Policy Research Group

CAFIO - Policy Research Group

The Center for Agricultural & Food Industrial Organization - Policy Research Group (CAFIO-PRG) was established in 2012 with funding from the U.S. Department of Agriculture under the Policy Research Centers Program. CAFIO-PRG is led by the Project Director, Professor Konstantinos Giannakas, and its main focus has been on the development of a novel, empirically relevant, integrated, multi-market framework of policy analysis. This new policy analysis framework explicitly accounts for heterogeneity in consumer preferences or/and incomes; heterogeneous producers (producers differing in education, experience, motivations, location, management skills, technology adopted etc.); imperfectly competitive input suppliers, processors or/and retailers; and links and interactions between the agri-food supply channels of interest (i.e., markets of the regulated product and its relevant substitutes and complement products and services).

Another key component of CAFIO-PRG research is the extensive utilization of behavioral and experimental economic methods in policy analysis and policy design. The two key characteristics/ differentiating attributes of our research (i.e., the explicit consideration of agent heterogeneity and use of behavioral and experimental economics in policy analysis) are closely connected, as (a) our heterogeneity framework provides a theoretical grounding to our economic experiments, while, (b) by eliciting and registering the attitudes, motivations, and unique decision characteristics of individuals in diverse groups, the behavioral and experimental economics methods are uniquely equipped to capture the nature and magnitude of the relevant agent heterogeneity. Together, they can improve our understanding of the effects of different policies on the interest groups involved.

Activities & Accomplishments since 2012
The development of the new policy analysis framework has now been completed and various adaptations have been used to analyze important policy issues like:

• The economics of output and input subsidies and taxes in the presence of agent heterogeneity
• The market potential and optimal regulatory response to food nanotechnology,
• Producer behavior and design of policies related to downstream water pollution issues,
• Least-cost policies to facilitate commercialization of biomass crops for energy,
• The impact of agricultural policies on entrepreneurship and rural development, 
• Producer response to various risk management policies.

In addition to the issues that were part of the CAFIO-PRG project (outlined above), the framework has also been utilized by our group to research a diverse array of issues like:

• The coexistence of genetically modified, conventional, and organic food products 
• The market and welfare effects of a national Renewable Portfolio Standards policy
• The effects of the Fair Trade regime on coffee producers 
• The impact of property rights problems on cooperative organizations 
• The role of innovation and policy in combating hunger around the world 

In addition to publishing its research findings in peer-reviewed academic journals, books and making presentations at professional association meetings and workshops, CAFIO-PRG has been communicating the essence of its research findings through CAFIO Policy Pagers, which are one-page discussions of important policy issues, CAFIO-PRG research, and results and implications. These policy pagers are posted in this website and are circulated widely in academia, industry and the government. Results have also been disseminated through outreach and extension meetings led by members of the group.