This paper examines the effects of aging and income subsidies on farm efficiency in Korea by utilizing the Korean Farm Household Economic Survey from 2008 to 2015. A stochastic frontier model with a non-monotonic assumption on the effect of efficiency factors is implemented to reflect a super aging and less developed production structure in Korean agriculture. This study finds continuously decreasing farm efficiency with age, which contradicts the commonly assumed inverted-U relationship between age and productivity. Especially, we find that labor is the most important factor to explain recent farm efficiency losses in Korea. Furthermore, this paper finds that the Korean income subsidy has a negative effect on farm efficiency. Our results provide two policy implications for the government of Korea. First, even though the “Returns to the Farm and Rural program” is appropriate, Korea should modify the program to encourage more young people to participate this program rather than old people, in order to attain the sustainable development of the agricultural sector. Second, a policy maker in Korea should consider a coupled subsidy that is directly related to farm production rather than a decoupled subsidy, regardless of the lower efficiency of the coupled subsidy in achieving agricultural development.

This study investigates price relationships between organic and conventional carrots, tomatoes, and lettuce in the U.S. utilizing Nielsen scanner data from 2006–2015. We employ a threshold vector error correction model (TVECM), threshold vector autoregressive model (TVAR), and threshold cointegration test to test whether market integration exists between organic and conventional vegetables as well as the existence of asymmetric price transmission. The results find positive long-run relationships between organic and conventional prices of carrots and tomatoes and show the existence of asymmetric price transmission in price pairs of lettuce and tomatoes. Our findings suggest that the price relationship between organic and conventional vegetables varies by characteristics, such as shelf life, volatility in the price premium, and substitutability.

This paper investigates what factors and characteristics of organic consumers affect annual organic food expenditure by using Nielsen’s consumer panel dataset from 2010 to 2014. To be specific, this paper explores new marketing opportunities by investigating organic consumer heterogeneity in different household income levels by utilizing the multilevel model. Findings in this study will contribute to the previous and existing literature in three-folds. First, we find that the organic consumers are more heterogeneous in the high-level of income groups (approximately above $60,000), as well as the low-income households between $35,000 and $45,000. This finding demonstrates that the income levels above $60,000 and around $40,000 have potential market segmentation. Second, we find that that annual organic expenditure is positively associated with consumers who consecutively repurchase organic food products compared to irregular organic consumers, supporting a different level of satisfaction. Third, we find that USDA organic labeling has a positive effect on annual organic expenditure compared to the organic labeling certified by private companies, implying the importance of credibility for the organic labeling.