APEC – Exam #2 – Agricultural and Applied Economics – study material
Every choice in creating a policy will.... - correct answer ✔✔create either winners or losers.
- It creates opportunities and displaces others
- The decision to change policies or plans, or retain them will mean inevitability that there are winers
and losers
4 steps in the planning policy and administration process? - correct answer ✔✔1. Problem
identification
2. Establish scientific alternatives for solution
- Testing alternatives
- Evaluating results
- Drawing conclusions
3. Analysis of most cost-effective solution
- Relative to what?
- Specific shortcomings?
- Who is responsible?
4. Implementation
Benefit-cost analysis - correct answer ✔✔is an economic tool for comparing in monetary terms the
desirable and undesirable impacts of proposed policies
Benefits are measured by...
and must be... - correct answer ✔✔willingness to pay
- Benefits must be greater than the cost, this would make something a good project worthy of
investment
,Benefit costs ratios over... - correct answer ✔✔1.0 are indicators of "good" projects, but maximum
net present values are the best
Measurement problems of costs and benefits - correct answer ✔✔Are all costs and benefits
measured?
Use of dollars as a measure/distributional issues
Pay-per-throw solid waste is used for an example of... - correct answer ✔✔A benefit-cost analysis
- makes people pay for stickers and different sized trash cans costs different amounts of money. You
have to have them for people to pick up your trash. It makes people more aware of what they are
throwing away.
It can help the people who are low waste households because they were paying too much of a standard
payment for such little trash
- High waste households will pay more because they were paying too little a standard for the amount of
trash they were forming.
- The entire community will benefit because there will be less landfill
- How do we know if it's worth doing? Look at the costs and benefits. There would be 9 million of net
benefits, so that makes it worth doing
Nonpoint source pollution is a huge problem in the world because it... - correct answer ✔✔leads to
pollutions called
- Dead Zones- so full of nutrients and algae that aquatic life can't live in this area
- Great Lakes Region has Algal Blooms caused by nonpoint source pollution which is a rapid group of
algae and as it dies off it can become toxic.
- We don't have good studies that evaluate the effectiveness of our studies
Evidence-based policy - correct answer ✔✔- the use of scientifically rigorous studies such as
randomized controlled trials to identify programs and practices capable of improving policy-relevant
outcomes
,- being pushed in the government right now, and was especially pushed by Obama. We want to know
that our tax paying money is going to have high benefits.
History of Agriculture - correct answer ✔✔In agriculture, we apply scientific principles to study the
specifics of crop management techniques.
Collect data on control plots, control for confounding factors, etc.
Environmental efforts have likewise relied heavily on scientific principals.
Scientific investigations related to agriculture and the environment should not stop when human
behavior enter the picture.
Recent reports indicate that USDA is behind other agencies in applying evidence-based policies and
behavioral science to improve program performance.
CBEAR is designed to help.
3 important aspects of federal policy making is - correct answer ✔✔1. Test
2. Learn
3. Adapt
Randomized control trials (RCT) - correct answer ✔✔Haynes et al., argue strongly for the use of
randomized control trials (RCTs) for the analysis and evaluation of public programs and policies.
Testing new interventions against status quo or against alternative interventions (including variations in
existing interventions).
RCTs are very similar to crop trials in agriculture.
RCTs have been used since the 1950s in the private sector (drug trials) and in areas of education and
criminal justice.
RCTs help eliminate rival explanations and help identify causal relationships.
, The difference between an experiment vs. pilot - correct answer ✔✔Experiment= Has a hypothesis,
sharing results with knowledge, rigorous formal research design
Pilot= Trying something new, no real testing mindset, no rigorous learning or evaluation strategy
Key Advantages of RCT's (3) - correct answer ✔✔1) It helps to avoid problems of selection bias
2) Helps avoid external bias.
3) They are easy to explain to policy makers and key decision makers
- Organize groups into a large group of units so all external factors are the same so there are no weather
biases, no selection bias (same soil, same nutritions, same weather...etc.)
- Randomly dividing units into treated and control groups
Why not just introduce a new program and observe what happens (2)? - correct answer ✔✔Time-
Varying External Factors:
Other changes in the environment can cause changes in outcomes that are not attributable to the
intervention.
External factors could include local economic conditions, changing requirements from state
governments, variations in weather, and/or changes in the frequency of pests.
Selection Bias:
The participants in the new program (the 'treated') might systematically differ from those who choose
not to participate in ways that affect their outcomes.
Importance of counterfactuals - correct answer ✔✔Ex. you can look at post treated vs. pre treated
group, but you need a control group that is never treated so you can compare them (this is just an
example, it could be talking growing plants or anything)
Sometimes great ideas just don't work in reality. That's why coutnerfactuals are important.
Every choice in creating a policy will.... - correct answer ✔✔create either winners or losers.
- It creates opportunities and displaces others
- The decision to change policies or plans, or retain them will mean inevitability that there are winers
and losers
4 steps in the planning policy and administration process? - correct answer ✔✔1. Problem
identification
2. Establish scientific alternatives for solution
- Testing alternatives
- Evaluating results
- Drawing conclusions
3. Analysis of most cost-effective solution
- Relative to what?
- Specific shortcomings?
- Who is responsible?
4. Implementation
Benefit-cost analysis - correct answer ✔✔is an economic tool for comparing in monetary terms the
desirable and undesirable impacts of proposed policies
Benefits are measured by...
and must be... - correct answer ✔✔willingness to pay
- Benefits must be greater than the cost, this would make something a good project worthy of
investment
,Benefit costs ratios over... - correct answer ✔✔1.0 are indicators of "good" projects, but maximum
net present values are the best
Measurement problems of costs and benefits - correct answer ✔✔Are all costs and benefits
measured?
Use of dollars as a measure/distributional issues
Pay-per-throw solid waste is used for an example of... - correct answer ✔✔A benefit-cost analysis
- makes people pay for stickers and different sized trash cans costs different amounts of money. You
have to have them for people to pick up your trash. It makes people more aware of what they are
throwing away.
It can help the people who are low waste households because they were paying too much of a standard
payment for such little trash
- High waste households will pay more because they were paying too little a standard for the amount of
trash they were forming.
- The entire community will benefit because there will be less landfill
- How do we know if it's worth doing? Look at the costs and benefits. There would be 9 million of net
benefits, so that makes it worth doing
Nonpoint source pollution is a huge problem in the world because it... - correct answer ✔✔leads to
pollutions called
- Dead Zones- so full of nutrients and algae that aquatic life can't live in this area
- Great Lakes Region has Algal Blooms caused by nonpoint source pollution which is a rapid group of
algae and as it dies off it can become toxic.
- We don't have good studies that evaluate the effectiveness of our studies
Evidence-based policy - correct answer ✔✔- the use of scientifically rigorous studies such as
randomized controlled trials to identify programs and practices capable of improving policy-relevant
outcomes
,- being pushed in the government right now, and was especially pushed by Obama. We want to know
that our tax paying money is going to have high benefits.
History of Agriculture - correct answer ✔✔In agriculture, we apply scientific principles to study the
specifics of crop management techniques.
Collect data on control plots, control for confounding factors, etc.
Environmental efforts have likewise relied heavily on scientific principals.
Scientific investigations related to agriculture and the environment should not stop when human
behavior enter the picture.
Recent reports indicate that USDA is behind other agencies in applying evidence-based policies and
behavioral science to improve program performance.
CBEAR is designed to help.
3 important aspects of federal policy making is - correct answer ✔✔1. Test
2. Learn
3. Adapt
Randomized control trials (RCT) - correct answer ✔✔Haynes et al., argue strongly for the use of
randomized control trials (RCTs) for the analysis and evaluation of public programs and policies.
Testing new interventions against status quo or against alternative interventions (including variations in
existing interventions).
RCTs are very similar to crop trials in agriculture.
RCTs have been used since the 1950s in the private sector (drug trials) and in areas of education and
criminal justice.
RCTs help eliminate rival explanations and help identify causal relationships.
, The difference between an experiment vs. pilot - correct answer ✔✔Experiment= Has a hypothesis,
sharing results with knowledge, rigorous formal research design
Pilot= Trying something new, no real testing mindset, no rigorous learning or evaluation strategy
Key Advantages of RCT's (3) - correct answer ✔✔1) It helps to avoid problems of selection bias
2) Helps avoid external bias.
3) They are easy to explain to policy makers and key decision makers
- Organize groups into a large group of units so all external factors are the same so there are no weather
biases, no selection bias (same soil, same nutritions, same weather...etc.)
- Randomly dividing units into treated and control groups
Why not just introduce a new program and observe what happens (2)? - correct answer ✔✔Time-
Varying External Factors:
Other changes in the environment can cause changes in outcomes that are not attributable to the
intervention.
External factors could include local economic conditions, changing requirements from state
governments, variations in weather, and/or changes in the frequency of pests.
Selection Bias:
The participants in the new program (the 'treated') might systematically differ from those who choose
not to participate in ways that affect their outcomes.
Importance of counterfactuals - correct answer ✔✔Ex. you can look at post treated vs. pre treated
group, but you need a control group that is never treated so you can compare them (this is just an
example, it could be talking growing plants or anything)
Sometimes great ideas just don't work in reality. That's why coutnerfactuals are important.
