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The Department of Environmental Economics and Management

The Robert H. Smith Faculty
of Agriculture, Food and Environment
The Hebrew University of Jerusalem

Herzl 229, Rehovot 7610001
Fax: 08-9466267

Department Head:
Prof. Ayal Kimhi, Tel: 08-9489376

Head of the teaching program:
Dr. Ohad Raveh, Tel: 08-9489373

Meital Kappach, Tel: 08-9489230


Schoenbaum, I. ; Henkin, Z. ; Yehuda, Y. ; Voet, H. ; Kigel, J. Cattle foraging in Mediterranean oak woodlands – Effects of management practices on the woody vegetation. Forest Ecology and Management 2018, 419-420, 160-169. Publisher's VersionAbstract
Vegetation structure and composition of woodlands in the Mediterranean Basin have experienced extensive land-use change during recent decades. Decline in traditional foraging by goats is leading to more closed and spatially homogeneous woody vegetation, reduced plant diversity, and increased fire risk because of accumulation of inflammable material. We studied the use of cattle foraging as an alternative to goat foraging in Mediterranean oak woodlands. Our main goal was to provide basic information on the responses of woody vegetation to cattle foraging intensity, and on the factors affecting spatial patterns of woodland utilization. We conducted the study in the Western Galilee, Israel, in oak woodland dominated by Palestine oak (Quercus calliprinos Webb.) interspersed with patches of shrubs and herbaceous vegetation. Effects of two animal population densities, moderate (0.33 cow⋅ha−1) and high (0.55 cow⋅ha−1), on the structure, composition, and regeneration potential of dense and of open woody formations were examined. Four consecutive annual seasons of cattle foraging resulted in relatively large amounts of woody vegetation removal, especially under high animal density, but had no negative effects on woody species richness or regeneration potential from saplings. The type of vegetation formation and initial state of the woody vegetation were important factors affecting the degree of change. Woody biomass removal by cattle, as shown in this study, can reduce fire hazards and increase vegetation heterogeneity and plant diversity. These findings support the use of cattle as an efficient alternative tool for multi-purpose, sustainable management of Mediterranean oak woodlands. © 2018 Elsevier B.V.
Landau, S. Y. ; Dvash, L. ; Yehuda, Y. ; Muklada, H. ; Peleg, G. ; Henkin, Z. ; Voet, H. ; Ungar, E. D. Impact of animal density on cattle nutrition in dry Mediterranean rangelands: A faecal near-IR spectroscopy-aided study. Animal 2018, 12, 265-274. Publisher's VersionAbstract
In the context of determining the sustainable carrying capacity of dry-Mediterranean herbaceous rangelands, we examined the effect of animal density on cattle nutrition, which is fundamental to animal performance and welfare. The effects on dietary components of low (0.56 cows/ha; L) and high (1.11 cows/ha; H) animal densities were monitored for three consecutive years in grazing beef cows. In the dry season (summer and early autumn), cows had free access to N-rich poultry litter (PL) given as a dietary supplement. In each season, near-IR spectroscopy (NIRS) was used to predict the chemical composition of herbage samples (ash, NDF, CP, in vitro dry matter digestibility (IVDMD) and metabolizable energy (ME) content from IVDMD). Near-IR spectroscopy was applied also to faecal samples to determine the chemical composition of the diet selected by the animal, as well as the contents of ash, NDF and CP in the faeces themselves. A faecal-NIRS equation was applied to estimate the dietary proportion of PL. Seasonal categories were green, dry without PL supplementation and dry with it. We found no effects of animal density on nutrition during the green season but effects were apparent when cows consumed dry pasture. Ash content predicted by faecal NIRS was higher in the diet than in plant samples clipped from pasture, which infers that cows ingested soil. Dietary and faecal ash contents were higher (P<0.05) at the H, implying greater soil intake in these animals. During the dry period, dietary contents of ME were higher in L than in H (P<0.05). Poultry litter supplementation was associated with a marked increase (P<0.01) in dietary and faecal CP contents. Poultry litter represented 0.45 and 0.59 of the diet in treatments L and H, respectively (P<0.05). Consequently, treatment H had higher faecal protein (P<0.05). A tendency of higher dietary protein (P=0.08) and lower dietary NDF (P=0.10) in treatment H was probably related to greater PL ingestion. Given that high and sustained rates of poultry litter consumption are detrimental to animal health, the above results cast doubts on the long-term sustainability of the higher of the animal densities tested. Although it may be sustainable vis-à-vis the vegetation, treatment H may have exceeded the boundaries of what is acceptable for cow health. Chemical information revealed with NIRS can be used to evaluate whether animal densities are compatible with animal health and welfare standards and can play a role in determining the carrying capacity of Mediterranean rangelands. © The Animal Consortium 2017.
Ben Abu, N. ; Harries, D. ; Voet, H. ; Niv, M. Y. The taste of KCl – What a difference a sugar makes. Food Chemistry 2018, 255, 165-173. Publisher's VersionAbstract
Dramatic increase in NaCl consumption lead to sodium intake beyond health guidelines. KCl substitution helps reduce sodium intake but results in a bitter-metallic off-taste. Two disaccharides, trehalose and sucrose, were tested in order to untangle the chemical (increase in effective concentration of KCl due to sugar addition) from the sensory effects. The bitter-metallic taste of KCl was reduced by these sugars, while saltiness was enhanced or unaltered. The perceived sweetness of sugar, regardless of its type and concentration, was an important factor in KCl taste modulation. Though KCl was previously shown to increase the chemical activity of trehalose but not of sucrose, we found that it suppressed the perceived sweetness of both sugars. Therefore, sensory integration was the dominant factor in the tested KCl-sugar combinations. © 2018 Elsevier Ltd
Lerman, Z. ; Sedik, D. Transition to smallholder agriculture in Central Asia. Journal of Agrarian Change 2018, 18, 904-912. Publisher's VersionAbstract
The article reviews the development of smallholder farming in Central Asia's former Soviet republics. One of the striking features of the agricultural transition in Central Asia (and Commonwealth of Independent States [CIS] in general) is the dramatic shift, since 1992, from the predominance of large corporate farms to individual or family agriculture based on a spectrum of small farms. Evidence shows that individualization of agriculture is associated with the observed posttransition recovery in Central Asia (and in CIS in general) and that small family farms outperform the large enterprises. This clashes with the traditional philosophy of economies of scale and with the inherited view of small family farms as an undesirable aberration. We discuss the policies that helped smallholder farms in Kazakhstan, Kyrgyzstan, and Tajikistan and severely restricted their growth and development in Uzbekistan and especially Turkmenistan. © 2018 John Wiley & Sons Ltd
Hochman, G. ; Hochman, E. ; Naveh, N. ; Zilberman, D. The synergy between aquaculture and hydroponics technologies: The case of lettuce and tilapia. Sustainability (Switzerland) 2018, 10. Publisher's VersionAbstract
This study investigates the economic and environmental value of the use of technologies that convert pollution and waste in one production process to an input in another production process. The study focuses on an aquaponics case study to show that the negative externalities borne from intensive fish farming can be internalized without regulatory intervention through a combination of fish farming and hydroponics. The introduction of aquaponics diversified the farmers' sources of income, yielded savings in the cost of water purification and the cost of fertilizer for the plants' growth, and resulted in more fish and plant output compared to the unregulated scenario. While deriving these results, we also derive a separation rule for managing live aquatic inventory, which separates expenses (which are affected by the biology of fish) and income. © 2018 by the authors.
Galkin, E. ; Dalal, A. ; Evenko, A. ; Fridman, E. ; Kan, I. ; Wallach, R. ; Moshelion, M. Risk-management strategies and transpiration rates of wild barley in uncertain environments. Physiol Plant 2018, 164, 412-428.Abstract
Regulation of the rate of transpiration is an important part of plants' adaptation to uncertain environments. Stomatal closure is the most common response to severe drought. By closing their stomata, plants reduce transpiration to better their odds of survival under dry conditions. Under mild to moderate drought conditions, there are several possible transpiration patterns that balance the risk of lost productivity with the risk of water loss. Here, we hypothesize that plant ecotypes that have evolved in environments characterized by unstable patterns of precipitation will display a wider range of patterns of transpiration regulation along with other quantitative physiological traits (QPTs), compared to ecotypes from less variable environments. We examined five accessions of wild barley (Hordeum vulgare ssp. spontaneum) from different locations in Israel (the B1K collection) with annual rainfall levels ranging from 100 to 900 mm, along with one domesticated line (cv. Morex). We measured several QPTs and morphological traits of these accessions under well-irrigated conditions, under drought stress and during recovery from drought. Our results revealed a correlation between precipitation-certainty conditions and QPT plasticity. Specifically, accessions from stable environments (very wet or very dry locations) were found to take greater risks in their water-balance regulation than accessions from areas in which rainfall is less predictable. Notably, less risk-taking genotypes recovered more quickly than more risk-taking ones once irrigation was resumed. We discuss the relationships between environment, polymorphism, physiological plasticity and fitness, and suggest a general risk-taking model in which transpiration-rate plasticity is negatively correlated with population polymorphism.
Perez-Sebastian, F. ; Raveh, O. What drives vertical fiscal interactions? Evidence from the 1980 Crude Oil Windfall Act. Regional Science and Urban Economics 2018, 73, 251-268.Abstract
In economies with multi-level governments, why would a change in the fiscal rule of a government in one level lead to a fiscal response by a government in a different level? The literature focused primarily on the standard common-pool problem, while giving little attention to the potential role of complementarity or substitutability (CS) between the public goods supplied by the two governments. This paper fills this gap by focusing on the latter channel. First, we illustrate its potential key role in determining the sign of the vertical reaction through a generic model of vertical fiscal interactions. Second, we propose a novel strategy for identifying it, by considering an empirical design that confines the common-pool channel to specific locations. We implement this design through a quasi-natural experiment: the 1980 U.S. Crude Oil Windfall Act, which increased federal tax collections from sale of crude oil, thereby affecting the tax base of oil rich states specifically. This latter feature enables attributing the vertical fiscal reactions of the remaining states to the CS channel. Following this strategy, via a difference-in-differences approach, we decompose the sources of the vertical fiscal reactions arising from this federal tax change and find that those attributed to the CS channel: (i) account for approximately 38% of the overall vertical fiscal response; (ii) point at complementarity between state and federal public goods, most notably in transportation and welfare expenditures; (iii) are manifested primarily via changes in states' sales and income taxation.
Tsur, Y. ; Zemel, A. Water policy guidelines: A comprehensive approach. Water Resources and Economics 2018, 23, 1 - 13. Publisher's VersionAbstract
We study water management in the context of a prototypical water economy containing the main water sources and user sectors. A water policy consists of water allocation from each source to each user sector at each point of time as well as the capital investments needed to carry out these allocations. We show that the optimal policy brings the water capital stocks (infrastructure and equipment) to well-specified turnpike processes as rapidly as possible and evolves along these turnpikes thereafter, eventually converging to a unique steady state. Implications for water pricing, as well as for the timing and extent of recycling and desalination activities, are discussed.
Fishman, A. ; Finkelshtain, I. ; Simhon, A. ; Yacouel, N. Collective brands. International Journal of Industrial Organization 2018, 59, 316 - 339. Publisher's VersionAbstract
We analyze the effect of a shared brand name, such as geographically designated agricultural brands, on incentives of otherwise autonomous firms of the same type to establish a collective reputation for product quality. When firms of the same type share the same brand name, consumers have more observations of past quality and are able to predict quality with greater precision than if brands are private. This effect increases firms’ incentive to invest in quality. On the other hand, a shared brand name may motivate free riding on the group’s reputation, reducing incentives to invest. We identify conditions under which the former effect is dominant and leads to higher quality than stand alone firms can achieve.
Raviv, O. ; Broitman, D. ; Ayalon, O. ; Kan, I. A regional optimization model for waste-to-energy generation using agricultural vegetative residuals. Waste Management 2018, 73, 546 - 555. Publisher's VersionAbstract
The spatial distribution of vegetative agricultural residuals (VAR) implies that any waste treatment system (WTS) designed to manage VAR is particularly sensitive to transportation costs. Additionally, a wide range of treatment technologies is potentially available for VAR treatment, but some of them lack a well-developed market for their output products. This study develops a method to design an economically feasible VAR treatment system, analyzing the profitability of the system as a function of logistics and uncertain market prices of the available treatment technologies' products. The design method includes an economic optimization model followed by a sensitivity analysis of the potential changes in the system’s profitability. The results show that the market price of the treatment technologies' products has a larger impact on the system’s profitability than transportation costs. Specifically, if biochar prices reach the level forecasted by experts, pyrolysis will become the dominant technology of the WTS. The research highlights the importance of the treatment technology selection and the location of treatment facilities in the design of an optimal WTS for VAR.
Broitman, D. ; Raviv, O. ; Ayalon, O. ; Kan, I. Designing an agricultural vegetative waste-management system under uncertain prices of treatment-technology output products. Waste Management 2018, 75, 37 - 43. Publisher's VersionAbstract
Setting up a sustainable agricultural vegetative waste-management system is a challenging investment task, particularly when markets for output products of waste-treatment technologies are not well established. We conduct an economic analysis of possible investments in treatment technologies of agricultural vegetative waste, while accounting for fluctuating output prices. Under a risk-neutral approach, we find the range of output-product prices within which each considered technology becomes most profitable, using average final prices as the exclusive factor. Under a risk-averse perspective, we rank the treatment technologies based on their computed certainty-equivalent profits as functions of the coefficient of variation of the technologies’ output prices. We find the ranking of treatment technologies based on average prices to be robust to output-price fluctuations provided that the coefficient of variation of the output prices is below about 0.4, that is, approximately twice as high as that of well-established recycled-material markets such as glass, paper and plastic. We discuss some policy implications that arise from our analysis regarding vegetative waste management and its associated risks.
Castillo, F. ; Gilless, J. K. ; Heiman, A. ; Zilberman, D. Time of adoption and intensity of technology transfer: an institutional analysis of offices of technology transfer in the United States. The Journal of Technology Transfer 2018, 43, 120 - 138. Publisher's VersionAbstract
This paper considers the adoption of institutional innovations by not for profit organizations, an issue that can be considered in the context of the extensive literature on the adoption of technological innovation by firms. The specific institutional innovation considered is the offices of technology transfer (OTT)—the organization that assemble and disclose university innovations and negotiate and enforce licenses with users of these innovations. We propose a theoretical framework that depart from previous studies by focusing on the timing decision of institutions rather than on the percentage of institutions that adopt at each point in time. Our theoretical framework also incorporates organization theory via imitation effects on the timing of adoption. We find that number of adopters has an S-shape function of time, which may indicate a strong element of imitation led universities to create OTTs. We also find that universities with higher research incomes and rankings were earlier adopters of the OTT model and that universities with medical schools were generally late adopters. Finally, we find that the number of universities who have already adopted the OTT model increases the speed by which other non-adopters make their OTT adoption decisions and that the number of invention disclosures, a primary indicator of output of OTTs, increases with the size of research budget, is smaller for those with medical schools, and larger for those that were earlier adopters of OTT. Section 1 of the paper discusses the recent trends in technology transfer while Section 2 reviews the advent of OTTs as facilitators of technology transfer activities. Section 3 reviews the relevant technology and institutional innovation literature. Section 4 develops a conceptual framework that links Sections 2 and 3 to analyze the advent and timing of the establishment of OTTs. Section 5 estimates the time of adoption of the OTT working model on the part of major research universities in the US, and analyzes the impact of time of adoption of the OTT model on the intensity of the technology transfer process. Section 6 presents empirical results while the conclusions and policy implications are discussed in Section 7.
Chakraborty, P. ; Raveh, O. Input-trade liberalization and the demand for managers: Evidence from India. Journal of International Economics 2018, 111, 159 - 176. Publisher's Version
Heiman, A. ; Hildebrandt, L. Marketing as a Risk Management Mechanism with Applications in Agriculture, Resources, and Food Management. Annual Review of Resource Economics 2018, 10, 253 - 277. Publisher's VersionAbstract
Marketing tools, in addition to their role in persuasion and serving as a bridge between production and consumers, reduce prepurchase risks. This role has received less attention in the literature. This review highlights marketing's role in reducing consumers? purchasing risk. We present our approach, backed up with extensive literature review, beginning with a description of advertising, branding, and pricing that may serve as a signal of a product's quality. We then describe and analyze the role of product demonstrations, free product samples, and money-back guarantees (MBGs), which enable consumers to acquire direct experience before a final decision is made, in reducing risks. We briefly discuss product warranties and their relationship to MBGs. We demonstrate how marketing tools can help reduce the risk associated with the consumption of food products that contain genetically modified organisms, as well as help in marketing of agricultural products that vary in their levels of risk to buyers.Marketing tools, in addition to their role in persuasion and serving as a bridge between production and consumers, reduce prepurchase risks. This role has received less attention in the literature. This review highlights marketing's role in reducing consumers? purchasing risk. We present our approach, backed up with extensive literature review, beginning with a description of advertising, branding, and pricing that may serve as a signal of a product's quality. We then describe and analyze the role of product demonstrations, free product samples, and money-back guarantees (MBGs), which enable consumers to acquire direct experience before a final decision is made, in reducing risks. We briefly discuss product warranties and their relationship to MBGs. We demonstrate how marketing tools can help reduce the risk associated with the consumption of food products that contain genetically modified organisms, as well as help in marketing of agricultural products that vary in their levels of risk to buyers.
Elimelech, E. ; Ayalon, O. ; Ert, E. What gets measured gets managed: A new method of measuring household food waste. Waste Management 2018, 76, 68-81.Abstract
The quantification of household food waste is an essential part of setting policies and waste reduction goals, but it is very difficult to estimate. Current methods include either direct measurements (physical waste surveys) or measurements based on self-reports (diaries, interviews, and questionnaires). The main limitation of the first method is that it cannot always trace the waste source, i.e., an individual household, whereas the second method lacks objectivity. This article presents a new measurement method that offers a solution to these challenges by measuring daily produced food waste at the household level. This method is based on four main principles: (1) capturing waste as it enters the stream, (2) collecting waste samples at the doorstep, (3) using the individual household as the sampling unit, and (4) collecting and sorting waste daily. We tested the feasibility of the new method with an empirical study of 192 households, measuring the actual amounts of food waste from households as well as its composition. Household food waste accounted for 45% of total waste (573 g/day per capita), of which 54% was identified as avoidable. Approximately two thirds of avoidable waste consisted of vegetables and fruit. These results are similar to previous findings from waste surveys, yet the new method showed a higher level of accuracy. The feasibility test suggests that the proposed method provides a practical tool for policy makers for setting policy based on reliable empirical data and monitoring the effectiveness of different policies over time.
Pinto, O. Y. ; Ert, E. Risk preferences of people with disabilities and their relation to labor market participation. Journal of Neuroscience, Psychology, and Economics 2018, 11, 106 - 115.Abstract
Previous studies have suggested that the participation of people with disabilities in the labor market might be affected by their risk perception, as finding a job might be perceived as an action that risks their allowance. The current study explores 2 main questions that relate to risk preferences among people with disabilities. First, it explores the potential relationship between risk preferences and employment by comparing the risk preferences of employed and unemployed people with disabilities. Second, it questions whether the risk preferences of people with disabilities are different from those of people without disabilities. To measure risk preferences in these 3 populations, we used 2 common elicitation methods: the Holt–Laury task and the balloon analogue risk task. The 2 methods complement each other, as the Holt–Laury task measures decisions from description and “explicit” risk-taking, whereas the balloon analogue risk task measures decisions from experience and “implicit” risk-taking. The results revealed no difference in risk preferences between people with and without disabilities. However, contrary to propositions from earlier studies, employed people with disabilities were found to be more risk-averse than unemployed people with disabilities. One possible interpretation of the results could be that risk aversion increases the willingness of people with disabilities to make compromises in order to participate in the labor market. (PsycINFO Database Record (c) 2018 APA, all rights reserved)
Ert, E. ; Lejarraga, T. The Effect of Experience on Context-dependent Decisions. Journal of Behavioral Decision Making 2018, 31, 535 - 546. Publisher's VersionAbstract
Abstract Does the well-documented ?decoy effect? emerge in decisions from experience among risky options? We conducted a series of experiments where participants made choices between gambles, and we varied whether participants learned about the options from description, experience, or both. Our results consistently showed no traces of the decoy effect when participants learned from experience. Even when participants read precise descriptions of the options, actually experiencing those options eliminated the decoy effect. Moreover, in decisions under risk (decisions from description), the decoy effect is less robust than previously thought. The decoy effect only emerged in an experimental design in which we used two decoys generating attraction for different options but did not emerge when only one decoy was used. Increasing the distance between the decoy and the target did not make the decoy effect emerge in decisions from experience but seemed to reduce the decoy effect in decisions from description. Overall, we identify two boundary conditions for the decoy effect in decisions under risk: First, it is not robust to situations that involve learning from experience; and second, the attraction of a single decoy may not be sufficient to observe a decoy effect. Copyright ? 2018 John Wiley & Sons, Ltd.
Talev, E. ; Bar-Nahum, Z. ; Fleischer, A. ; Tchetchik, A. Is agriculture important to agritourism? The agritourism attraction market in Israel. European Review of Agricultural Economicserae 2018, 45, 273 - 296. Publisher's VersionAbstract
Agritourism attractions are a commonly chosen alternative in farm diversification. Some attractions are based on active farms, while others are based on rural ambience. We model and estimate the agritourism attraction market as a differentiated-goods market based on Israeli market data and simulate different scenarios. We show that total welfare increases when attractions are based on rural ambience rather than on active farms. We also show that an indirect support scheme has a stronger impact on total welfare than a direct scheme.
Fleischer, A. ; Felsenstein, D. ; Lichter, M. A Spatially Accurate Method for Evaluating Distributional Effects of Ecosystem Services. Ecological Economics 2018, 145, 451 - 460. Publisher's Version