Aspergers Syndrome and Autism Stereotypes and life

Aspergers Syndrome and Autism Stereotypes and life According to the Center for Disease Control, Autism (or a closely related disorder such as Aspergers Syndrome) affects 1 in 150 children in the United States. (Overview Autism, DD, NCBDDD, CDC) The first thing that you think of when you hear of Aspergers Syndrome or Autism; are the age old stereotypes that one with Aspergers Syndrome or Autism are labeled with, such as: that they cant feel emotions, they lack empathy, and most of all they are all like the guy from Rain Man. What about the positive side of having Aspergers Syndrome/Autism. Most of all, living with Aspergers Syndrome or Autism may come as a struggle, but with the right support anything is possible. Even though this is the twenty-first century; a lot of people still label people on the Autistic Spectrum with the age old stereotypes, but not all individuals on the spectrum abide by those stereotypes: The fact that individuals on the autism spectrum have no emotion is not true. The emotion is there; but the individual might have a hard time expressing those emotions, or the way the emotion is triggered is different then everyone elses. The myth about individuals on the spectrum not having a sense of humor is false. The individual on the spectrum might find different to be funny such as satire. It said that there is no capacity for improvement for those on the spectrum, and that is false. If the individual is given the right support and a positive environment, they will be able to improve. The age old stereotype within the autism spectrum is that they are all good at math, music or science, but that is a hit and miss situation. Sometimes an individual is bad at math but good at other things such as recognizing faces. (Carley 19-21) According to Reitman, Most stereotypes of persons with autism are that they are odd, aloof, strange, or loners. Those who are labeled with Aspergers tend to be thought of as nerds or brains but as people who lack basic social graces, lack manners, and do not have friends. Those characterizations are rarely the truth though and those with these labels often struggle to free themselves of them. (Reitman) What Reitman means; when an individual on the spectrum is labeled with these stereotypes it is a challenge for them to prove their community and the world wrong, and that they can achieve anything that they put their mind to. From Frys personal stand point, People on the spectrum tend to be labeled as: geeky nerdy people with no social skills, lack of empathy, sometimes as someone with a mental health issue rather than neurological condition, and as someone who may be learning disabled. (Fry) Not all people on the spectrum can calculate dates and generate calendars in their heads like Rain Man can. Only those with a form of Savant Syndrome have those kinds of abilities. According to Jackson, being talented at math is either a hit or miss: I am no genius in this area but a lot of AS kids are. It seems to be one thing that you either excel at or you dont. A lot of kids with AS love Latin, German, and definitely information technology (IT). There may be some subjects which are better suited to an AS persons brain but, generally speaking, we are not clones and have our own strengths and weaknesses. Despite the film Rain Man, we dont all have these amazing mathematical skills. (Jackson 123) The positives of having Aspergers Syndrome or Autism are, having an extraordinary memory and being honest. Lisa Rudy from About.com has listed the top 10 terrific traits of Autistic people, and just to name a few of them: Autistics rarely judge other people, they are less materialistic, play fewer head games, and they have fewer hidden agendas. (Rudy) Pyles stated: Many people with Aspergers Syndrome tend to have normal or high levels of intelligence, and test in the high IQ ranges. Individuals with Aspergers Syndrome tend to have phenomenal memories, especially for things they are interested in. Most individuals with Aspergers Syndrome tend be very honest and they rarely tell lies. Lies dont work for them anyways. Also people with Aspergers Syndrome are law-abiding citizens. (Pyles 67-69) So if someone thinks an individual on the spectrum is lying and insist thats true; then that are wrong, because people on the Autistic Spectrum dont have a reason to tell lies, because of most the time when they do tell lies; they are bad at it and then they feel guilty for lying. Imagine that a person can remember almost everything that happened to them; in this cause that is true for individuals on the Autistic Spectrum. They can remember almost anything such as: exact details, places, events and sometimes exact date and time. According to Kanners research on Autism: Many of Kanners children had superb rote memory. They were able to remember and mechanically repeat large amounts of information. Some of the children were capable of memorizing and repeating long and unusual words. Others repeated the questions and answers of the Presbyterian Catechism, list of animals, nursery rhymes, a roster of the U.S. presidents, and lullabies in French. (Rodriguez 31) People on the Autistic Spectrum deal with everyday life the best way that they can; most of the time a person on the spectrum can lead an almost normal life with a little bit of help. For example, they would have to learn coping skills to deal with everyday dramas and to make the right decision during tough times, and social skills to help them get along in society. Society isnt made for those on the spectrum, and is actually made for a NeuroTypical. NeuroTypical is defined as: An informal term used by the online autism community to denote those whose neurological development and function is within the normal range. (A World Apart Definitions) That is no excuse though for a person on the spectrum to give up on society and live a stereotypical life. For those living on the spectrum, it is hard to pick up on social cues or figure out what is the right behavior for each social situation. Today, there are therapies and other resources out there such as, speech therapy, occupational therapy and social skills training. There are even specialists trained in working with people on the Autistic Spectrum. For example: Reitman works with individuals as young as 18 months and on into adulthood as well. With the younger individuals, Reitman addresses communication and social skills deficits through role-play, creation of rules and discussions of difficulties being encountered. For adolescents and adults, the struggles with miscommunication are frequent ones, as is the managing of ever-shifting priorities and responsibilities. Organization, self-esteem, initiation, and inattention are common issues that are addressed in therapy. (Reitman) Even though there are all these therapies and other resources out there, but not all of them is for every individual. I believe that there is no one treatment that works for everyone and that each individual is unique. The work we do is collaborative and aimed at helping the person to develop self-awareness, empathy, and perspective-taking skills. (Reitman) Then there is the view of the individual on the spectrum and how they view their everyday life. Fry takes it as it comes when it comes to life, he tries to build a network of friends and family who are autistic aware, tries to avoid situations were would not feel comfortable for example: social events or places where there would be too much sensory inputs and he takes time out to refocus. (Fry) What do sensory inputs mean? Sensory inputs are actually sensory issues. As worded by Zaks, sensory issues may be thought of as difficulties interacting or dealing with the environment posed by the way the autistic brain handles sensory information. (Zaks 7) But what sensory issues do those on the spectrum deal with in everyday life though? The sensory issues that an individual on the spectrum deals with on the day-to-day basis varies at times; sometimes it is either noises such as, loud music, scratching the chalk board, or the vacuum cleaner. Then there are also smells and lights. If an individual is in an area where the sound is getting to them to the point where it gets too much for them, Zaks said: The most obvious answer is to get away from the noise. But that is not always possible. Sometimes down out the din. Other chose to wear ear plugs. If an intolerable noise suddenly occurs, an autistic person may need to bolt from the scene until measures are taken to reduce or eliminate the source of distress. (Zaks 16) Sometimes individuals can be sensitive to smells. From personal experiences this all known too well. Some smells can make an individual psychical ill and sometimes sick, smells such as, a stinky diaper, strong perfume, and canned salmon. There are also other smells that would irritate almost anyone regardless of being on the spectrum or not, but it irritate and bothers those on the spectrum even more than it does to those that are not on the spectrum. Zaks suggests, If scents are unavoidable and make you sick, try wearing a special filtration mask such as those used by cyclists to eliminate car fume smells when they ride in traffic. (Zaks 12) Often times, people on the spectrum are sensitive to light. Lights that do not cause other people stress can sting or hurt the eyes of a person on the spectrum, and cause them severe headaches or induce nausea. Some individuals cant tolerate the flashing lights of the television or movies. Even though their vision may measure within the normal range at the eye doctors, yet they will still have a problem with painful eyes. (Zaks 13) However there are some suggestions though, the individual could get transitions lenses if they need prescription glasses, or wear lightly tented sun glasses if they do not need prescription glasses. Even though the first thing you think of when you hear of Aspergers Syndrome or Autism are the age old stereotypes. There still positive sides of being on the spectrum. While growing up with having Aspergers syndrome or Autism may be rough, but there is better help out there and more information then there was years ago. Years ago, the Autistic Spectrum was just being researched on and not much was known about it, but today there is more information out there for individuals on the spectrum to find and better oneself and become a more productive citizen of society. Instead of being a living stereotype like the world wants them to be.

Four Weddings And A Polaroid :: essays research papers

Ruby looked up from her cold mug of coffee just as a mysterious man walked into the diner. the sound of the bells on the door handle had startled her and interrupted her usual day dreaming. She watched the man from her counter stool as he seated himself at a nearby booth. He gazed out the window with a troubled look on his face and finally turned and met eyes with Ruby. He offered her a kind smile but Ruby turned her head quickly out of embarrassment. She hadn't even realized she was starring at him, but there was something so familiar about him she couldn't help herself. "Wishful thinking, gals like us never get guys like that." Ruby's thoughts were immediately shut off bye her friend Elaine's comment. "And just why not?" Ruby replied, Elaine just smiled and continued drying the silver wear. Elaine worked at the diner as a waitress, though Ruby never quite understood why. She hated her job, always complaining about everything and everyone there. But that was just Elaine's nature, never satisfied. "Well I better get going, I still have to get my dress from the tailor's, for the big event," started Ruby as she gathered her coat and purse. "I would hardly call your sister's wedding a big event," commented Elaine. "If I recall this is her third big event in two years." "Fourth!" Ruby called out over her shoulder on her way out the door. The days of the week seemed to fly by and before she knew it, Ruby was in her apartment dressing for her sister, Jillian’s wedding. The mysterious man from the diner had almost completely escaped her thoughts. Running late, as usual, she finished fastening the clasp on her bridesmaid gown and hurried outside to catch a cab. Ruby was her sister’s maid of honor and to her it was an honor, at least the first time she was chosen for the position. â€Å"Where to?† beckoned the cabby from the front seat. â€Å"Church of the Redeemer on 38th Street,† Ruby told the cabby as she searched through her purse for the lipstick she had bought strictly for the occasion. She recalled standing, starring at the cosmetics shelf of the drug store for close to twenty minutes trying desperately to locate a shade that would match her dress. She felt foolish for wasting so much time on such an insignificant thing, but how in the world do you match a color like sea-foam?

Lucky Paul in The Rocking Horse Winner :: Rocking Horse Winner

Lucky Paul in The Rocking Horse Winner "The rocking horse winner" by D.H. Lawrence is a striking story about a little boy, Paul who secretly rides his rocking horse to pick the winning horse in the various horse races that took place. After the beginning of the story, there is a short conversation between Paul and his mother about luck, and it was the conversation that started the whole dramatic episode which lead to Paul's death. The conversation between Paul and his mother, the phrase that is constantly heard in the house and the rocking horse itself are the main ideas covered in the scope of this paper. The dialogue between Paul and his mother is mainly about luck and how a person can get money if such a person is lucky. From the story, the reader should be aware of Hester's crave for money and her expensive taste, therefore, it is not surprising when she talks her son into believing that luck brings money. We could also establish at this point that the family is at least living comfortably, meaning they were not very poor; "They lived in a pleasant house, with a garden, and they had discreet servants." Paul's mother tells him that his father is not lucky and because of this, she is no longer a lucky woman. The conversation ends with Paul believing that he is a lucky boy, and the action he takes in finding this luck is what brings his demise in the end. The phrase "there must be more money" was mentioned in the story over ten times. The phrase symbolizes the insatiable desire the family has for money. In the early parts of the story the phrase was being heard by the children, and they knew that they heard it but none of them said anything about it. The reader can also conclude that the phrase also pushed Paul into the act he was doing to make all the money. The reader would notice from the story that the phrase grows louder when Paul's mother had possession of the five thousand pounds that was given to her by Paul, even though she did not know the money was from Paul "...and Paul's mother touched the whole five thousand. Then something curious happened. The voices in the house suddenly went mad". As if thirsting for more money the phrase grows louder because Paul's mother has spent all the money to satisfy her expensive taste.

Coffee Commodity Chain

DEPARTMENT OF ECONOMICS ISSN 1441-5429 DISCUSSION PAPER 06/08 COFFEE COMMODITY CHAIN Tine S. Olsen and Brett Inder ¦ ABSTRACT: To explain the value added along the coffee commodity chain we propose and estimate a theoretical model of the coffee commodity chain. The theoretical model consists of four markets and five agents in the coffee commodity chain and predicts that prices in the coffee commodity chain move together but are also influenced by income, technology and production. A vector error correction model is used to test the theoretical predictions.In addition to the theoretical conclusions the empirical model confirms the beneficial role of the International Coffee Agreement and the importance of the level of production in determining coffee prices. Key words: global commodity chain, vector error correction model, coffee, value added JEL classifications: O01, F02, Q110, C320, F230, F14  ¦ Monash University Department of Economics (Olsen), Monash University Department of E conometrics and Business Statistics (Olsen and Inder). Corresponding author Tine S. Olsen, [email  protected] monash. edu.  © 2008 Tine S. Olsen and Brett InderAll rights reserved. No part of this paper may be reproduced in any form, or stored in a retrieval system, without the prior written permission of the author COFFEE COMMODITY CHAIN 1. Introduction Between being grown and picked by a farmer in a developing country and being consumed, most often in a developed country, coffee passes through many sets of hands. Inspired by the global commodity chain literature we here propose a theoretical and an empirical model of the coffee commodity chain. We want to find out what determines the value added at each stage of the commodity chain.The question touches upon the distribution of income among agents and countries in the commodity chain, the prevailing market structure at each stage of the production process, trade, bargaining power and other factors influencing the commodity chai n. Figure 1 provides a graphical representation of the value chain for coffee in Brazil, Colombia and the US. [Figure 1] Value added at the various stages of the chain is the difference between input and output price. For Brazil and Colombia producer’s share is producer price and processing and transport is export price minus producer price.For Brazil international processing and transport is the difference between import price of Brazilian coffee in US and the export price in Brazil and processing in US is the US retail price minus the import price of Brazilian coffee in the US. For Colombia processing in US and transport is the difference between the US retail price and the Colombian export unit value. Regarding weight-loss due to roasting, green coffee is the commodity at all stages of the chain until it reaches the consumer. We follow one pound of green coffee along the commodity chain and multiply the retail price by 0. since coffee looses 20% of the weight in roasting ( Daviron and Ponte, 2005, p. 242, n. 5). 2 Figure 1 shows that the share of value added acquired by Brazil and Colombia has decreased after 1948. Behind this observation lies that the share to producers has decreased in Colombia but remained roughly constant in Brazil while the shares to domestic processing and transport have decreased in both countries, in particular after 1990. What we attempt to explain by this analysis are the decreasing shares of income to producing countries and the disappearing margins to exporters.The framework of this analysis is global commodity chains, terms of trade literature and price transmission literature. Commodity chains for coffee are described by Talbot (1997; 2002) and Ponte (2002). Commodity chain analysis focuses on the good along the nodes of the chain, and looks at the flow of the good through the commodity chain, the transactions which take place along the chain, the geographical location of the chain, the agents involved in the chain, and the rules governing the chain (Talbot, 2002).North-South trade and growth literature is relevant in the analysis of commodity chains to model the terms of trade between North and South. Darity and Davis (2005) argue that in the study of uneven development the North-South trade and growth literature provides insights which have been neglected by the later literature of new growth theory and new trade theory. This has encouraged us to apply North-South models to the coffee value chain. The theoretical model derived in section 2 builds on Bloch and Sapsford (2000) who model primary commodities used as inputs in the production of manufacturing.Where Bloch and Sapsford (2000) take an aggregate view of primary commodities and manufactures, we here focus on coffee and hereby take an approach similar to Boratav (2001) who examines terms of trade for individual commodities. And just like Bloch, Dockery, and Sapsford (2004) we analyse the effect of mark-up on wages and commodity prices on the final consumer prices. Price transmission literature such as Hazell, Jaramillo, and Williamson (1990), Mundlak and Larson (1992), Baffes and Gardner (2003), Krivonos (2004), Morisset (1998) and Weldegebriel (2004) also offer a framework to analyse prices of commodities at different 3 odes of the commodity chain. This part of the literature views producer and retail prices as determined by world prices. In Bloch and Sapsford (2000) the price of manufactures, which is a good higher up in the value chain if it is interpreted as roasted coffee, is a function of the price of primary products because primary products are inputs in the production of manufactures. In the transmission literature it is assumed that the price formation happens in the world market and that market forces allow prices movements to trickle down to producers and consumers.The price trickles down because of trade, price signals and arbitrage. The causality between world prices and producer prices is therefore oppos ite in the terms of trade literature and the price transmission literature. The contradiction is created because the value chain literature focuses on the flow of goods while the transmission literature focuses on the flow of information and market signals. We can look at the problem in multiple time frames. In the long run, prices may be determined by economic fundamentals and can be modelled according to the terms of trade literature.In the short run the price may be a result of the global market situation and the transmission literature is applicable. We here propose a theoretical model which builds on the terms of trade literature but the same time accommodates features from the price transmission literature. The choice of countries in the empirical model poses the main limitation of the empirical analysis. Coffee is consumed in all countries across the world and production statistics are available for 71 countries1. Though an analysis comprising all consuming and producing coun tries is possible, the approach here is to only look at a few countries.The countries for analysis in this study are the largest producer, Brazil, the largest consumer, US, and Colombia as a country which depends heavily on coffee. 2 In the following, the theoretical model is presented in section 2. The empirical model, data and preliminary data analysis are presented in section 3 and section 4 reports the results. The theoretical hypotheses and empirical results are evaluated in section 5, which concludes. 4 2. Theoretical Model The commodity chain, which spans from producers to consumers, is modelled in the form of the prices at each node of the chain.The model builds on Bloch and Sapsford (2000), but instead of primary commodities and manufactures, we here follow the same commodity along the chain and the commodity is an input in the production at the next stage of the chain. The producer and intermediary one (often the exporter) meet in market one where the producer price is det ermined. In market two intermediary one sells the commodity to intermediary two (often the importer) for the export price. In market three intermediary two sells the commodity to intermediary three (often the roaster) for the import price.Finally in market four intermediary three sells the commodity to the consumer and receives the retail price. The model has this set of agents to reflect what price data is available at the various stages of the supply chain. Except for intermediary three, each agent takes the price and quantity produced in other markets as given. This assumption makes the markets separable. Intermediary three determines the price in market four by mark-up and we hereby follow Bloch and Sapsford (2000) in the assumption of different market structures in developing and developed countries.The assumption of imperfect competition in market four reflects the high concentration in the coffee roasting sector as described by Talbot (1997). The commodity is produced by the farmer according to the production function G = Ae? 0t L? 1T ? 2 ? G . G (1) Where, in the case of coffee, G is green coffee, LG is the labour input in coffee production, T the number of coffee trees and ? G is a random disturbance term, such as weather. t is time and represents technological progress in the production techniques. ? 0 , ? 1 and ? 2 are elasticities of inputs and technology.The number of trees is assumed to be fixed in the short term and is therefore not a variable input. 5 Exporters constitute the demand side in market one. They have the production function: X = Be ? 0t L? 1 G ? 2 ? X , X (2) where X, in the case of coffee, is green coffee packed, sorted and graded and located in the producing country. LX is the labour input necessary to export the product. It should be noted that green coffee, which is the output produced by the farmer according to the production function (1), is an input in the exporter’s production function.As before, t represents technolo gical progress and ? 0 , ? 1 , and ? 2 are elasticities of inputs and technology. The shocks, ? X , may represent strikes or other random shocks to the production process. The production functions for importers and roasters are defined in a similar manner with coffee from the previous part of the chain as an input. 1 M = De? 0t L? M X ? 2 ? M (3) R = Fe? 0t L? R1 M ? 2 ? R (4) Equation (3) is the production function for importers and equation (4) is the production function for roasters. M is green packed and sorted coffee imported into the consuming country.R is roasted and ground coffee sold in retail. The importer employs labour LM and the roaster employs labour LR . The factor prices are as follows. The price of LG is the wage rate in agriculture, wG ; the price of LX is the wage paid by exporters, wX . The price of LM is wM and the price of LR is wR . Coffee at stage J of processing has price pJ , e. g. G has the price pG . It is assumed that all inputs have positive but diminis hing marginal products in all four production functions: 1 > ? 1 > 0 , 1 > ? 2 > 0 , 1 > ? 1 > 0 , 1 > ? 2 > 0 , 1 > ? > 0 , 1 > ? 2 > 0 , 6 1 > ? 1 > 0 and 1 > ? 2 > 0 . It is also assumed that inputs together do not give rise to increasing returns to scale: ? 1 + ? 2 < 1 , ? 1 + ? 2 < 1 , ? 1 + ? 2 < 1 and ? 1 + ? 2 < 1 . 2. 1 Price Determination in Market One In market one we assume perfect competition and the price paid to farmers, pG , is determined by equilibrium in the market with demand and supply for green coffee. Supply is determined by profit-maximising coffee farmers and demand by profit-maximising exporters. Profit maximisation gives the supply function: pG = wG? 1? 1 ? Ae? 0tTG 2 ? G ? ? ? ?1/? 1 G (1 1 )/? 1 . (5) The optimal amount of coffee demanded by the exporter who profit maximises is: ( ) 1/(1? ?1 ? ? 2 ) G = ? p X Be ? 0t ? X pG ? 1 ? 1? 21? ?1 wX ? ?1 ? 1? 1 ? ? ? (6) . The equilibrium price in market one is derived by equating supply given by equation (5) an d demand in equation (6): ln( pG ) = a0 + a1 ln( p X ) + a2 ln( wG ) + a3 ln( wX ) + a4 ln(T ) + a5t + ? G (7) Where ( ( a0 = 1 (1 ? ?1 ? ? 2 ) ln ? 1? 1 A? 1/? 1 B? 21? ?1 ? 1? 1 ) (1 1 )/[? 1 (1? ?1 ? ? 2 )] ), a > 0 0 (8) a1 = ? 1 ? ?1 ) , a1 > 0 (9) a2 = 1 (1 ? ?1 ? ? 2 ) , a2 > 0 (10) a3 = 1 (1 ? ?1 ) , a3 < 0 (11) a4 = 2 (1 ? ?1 ? ? 2 ) , a4 < 0 (12) a5 = ? ( ? 0 (1 ? ?1 ) ? ? 0 (1 ? ?1 ? ? 2 ) ) (13) & ?G = ? ( (1 ? ?1 ) ln(? X ) ? (1 ? ?1 ? ? 2 ) ln(? G ) ) (14) 7 ? = (1 ? ?1 ? ?1? 2 ) ?1 (15) The coefficients will be interpreted in section 2. 5 below together with the rest of the coefficients of the model. 2. 2 Price Determination in Market Two In market two exporters sell to importers. The price is again determined by equilibrium between demand and supply.Supply is determined by profit maximisation by exporters and demand by profit-maximising importers. Supply in market two by the exporter is calculated from what amount of coffee is demanded in market one: 1/(1? ?1 ? ? 2 ) X = ? Be ? 0t p X ? 1 + ? 2 ? X pG ? ? 2 ? 2 ? 2 wX ? ?1 ? 1? 1 ? ? ? (16) The demand function by importers is derived by profit maximisation in a similar manner to the derivation of the demand function for exporters above. Making use of the symmetry of the production functions, the demand function is similar to (6). The price in market two is determined by equating demand and supply: n( p X ) = b0 + b1 ln( pG ) + b2 ln( pM ) + b3 ln( wX ) + b4 ln( wM ) + b5t + ? X (17) where the b’s are: b0 = ? ?( ? 1 + ? 2 ? 1) ln ( B? 2 ? 2 ? 1? 1 ) + ( ? 1 + ? 2 ? 1) ln ( ? 2? 1 ? 1? 1 1 D ? 1 ) ? , b0 > 0 ? ? (18) b1 = 2 (? 1 + ? 2 ? 1) , b1 > 0 (19) b2 = ? (1 ? ?1 ? ? 2 ) , b2 > 0 (20) b3 = 1 (1 ? ? 1 ? ? 2 ) , b3 > 0 (21) b4 = 1 (1 ? ?1 ? ? 2 ) , b4 < 0 (22) b5 = ? [ ? 0 (? 1 + ? 2 ? 1) + ? 0 (1 ? ?1 ? ? 2 ) ] (23) 8 ? X = ? ( ( ? 1 + ? 2 ? 1) ln(? X ) + (1 ? ?1 ? ? 2 ) ln(? M ) ) (24) ? = (1 ? ? 1 ? ? 2 ( ? 1 + ? 2 ) ) > 0 (25) ?1 2. 3 Price Determination in Market ThreeIn mar ket three, intermediary three purchases green coffee from intermediary two, or in the example of Brazil, the roasters purchase the coffee from the importers and produce roasted coffee according to the production function (3). The roasters’ demand and the importers’ supply are again given by profit maximisation. Given the similar production functions for roasters and importers, the derivations of the equilibrium price are as for market two. The equilibrium price is (expected signs in parentheses under the coefficients): ln( pM ) = c0 + c1 ln( p X ) + c2 ln( pR ) + c3 ln( wM ) + c4 ln( wR ) + c5 t + ? M + + + + ? (26) + /?The signs of the coefficients are determined in a similar way as in market two since the market set-ups are identical. 2. 4 Price Determination in Market Four In market four the price is not determined by supply and demand, but rather by a mark-up on the unit cost function because of imperfect competition. This is one of the conclusions by Prebisch (195 0) and Singer (1950) which Bloch and Sapsford (2000) also model. The price is determined by: p M? ?L w pR = m ? R R + M ? R? ?R (27) Where m is the mark-up. To derive pR the cost-minimising demands for labour and green coffee are derived and inserted into (27) which gives the price of oasted coffee: ln( pR ) = d 0 + d1 ln( R) + d 2 ln( pM ) + d3 ln( wR ) + d 4 ln(m) + d5t + ? R (28) where 9 ( ) ( ) d 0 = (? 1 + ? 2 ) ? 1 ln( B) + ? 1 (? 1 + ? 2 ) ln ? 2? 1? 1 + ? 2 (? 1 + ? 2 ) ln ? 1? 2 ? 1 , d 0 > 0 (29) d1 = (? 1 + ? 2 ) (30) ?1 ?1 ?1 (1 ? ?1 ? ? 2 ) , d1 >0 d 2 = (? 1 + ? 2 ) ? 2 , d 2 > 0 and d3 = ? 1 (? 1 + ? 2 ) , d 3 > 0 (31) d5 = 0 (? 1 + ? 2 ) < 0 , d 5 < 0 (32) ? R = ? (? 1 + ? 2 ) ln(? R ) (33) ?1 ?1 ?1 ?1 2. 5 Hypotheses Before commencing to estimate the system of the four equations, equation (7), (17), (26) and (28), it is necessary to address data limitations.To test the four equations for the coffee market it is necessary to have wages in coffee farming, wages in th e coffee-exporting sector, wages in the coffee-importing sector and wages in the coffee-roasting sector. These wage data are not available and the wages in producing countries, wG and wX , will be approximated with the gross domestic product (GDP) per capita in producing countries, y P . Wages in the importing sector and the roasting sector in the consuming country, wM and wR , are approximated with the GDP per capita for a consuming country, yC .In addition to data on wages, data on coffee trees limit the empirical analysis since data for coffee trees or acreage are not available for the desired timeframe of the analysis. The quantity of coffee trees enters equation (7) and coffee production enters equation (28). Both variables are in the empirical model represented by world coffee production. The alterations to the theoretical model, give the following four equations: ? pG = a0 + a1 p X + a2 y P + a4 q + a5 t + ? G + + + /? ? + /? (34) 10 p X = b0 + b1 pG + b2 pM + b3 y P + b4 yC + b5 t + ? X (35) ? pM = c0 + c1 p X + c2 pR + c3 yC + c5 t + ? M (36) R = d 0 + d1 q + d 2 p M + d 3 yC + d 4 m + d 5 t + ? R (37) + + + + + + + + + ? + + /? + + /? + /? 1 ? The expected signs of the parameters are indicated under the respective parameters; +/– indicate that the sign is uncertain from the adjusted theoretical model. World production is q, and the coefficients on income in market one and three are defined as: ? a2 = a2 + a3 = ? ?1 (? 1 (1 ? ? 2 ) ? ?1 ) * c3 = c3 + c4 = [? 1 (1 ? ? 2 ) ? ?1 (1 ? ? 2 ) ] (1 ? ? 1 ? ? 2 ( ? 1 + ? 2 ) ) (38) ?1 (39) The coffee commodity chain model consists of the four simultaneous equations in equation (34) to (37) from which hypotheses can be derived.Firstly, it is apparent that all prices are positively correlated. An increase in the price of coffee in market i–1 (increased input price) shifts the supply curve in market i left since it increases marginal costs and the equilibrium price is higher and the quantity traded lower. An increase in the price of coffee in market i+1 increases the supply in market i+1 and hereby the demand for coffee in market i and increases the price in market i. Secondly, the coefficients on national incomes have mixed signs. They depend on the input elasticities of labour at different nodes of the chain.If the input elasticity of labour in coffee growing (importing) is relatively large compared to the input elasticity of labour in ? ? coffee exporting (roasting) then a2 ( c3 ) will be positive. It may be assumed that production processes are relatively more labour-intensive early in the commodity chain because of less reliance on capital. In market two the coefficient on producer income is positive because it is an input price for exporters. In contrast consumer income is an input price for importers and decreases the export price. The coefficient on income, d 3 , in market four expresses a markup, and is positive.Overall coefficients on national incomes are expected t o pull coffee prices 11 up, only with the exception of the income in the consuming country which is assumed to depress the export price of coffee. Thirdly, coffee production has a positive impact on the retail price, but a negative impact on the producer price. It is expected that the effect of output is largest on the producer price because prices paid to producers are primarily influenced by conditions in the coffee market while the retail prices in consuming countries are outcomes of many factors, such as market structures, wages and technology.In a system with all four equations the coefficient on production is therefore expected to be negative. Fourth, the effects of technological change on the prices in markets one, two and three are uncertain, and negative for the retail price in market four. If it is assumed that production methods become more technologically progressive the higher up they are in the chain, the coefficients on the time trend will be positive in market one, t wo and three. Constants a0 , b0 , c0 and d0 , are positive but do not have any economic interpretation. G , ? X , ? M and ? R are random shocks with expected value zero. ?G , ? X and ? M are linear combinations of shocks to production in two markets. Therefore, the residuals generated by estimation of equations (34), (35), (36) and (37) are not independent of each other. Furthermore, any given price in the commodity chain depends on the prices at the previous and next stage of the chain. The four equations are hence simultaneous, and the econometric model accommodates for this. 3. Econometric Model and Preliminary Data AnalysisAnnual data from 1948 to 2004 are employed to estimate the theoretical model. An empirical analysis of the commodity chain for coffee from a single origin in a time series framework is not possible due to data limitations. Instead eight price series are used. These are producer 12 and export prices in Brazil and Colombia, import price of Brazilian coffee into the US, import unit value of (all) coffee in the US, the world price and the US retail price of coffee. Given the non-stationarity of the time series used to estimate the model, a vector error correction model (VECM) is appropriate.A VECM captures long-run paths of the series in the cointegrating vectors and short-run dynamics in the error correction equations. It is formulated as: ?y t = ?y t + ? 1? y t ? 1 + L + ? p ? 1? y t ? p +1 + ut , (40) where y t = ( ptG , B , ptG ,C , ptX , B , ptX ,C , ptM , B , ptW , ptM ,US , ptR , yt )? , ? is the loading vector of coefficients on error correction terms, ? is the coefficient vector for the cointegrating vector, ? j is the coefficient matrix on lag j and ut is the vector of error terms. ptG , j and ptX , j are respectively the producer and the export price in country j, where B is Brazil and C is Colombia. tM ,US ? B is the import price of Brazilian coffee in the US, ptM ,US is the import price of (all) coffee in the US, ptW is the wor ld price and ptR ,US is the retail price in the US. yt is relative income between consuming and producing countries and is used to avoid that the rank of ? = ? is not higher than the number of truly endogenous variables. According to the theoretical model national incomes have an impact on coffee prices, but coffee prices do not have an impact on national incomes. This is though not true for Brazil and Colombia for parts of the sample.Today Brazil and Colombia no longer rely heavily on export earnings from coffee (ICO, 2003) but historically this is not the case, and this analysis covers 1948-2004. Therefore, yt is treated as an endogenous variable. Sources for prices are as in Figure 1 above. World production of coffee is included as an exogenous variable. Source are Departamento Nacional do Cafe (1938, 1939/40), Deaton and Laroque (2003) and FAOSTAT online (2007). Real GDP are from Maddison (2007) and GGDC (2005) and the US CPI from BLS (2005a) has been used to reach nominal GDP. 13 To determine the stationarity properties of the series, unit root tests are carried out.It is pointed out by Morisset (1998) and Krivonos (2004) that coffee price responses may be asymmetric and we follow Enders and Granger (1998) and conduct unit root tests for variables which possibly adjust asymmetrically. The results are outlined in Table 1. [Table 1] All variables in Table 1 are expressed in natural logarithms. Lag-length is determined by the Akaike Information Criterium (AIC) and inclusion of a trend is decided from visual inspection of the series and the decision noted under â€Å"Trend† where â€Å"y† indicates that a trend is included and â€Å"n† that it is not.The F-statistic for the hypothesis that the series has a unit root shall be held up against the Enders and Granger (1998) critical value of 7. 07 when a trend and a constant are included in the regression and 5. 14 when only a constant is included. The results in Table 1 show that all series but world production have one unit root and hence are non-stationary and integrated of order one. The test statistic for the stationarity of world production is close to the 5% critical value by Enders and Granger (1998), so depending on significance level the series could also have been concluded to be nonstationary.It is not important to correctly identify the stationarity properties of world production, since the series is not an endogenous variable in the VECM and furthermore, it enters the model in first differences. No series adjusts asymmetrically according to this analysis, and asymmetries are disregarded when formulating the empirical model. Due to the possible impact from the International Coffee Agreement (ICA) a dummy variable, which takes the value one in the years the agreement was in place (1962 to 1989), is included. The ICA dummy is included in the short-run regressions because the ICA had an impact only on prices in the short run.In the long run quotas were adjust ed to meet market forces on supply and demand, but in the short run quotas stabilised coffee prices. 14 4. Results Before estimating the VECM in equation (40) the lag-length and the rank of the VECM are determined. Schwartz Information Criteria points at one lag and the AIC and the HannanQuinn Criteria point towards four. In the estimation process the model was first estimated with one lag and tests of the residuals indicated no problems regarding normality. There was no need to expand the number of lags and the model reported here has one lag.With one lag Johansens’s cointegration test gives the following rank of the VECM: [Table 2] Using the trace test, the hypothesis of rank one cannot be rejected, and from the maximum-eigenvalue test the hypothesis of no cointegration cannot be rejected. The test statistics are close to the 5% critical values which makes the decision regarding the rank of the matrix equivocal. The trace statistic for the hypothesis of one or less cointegr ating vectors is close to the critical value, but the test statistic for the hypothesis of rank three or less is clearly rejected.Therefore, according to the trace statistic there are one or two cointegrating vectors. Looking at the maximum-eigenvalue statistic, the test statistics and 5% critical values are relatively close until the hypothesis of three or less cointegrating vectors. Again, rank up to two is acceptable according to the test statistics. A model with two cointegrating vectors is preferred because this indicates seven trends among the nine variables and some variables share trends. 4. 1 Long-Run Equilibrium The preferred model has the following two estimated cointegrating vectors: 15 ptW = 0. 24 ptM ,US ? B + 0. 4 ptX ,C + 0. 15 ptX ,B + 0. 18 ptR ,US (2. 95) (2. 22) (2. 61) (4. 01) ? 0. 05 ptG ,B + 0. 34 ptG ,C ? 0. 28 yt ? 0. 00 t + 0. 43 (3. 58) (6. 35) (2. 86) (3. 76) ptG ,C = ? 0. 23 ptM ,US + 0. 10 ptM ,US ? B + 1. 05 ptX ,C + 0. 91 yt + 0. 01t + 1. 97 (5. 05) ( 0. 70) (5. 71) (5. 09) (41) (4. 51) (42) t-statistics are in parentheses under the parameter estimates. The first cointegrating vector, CIV1, in equation (41) represents the long-run equilibrium in the world market. The second cointegrating vector, CIV2, in equation (42) represents the long-run equilibrium between the two Colombian prices.The two cointegrating vectors are found by commencing with a general model with one cointegrating vector and all nine endogenous variables in this cointegrating vector. Insignificant variables in the cointegrating vector are removed sequentially. It is clear that the US import unit value is not significant in CIV1 and it is moved out to a second cointegrating vector. Other variables were included in CIV2 if they obtain significant coefficients in CIV2 or exhibit significant error correction. According to the first cointegrating vector, CIV1, six prices move together in the long run, and one moves opposite to this group.The world price, the import p rice of Brazilian coffee in the US, the export price in Brazil, the export unit value in Colombia, the US retail price and the Colombian producer price all move together in the long run. Five of the prices have roughly the same influence on the common path, but the world price, to which CIV1 is normalised, dominates through a higher coefficient (one). The Brazilian producer price moves in opposite direction to these six prices, but has a small coefficient in equation (41). The prediction of the theoretical model is that all prices should move together.Therefore, the coefficient on the Brazilian producer price contradicts the model, but the coefficient is small. 16 The second cointegrating vector, CIV2, shows Colombian prices (producer and export price) and the import price of Brazilian coffee in the US move together in the long run. It is clear that the two Colombian prices dominate the movements of the group of prices since the Colombian export price obtains an estimated coefficien t above one and CIV2 is normalised to the Colombian producer price.The import price of Brazilian coffee into the US is the least influential in the group since its estimated coefficient is 0. 10 and hence a tenth of the estimated coefficient on the Colombian prices. The import unit value of (all) coffee into the US enters CIV2 with a negative coefficient indicating that the Colombian prices and the import unit value of coffee in the US move in opposite directions to each other in the long run. As the Brazilian producer price in CIV1, this poses a challenge to the theoretical model which predicts that all prices should move together.However, the US import price and the Colombian producer price are far from each other in the coffee commodity chain and the coefficient is less than a quarter of the coefficient on the Colombian export unit value. Therefore, this coefficient, like the Brazilian producer price in CIV1 above, does not mean that the theoretical model is rejected, and prices are found to generally co-move in the long run. The coefficients on relative income are significant in both cointegrating vectors but have different signs. When relative income decreases, the six prices in CIV1 increase. In contrast, the three prices which co-move in CIV2 decrease.The effect of relative income on coffee prices in the long run are hence not clear from looking at the cointegration vectors. Technological progress, here modelled as a time trend, obtains estimated coefficients in the cointegrating vectors of the same sign as relative income. Technological progress hence moves the two groups of prices in different directions. Alternatively, if something else than technological progress is the reason for the coefficients on the time trend, something else makes the two groups of prices diverge over time. Over time the six prices in CIV1, which are 17 lose to the world market, move closer together. Opposite to this, the Colombian producer price moves away from the path of ot her prices in CIV2. 4. 2 Short-Run Dynamics The short-run structures show how the series adjust towards the long-run equilibria, and how the endogenous variables respond to shocks in exogenous variables. Error correction towards the two long-run equilibria happens according to the estimates in Table 3. [Table 3] Whether a variable error corrects and restores the long-run equilibrium between prices in a cointegrating vector is determined by looking at its sign in the cointegrating vector (the sign of ? and its sign in the loading matrix (the sign of ? ). If the combined sign is negative, the variable works towards restoring equilibrium. The two export prices, ptX ,C and ptX , B , and the import price of Brazilian coffee into the US, ptM ,US ? B , are the only variables which significantly adjust to disequilibrium between the variables in CIV1. These three prices work to restore an equilibrium which is dominated by the world price. The world price in contrast moves further away from t he equilibrium when a shock has created disequilibrium.The import price of Brazilian coffee into the US and the Colombian export price significantly adjust to disequilibrium between the prices in CIV2. Though the import price of Brazilian coffee into the US was not significant in determining the second long-run equilibrium (CIV2), it significantly works to restore it. The estimated parameters on the error correction term in the equations for the import unit value in the US, the Colombian producer price and relative income are not different from zero. This suggests that these variables do not 18 ork to restore the long-run relationship described by CIV2. The Colombian producer price is an important determinant of the equilibrium described by CIV2, but it does not adjust to restore this equilibrium. It thus influences other prices, but is itself not influenced by other prices. Relative income does not adjust to disequilibrium between the variables in CIV1 but its error correction towa rds the equilibrium described by CIV2 is significant on the 10% level. Relative income therefore works in part to restore the equilibrium between (among others) the Colombian prices in CIV2.This could show that any endogeneity of relative income is due to the importance of coffee prices for national income in Colombia. In addition to the error correction terms, the short-run equations include exogeneous variables. The four exogenous variables in the VECM are a constant (c), the dummy for the International Coffee Agreement (ICA) and the current and lagged first difference of world production of coffee, d(qt) and d(qt-1). The estimated coefficients on the exogeneous variables in the short-run regressions are presented in Table 4. [Table 4]None of the estimated constants in the short-run equations for prices are significantly different from zero. This suggests that time trends have been captured in the cointegrating vectors, but it is noticeable that the constant is positive and has hi gh t-statistics in the equations for the price of coffee imported into the US and the retail price in the US. This indicates that the prices, which have increased in an unexplained way, are prices in the US and that value added is largest further up in the coffee commodity chain. The constant is also positive with a high tstatistic in the short-run equation for the Colombian producer price.This could indicate that the attempts by the Federacion Nacional de Cafeteros de Colombia3 (FNC) to influence the prices of Colombian coffee have been successful. 19 The estimated coefficient on the ICA dummy is positive in the equation for relative income and in six equations for prices but negative in two equations for prices. However, it is never significant. The ICA increased six of the eight prices and it should be pointed out that the most significant, though not significant even at the 10% level, increases are for export prices and the import price of Brazilian coffee into the US.It was not producers which gained from ICA but rather exporters and importers of Brazilian coffee. So, there is weak evidence that while exporters benefited from the agreement the producers did not; the effects of the commodity agreement did not trickle down and reach them. First differences of world production and lagged world production enter with negative and significant signs in all regressions but one. This stresses the importance of production in determining prices in the short run. This is predicted by the theoretical model; increased production lowers price regardless of where in the chain the price is situated. . 3 Weak Exogeneity Tests of weak exogeneity are carried out to further test the driving forces in the system. A weakly exogenous variable has an impact on the long-run path of the variables of the system, but is not itself influenced by the variables in the system. The results from likelihood ratio tests are given in Table 5. [Table 5] In Table 5 the test statistics for the w orld price, the import unit value into the US, the Colombian export unit price, the US retail price and the two producer prices are lower than the 5% critical value, and the null hypothesis can not be rejected for these variables.These six prices are hence weakly exogenous. Agents at the ends of the chain, retailers, importers and producers, are hence not responding to deviations from the long-run equilibrium relationships between prices. As such, they are somewhat isolated from the world market. This is not 20 surprising since the price transmission literature asserts that the price determination happens in the world. Further up and down the chain other factors, such as market set-ups, intervention and incomes determine the prices.The hypothesis of weakly exogenous relative income is clearly rejected, indicating that it is correct to model income as endogenous in the system as discussed above. Also, the likelihood ratio test shows that the causality between prices and relative inco me is uncertain. Coffee prices and national incomes in Brazil and Colombia are interrelated. Coffee prices are important determinants of income in Brazil and Colombia, but national incomes also determine coffee prices. Regarding relative income it is clear that the results are equivocal.The coefficients in the cointegrating vectors obtained different signs and it may or may not be weakly exogenous according to the error correction coefficients and weak exogeneity tests. The final set of results which can shed light on the effect which relative income has on prices, is impulse response functions. They were estimated for the VECM and show that relative income has a negative impact on all eight coffee prices and hence that a decreasing income gap between producing and consuming countries increases coffee prices. 5. DiscussionRegarding the central question of what determines the value added at each stage of the commodity chain, it can be concluded that the prices definitely determine ea ch other, and that from outside the system of prices quantity has a large impact, but only in the short run. In the long run, relative income has an effect on all prices, and a closing income gap between producers and consumers increases prices. In addition, prices move in response to changes in technological progress. In this concluding section four overall conclusions are drawn. The first is of how the prices influence each other.The second is of how relative income impacts prices. The third is 21 of how production influences prices. And last how the time trend, which represents technology, influences prices. It is of utmost importance to determine which prices are detached from the chain. The theoretical model predicts positive correlation between the prices and this is generally found in the empirical model both by long-run co-movements and by adjustments to restore the long-run equilibria in the short run. Both CIV1 and CIV2 show co-movement among prices, but the VECM is estima ted with two cointegrating vectors.This indicates that there may be a break in the coffee commodity chain since one group of prices moves together in one manner while the other group moves in a different manner in the long run. The world market prices in CIV1 move together but the Colombian prices in CIV2 do not follow their movement, and the Colombian prices may be detached from other prices, possibly due to FNC. Since the Brazilian producer price is not significant in CIV2 and moves against the other prices in CIV1 it can be said to also be detached from the value chain.The error correction properties of the system and the weak exogeneity tests show that prices in the middle of the chain work to restore the two long-run equilibria. The prices at the ends of the chain, the producer prices and the retail price, and the dominating world price do not error correct. The lack of error correction by the prices at the ends of the chain indicates that they are not influenced by the long-ru n paths and points at breaks in the coffee commodity chain.The empirical results suggest that the world market is characterized by close linkages between prices but retail price and producer prices are less integrated with other prices. This finding may support the arguments made by the price transmission literature. The limited trickle down of price signals to producer prices confirm the findings of Fitter and Kaplinsky (2001) and Ponte (2002) who argue that surplus created along the chain falls on agents further up the chain, and not on producers. The discussion of intervention and integration in the 22 ransmission literature (Baffes and Gardner, 2003; Hazell et al, 1990; Krivonos, 2004; Mundlak and Larson, 1992) explain why the Colombian producer price and export price, which have experienced considerable intervention by FNC, are detached from other prices. It is not possible to reach an unequivocal conclusion regarding the impact of relative income by looking at the cointegratin g vectors, short-run dynamics or weak exogeneity tests. It is concluded that decreasing income gap increases prices in the world market, whereas it decreases the Colombian producer price.The negative relationship between relative income and all eight prices found by the impulse response functions confirms the expected signs of the coefficients on income in market one and two. The negative relationship between relative income and prices extends to market three. However, since income in consuming countries occurs in the numerator of relative income, relative income should obtain a positive coefficient if the hypothesis of decreasing importance of labour along the coffee commodity chain is confirmed. A negative ? c3 in equation (36) suggests that the roasting sector relies more on labour than the importing ector, in light of the discussion of equation (35) above. Income’s significance in the determination of producer prices, both in the theoretical and the empirical model, offer s support for the terms of trade literature, where prices are determined by underlying macroeconomic factors. Relative income also helps explain divergence of producer and retail prices as these prices reflect relative overall economic performance of producer countries compared to consuming countries. The theoretical model predicts that there is a negative relationship between prices and production. This is fully supported by the empirical model.The negative and significant coefficients on the differences of world production show that it could be the supply curves which shift outwards and create the decreasing prices. 23 According to the theoretical model the sign on the time trend (technological progress) is unknown and depends on whether the supplier or the demander in a given market experiences the most significant technological innovations. The negative sign of the estimated coefficient on the time trend in CIV1 shows that the prices in CIV1 move closer together over time than w hat is explained by relative income.Technological progress can be the explanation for this. A negative sign indicates that the technological progress is largest for the supplying parties in markets one, two and three and/or the negative sign of d 5 is confirmed. The latter case is particularly neat since CIV2, which holds a positive time trend, does not contain the US retail price, and the different signs of the time trend in the cointegrating vectors are not conflicting. They are not conflicting because in CIV1, which describes all four markets, d 5 causes a negative time trend.In CIV2, which describes market one, two and three, a5 , b5 and c5 represent relatively bigger technological progress by demanders which creates a positive time trend. A positive time trend could occur in market one, two and three in the theoretical model if the technological progress is largest for the demanding parties in these three markets. This development is not unlikely in the coffee commodity chain i f agents along the chain become more able to improve their production methods (technological progress) because they become wealthier either through market power and/or the value they add to coffee.This hypothesis can however not be tested with the data used for this analysis, but touches on the discussion in Ponte (2002). Therefore, the positive time trend in CIV2 could be capturing technological progress or some factor not included in the model that coincides with the passing of time. Market power and bargaining power are examples of unmodelled variables in the VECM. The almost significant positive constants in the regressions of US prices show that US import and retail prices tend to increase more than other prices.This could capture the mark24 up, m in (37). The negative constant in the short-run regression for the Brazilian export price could be caused by the coffee commodity chain being a trader-driven commodity chain, as argued by Talbot (2002), where international traders tra de large amounts of coffee with very little margin. Looking at the value chain for Brazil in Figure 1 confirms this, since the value added at the exporting stage, which is denoted processing and transport in Brazil, reduces to almost zero after 1990.It is no coincidence that this is the year after the breakdown of ICA, and it is also argued by Ponte (2002) that this event changed the power relations along the coffee commodity chain. The empirical model gives some insight into issues which are not explicitly modelled in the theoretical model. The theoretical model did not predict which prices would be dominating and which would be adjusting to movements in other prices. However, it is found that the world price is dominating and the export prices are responding.Boratav (2001) found that the ratio between world price and export unit value was stable, and the analysis here can extend the conclusion by suggesting that the export prices follow the world price. If the aim is to create a m ore equal income distribution among agents in the global coffee commodity, this analysis offers some insights of policies to achieve this. Income levels in coffee-producing countries are important determinants of the coffee prices and low national incomes pull coffee prices down even though the retail and import price in consuming countries might increase.Unless the general income level in producing countries increases increased income in consuming countries will not trickle down to the coffee farmers. Alternatively the structure of the chain can be changed and an income distribution more favourable for coffee farmers could be achieved. At the international level the International Coffee Agreement increased coffee prices, but more so export and import prices than producer prices. If the aim is to benefit those in the global coffee commodity chain who has the least – the farmers – an international agreement is 5 hence not the most efficient tool. Improved technology for farmers and increases bargaining power are other factors which would redistribute value within the commodity chain. Producer and retail prices which are detached from the world market, technological progress mainly by demanding parties in the chain and increasing mark-ups (or market or bargaining power) in consuming countries are all findings which support the idea by Darity and Davis (2005) to bring Karl Marx back into the picture.Though international commodity agreements, producer cartels and attempts to change the structures of the centre and periphery are not policies currently in vogue, it may be useful to keep them in mind when engaging in the world coffee market. 26 Value Chain for Brazil 1950 1960 1970 1980 year 1990 2000 20 0 40 20 40 % 60 % 60 80 80 100 100 Value Chain for Colombia 1950 Processing in US International processing and transport Processing and transport in Brazil Brazilian producer's share 1960 1970 1980 year 1990 2000 Processing in US and transportProcessing and transport in Colombia Colombian producer's share Fig. 1. Distribution of the Coffee Dollar along the Commodity Chain. Sources: Brazilian and Colombian producer prices: FAO (various years), FAOSTAT (2006) and ICO (2005). Export and import unit values: FAOSTAT online (2006) and U. S. Department of Commerce: Bureau of the Census (1989). Wholesale prices for Brazil: IFS (various years). US Retail prices: BLS (2005b). 27 Table 1. Asymmetric Unit Root Tests n 1 pW n 1 pM,B-US n 1 pM,US n 1 pR,US y y# 8 4 0 0. 19 0. 33 0 1 3 1 0. 2 0. 48 4 1 3 0. 66 0. 78 2 6 3 0. 65 0. 55 4 6 6 0. 31 0. 99 6 0 5 0 0. 99 0. 99 0 2 5 4 0. 37 0. 07 1 8 n 0. 99 0. 99 3 3 0. 00 0. 97 5 3 0. 98 0. 87 0 3 0. 52 0. 89 4 3 0. 42 0. 69 2 0 0. 22 0. 90 9 1 0. 55 0. 89 5 1 0. 93 0. 92 5 8 0. 75 0. 60 25. 499 1 1 I(1) symm . . . . I(0) symm 1 26. 032 0. 38 0. 00 I(1) symm 0 # Unit Root 5 0 8. 87 q y 4 Bartlett’s White Noise pX,C Asymmetric Adjustment 1 0. 97 Lags Lags n 0. 95 0. 32 pX,B 0. 59 0. 53 1 8 1. 21 n 1 0. 15 pG,C 0 1. 31 1 0. 99 2. 62 n 0. 19 0. 19 Trend 1. 80 pG,B Bartlett’s WhiteNoise s Asymmetric Adjustment Conclusion Unit Root Analysis of Series in Levels Analysis of Series in 1st Differences Series 29. 849 26. 732 28. 028 0 0 0 # 28. 842 32. 509 27. 076 29. 196 I(1) symm I(1) symm I(1) symm I(1) symm I(1) symm I(1) symm I(1) symm 28 5 5 4 ## 1 6 â€Å"Unit Root† contains the F-statistic for the hypothesis that the series has a unit root. â€Å"Asymmetric Adjustment† contains the p-value for the hypothesis of symmetry. â€Å"Bartlett's White Noise† contains the p-value from Bartlett's periodogram-based test for white noise.The null is that the error terms are white noise. # indicates that the lag-length selected by AIC did not result in white noise residuals and increasing the laglength did not amend the problem and the lag-length was hence decreased until the indicated number of lags. ## indicates that residuals from the regressions with the first difference of relative income fail Bartlett's periodogram-based test for white noise regardless of variations of the number of lags and the lag-length is chosen by AIC. Table 2.Rank for VECM(1) with nominal prices and relative income Trace Test Maximum-Eigenvalue Test 5% 5% Test Critical Hypothesized Test Critical No. of CE(s) Statistic Value Prob. * Statistic Value Prob. * None 232. 686 228. 298 0. 031 49. 706 62. 752 0. 486 At most 1 182. 980 187. 470 0. 083 46. 246 56. 705 0. 367 At most 2 136. 734 150. 559 0. 230 36. 528 50. 600 0. 617 At most 3 100. 206 117. 708 0. 372 31. 817 44. 497 0. 570 At most 4 68. 389 88. 804 0. 570 21. 460 38. 331 0. 885 At most 5 46. 929 63. 876 0. 556 19. 020 32. 118 0. 728 At most 6 27. 909 2. 915 0. 628 13. 839 25. 823 0. 736 At most 7 14. 070 25. 872 0. 652 8. 642 19. 387 0. 761 At most 8 5. 428 12. 518 0. 536 5. 428 12. 518 0. 536 Trace test indicates 1 cointegrating equation at the 5% level. Max-eigenvalue test indicates no cointegration at the 5% level. * MacKinnon-Haug-Michelis (1999) p-values. 29 30 Table 3. Error Correction Parameters ? pW 2. 04 pM, US 0. 52 pM,US3. 68 pX,C 2. 33 pX,B 4. 20 pR,US 0. 99 pG,B 1. 73 pG,C 0. 96 y -0. 16 CIV1 (1. 64) (0. 44) (2. 92) (2. 09) (3. 04) (1. 59) (0. 94) (1. 11) (0. 97) EC ? N 0. 99 Y 0. 07

The Dark Child

The Dark Child Camara Laye wrote The Dark Child to oppose stereotypes that have become part of western culture. When most westerners think about Africa they think of an undeveloped country that is stricken by poverty and primitive behavior. The dark child is an autobiography of Camara Laye’s youth and his early life growing in to adulthood. Camara Laye grew up in the town of Kouroussa on the inland plain of French Guinea in the Malinke tribe. His father was a well-renounced blacksmith and a man of tradition but he wanted a Western education for his son.Around the center of this book is where Camara Laye describes his initiation into adulthood at about the age of thirteen. He and the other boys sing while they enter the forest where they kneel with closed eyes with a roar of many lions surrounding them. Later he discovers the â€Å"rational† explanations for these frightening events, but he is wise enough to recognize that for the boys who take part in it, the ceremony i s still a true test of courage, and a real division between childhood and adulthood.The actual circumcision comes later, which he describes as â€Å"a really dangerous ordeal, and no game† Upon his return to the village, he is moved to his own hut, separated from his mother and father and he is given new â€Å"men's clothes† with quiet gratitude. This scene closes with Camara turning to his mother to thank her, who he finds standing quietly behind him, smiling at him sadly. Shortly after moving into his hut, Camara leaves at 15 years of age to attend â€Å"Ecole Georges Poiret, now known as the technical college† in Guinea's capital city of Conakry.His mother warns him to â€Å"be careful with strangers† and sends him off on a train to live with his Uncles Sekou and Mamadou in Conakry. In the school, Camara encounters difficult language barriers and a hot, humid climate more severe than his home in Koroussa. In his new school it is evident that it is more colonized. Camara lives the life of a typical college student by studying at school and going home during the breaks. As he experiences the European education, he adopts the culture associated with it.His mother changed the way his hut looks to give it a more European look, which he notices. He is aware of because the changes were making â€Å"the hut more comfortable. † Several years after leaving for Conakry, Camara returns home with his â€Å"proficiency certificate† and an offer from the director of his school to continue his studies through a scholarship, in France. While his uncles and father support and encourage him to take the foreign study opportunity, his mother is forbids him to accept the offer.He decided to accept the offer despite his mother's resistance to the idea, and parts with her and his father all while his mother was shouting insults and pushing him away. She then fell into a heap of tears, turning her anger instead to the European influences. H is father gave him with a map of city transportation of the Paris Metro in France. His father gives him the physical, practical tools for surviving in the city, but with that comes a theoretical compass directing the learning and success of his son. The mixed emotions of fear, excitement, anxiety and sadness cultivate with Camara crying as he goes to exit the plane.

Perfect competition Essay

The focus today’s lecture is the examination of how price and output is determined in a monopoly market. Pure monopoly is a single firm producing a product for which there are no close substitutes. It is important for us to understand pure monopoly since this form of economic activity accounts for a large share of output and it provides us with an insight into the more realistic market structure of monopolistic competition and oligopoly. It is characterised by: †¢ a single seller producing a product with no close substitutes. The firm and the industry are the same. The product is unique – there is no close substitute for it. You either buy the product or go without. †¢ effective barriers to entry into the market (legal, technological, economic). These barriers block new firms from entering the industry, blocking potential competition. †¢ the firm is a price maker; faces a downward sloping demand curve for its product (this demand curve is the market demand curve). The firm has considerable control over price since it controls the quantity supplied and can cause price to change by varying the amount supplied. †¢ effective barriers to entry One special type of monopoly is a natural monopoly, a monopoly that arises because of the existence of economies of scale over the entire relevant range of output and competition is impractical, e. g. , water, electricity. These industries are usually given exclusive rights by the government, with the proviso that government regulates the operations to prevent abuses of monopoly power. A larger firm will always be able to produce output at a lower cost than could a smaller firm. The pressure of competition in such an industry would result in a long-run equilibrium in which only a single firm can survive (since the largest firm can produce at a lower cost and can charge a price that is less than the ATC of smaller firms). Natural monopolies have low MC and it is to their advantage to expand output. Barriers to entry The absence of competition in an industry is due largely to barriers to entry. Barriers to entry may take different forms: 1. economies of scale: costs – efficient, low cost producers are usually large firms operating under conditions of economies of scale, where AC falls over a range of output. 2. Legal barriers: Patents and Licences – government creates legal barriers in giving patents and licences. Patents: this is the exclusive right to control a product for a number of years, protecting the inventor from rival competitors who did not spend any money and time in its development. Licences: the issuing of licences by the government limits entry into an industry. 3. ownership of critical raw materials: a firm that owns a critical raw material can block the creation of rival firms. 4. unfair competition – rivals may be eliminated and the entry blocked by aggressive, cut-throat tactics such as pressure on resource suppliers and banks to withhold materials and credit, aggressive price cutting designed to bankrupt competitors. Unfair competition is illegal or borders on illegality. Under conditions of economies of scale, large firms can produce output at a lower cost than can smaller firms. Assume that the ATC curve of all firms in the industry is ATCo; however, one firm has become larger than the others, thereby producing at a lower ATC. This larger firm can sell its output at a lower price (at P’) at which point smaller firms will experience economic losses. At Po, smaller firms would receive zero economic profit. At P’ the larger firm will receive zero economic profit, but smaller firms would receive economic losses and so leave the industry or merge with others. This situation will continue until only one large firm remains. This gives us a â€Å"natural monopoly†. A large firm can operate as a regulated monopoly in which the government regulated the prices that could be charged for product/services. [pic] A firm may acquire monopoly power by having sole ownership of a raw material. Firms can also raise the sunk costs associated with entry into an industry to help discourage entry by new firms. Sunk costs are costs that cannot be recovered upon exit from an industry – advertising expenditures. If firms know that they’d lose a large amount in the form of sunk costs, they may hesitate to enter an industry. Large sunk costs are also difficult to finance. Patents and licenses provide two types of barriers to entry that are created by the government. While patent protection is necessary to ensure that there are sufficient incentives for firms to engage in research and development expenditures, it also provides the patent holder with some degree of monopoly power. A local monopoly is a monopoly that exists in a specific geographical area. Monopoly Demand, AR, MR, TR, and elasticity The demand curve facing a monopoly firm is the market demand curve (firm is the market). Since the market demand curve is a downward sloping curve, marginal revenue will be less than the price of the good. The monopolist can increase its sales only by lowering its price. This is different from the perfectly competitive firm which faces a perfectly elastic demand curve at the market price. Recall that MR is: †¢ positive when demand is elastic, †¢ equal to zero when demand is unit elastic, and †¢ negative when demand is inelastic. We will examine the implications of a downward sloping demand curve. i) P > MR – the monopolist can only increase sales if price falls, this causes MR < P (AR) for all output except the first. The falling MR means that TR will increase at a decreasing rate. Since it must lower price to sell more, the firm’s MR lies below its demand curve. ii). Price elasticity Recall the TR test for price elasticity of demand. TR tests tells us that when demand is elastic (inelastic), a decline in price will increase (decrease) TR. A monopolist or other imperfectly competitive firm will not chose to lower price into the inelastic segment of its demand curve, this will reduce TR and increase production costs, thereby lowering profits. The relationships between demand, MR and TR curves are shown in the diagram below, TR is maximized at the level of output at which demand is unit elastic (and MR = 0). Since the objective is to maximize its profit, the firm will look at its costs and revenue in determining its output level. As long as TR is increasing, MR is positive. When TR is at its maximum, MR = 0 and when TR is decreasing, MR is negative. [pic] Note that, as in all other market structures, AR = P of the good. (AR = TR/Q = (PxQ)/Q = P. ) This means that the price given by the demand curve is the average revenue that the firm receives at each level of output. iii) Cost Data The price-quantity combination depends not only on the MR and demand data, but also on costs. Profit-maximising firms produce the level of output where MC = MR (as long as P > AVC). For the monopoly firm, MR = MC at an output level of Qo and firm will charge Po. Since Po > ATCo at this level of output, the firm receives economic profit. These monopoly profits, though, differ from those received by a perfectly competitive firm in that these profits will persist in the long run (due to the barriers to entry that characterize a monopoly industry). [pic] A monopoly firm may experience losses (see diagram below) if P < ATC. The economic losses equal to the shaded area. Since price is above AVC, it will continue operations in the short run, but will leave the industry in the long run. [pic] A monopoly firm will shut down in the short run if the price falls below AVC. [pic] It may be a widely held view that a monopolist can charge any price s/he wants, but the firm is constrained by the demand for its product. If a monopoly firm wishes to maximizes its profit, it must select the level of output at which MR = MC. An increase in the price above this level would reduce the profits received by the firm. Some misconceptions about monopoly pricing i) One common misconception is that the monopolist will charge the highest price it can get. This is not true. Monopolist may not seek higher prices since these bring in smaller than maximum profit. Total profit = TR – TC, and these depend on the quantity sold, price and unit cost. ii) The monopolist is more concerned with maximum total profit, not maximum unit profits. He accepts a lower than maximum per unit profit since additional sales will more than make up for the lower unit profits, e. g., willing to sell 5 units at a profit of $30 per unit (total profit = $150) than 4 units at a profit of $70 (total profit = $140). Economic effects of monopoly It will be profitable for the monopolist to sell a smaller quantity and charge a higher price than would a competitive producer. The profit maximizing output will result in an under allocation of resources since the restricted output uses fewer resources. Given the same costs, a monopolist will find it profitable to charge a higher price, produce a smaller output and mis-allocate resources compared with a perfectly competitive industry. X-efficiency: occurs when a firm’s actual costs of producing any output are greaterthan the minimum possible costs. Price discrimination and dumping Firms operating in markets other than those of perfect competition are able to increase their profits by engaging in price discrimination, where higher prices are charged to those customers who have the most inelastic demand for the product. It takes place when a given product is sold at more than one price and these price differences are not justified by cost differences. Necessary conditions for price discrimination include: i) Monopoly power: the firm control output and price (not be a price taker); ii) separation of buyers – the firm must be able to sort customers according the their elasticity of demand or willingness to pay for the product, and iii) no reselling – resale of the product must not be feasible – cannot buy low and sell high.. The diagram below illustrates how price discrimination may be used in the market for airline travel. Vacation travelers are likely to have a more elastic demand than business travelers. The optimal price is higher for business travelers than for vacation travelers. Airlines engage in price discrimination by offering low price â€Å"super saver† fares that require a weekend stay and tickets to be purchased 2-4 weeks in advance. These conditions are much more likely to be satisfied by individuals traveling for vacation purposes. This helps to ensure that the customers with the most elastic demand pay the lowest price for this commodity. [pic] Other examples of price discrimination include daytime and evening telephone rates, child and senior citizen discounts at restaurants and movie theaters, and cents-off coupon in Sunday newspapers. When countries practice price discrimination by charging different prices in different countries, they are often accused of dumping in the low-price countries. Predatory dumping occurs if a country charges a low price initially in an attempt to drive out domestic competitors and then raises the price once the domestic industry is destroyed. Consequences of discrimination The monopolist will be able to increase profits by engaging in discriminatory price practices. Monopolist will produce a larger output than a non-discriminating monopolist. Comparison of perfect competition and monopoly The diagrams below show a perfectly competitive market and the loss in consumer and producer surplus that results when a perfectly competitive industry is replaced by a monopoly. The introduction of a monopoly firm causes the price to rise from P(pc) to P(m), while the quantity of output falls from Q(pc) to Q(m). The higher price and reduced quantity in the monopoly industry causes consumer surplus to fall by the trapezoidal area ACBP(pc). This does not all represent a cost to society, though, since the rectangle P(m)CEP(pc) is transferred to the monopolist as additional producer surplus. The net cost to society is equal to the blue shaded triangle CBF. This net cost of a monopoly is called deadweight loss. It is a measure of the loss of consumer and producer surplus that results from the lower level of production that occurs in a monopoly industry. [pic] Some economists argue that the threat of potential competition may encourage monopoly firms to produce more output at a lower price than the model presented above suggests. This argument suggests that the deadweight loss from a monopoly is smaller when barriers to entry are less effective. Fear of government intervention (in the form of price regulation or antitrust action) may also keep prices lower in a monopoly industry than would otherwise be expected. A related point is that it is unreasonable to compare outcomes in a perfectly competitive market with outcomes in monopoly market that results from economies of scale. While competitive firms may produce more output than a monopoly firm with the same cost curves, a large monopoly firm produces output at a lower cost than could smaller firms when economies of scale are present. This reduces the amount of deadweight loss that might be expected to occur as a result of the existence of a monopoly. On the other hand, deadweight loss may understate the cost of monopoly as a result of either X-inefficiency or rent-seeking behavior on the part of monopolies. X-inefficiency occurs if monopolies have less incentive to produce output in a least-cost manner since they are not threatened with competitive pressures. Rent-seeking behavior occurs when firms expend resources to acquire monopoly power by hiring lawyers, lobbyists, etc. in an attempt to receive governmentally granted monopoly power. These rent-seeking activities do not benefit society as a whole and divert resources away from productive activity. Regulation of natural monopoly A monopoly firm can produce at a lower cost per unit of output than could any smaller firms in a natural monopoly industry. In this case, the government generally regulates the price that a monopoly firm can charge. The diagram below illustrates alternative regulatory strategies in such an industry. If the government leaves the monopolist alone, it will maximize its profits by producing Q(m) units of output and charging a price of P(m). Suppose, instead, though, that the government attempts to emulate a perfectly competitive market by setting the price equal to marginal cost. This would occur at a price of P(mc) and a quantity of output of Q(mc). Since this is a natural monopoly, though, the average cost curve declines over the relevant range of output. If average costs are declining, marginal costs must be less than average costs (this relationship between marginal and average costs was discussed in detail in Chapter 9). Thus, if the price equals marginal costs, the price will be less than average total costs and the monopoly firm will experience economic losses. This pricing strategy could only exist in the long run if the government subsidized the production of this good. [pic] An alternative pricing strategy is to ensure that the owners of the monopoly receive only a â€Å"fair rate of return† on their investment rather than monopoly profits. This would occur if the price were set at P(f). At this price, it would be optimal for the firm to produce Q(f) units of output. As long as the owners receive a fair rate of return, there would be no incentive for this firm to leave the industry. Roughly speaking, this is the pricing strategy that regulators use in establishing prices for utilities, cable services, and the prices of other services produced in regulated monopoly markets.

Introduction to Italian High Renaissance Neoplatonism

Renaissance Humanism was the most significant intellectual movement of the Renaissance. It was beginning in Italy and spreading to the rest of Europe such as Hungary, Poland by the 16th century. It blended concern for the history and actions of human beings with religious concerns. The humanists were scholars and artists who studied subjects that they believed would help them better understand the problems of humanity. Its influence affected philosophy, politics, science, art, religion, literature and other aspects of intellectual inquiry.The central feature of humanism in this period was the commitment to the idea that the ancient would was the pinnacle of human achievement, especially intellectual achievement, and should be taken as a model by coexistent Europeans. At 15th Century, more detailed observation of man himself and of nature followed in the 15th century with the growth of interest in anatomy, perspective, details of nature, landscape backgrounds, and form and color in li ght. Paintings of the 15th century also reflect the growing curiosity about man’s achievement in Italy’s past.It is this preoccupation with and study of Classic culture and art that gave the Renaissance in Italy its particular character. Humanism asserted the right of the individual to the use of his own rason and belief, and stressed the importance and potential of man as an individual. This concept cana be identified with a belief in the power of learning and science to produce â€Å"the complete man†. At 16th Century, christianity was added to platonic ideal: Neo- platonism.Neo-Platonism in the Renaissance was the philosophy based on the teachings and doctrines of a group of thinkers of the early Christian era who endeavored to reconcile the teachings of Plato with Christian concepts. It a reconciliation of Aristotelian and Platonic ideas with Christian beliefs. The Neo-Platonists, being at the same time both lovers of the pagan past with its Platonic ideals of physical beauty, and being Christians, wanted to fuse this pagan idealism with Christian doctrine.The art and taste during the Renaissance for complicated mythological fantasies intermingled with allegories and symbolisms tried to achieve this fusion of the Platonic idealism with Christian doctrine. The main object of the Neo-Platonic Academy in Florence in the 15th century was the reconciliation of the spirit of antiquity with that of Chrisianity. Neo-Platonism, this philosophy was seen as the ideal balance between the Christian faith and the fresh humanistic concept of man’s advancement through the search for knowledge.This was due to the fact that contemplation of the spiritual rather than the physicala was believed to be the route to both Christian and Neo-Platonic salvation. Many famous renaissance artists were influenced by this philosophy and their artworks demonstrated Neo- Platonic concepts such as the synthesis of classical and Christian ideals, the idealistic po rtrayal of beauty, and the soul’s struggle from physical existence to divine perfection.