Department of Agricultural, Food, and Resource Economics Elton R. Smith Endowment

Much of this work has to do with incentives. Several take the view that agriculture is an information intensive industry and that information structures affect investment. For example, in

• Hennessy, D.A. “Information Asymmetry as a Reason for Food Industry Vertical Integration.” American Journal of Agricultural Economics, 78(November 1996):1034-1043. Link

it is shown that imperfectly informative grading systems reduce investment incentives but that vertical integration can eliminate the friction. How genetic information can affect investment and product development is explored in,

• Hennessy, D.A., J.A. Miranowski, and B.A. Babcock. “Genetic Information in Agricultural Productivity and Product Development.” American Journal of Agricultural Economics, 86(February, 2004):73-87. Link

Two papers address site-specific management and variable rate technologies, also from the viewpoint that information allows for adapted action:

• Hennessy, D.A., and Bruce A. Babcock. “Information, Flexibility, and Value Added.” Information Economics and Policy, 10(November, 1998):431-450. Link

• Miao, R., and D.A. Hennessy. “Optimal Protein Segregation Strategies for Wheat Growers.” Canadian Journal of Agricultural Economics, 63(3, 2015):309-331. Link

The issue of banning a technology is addressed in,

• Hennessy, D.A., and G. Moschini. “Regulatory Actions Under Adjustment Costs and the Resolution of Scientific Uncertainty.” American Journal of Agricultural Economics, 88(May, 2006):308-323. Link

A theoretically similar paper is

• Miao, R., and D.A. Hennessy. “To Learn or To Change: Optimal R&D Investments under Uncertainties.” Natural Resource Modeling, 27(May, 2, 2014):235-257. Link

where both deal with precautionary principle.

Other papers look at uniformity, seasonality and irregularities as impediments to investment and efficiency:

• Hennessy, D.A. “Slaughterhouse Rules: Animal Uniformity and Regulating for Food Safety in Meat Packing.” American Journal of Agricultural Economics, 87(August, 2005):600-609. Link
• Hennessy, D.A. “Informed Control Over Inputs and Extent of Industrial Processing.” Economics Letters, 94(March, 2007):372-377. Link
• Hennessy, D.A. “Region Marginalization in Agriculture, Seasonality, Dedicated Capital, and Product Development with Reference to North Europe Dairy Sector.” Annals of Regional Science, 41(June, 2007):467-486. Link
• Hennessy, D.A., and T. Wang. “Animal Disease and the Industrialization of Agriculture.” In Health and Animal Agriculture in Developing Countries, D. Zilberman, J. Otte, D. Roland-Holst and D. Pfeiffer eds. Springer, New York, on behalf of the Food and Agricultural Organization, United Nations, 2012, Chapter 5, pp. 77-99. Link

In the background for each of these applied papers are notions of order and heterogeneity as explored by Lapan and Hennessy. See Stochastic Order and Copulas and Symmetries and Portfolio Analysis for more details.

How technological complementarities can provide incentives for investment and technology adoption are studied in:

• Hennessy, D.A., J. Roosen, and J.A. Miranowski. “Leadership and the Provision of Safe Food.” American Journal of Agricultural Economics, 83(November, 2001):862-874. Link
• Hennessy, D.A., Jing Zhang, and Na Bai. “Structure of Protein Production, Animal Health Inputs, Endogenous Risk, Public Infrastructure and Technology Adoption.” Forthcoming at Food Policy. Link

Several papers address genetically modified technologies where a few (two with Alex Saak) have to do with embedded options:

• Saak, A.E., and D.A. Hennessy. “Planting Decisions and Uncertain Consumer Acceptance of Genetically Modified Crop Varieties.” American Journal of Agricultural Economics, 84(May, 2002):308-319. Link
• Hennessy, D.A, and A.E. Saak. “State-Contingent Demand for Herbicide-Tolerance Seed Trait.” Journal of Agricultural and Resource Economics, 28(April 2003):1-14. Link

Embedded cost savings are the theme in:

• Hennessy, D.A. “Competition, Externalities, and Input Substituting Technologies.” American Journal of Agricultural Economics, 84(May, 2002):467-481. Link
• Perry, Edward D., Federico Ciliberto, D.A. Hennessy, and GianCarlo Moschini. “Genetically Engineered Crops and Pesticide Use in U.S. Maize and Soybeans.” Science Advances, 2(8, 31 Aug. 2016). Link

Several papers, also with GianCarlo Moschini and others, seek to clarify how genetically modified seeds affect production incentives,

• Xu, Zheng, D.A. Hennessy, K. Sardana, and G. Moschini. “The Realized Yield Effect of GM Crops: U.S. Maize and Soybean.” Crop Science 53(May, 2013):735-745. Link
• Perry, Edward, G. Moschini, and D.A. Hennessy. “Testing for Complementarity: Glyphosate Tolerant Soybeans and Conservation Tillage.” American Journal of Agricultural Economics, 98(3, 2016):765-784. Link

A paper that might fit under the risk management heading is, 

• Hennessy, D.A. “Stochastic Technologies and the Adoption Decision.” Journal of Development Economics, 54(December 1997):437-453. Link

where adoption incentives are studied when a technology is, in some sense, risk decreasing. Another outlier is: 

• Miao, R., D.A. Hennessy, and B.A. Babcock. “Investment in Cellulosic Biofuel Refineries: Do Renewable Identification Numbers Matter?” American Journal of Agricultural Economics, 94(April, 2012):760-762. Link

Waivable mandates do matter for investment decisions.

Current ERS chair's interests in the are are in technology adoption and investment concern antibiotics use, dairy sector expansion and exits, and also seeding rate choices.