation was general in that it considered efficiency independent of the importance of growth or inflation. The second focused on a specific objective such as increased growth or controlled inflation.


Assumptions
The litany of assumptions that accompany economic models are what is steering me away from incorporating an economic model such as general-equilibrium. Some of the assumptions for this model include:


- The CGE uses Walrasian equilbrium including the public and foreign sectors. (The meaning of this I am not exactly sure, so it is not really something that deters me from using CGE, but I did want to document it.)
- Taxes and public expenditure are taken as exogenous by consumers and firms, but are considered decision variables for the government
- The equilibrium of the economy is given by a price vector for all goods and inputs, a vector of activity levels and value for public income
- Public income must satisfy following conditions:
1) consumers maximize utility
2) firms maximize profits
3) public income equals payment of all economic agents
4) supply equals demand in all markets

This last set of mentioned assumptions are the type of required assumptions that do deter me. I do not believe that 

"the consumer’s behaviour is modelled by assuming that s/he aims to 

maximize welfare, which is derived from consumption goods." I also believe that firms must solely focus on maximizing profits. Lastly, is it really practical to expect supply to equal demand in all markets.

Opinion 
The most useful aspect of this paper were its Multi-Criteria Decision Making (MCDM) references:


(Introduction to MCDM techniques, and their applications to economic problems) Ballestero E, Romero C. Multiple criteria decision making and its applications to economic problems. Boston, MA: Kluwer Academic Publishers; 1998.

(State-of-the-art review of the field)Figueira J, Greco S, Ehrgott M, editors. Multiple criteria decision analysis state of the art surveys. International Series inOperationsResearch & Management Science, Vol. 78. Berlin: Springer-Verlag; 2005.
(Recent developments and applications of MP)Gabriel SA, Faria JA, Moglen GE. A multiobjective optimization approach to smart growth

in land development. Socio-Economic Planning Sciences 2006;40:212–48.

Hung ML, Yang W, Ma HW, Yang YM. A novel multiobjective programming approach dealing with qualitative and quantitative objectives for environmental management. Ecological Economics 2006;56:584–93.

Lins MPE, Angulo-Meza L, Moreira-Da-Silva AC. A multi-objective approach to determine alternative targets in data envelopment analysis. Journal of the Operational Research Society 2004;55:1090–101.

Gabriel SA, Kumar S, Ordo´n˜ez J, Nasserian A. A multiobjective optimization model for project selection with probabilistic considerations. Socio-Economic Planning Sciences 2006;40:297–313.

Ferna´ndez E, Puerto J. Multiobjective solution of the uncapacitated plant location problem. European Journal of Operational Research 2003;145:509–29.

Arroyo JEC, Armentano VA. Partial enumeration heuristic for multiobjective flowshop scheduling problems. Journal of the Operational Research Society 2004;55:1000–7.

Doerner KF, Gutjahr WJ, Hartl RF, Strauss C, Stummer C. Pareto ant colony optimization with ILP preprocessing in multiobjective project portfolio selection. European Journal of Operational Research 2006; 171:830–41.

According to Google Scholar this paper has been cited three times, but it was only published in 2009. That is actually good considering it has not been a whole year. The paper itself was well laid out and addressed it objectives and the format it stated in the beginning of the paper. It has no direct impact on the field of food distribution environmental or nutritional impacts. However the suggested extensions and referred MCDM methodologies could be used to create a model that addresses the multiple goals within a food value supply chain. With that in mind the Multiobjective Programming (MP) could possibly be combined with Agent-Based Modeling instead of CGE as I am not interested in being consistent with economic theory. 


The conclusion of the paper included the following suggested extensions:
- Alternative multi-criteria methods that do not seek global optimum, but, rather, satisfy "reasonable" aspiration levels using goal programming
- interactive MCDM provides a way to "fine-tune" policies by incorporating preferences of policy makers once initial policy suggestions have been offered

Review: (Hushak et al., 1993) Survey of Wholesale and Retail Buyers in the Six Southern States of the North Central Region

Survey of Wholesale and Retail Buyers in the Six Southern States of the North Central Region 

Hushak, Leroy (Professor Dept of Ag Econ and Rural Sociology), Charles F. Cole (Professor School of Natural Resources), Douglas P. Gleckler (Research Associate School of Natural Resources) Ohio State University, Columbus, OH

Technical Bulletin Series #104 (Funding provided through USDA Grant #89-38500-4319), January 1993

Objectives
This study had four specific objectives:

(1)  Describe the marketing channels for farm-raised and wild-caught seafood in the North Central Region (NCR)

(2)    Describe processing function of wholesale and retail channel members in order to examine vertical integration and accurately describe distribution channels.

(3)    Describe attitudes and preferences of NCR buyers regarding product quality attributes of farm-raised versus wild-caught seafood

(4) Develop list of species with potential to be marketed as farm-raised

This study is meant to look beyond “farm gate” transactions into the traditional seafood channel to bridge gap between producer and consumer studies. Ultimately this study aimed to aid in the development of the seafood aquaculture industry. Business and industry planners could benefit from the uncovering of channel member processing functions in order to find penetration points within distribution channel.

Key Methods or Approach 
Mailed questionnaires were designed to collect demographics and information pertaining to the four specific objectives. The mailing list consisted for 430 survey units limited by presence in Yellow Pages ads for wholesale and retail fish and seafood business in cities with populations greater than or equal to 100,000. The total universe as reported by a mailing list service publication is 565 retailers and 264 wholesalers. One hundred twenty-nine response were expected, 362 of the 430 were deliverable and 103 were usable.

Market channel functional relationships consisted of: (1) specialty retailer, (2) wholesaler, (3) distributor, (4) retail grocer with seafood counter, (5) processor, (6) warehouse, (7) broker, (8) producer and (9) other.

Each market channel participant could perform one or many of the following functions: (1) production, (2) processing, (3) brokering, (4) wholesaling, (5) warehousing, (6) distribution, (7) grocery retail, (8) specialty retail and (9) other. Some participants also imported or traded.  (More specific processing forms for reference: process dressed products to fillets, process dressed products to steaks, process “in round” products to fillets, process “in round” products to steaks, repackage large shipments into smaller subunits, process “in round” to dressed products, dress and debone, cook/steam/fry/boil/etc., thaw frozen products for sale as “previously frozen,” freeze fresh products for sale as frozen, fillet live fish, bread fillets, dress live fish, marinate or season products, process products into nuggets, stuff products and process products into patties)

Results
Objective 1
Respondents from all channel classifications buy inventory from multiple sources, perform multiple functions and sell to multiple customer types. Because of this describing the marketing channel cannot be mapped in a straight forward manner. The general flow is from producer -> wholesaler -> retailer -> consumer. Transactions occur in all directions, but mainly forward or downstream as described. Farm-raised products are bought from fewer sources than wild-caught.

Objective 2
Processing forms range between species and occur at all classification types. More wholesalers have the facilities to process fish “as harvested.” This is also described as “in round” or “dressed.” Grocery retailers tend to do more end user convenient processing such as precooking, marinating/seasoning, breading or forming into nuggets. Stuffing is more often performed by a specialty grocer or wholesaler.

Objective 3
Attributes for cultured products were rated better than wild-caught products.  Current demand for farm-raised products in relation to supply is seen as higher. Because of this the market potential for farm-raised products is good due to current and future excess demand perceived b respondents.

Objective 4

The most frequently sold freshwater species are: (1) walleye, (2) salmon, (3) trout and (4) channel fish. The 5 seafood products respondents would like to sell if farm-raised are: (1) walleye, (2) yellow perch, (3) hybrid striped bass, (4) largebouth bass and (5) bluegill sunfish. The 5 least desired farm-raised products are: (1) common carp, (2) sturgeon, (3) crawfish, (4) tilapia and (5) salmon. A list of 19 species were divided into the following 4 types based on whether merchants would “liketo” sell the fish and actual market presence.

Type A: Has a low market presence and low demand (Carp)

Type B: Species generally satisfy demand as cultured products. (freshwater mussels, sturgeon and tilapia (these may increase if marketing efforts are aimed at product awareness); cultured catfish and salmon (have room for expansion in NCR); frogs, crawfish and freshwater shrimp (also have potential for expansion but less))

Type C: Have the highest potential for industry development based on market presence and buyer demand (walleye, yellow perch, white bass, white perch and buffalo fish)

Type D: Popular or many market participants would like to sell farm-raised product (trout (sold exclusively as farm-raised); hybrid striped bass, largemouth bass, bluegill and smallmouth bass)  

In regards to the overall expansion of the farm-raised seafood product industry, texture, value, price and stability are potential problems. In relation to wild-caught participants preferred the availability, uniformity of size, seasonality of supply, freshness and quality  of farm-raised seafood.

Assumptions 
This study promotes aquaculture over wild, but did not provide evidence that it was better nutritionally or environmentally.

General Comments and Opinion 
This study was cited 3 times according to Google Scholar by similar types of studies. The reference list also consisted of similar studies. However, there is one reference of interest: Redmayne, P. 1990. Follow that fish: Demistifying distribution, part 1. Seafood Leader, July/Aug.

Overall the stated objectives were met, but the data in the tables did not always coincide or were hard to follow. The discussion of the various types addressed by Objective 4 could have been more clearly stated. Also, the term “buyer demand” was used often, which is misleading since all participants were merchants and not end consumers. Many obvious but necessarily stated conclusions about the market channel were given such as grocers are dependent of wholesalers for both farm-raised and wild-caught products. Specialty and grocery retailers sell most of output to final consumers, whereas restaurants are primary customers of wholesalers and retailers secondarily. Some speculation was made about the processing industry for farm-raised and wild-caught products. At times limited data was also cited as an explanation for results. 

Review: (Dung et al., ????) Agent-based modeling and simulation of integrated rice-shrimp farming in Bac Lieu Province, Mekong Delta, Vietnam

Agent-based modeling and simulation of integrated rice-shrimp farming in Bac Lieu Province, Mekong Delta, Vietnam

Le Canh Dung1, Chu Thai Hoanh2, Christophe Le Page3, and Nantana Gajaseni4
1Mekong Delta Development Research Institute, Can Tho University, Vietnam (lcdung@ctu.edu.vn) Currently a PhD student at Faculty of Science, Chulalongkorn University, Thailand
2International Water Management Institute (IWMI), Regional Office for Southeast Asia, Penang, Malaysia
3Centre de coopération internationale en recherche agronomique pour le development (CIRAD), CUCIRAD Unit, Faculty of Science, Chulalongkorn University, Thailand
4Faculty of Science, Chulalongkorn University, Thailand

Main Objective
This study aims to integrate and share stakeholder knowledge about rice-shrimp farming in Bac Lieu Province, Vietnam. The culmination of this knowledge will accelerate collective improvements in the design and management of rice-shrimp production systems (by comparing product mixture?). The research objectives are two-fold: “(1) to understand better the land-use decisions based on interactions among water quality, risk perception, and market price factors; (2) to provide a research process for analyzing decision-making in land-use that can be used for modeling and policy analysis.”

Key Methods
The key method is companion modeling (ComMod). It has two parts. The first is a Role-Playing Game (RPG) between farmers from two villages in Bac Lieu who recreate their famring decisions to reveal diverse water and land-use strategies. The second part is a generic Agent-Based Model (ABM) that used a subset of individual farming decisions to parameterize integrated rice-shrimp farming based on water salinity. The ABM was used using Common-Pool Resource and Multi-Agent System (CORMAS) platform (Le Page et al., 2000). ABM was used to analyze interaction among biophysical and socioeconomic factors that affect land-use decisions. This model accounted for (1) production cost, (2) price of product return and (3) risk of shrimp disease. Currently only one agent is analyzed. The model will become more complex as sluice operator and marketing intermediary agents risk perceptions and economic conditions are added. The model shows spatial setting. More complex model can be created to select production systems at two extremes of canal with different salinity conditions.

The model is split in to three modules: (1) Water (Space- Canal, Village, Farm, Plot), (2) Production (Crop- Rice, Shrimp, Crab, Fish), (3) Social (Household- 3 key operation methods of the farm are: (a) initiate household income status, (b) produce crops, and to (c) harvest products). It is not clear how these modules are embedded in the ABM.

Important Results and Conclusions
This iteration of the model was able to mimic the RPG production change due to water salinity. This will help gain credibility of the model in order to gather more data.

Assumptions
Use of this model assumes that ALL key stakeholders of the common resource (the canal in this instace) are involved in RPG. It also assumes that all stakeholders WANT to share experiences in land-use decisions in order to strengthen the adaptive management capacity of the local community.

Opinion
I am unsure of where this paper was published or how many times it has been cited. Given the terseness of its 5 pages the references list is short and appears to support the model that was built. The first research objective was partially met since land-decision used based on water salinity. It is unclear whether additional scenarios based on sluice operator decisions, risk and economic conditions were actually simulated and assessed. Therefore I am left unaware of scenarios related to risk perception and market price factors. The beginnings of the second research objective was met since the expansion of this model could provide a research process of analyzing decision-making in land-use that can be used for modeling policy analysis.

Impact on Food Distribution Environmental and Nutritional Impacts in Hawaii
This type of modeling could be used to test farm production reaction to various environmental factors. The methodology of the RPG would have to be representative of generalized groupings of operations in Hawaii since it is not practical to interview all producers.

Progressing Direction

After stepping away from this blog to concentrate on classes and other endeavors toward the pursuit of this research, I have come back with an evolved explanation of my research direction, and have realized that I must state my goal before any direction can be chosen, so.... The goal of this doctoral research is to create a life cycle assessment agent-based model that can account for the environmental impact of food consumption patterns in Hawaii. This is the first of many approaches I would like to explore the impact of food availability in order to improve information for food distribution businesses and consumers within a region or community.

The USDA Food Environment Atlas already extensively addresses my larger research goal for many different indicators. This doctoral research will be patterned off of the Food Price-Price Ratio indicators. However, instead of solely examining retail price, my indicators will factor in life cycle assessment to monetize the environmental impact of food choice alternatives.

Given available funding and data availability this doctoral research will focus on seafood in Hawaii. In order of the research to be meaningful I will have to look at specific species. Species of interest are:

1) tilapia or any type of fish that will serve the current purpose of low cost fish sticks, patties or fillets that are used in cafeterias, fast food establishment or frozen meals (comparison of various alternatives of locally available and imported species)
2) shrimp (local vs. import)
3) tuna (local vs. import)
4) salmon (wild vs. farmed)- this analysis does not examine local vs. import, but salmon is widely consumed on these islands

The data is coming from a survey that aims to gather the entire flow of seafood consumption in Hawaii in order to better understand what is imported, which species are consumed the most, and what is the distributional flow from import -> wholesale -> retail -> restaurant or home consumption of fresh, frozen and processed (canned, dried or processed) fish in the state of Hawaii. This survey will be done at the business and institutional levels, asking each operation the weight and price of purchase and sale of 18 different seafood species. A census is being attempted, meaning data for ALL seafood operations. A similar survey was attempted by SMS Research for NHRS (link papers.....) that used a stratified sample by economic unit. This data collection methodology will not truly capture seafood consumption in the island, but it can certainly give a better pictures. These studies will be examined in more depth in later postings.

Speaking of, going forward various articles and media will be reviewed on this blog, some related to this doctoral research that specifically pertains to seafood in Hawaii and some will simply pertain to food distribution and its environmental or nutritional impact. Each review will for the most part address the following points:

What was/were the main objective(s) of the paper?

What were the key methods or approach?

What were the important results and conclusions?

Errors in experimental design, statistical analyses or analytical approaches?

Assumptions made with the data, calculations, models? Reasonable?

References? Amount of citations?

Meet stated objectives?

Main conclusions supported by data? Why or why not?

Number of times cited?

Impact on field of food distribution environmental or nutritional impacts?

Opinion

With that I continue this journey...

Mānoa Valley POI

Monterey Bay Aquarium Pacific Coast Federation of Fishermen's Associations and the Institute for Fisheries Resources

William "Zeke" Grader (Pacific Cost Federation of Fishermen's Associations), Jennifer Dianto (Monterey Bay Aquarium), Natasha Benjamin (Institute for Fisheries Resources), 2002. Monterey Bay Aquarium Pacific Coast Federation of Fishermen's Associations and the Institute for Fisheries Resources. In: Ridge, Tom (Ed.). Pacific Coast Federation of Fishermen's Associations (PCFFA), Washington DC, p. 3.

This is a letter from the Monterey Bay Aquarium, Pacific Coast Federation of Fishermen's Associations and the Institute for Fisheries Resources to the 2002 Director of Homeland Security, Tom Ridge, recommending that basic measures for labeling seafood in retail stores be required. They state the following reasons:

- European Union (EU) adopted regulations requiring labeling of all fisheries and aquaculture products
*labeling regulation is intended to strengthen traceability
- All fisheries products on sale at retailers will have to be labeled with the following information
(1) the commercial name of the species
(2) the production method (wild or farmed)
(3) the area where the fish was caught
- Reasons for Congress to adopt legislation:
(1) Security
(2) Consumer Right-to-Know
(3) Domestic Market
(4) Foreign Market
(5) Health Safety
(6) Sustainable Fisheries

My thoughts...
It is stated in the letter:
"Informational labeling does not render any judgment on the sustainability of the product or the impact that its harvest has on the environment."

This is true since the consumer will have to formulate their own opinion. Biased information will be provided by all stakeholders. It is the job of academic researchers to sort through this information and provide unbiased information on which consumers can base their knowledge. How academic research makes it from journals to consumers untainted is another issue...

Evaluating the Marketing Channel and Food Safety of Fish and Seafood Products in Hawaii

This is the description of the seminal research which revolves around a grant proposal to produce the following outputs with funding from NOAA...

Goal: Collect basic information essential to research and policy-making activities related to the supply of safe fish and seafood products (FSP) in Hawaii.

Plan for Objectives:

1. Describe present FSP marketing channels in Hawaii and flows from local, U.S. domestic and foreign sources
2. Reveal attitudes and perceptions of Hawaii FSP market participants (importers, wholesalers, retailers and consumers) toward local FSP.
3. Assess possible performance of existing marketing channels in light of safety requirements on FSP
   Data for the above objectives will be collected from surveys given to segments of market participants with questions regarding:
   a) Socioeconomic-demographic characteristics of respondents
   b) FSP flow handled by respondent (annual sales & purchases (quantity and value) by species)
   c) Perception of respondents toward FSP from Hawaiian waters
   d) Food safety considerations
   e) Reaction to supply constraints when there are restrictions from outside sources
   
   
4. Investigate whether Hawaii restaurants (consumers in general) are substituting high quality local FSP for cheaper imports
5. Identify factors (with focus on "food-safety") that influence the purchase of local FSP by Hawaii restaurants (consumers in general)
6. Examine impacts and implications on purchase patterns of local restaurants (consumers in general) with respect to development of Hawaii fisheries and aquaculture industry
   Data for the above objectives will be collected from surveys given to local consumers with questions regarding:
   a) Socioeconomic-demographic information (from restaurants: annual sales, location, formality, seating capacity, years in business and cuisine type)
   b) Current and planned seafood sales by species and origin (local vs. import)
   c) Perception toward local vs. imported FSP (attributes include: price, customer preference, flavor, quality, freshness, nutritional value, supply reliability and most importantly food safety)
   

Expected Ouputs:

• Report of findings regarding the current structure of the FSP marketing channel in Hawaii. Information will address:
1. Product flow by species across market segments
2. Benefits distribution across market segments 
3. Overall self-sufficiency for Hawaiian islands.
• Assessment of purchasing decisions of local consumers

As the project moves along partnerships will be sought among stakeholders interested in promoting healthy and high-quality FSP from Hawaii. Hopefully the knowledge and methodologies from this seminal effort can inform and enhance similar work for the beef, poultry, fruit/vegetable and non-timber forest product industries in Hawaii.