IDEAS home Printed from https://ideas.repec.org/a/bla/ecorec/v62y1986i3p338-342.html
   My bibliography  Save this article

Uncertainty and Production Quotas

Author

Listed:
  • R. W. FRASER

Abstract

This paper examines the role of uncertainty in determining the impact of production quotas on a risk‐neutral producer's behaviour In the context of production uncertainty the introduction of a quota will lead to a reduction in planned production. Moreover, in a situation of an established quota, the level of planned production relative to the quota depends both on the size of the profit margin on quota production and on the extent of production uncertainty. Apart from these direct influences, uncertainty influences planned production indirectly in a situation where over‐quota production can be sold in an uncertain export market. The direction of this influence depends on the relationship between the producer's uncertainties of price and production. It is argued, therefore, that the welfare assessment of the impact of production quotas must incorporate the role of uncertainty.

Suggested Citation

  • R. W. Fraser, 1986. "Uncertainty and Production Quotas," The Economic Record, The Economic Society of Australia, vol. 62(3), pages 338-342, September.
    • Handle: RePEc:bla:ecorec:v:62:y:1986:i:3:p:338-342
    DOI: 10.1111/j.1475-4932.1986.tb02692.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1475-4932.1986.tb02692.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1475-4932.1986.tb02692.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. R. M. Parish, 1962. "The Costs Of Protecting The Dairying Industry," The Economic Record, The Economic Society of Australia, vol. 38(82), pages 167-182, June.
    2. Ravi Kanbur, S. M., 1982. "Increases in risk with kinked payoff functions," Journal of Economic Theory, Elsevier, vol. 27(1), pages 219-228, June.
    3. repec:bla:ecorec:v:59:y:1983:i:167:p:365-74 is not listed on IDEAS
    4. R. W. Fraser & R. J. Van Noorden, 1983. "Extraction of an Exhaustible Resource: The Effects on Investment of Several Parameters Being Subject to Uncertainty," The Economic Record, The Economic Society of Australia, vol. 59(4), pages 365-374, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hennessy, David A. & Wei, Wei, 2000. "Decisions and tradable production quota when yield is uncertain," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 44(2), pages 1-15.
    2. 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.
    3. Lindner, R.K., 1990. "Tradeable Discharge Permits as Output Quotas," Discussion Papers 232308, University of Western Australia, School of Agricultural and Resource Economics.
    4. Lindner, Robert K., 1990. "Something Fishy in the ITQ Market," 1990 Conference (34th), February 13-15, 1990, Brisbane, Australia 145199, Australian Agricultural and Resource Economics Society.
    5. Ben Groom & Phoebe Koundouri & Celine Nauges & Alban Thomas, 2003. "Irrigation water management under risk: An application to Cyprus," DEOS Working Papers 0306, Athens University of Economics and Business.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rob Fraser, 1993. "On the Neutrality of the Resource Rent Tax," The Economic Record, The Economic Society of Australia, vol. 69(1), pages 56-60, March.
    2. Balagtas, Joseph Valdes & Sumner, Daniel A., 2004. "Milk Marketing Orders And Milk Sanitation Regulation: Re-Evaulating Marketing Orders' Welfare Effects," 2004 Annual meeting, August 1-4, Denver, CO 20399, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. 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.
    4. Freebairn, John W., 1992. "Dairy Industry Policy," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 60(01), pages 1-19, April.
    5. B. R. Parmenter & D. Sams & D. P. Vincent, 1981. "Who Pays for Home Consumption Pricing Schemes?," The Economic Record, The Economic Society of Australia, vol. 57(2), pages 168-179, June.
    6. Godden, David P. & Drane, F.H., 1978. "Selective underwriting v. a market share entitlement scheme for the Australian dairy industry," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 46(03), pages 1-7, December.
    7. Freebairn, John W. & Gruen, Fred H.G., 1977. "Marketing Australian Beef And Export Diversification Schemes," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 21(1), pages 1-14, April.
    8. Fred Schroyen & Adekola Oyenuga, 2011. "Optimal pricing and capacity choice for a public service under risk of interruption," Journal of Regulatory Economics, Springer, vol. 39(3), pages 252-272, June.
    9. Beck, Anthony C., 1974. "The Social Cost On Production Control In The Australian Egg Industry," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 42(04), pages 1-17, December.
    10. Freebairn, John W., 1992. "Evaluating The Level And Distribution Of Benefits From Dairy Industry Research," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 36(2), pages 1-25, August.
    11. Demers, Fanny S. & Demers, Michel, 1994. "Prudence, demand uncertainty background risk and the law of supply : anonexpected utility approach to the firm," CEPREMAP Working Papers (Couverture Orange) 9425, CEPREMAP.
    12. Ryan, James G., 1975. "Using Input Demand And Production Function Models To Assess The Net Benefits Of Dairy Herd Improvement," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 19(1), pages 1-16, April.
    13. Vere, David T. & Sinden, Jack A. & Campbell, M.H., 1980. "Social Benefits of Serrated Tussock Control in New South Wales," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 56(03), pages 1-16, December.
    14. Jorge Ibarra-Salazar, 2005. "The Newsboy Model: Changes in Risk and Price," The Geneva Papers on Risk and Insurance Theory, Springer;International Association for the Study of Insurance Economics (The Geneva Association), vol. 30(1), pages 99-109, June.
    15. Julian M. Alston & John J. Quilkey, 1980. "Insurance Milk," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 24(3), pages 283-290, December.
    16. Machina, Mark J, 2001. "Payoff Kinks in Preferences over Lotteries," Journal of Risk and Uncertainty, Springer, vol. 23(3), pages 207-260, November.
    17. 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.
    18. 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.
    19. R.W. Fraser, 1984. "Unreliable Markets and Perishable Products," Economics Discussion / Working Papers 84-11, The University of Western Australia, Department of Economics.
    20. Rob Fraser, 1995. "An Analysis Of The Role Of Uncertainty In The Marketing Of Perishable Products," Journal of Agricultural Economics, Wiley Blackwell, vol. 46(2), pages 233-240, May.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ecorec:v:62:y:1986:i:3:p:338-342. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/esausea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.