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Producer Price Equalization

Author

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  • Alston, Julian M.
  • Freebairn, John W.

Abstract

Most previous studies of home consumption pricing and producer price equalisation schemes have concentrated on static economic surplus effects under an assumption of a perfectly elastic export demand. This paper compares the effects of different types of producer price equalisation schemes with free trade in the wheat, milk and egg industries allowing for a downward sloping export demand. Average values and variances of prices, quantities, revenues, and economic surplus measures are estimated for each policy in a simulation model allowing a range of values for elasticities of supply and demand, market shares, and variability of supply and export demand. The stabilisation effects of equalisation schemes are evaluated using these estimates.

Suggested Citation

  • Alston, Julian M. & Freebairn, John W., 1988. "Producer Price Equalization," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 56(03), pages 1-34, December.
    • Handle: RePEc:ags:remaae:12270
    DOI: 10.22004/ag.econ.12270
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    References listed on IDEAS

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    7. Alex F. McCalla, 1966. "A Duopoly Model of World Wheat Pricing," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 48(3_Part_I), pages 711-727.
    8. Cronin, M.R., 1979. "Export Demand Elasticities With Less Than Perfect Markets," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 23(1), pages 1-4, April.
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    10. Longworth, John W., 1967. "The Stabilization And Distribution Effects Of The Australian Wheat Industry Stabilization Scheme," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 11(1), pages 1-16, June.
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    Cited by:

    1. Alston, Julian M. & Gray, Richard S., 2000. "State Trading Versus Export Subsidies: The Case Of Canadian Wheat," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(1), pages 1-17, July.
    2. Freebairn, John W. & Alston, Julian M., 2001. "Generic advertising without supply control: implications of funding mechanisms for advertising intensities in competitive industries," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 45(1), pages 1-29.
    3. Martin, S.K. & Zwart, A.C., 1987. "Marketing Agencies And The Economics Of Market Segmentation," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 31(3), pages 1-14, December.
    4. Alson, Julian M. & Hurd, Brian R., 1988. "The Hidden Social Costs Of Government Spending In Farm Programs," Working Papers 225823, University of California, Davis, Department of Agricultural and Resource Economics.
    5. Fraser, Rob W., 1995. "A Note: A Clarification Of The Role Of Yield Uncertainty In Influencing Over-Quota Production," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 39(2), pages 1-5, August.

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    Keywords

    Agribusiness; Consumer/Household Economics;

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