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Estimating the social welfare effects of New Zealand apple imports

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  • Cook, David
  • Carrasco, Luis Roman
  • Paini, Dean
  • Fraser, Rob

Abstract

International trade of agricultural products not only generates wealth but is also responsible for the introduction of invasive pests beyond their natural range. Comprehensive bioeconomic modelling frameworks are increasingly needed to assist in the resolution of import access disputes. However, frameworks that combine welfare analysis attributable to trade and invasive species spread management are lacking. This study provides a demonstration of how a comprehensive economic framework, which takes into account both the gains from trade and the costs of invasive species outbreaks, can inform decision-makers when making quarantine decisions. We develop a partial equilibrium trade model considering international trade and combine it with a stratified dispersal model for the spread and management of potential outbreaks of an invasive species. An empirical estimation is made of the economic welfare consequences for Australia of allowing quarantine-restricted trade in New Zealand apples to take place. The results suggest the returns to Australian society from importing New Zealand apples are likely to be negative. The price differential between the landed product with SPS measures in place and the autarkic price is insufficient to outweigh the increase in expected damage resulting from increased fire blight risk. As a consequence, this empirical analysis does not support the opening up of this trade.

Suggested Citation

  • Cook, David & Carrasco, Luis Roman & Paini, Dean & Fraser, Rob, 2011. "Estimating the social welfare effects of New Zealand apple imports," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(4), pages 1-22.
    • Handle: RePEc:ags:aareaj:197006
    DOI: 10.22004/ag.econ.197006
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    2. Cook, David C. & Fraser, Rob W. & Weinert, Andrew S., 2013. "An Example of How Chemical Regulation is Affecting Biosecurity Policy-Making: Mediterranean Fruit Fly in Western Australia," 2013 Conference (57th), February 5-8, 2013, Sydney, Australia 152142, Australian Agricultural and Resource Economics Society.
    3. David Cook & Jean-Philippe Aurambout & Oscar Villalta & Shuang Liu & Jacqueline Edwards & Savi Maharaj, 2016. "A bio-economic ‘war game’ model to simulate plant disease incursions and test response strategies at the landscape scale," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 8(1), pages 37-48, February.
    4. Yangyuyu Luo & Sayeeda Bano, 2020. "Modelling New Zealand dairy products: evidence on export survival and duration," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(3), pages 605-631, July.
    5. Kenneth R. Szulczyk, 2023. "Estimating the economic costs and mitigation of rice blast infecting the Malaysian paddy fields," SN Business & Economics, Springer, vol. 3(1), pages 1-21, January.
    6. Krishna P. Timsina & Richard J. Culas, 2020. "Impacts of Australia’s free trade agreements on trade in agricultural products: an aggregative and disaggregative analysis," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(3), pages 889-919, July.
    7. Olaniyi, Oladokun Nafiu & Szulczyk, Kenneth R., 2020. "Estimating the economic damage and treatment cost of basal stem rot striking the Malaysian oil palms," Forest Policy and Economics, Elsevier, vol. 116(C).
    8. David C. Cook & Jean-Philippe Aurambout & Oscar N. Villalta & Shuang Liu & Jacqueline Edwards & Savi Maharaj, 2016. "A bio-economic ‘war game’ model to simulate plant disease incursions and test response strategies at the landscape scale," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 8(1), pages 37-48, February.
    9. Sayeeda Bano & Frank Scrimgeour, 2017. "New Zealand and Indian Trade in Agricultural and Manufactured Products: An Empirical Analysis," Working Papers in Economics 17/26, University of Waikato.

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