1

The Significance of Statistical and

Economic Significance in Agribusiness
Management Research

By Knowledge Mupanda

AGEC 671 TERM PAPER

Spring 2010
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1. Introduction

Agribusiness management is a relatively young science that is still dependent on older

disciplines for its personnel, paradigm, methodologies and practices. At present, it still relies

heavily on agricultural economics and the management disciplines. Like any other young

science or pre-science it tries to gain legitimacy in its explanation of phenomena by

conforming to theories and paradigms from older or ‘mother’ disciplines while it builds its own

identity as a distinct discipline. Thus it fits in the description of pre-paradigm science which

Baum and Dobbin (2000) citing Kuhn (1977) characterized with deep disagreements about

basic theory, and interpretation of facts which is mainly caused by importation of paradigms

and personnel from parent fields and other mature sciences. Harling (1995) elaborates on some

of these paradigm disagreements in agribusiness management. However, for Agribusiness

management to develop as a unique discipline it should be able to select relevant paradigms,

methodologies and practices to import from ‘mother’ disciplines while it critically questions

some practices in ‘mother’ disciplines before it makes use of them or totally abandon their use.

One such practice that has gone rather unchecked in established disciplines is failure to

separate economic from statistical significance and subsequent reliance on statistical

significance as the basis upon which research conclusions and recommendations are drawn.

While economic (practical) significance and statistical significance can coincide, the two are

inherently different and in a field like agribusiness, we would think economic significance

takes precedence over statistical significance in research methodologies and practices because

it is an applied science and practical significance matter than theoretical (statistical)

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significance. In Economics, the fight against the practice (or oversight in economists) has been

presented by McCloskey and Ziliak in several papers culminating into a book, The Cult of

Statistical Significance (2008).

In several papers and over a period of twenty years, McCloskey (later on joined by

Ziliak) has argued that economists largely confuse statistical and practical (economic)

significance and have abdicated the responsibility to draw economic conclusions to statistical

tests. It is McCloskey and Ziliak’s contention that economists have put economic significance

on the back burner of economic analysis and substituted it for statistical significance despite

the weak theoretical basis for the later. While McCloskey and Ziliak’s views have received a

fair amount of criticism (Hoover and Siegler, 2008; Engsted, 2009) their relevance to applied

sciences like agribusiness management and agricultural economics cannot be dismissed at face

value without a disciplined self-introspection. The problem is there is currently no address of

some of the pertinent issues raised by McCloskey and Ziliak in the context of agribusiness

management. Here we argue that economic significance is of greater importance and relevance

in agribusiness research methodology and statistical significance is a tool than can be used to

bolster the former but not supplant it.

We present our arguments in a discipline development context, were it is appreciated that

the growth cycle of a discipline starts with it borrowing methodologies, practices, personnel

and intellects from ‘mother’ disciplines. However, there is controversy that arises after a while

regarding how such a developing discipline can make itself unique. Should it just wean itself

by developing its own theories, procedures and practices or it should strive to integrate

theories, methodologies and practices from the ‘mother’ disciplines to come up with its unique
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strategies? If integration is chosen what procedures should be put in place that a young

discipline should not inherit ‘challengeable’ practices and mistaking them for genuine

methodologies? The question of legitimacy plays a significant role in finding answers to these

questions. Does a discipline require legitimacy from its ‘mother’ disciplines or it clientele?

We use the arguments presented by McCloskey and Ziliak on the roles of statistical and

economic significance and present that agribusiness management as a young discipline can

make itself unique by cultivating its own unique practices that are based on the needs of its

clientele.

We contend that quantitative agribusiness research is a practically oriented procedure and

analysis should make a distinction between economic and statistical significance, particularly

were the two are different in research findings. We also contend that research conclusions in

agribusiness management research should be based on economic significance. To this end, we

set to find out to what extent has agribusiness management research moved away from

traditional practices in statistics and economics and moved towards creating its own distinct set

of research methodologies and practices which aid in the growth of the discipline.

2. Conceptual Model Development

The research process in any field significantly contributes towards shaping the field. This

is as seen from publications of research in the field particularly from its leading journals and

intellects. We assume that such publications help shape the opinion of the discipline in as

much as they are contributed by individuals with pervasive and deep knowledge of the

discipline. Such publications also show how much a discipline is importing from other
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disciplines and how it is imparted in the development of the discipline. The conclusions drawn

from the researches as published help shape future research. This is true when leading

publications in the field are considered. Thus the leading publications in a discipline represent

an embodiment of accepted methodologies, practices, and research values in that discipline and

hence make up the right unit of analysis to evaluate methodological practices in the discipline.

One such a leading journal in Agribusiness management is Agribusiness, which “focuses on

the application of economic analysis to the organization and performance of firms and markets

in industrial food systems.” (http://www.wiley.com/WileyCDA/WileyTitle/productCd-

AGR.html). From this goal we can read that agribusiness management is a practically oriented

science hence its applied (economic) nature should feature in research findings.

A ‘mother’ discipline is a discipline that makes significant contributions to the emergence

of another discipline. For a while the young discipline (pre-science) is physically housed and

managed under the facilities of the mother discipline. Thus the influence of the ‘mother’

discipline has a significant impact on the formulation of the research methodologies and

practices of the young discipline. For agribusiness, the mother discipline is agricultural

economics. The two are close fields such that it is still arguable if agribusiness is not a mere

sub-discipline of agriculture economics. We assume that eventually agribusiness management

is going to be a separate discipline and we treat it as such despite its current dependence on

agricultural economics. The responsibility for the growth of the young discipline is not

dependent on the mother discipline only but other disciplines. In this case agribusiness

management also relies on strategic management, organizational management, and economics

among other contributing field.

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2.1 Review of the Literature

2.1.1 Paradigm Integration or Standalone

Having a paradigm is critical in the growth of a science. However, lack of consensus

among researchers on specific issues may call for further discussion in order to set the

discipline on a firm foundation (Harling, 1995). While arguing for a ‘fish-scale multi-science’

characterized by an interdisciplinary approach to learning and discovery, Baum and Dobbin

(2000) present that paradigm consensus among researchers improves their efficiency and

effectiveness and enables access to more resources as their efforts are spent in one accord.

Such consensus really matters when it comes to accepted practices, particularly in research

methodology.

Harling (1995) points to several areas that are still conflicting in agribusiness

management. There are differences among researchers from the definition of agribusiness

management, and its relationship with other contributing disciplines like strategic management

and economics. Another source of debate is the relationship between agribusiness

management and its apparent ‘mother’ discipline of agricultural economics on whether

agribusiness management is a sub-discipline of agricultural economics or a stand-alone

discipline. Such a debate, according to Kuhn (1977) is a characteristic of a pre-science and

will be solved as the science matures.

As a science mature, the consensus on pertinent issues is established and commonalities

become common. Given that agribusiness management is a young science that still imports a
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lot of its methodology from agricultural economics and economics, questions abound

concerning what role relevance plays in selecting what to import and impart in the field. How

much critique are methodologies and practices from ‘mother’ disciplines subjected to before

they are acceptable in a pre-science? Is there chance for the importation of controversies from

‘mother’ disciplines to agribusiness management? Answers to these questions are not readily

available. The reason is that there is already a lively debate on the direction pre-sciences

should take. Two schools of thoughts have emerged with contrasting views on the way to go

for pre-sciences to be established.

The first school argues that pre-sciences should come up with new paradigms that defines

them as stand-alone sciences instead of seeking legitimacy by conforming or integrating

mature sciences paradigms. In a case of strategic management, Markoczy and Deeds (2009)

argue that instead of the discipline focusing on trying to gain legitimacy from other disciplines

by going towards an integrated approach in its research agenda, it should instead focus into

developing its own theories that identify it. The Resource Based View (RBV) is presented as

one of such a theory that could be improved. Markoczy and Deeds (2009) cite (Pfeffer, 1993)

and argue that:

Successful researchers are not those who are able to come up with new
theories that fit the current fads and fashion, but rather those who address
theoretical problems that arise within the baseline theories or those who aim to
understand empirical trends and patterns that are widely known about, but not
yet understood theoretically within the discipline.
Such a position, if tenable would free pre-sciences from paradigm dependence and

importing of methodologies and practices. It would entail young sciences to come up with

their own set of practices that are relevant to their goals and objectives. The views of
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McCloskey and Ziliak regarding statistical and economic significance in economic analysis,

though focused on economics, inadvertently points to the risks associated with integration of

methodologies and procedures from ‘mother’ disciplines. It becomes even a bigger problem if

agribusiness management adopts theories, practices and methodologies from ‘mother’

disciplines without questioning their theoretical foundations.

Setting common research methodological practices will significantly contribute towards

advancing agribusiness as a separate field, distinct from other social sciences. Such

methodological practices like for any practically oriented science, must demonstrate their

ability to affect conduct of agribusinesses research. In setting such unique methodology and

procedures agribusiness management should worry of the challenges facing management

research as a field without ‘a common craft-skill and set of research procedures and practices’.

Whitley (1984) allude the lack of such a common set of craft skills in strategic management

research as caused by practitioners goals and perceptions directly entering into formulation of

research goals and evaluation criteria causing ‘low autonomy and low mutual dependence

among researchers’. Given that agribusiness management is younger than strategic

management, which has significantly matured and has set traditions over the years, these

challenges are not entirely insurmountable.

The second school of thought has advocated for pre-sciences to take a composite

approach in learning and developing. Baum and Dobbin (2000) propose a ‘fish-scale’ strategic

management discipline which means a discipline that successfully integrates and reconciles

otherwise contradictory paradigms from parent disciplines into one harmonious discipline.

Sonka and Hudson (1989) argue that agricultural economics is showing signs of moving away
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from being dependent on ‘orthodox’ economics as a theoretical foundation to integrate other

disciplines. This follows underlying concerns in agricultural economics that economic theory

is sacrificing relevance for abstract rigor. Mahoney and McGahan (2007) propose for an

interdisciplinary approach as a way to revitalize the strategic management field. It would be

interesting to find out if such multi-paradigm integration will result in assimilating of the

relevant components of a discipline and leave out the irrelevant. As we shall argue below the

concerns raised by McCloskey and Ziliak regarding the role of economic significance in

drawing research conclusions and recommendation are of critical importance to applied social

sciences like agribusiness management.

Views, opinions, perceptions, and definitions among disciplines differ significantly that

at times it is impossible to integrate different paradigms or disciplines. This is particularly true

when it comes to methodologies and practices from contributing disciplines. We call for a

critical review of methodologies and practices from ‘mother’ disciplines before they are used

in pre-sciences. Being critical and not just following the ‘fads and fashion’ of practices of

contributing disciplines will also help create a unique discipline as characterized by its

practices. The reason is methodologies and practices are mostly suitable to the objectives and

nature of research they are designed for. Outside those areas there may be need to improve, or

make some changes in both use and their interpretations. We present below the rather

controversial views of McCloskey and Ziliak and pick out the pertinent components for our

argument.
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2.1.2 McCloskey and Ziliak’s Case

For more than twenty years McCloskey and later on joined by Ziliak ‘in the early 1990s’

(McCloskey and Ziliak, 2008b) have been presenting arguments that have largely been

contrary to widely accepted methodologies and practices in economics. For the relevance of

this paper we have selected the following arguments that we find running through McCloskey

and Ziliak’s 2008 book, The Cult of Statistical Significance. The first argument is that

economists, mistake statistical significance for economic significance. The second one being

that economists have abdicated the responsibility of drawing conclusions (based on economic

significance) to statistical significant tests. The third argument (which is also closely linked to

the second) is that economists have not given adequate importance and validity to the

magnitude of the coefficient in statistical analysis. The last argument is that economists have

totally neglected the role of the loss function in analysis.

Like Hoover and Sigler (2008), we find the observation that economic significance is

different from statistical significance insipid. As such, we doubt if there is any economist who

does not know that difference despite McCloskey and Ziliak (1996) arguing that econometrics

textbooks largely do not have sections devoted to distinguishing the two. We believe

Professors of Econometrics teach this difference in class. We also do not believe using the

word “significance” ambiguously implies no difference between the two (McCloskey and

Ziliak, 1996, pp 109), as the relevant meaning of the word can be contextual. However, what

we find worth following up is weather economists and practitioners in pre-sciences that rely on

economics as a ‘mother’ discipline make this separation between statistical and economic

significance in drawing conclusions in publications. As Hoover and Sigler (2008) found out
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from papers published in the American Economic Review in McCloskey and Ziliak (1996)

sample, economists either implicitly or explicitly draw a difference between statistical and

economic significance in explaining results. However, could this be true to economists and

other practitioners in applied social sciences like agribusiness management?

The second argument by McCloskey and Ziliak (1996, 2004) is that conclusions in

economic publications are drawn largely based on statistical tests. McCloskey and Ziliak

(2004) write, “in the 1980s, 53% had relied exclusively on statistical significance as a criterion

of importance at its first use; in the 1990s 64% did”. However, it is true from a theoretical base

that statistical significance is neither necessary nor sufficient for a finding to be economically

important. In The Cult of statistical significance, pp. 23-32, McCloskey and Ziliak

convincingly argue that statistical significance is more a ‘precision’ measure than it is an

‘importance’ measure. Sterns, Schweikhardt and Peterson (1998) arguing for the case study as

a theory building research tool indicate that;

‘ significance even in a statistical sense is a relative term that must be

interpreted by the reader before findings can be interpreted or hypotheses
can be rejected. Manderscheid emphasizes that researchers need to clarify
the relation between statistical testing hypotheses and the actions that
follow these tests’.
As such, it is a mistake for conclusions and decisions to be entirely based on statistical

significance instead of economic significance.

The second argument tie in with the third argument, that the size of the coefficient (what

McCloskey and Ziliak call oomph!) is given very little consideration in reporting research

findings when it actually tells the practical or economic significance. According to McCloskey

and Ziliak (and too anyone else in applied social sciences) the magnitude of the coefficient
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matters. However, more often in economics publications, research findings are presented on

the basis of statistical significance. Variables are dropped or kept as long as they are

statistically significant in regressions. Even in cases where the variables are statistically

significant, the magnitude of their coefficients are hardly discussed and have little contribution

towards conclusions. It is very possible for a variable to be statistically significant, while the

value of its coefficient is very close to zero implying that the variable is economically

(practically) insignificant. In most publications, McCloskey argues, such a scenario plays no

part in the conclusion. Our objective is to find out, if agribusiness has gone against such a

practice and methodology and made a distinction between economic and statistical significance

as one way to distinguish itself from ‘mother’ disciplines.

The last argument we pick from McCloskey and Ziliak is whether the ‘power of the test’

is considered in economic publications. A key finding, 4.4% and 8% of American Economic

Review publications in 1996 and 2004 respectively considered the power of the test in their

analysis and reported on the type II error (McCloskey and Ziliak, 2004). The power of the test

is the probability that the test will find a statistically significant difference as a function of the

size of the true difference. In other words, the power of the test is the probability of detecting

an effect that actually exists. This interpretation should be appealing to a researcher, but is

rarely used judging from McCloskey and Ziliak’s findings. The power of the test is affected by

sample size, test size and the ‘true’ value. Despite, its appeal in the interpretation of results,

the use of power of the test is marginal. Park (2008) writes;

“It is neither always conceptually clear nor easy to put it into practice”.
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We present that the power of the test is critical and its importance should be felt in

publications within agribusiness. It would give results from statistical tests the sense of their

loss functions as such power of the test is a function of the preferred significance level or better

still the p-value. Given that significance level affects the probability of both type I and type II

error, Manderscheid recommends the need to “balance” the probability of type I and type II of

errors with economic and/or decision-theory criteria, “possibly using a loss-function

approach”.

2.2 Propositions

2.2.1 Objective of this study

The main objective of this study is to determine the extent to which agribusiness

scientists implicitly or explicitly make a distinction between statistical and economic

significance in research findings. We argue that drawing a distinction between the two in

interpretation will create uniqueness in agribusiness academic practice and improve the

development of the discipline. To achieve these broad objective specific hypotheses shall be

tested.

2.2.2 Hypotheses1

We hypothesize the following;

i. Research findings in agribusiness research are not interpreted in the context of

economic significance but statistical significance.

1
These hypotheses are not tested in the statistical sense, but are merely used as guidelines towards
achieving the paper’s objectives. They can alternatively be seen as answers to implicit research questions
which are in turn answered using largely qualitative analytical methods.
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ii. Interpretation of results in agribusiness research does not take into consideration the

magnitude of the coefficients but the sign of the coefficient.

iii. The power of statistical test is not considered in the interpretation of agribusiness

research findings.

3. Data and Methods

We are going to use a case study approach in this study. We conveniently sampled the

latest publication of the journal, Agribusiness Volume 26 Issue 2 (Spring 2010) from which we

read the seven included papers. The choice of the case study approach was mainly determined

by time constraints, as we would have preferred a multiple case study approach for several

issues of the Agribusiness Management Journals from various publishers to address

representativeness concerns. Each of the seven papers is read and is ‘asked’ these three

research questions:

1. Does the paper implicitly or explicitly mention economic significance in the

interpretation of results?

2. Does the paper interpret magnitude of coefficients as one way of appreciating

practical significance against economic significance?

3. Does the paper validate is statistical methods by use of the power of the test or

similar procedure?

A brief summary of the paper’s goals is presented as a description of the paper and the

methods used in achieving the objectives are presented. A citation of part of the results is
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given in some cases to support the research finding. After that each of the three questions are

answered. Cross comparison of the papers are done in the discussion part of the results before

conclusions are drawn.

4. Results and Discussion

4.1 Results

Bolotova, Y., C. S. McIntosh., P. E. Patterson., and K. Muthusamy. 2010. Is stabilization

of potato price effective? Empirical evidence from the Idaho Russet Burbank potato market,
Agribusiness 26(2): 177-201
In this paper, Bolotova et al (2010) study the effects of the potato supply management

program implemented by the United Potato Growers of Idaho on price stability and returns

before and after implementation of the supply management program. The supply management

program was implemented as a panacea to volatile prices and low producer prices. A

comprehensive background of the program is given and descriptive statistics of the prices

trends before and after the program is given. Finally, the authors run several autoregressive

conditional heteroscedasticity (ARCH) and generalized autoregressive conditional

heteroscedasticity (GARCH) models on the average and variance of the prices of potatoes with

dummy variables for the two periods. The paper explicitly mention type of statistical

significance in the interpretation of the results, hence there is no ambiguity between statistical

and economic significance. The magnitude (or ‘oomph’) of the coefficients is mentioned

however not very much interpreted to give it its clear economic meaning except for being

described as “higher in the cooperative period as compared to the pre-cooperative period”.

While there is mention of statistical significance in the presentation of results and tables, the
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conclusions drawn are based on the magnitude of average prices changes and price variances.

Thus in a way conclusions drawn are implicitly based on economic significance. The power of

the test is neither mentioned nor calculated in the methodology and interpretation of the results.

Zhang, Q., M. R. Reed., S. H. Saghaian. 2010. The impact of multiple volatilities on

import demand for U.S. commodities: the case of soybeans, Agribusiness 26(2): 202-219

This paper is a study of the effects of exchange rate, commodity price, and ocean freight

cost risks on import demand with forward-futures markets. The focus is on the exporting

countries, Brazil and the USA, and the importing countries, the EU, Japan, Taiwan, South

Korea, Indonesia, and Thailand in the panel analysis while exports to China and Mexico are

dealt with in separate models. The paper uses a version of Hooper and Kohlhagen (1978)’s

‘trade model which assumes the demand for commodity import is a derived demand’. The

paper presents a clear background of the econometric model used in the study. Results are

interpreted mainly based on statistical significance either implicitly or explicitly. The

presentation of results follows McCloskey and Ziliak’s typical “asterisk econometrics” in the

results Tables and “sign econometrics” as seen in the following paragraph,

The time trend is negative and statistically significant, while income is

negative and not statistically significant. The time trend shows that over
time, U.S. exports have diminished consistently and significantly. Even
though the United States is still the largest exporting country for soybeans,
South American soybean exports continue to gain market share relative to
the United States. Between the time trend and the income effect, it is clear
that the United States has been selling fewer soybeans as Brazil has
expanded its production capacity. Pp. 213.

The interpretation of all the results follows this format and it can be concluded that all the

interpretation is based on statistical significance not economic significance. There is

absolutely no mention of the coefficients magnitude, an indication that economic significance

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was not considered. Unsurprisingly, conclusions in the paper are drawn largely on the basis of

statistical significance. Typically, in such a trade related article economic significance is

expected to play a crucial role. For example, economic significance would be needed in

knowing at what oil price level Chinese firms will switch between Brazilian and USA sources

of soybeans. Interpretation of results as elasticities (own price, cross price, etc) was not done

as a way of presenting economic significance. And finally, the power of the test was not

calculated for the several models.

Bonanno A. 2010. An empirical investigation of Wal-Mart's expansion into food

retailing, Agribusiness 26(2): 220-242

This is the study of the determinants of Wal-Mart expansion into food retailing based on

the retailer’s store conversion strategy across all the USA. The study uses the industrial

organization entry literature to analyze variation in the number of conversions of former

Discount stores to Super Centers. The list of explanatory variables include county

characteristics, proximity to a food distribution center, lagged number of Wal-Mart retail stores

of both formats (Discount Stores and Supercenters) and their spatially weighted average of the

company’s stores operating in neighboring areas. An ordered-logit model is used to estimate

the odds of converting a discount store to a Super Centre. The interpretation of results cites

both statistical and coefficient magnitude. The inclusion coefficient magnitudes in the

interpretation can be an indication that the authors want to give an indication of the economic

significance of the results. Below is an example of a results paragraph from the paper,

The vital importance of the chain effect in the early years becomes
strikingly evident from the values of the odds ratios. Consider, for
example that at the beginning of a given year county i had no Supercenters
but at least one Discount Store, and that county j, located 50 miles from i
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was the only county in i’s proximity to host a Supercenter. Everything else
constant, in 1994, the odds of observing one or more store conversions in
county i would have been 7,716 times those of observing no store
conversions (385797.3/5057,715.946), in 1995 the odds would have been
35 times larger, and 9.55 times larger in 1996. As the geographic
concentration of Supercenters increases, the effect of one unit increase in
the spatially weighted average of Supercenters decreases, and the odds
ratios become smaller, although still indicating higher probabilities of
observing one or more store conversions than of observing none.
A key feature in the paper is that the results of models are validated using the Brant test.

Though it is not similar to the power of the test, the test is used to get more reliable results, and

in this case it is used to improve earlier results. Overall, the paper does not significantly rely

on statistical significance and implicitly draws conclusions based on economic significance.

The magnitude of econometric models coefficients are interpreted and there is very little “sign

econometrics”.

Barrena R., and M. Sánchez. 2010. The link between household structure and the level of
abstraction in the purchase decision process: an analysis using a functional food, Agribusiness
26(2): 243-264

The purpose of this study was to determine how far consumer values influence their

cognitive structure in functional foods purchase decisions. The study also further pursues a

question on how such a cognitive structure is affected by the presence of children in a

consumer households. The conceptual and analytical framework is based on the means-end

chain (MEC) theory. Data analysis is done using Laddering, which uses a series of progressive

questions that allow an interviewer to understand how a product’s attributes, the consequences

of using it, and the personal values it satisfies are linked together. Results are presented using

Hierarchical Value Map (HVM). These are not econometric techniques. As such no further

consideration is done for this paper because it does not fit well in this presentation.
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Herath, D, S. Henson. 2010. Barriers to HACCP implementation: evidence from the food
processing sector in Ontario, Canada, Agribusiness 26(2): 265-279

This study explores the barriers to the adoption of Hazard Analysis and Critical Control

Points (HACCP) by Agribusiness firms in Ontario, Canada. This is in response to the

realization that despite its several advantages, successful implementation of HACCP has been

limited, ‘with many food operators not embracing this system of process control with due

enthusiasm’. A binomial logistic regression model measuring the effect of firm endogenous

and exogenous factors on adoption of HACCP following a Principal Component Analysis of

20 firm-attributes influence adoption. Given that the 20 attributes were reduced to four factors

using principal component analysis, it left the values of the four factors with little economic

meaning but just mere index numbers. As such, the magnitude of the coefficients on these four

attributes carries no immediate economic meaning. To us this seems to be one situation were

‘sign econometrics’ can be practiced. Herath and Henson interpret the results on effect these

four factors on adoption on the basis of coefficient signs and statistical significance. However,

for factors other than the four factors from principal component analysis, Herath and Henson

present elasticity like interpretations like,

The results of the logit regression indicate that the most important driver of
the decision to implement HACCP is customer requirements for suppliers to
have HACCP. On average, there is a 58% (54% in Model 2) greater likelihood
of a firm having implemented HACCP if its customers require HACCP,
relative to firms whose customers do not require HACCP.

While the magnitude of coefficients are rightly cited in interpretation, in all the analysis

statistical significance overshadowed economic significance and conclusions are drawn on the

basis of statistical significance. There is also no consideration of the power of the test to

validate the statistical test procedures like the Wald test.

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Amadieu, P., and J. L. Viviani. 2010. Intangible effort and performance: the case of the
French wine industry, Agribusiness 26(2): 280-306

This study measures the intangible expenses and capital in small- and medium-sized

enterprises (SMEs), and investigates the impact of such intangible assets on firm performance

in the French wine industry. Intangible assets are characteristically unique to the firm,

inimitable and it is generally accepted that the more intangible assets the firm has, the greater is

its performance. In the Resource Based View framework, intangible assets imply a firm has

sustainable competitive advantage. Unfortunately, intangible assets are difficult to measure.

Several proxies based on marketing variables are used as indicators of intangible assets.

Multivariate analysis of variance and a Cobb-Douglas based production function are used to

evaluate the relationship between intangible assets and firm performance. Most of the

discussion of results is largely based on statistical significance and there is no implicit or

explicit mention of practical significance of differences between coefficients. The magnitudes

of coefficients are hardly mentioned, and emphasis is put on the sign of the coefficient as well

as p-values. There is no mention of the power of the test despite several statistical tests being

conducted.

Cranfield J., S. Henson, J. Northey, and O. Masakure. 2010. An assessment of consumer

preference for fair trade coffee in Toronto and Vancouver, Agribusiness 26(2): 307-325

This is a study of how consumer preferences of specific product attributes affect the

demand of final product. Several statistics and econometric tools are employed to achieve the

study’s objective. Conjoint analysis is used to determine how Canadian consumers of Fair

Trade coffee value different attributes that make up an individual coffee product. Later, cluster

analysis is used delimit consumer segments based on attitudes towards listed coffee products.
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Further multinomial probit analysis is used to assess factors influencing respondent’s

membership in a particular segment. The interpretation of results is in typical ‘sign

econometrics’ fashion which is compounded by ‘asterisk econometrics’ in the results tables.

Except for weight of attribute in the conjoint analysis which is given as a percentage, there is

no mention of the magnitude of the coefficient to at least attribute economic significance. The

paragraph below is an extract from the paper,

Subjects in this study have a preference for organically grown Fair Trade
coffee, as evidenced by the positive and significant part-worth utilities for the
organic attribute level for the whole sample, ….. With respect to the roast
attributes, part-worth utilities on the medium roast attribute are positive and
significant, whereas those on the dark roast are negative and significant. Pp.
314

Results are presented on the basis of statistical significance and there is neither

explicit nor implicit implication of economic significance. Like in most papers in this

volume the power of the test is not mentioned under the conjoint analysis results. This

style in results presentation is also present under the multinomial logit model results.

Results are interpreted on the basis of coefficients signs and statistical significance.

There is no mention of economic significance and all conclusions are based on statistical

significance.

4.2 Discussion

Table 1 is a summary of findings from the Agribusiness papers in volume 26 Issue

2. Economic significance and coefficients magnitude are discussed in two out of the six

considered paper. The rest present results on statistical significance and emphasizes

either the sign of the coefficient or the significance level. Only one paper did a validation
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of the statistical test albeit without using the power of the test. As such we fail to reject

any of the hypotheses.

While this research is very much restricted in making generalized statements

because of its small sample size, it has shown little difference in methodological practices

between agribusiness and one of its parent disciplines of economics. Discussion of

research results is concentrated on the sign of the coefficient and not its magnitude

though the later carries more economic meaning. Conclusions are largely drawn on the

basis of statistical significance which has taken the place of economic significance.

Despite the appeal of presenting economic and practical meaning given the objectives of

the study, most of the analysis gravitate towards ‘sign econometrics’ and statistical

significance, answers which do not respond to the ‘how much’ and ‘why’ questions of

real life. So with respect to McCloskey and Ziliak’s concerns, we conclude there may be

very little difference between economic methodological practices and agribusiness.

Agribusiness management, given its publications, may be importing practices that are not

very consistent with the expectation of its clientele, maybe as an immediate response to

the desire to gain legitimacy.

Table 2: Summary of findings

Does the paper consider….
Paper Economic Coefficients Power of
Significance? Magnitude? the test?
Bolotova et al (2010) Yes Yes NO
Zhang et al (2010) NO NO NO
Bonanno (2010) Yes Yes Yes
Barrena and Sánchez (2010) ----- ----- -----
Herath and. Henson (2010) NO NO NO
Amadieu and Viviani (2010) NO NO NO
Cranfield et al (2010) NO NO NO
 22

Table 1 also shows that power of the test is largely not art of the analysis in most

papers in the Agribusiness Issue of spring 2010 despite its appeal and meaning to an

applied field. Only the Bonanno (2010) paper considered something closer to the power

of the test to validate its result, but still that does not include the power of the test. A

cross-comparison of the results of the Bonanno (2010) paper and others that drew

conclusions on the basis of statistical significance and coefficients’ sign will reveal a

significant difference in how the Bonanno (2010) is more informative and has a distinct

appeal.

5. Conclusions

Agribusiness publications are likely to be following the practices in ‘mother’ disciplines.

This is an indication that the pre-science may not be questioning some of the methodological

practices in ‘mother’ disciplines despite the lack of economic appeal in some of them. The

concerns of McCloskey and Ziliak may not only be confined to the economics discipline but

young disciplines that rely on economics for paradigms, methodologies, and personnel. For

this single issue of Agribusiness, we have reviewed; we conclude that statistical significance is

more significant than economic significance in research publications despite the appeal of the

former in the goals of the same publication. Due to sample size limitation, we cannot

generalize our findings but recommend further research on the topic by increasing the same

size of publications and number of articles. It may also be necessary to carry out a survey on

publishers and editors of Agribusiness Management publications to find out if there are

guidelines for academics to follow when they present results.

 23

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