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On The Hidden Revenue Effects Of Wool Price Stabilisation In Australia: Initial Results

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  • Campbell, Rachel
  • Gardiner, B.
  • Haszler, Henry

Abstract

A preliminary analysis of demand in eight major OECD wool-consuming countries is used to provide up-to-date estimates of price elasticities of demand for wool. Those elasticities are employed to calculate ex ante market prices, assuming no wool price stabilisation in Australia. The computed ex ante prices are used in a dynamic simulation to estimate demand and, hence, revenue from wool sales to the eight countries in the absence of reserve price operations in Australia. Based on the preferred semi-log demand curve, the variability of wool prices is estimated to have been reduced by 44 per cent, due to Australian intervention in the market up to 1977/78. However, price stabilisation is estimated to have lowered the revenue from Australian wool sales to the eight countries by S139m, or by 2 per cent, in the period up to 1977/78.

Suggested Citation

  • Campbell, Rachel & Gardiner, B. & Haszler, Henry, 1980. "On The Hidden Revenue Effects Of Wool Price Stabilisation In Australia: Initial Results," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 24(1), pages 1-15, April.
    • Handle: RePEc:ags:ajaeau:23066
    DOI: 10.22004/ag.econ.23066
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    1. Myers, Robert J. & Piggott, Roley R. & Tomek, William G., 1990. "Estimating Sources Of Fluctuations In The Australian Wool Market: An Application Of Var Methods," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 34(3), pages 1-21, December.
    2. Edwards, Geoff W. & Freebairn, John W., 1982. "The Social Benefits from an Increase in Productivity in a Part of an Industry," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 50(02), pages 1-18, August.
    3. Richardson, Bob, 1982. "On The Hidden Revenue Effects Of Wool Price Stabilisation In Australia: Initial Results - A Comment," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 26(1), pages 1-3, April.
    4. Fisher, Brian S., 1985. "Frontiers in Agricultural Policy Research," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 53(02), pages 1-11, August.
    5. Watson, Alistair S., 1980. "Wool In 1980," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 24(2), pages 1-15, August.
    6. Henry Haszler & Geoff Edwards & Anthony Chisholm & Phillip Hone, 1996. "The Wool Debt, the Wool Stockpile and the National Interest: Did the Garnaut Committee Get it Right?," The Economic Record, The Economic Society of Australia, vol. 72(218), pages 260-271, September.
    7. Abbott, Malcolm, 2013. "Market support schemes and their interaction: the case of the wool industry," International Journal of Agricultural Sciences and Technology (IJAGST), SvedbergOpen, vol. 52(3), March.
    8. Geoff W. Edwards, 1987. "Agricultural Policy Debate: A Survey," The Economic Record, The Economic Society of Australia, vol. 63(2), pages 129-143, June.
    9. Fraser, Rob W., 2000. "An Economic Risk Assessment of the Impact on Producers of Removing Quarantine Restrictions," 2000 Conference (44th), January 23-25, 2000, Sydney, Australia 123647, Australian Agricultural and Resource Economics Society.
    10. Haynes, J.E., 1985. "Rural Assistance Levels: The Influence Of Policies And World Price Changes," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 29(1), pages 1-17, April.
    11. Hinchy, Mike & Simmons, Phil, 1983. "An Optimal-Control Approach To Stabilising Australian Wool Prices," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 27(1), pages 1-29, April.
    12. John D. Mullen & Julian M. Alston & Michael K. Wohlgenant, 1989. "The Impact Of Farm And Processing Research On The Australian Wool Industry," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 33(1), pages 32-47, April.
    13. Haszler, Henry & Curran, Bill, 1982. "On The Hidden Revenue Effects Of Wool Price Stabilisation In Australia: Initial Results- A Reply," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 26(1), pages 1-6, April.
    14. Fraser, R.W. & Murrell, A.J., 1990. "The Australian Wool Corporation's Reserve Price Scheme: An Assessment of Price Stabilisation and Producer Benefits," Discussion Papers 232295, University of Western Australia, School of Agricultural and Resource Economics.
    15. John C. Quiggin, 1983. "Wool Price Stabilisation And Profit Risk For Wool Users," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 27(1), pages 31-43, April.
    16. Kingma, Onko Tjerek & Longmire, James L. & Stoeckel, Andrew B., 1980. "A Review Of Three Research Programs In Quantitative Modelling In The Bureau Of Agricultural Economics," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 24(3), pages 1-24, December.

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    Demand and Price Analysis; Marketing;

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