Research:


Reporting and research of the world food situation

Understanding and assessing the developments of the world food situation is a permanent and broad based activity of the Centre that covers, among others, the evolving status of malnutrition, agricultural and food policy, natural resource management. The world food situation often serves as motivation for fundamental issues in food and development policy, which are to be disseminated both to policy makers and the general public.

With respect to the world food situation the Centre focuses on selected topics that need to be signaled more prominently. One example of recent research on food trends is the pressure that may arise in cereal markets due to the strong increase of meat consumption in fast growing developing countries.

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Modeling the international economy

The Centre has built up considerable expertise in Applied General Equilibrium (AGE) modeling, both with respect to theoretical contributions as to the construction of economy-wide models, e.g. for Bangladesh, Thailand, Indonesia and Nigeria. At present, a geographically detailed agricultural model for China is operational whereas a model fot the Common Agricultural Policy (CAP) of the European Union that has been used to evaluate the impact of previous CAP reforms is being extended to cover all current 27 states.

This core methodology is extended in various ways, such as dealing with imperfect competition, uncertainty, and spatial explicitness. Of particular interest are issues of price transmission and preserving product characteristics such as food safety along the product chains. These new development increasingly dominate the international trading relations and gradually permeate the negotiating agenda of the developing countries in the WTO.

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Safety and risks

Standard economic models easily incorporate taxes and tariffs but are usually not very sophisticated when it comes to represent incomplete markets or behavior under uncertainty and even less so when it comes to such concepts as empathy, trust and security. The Centre attempts to enrich their economic models by adding institutional diversity, focusing on security issues and risk. One basic insight hinges upon the observation that quite often actors’ decisions affect the probabilities of the events, leading to models with endogenous probability that have been applied to the economics of health and crime.

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Poverty

Poverty reduction remains the focal point of development assistance and is also one of the central research themes. Poverty analysis entails two quite different aspects, which both require methodological and empirical advance: poverty measurement and analysis of its determinants. The Centre has developed tools to combine survey and census information for the construction of poverty maps; it also explores the use of anthropometric indicators for the measurement of undernutrition. For the investigation of the causal effects of poverty, the focus is on the development of human resources, in particular health and education, and embedding this into an economy-wide setting. But clearly many of the research activities ultimately address the poverty issue.

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Natural resources

Research into the world food situation does not stop at food markets and farmers’ decisions, but also involves the management of natural resources. This covers both the description and analysis of physical processes and their representation and integration into economic modeling. Here the focus is on the impact of land degradation processes and the role of nutrients and soil chemistry on crop productivity. One motivation for this research is the question why the recipes of the Green revolution in Asia prove to be rather ineffective in Africa, which could only be answered by invoking a hitherto unexplored approach of spatial analysis. The integration of natural resources into economics also forcibly calls for a spatial approach. In an operational sense, this is done via the construction of spatially explicit models that operate on a grid. This is a natural way to incorporate information from maps (for instance obtained from satellite images) but also geo-referenced household information can be used. Such models are able to represent transport flows as well as water flows between the grid cells, taking into account natural barriers and infrastructure. It also allows representing diversity and distance, although specific requirements must be made to obtain workable algorithms.

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Tools and methodology

A variety of statistical and computational instruments is being used in the various modeling applications, especially for the large-scale, spatially explicit applications. Non-parametric methods have been cast into a tool kit plus manuals, available for other researchers and counterparts in joint projects. Theoretical investigations into spatial modeling and ways to obtain workable algorithms can also be found here.

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