IDEAS home Printed from https://ideas.repec.org/a/kap/atlecj/v30y2002i4p403-413.html
   My bibliography  Save this article

A comparison of rents and producer surplus when industry input supply functions are interdependent

Author

Listed:
  • Gregg Frasco

Abstract

The concept of producer surplus is used quite often in conventional welfare analyses. In the long run, producer surplus has no meaning unless it reflects the sum of the rents paid to factors of production. This paper demonstrates that if industry input supply functions are interdependent, then producer surplus is not equal to the sum of the rents. Furthermore, the size of the difference between producer surplus and rents can be made indefinitely large by appropriate choices of values for the relevant parameters, such as the price of output, production function parameters, the slopes of the industry input supply curves, and the degree of interdependence between input supplies. Copyright International Atlantic Economic Society 2002

Suggested Citation

  • Gregg Frasco, 2002. "A comparison of rents and producer surplus when industry input supply functions are interdependent," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 30(4), pages 403-413, December.
    • Handle: RePEc:kap:atlecj:v:30:y:2002:i:4:p:403-413
    DOI: 10.1007/BF02298783
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/BF02298783
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/BF02298783?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
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. repec:bla:ecorec:v:73:y:1997:i:221:p:146-58 is not listed on IDEAS
    2. Keith O. Fuglie, 1995. "Measuring Welfare Benefits from Improvements in Storage Technology with an Application to Tunisian Potatoes," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(1), pages 162-173.
    3. Gregg Frasco & Chulho Jung, 2001. "When producer surplus underestimates rents," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 29(4), pages 393-405, December.
    4. Bruce A. Babcock & William E. Foster, 1992. "Economic Rents Under Supply Controls with Marketable Quota," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(3), pages 630-637.
    5. Constantine, John H & Alston, Julian M & Smith, Vincent H, 1994. "Economic Impacts of the California One-Variety Cotton Law," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 951-974, October.
    6. Will Martin & Julian M. Alston, 1997. "Producer Surplus without Apology? Evaluating Investments in RD," The Economic Record, The Economic Society of Australia, vol. 73(221), pages 146-158, June.
    7. Robert E. Kohn, 1988. "The HQ Production Function," The Economic Record, The Economic Society of Australia, vol. 64(2), pages 133-135, June.
    8. Kalt, Joseph P., 1989. "Exhaustible resource price policy, international trade, and intertemporal welfare," Journal of Environmental Economics and Management, Elsevier, vol. 17(2), pages 109-126, September.
    9. repec:bla:ecorec:v:64:y:1988:i:185:p:133-35 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    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. Gregg Frasco & Chulho Jung, 2001. "When producer surplus underestimates rents," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 29(4), pages 393-405, December.
    2. Bullock, David S. & Dadakas, Dimitrios & Katranidis, Stelios D., 2009. "Measuring the Effects of Technology Change in Multiple Markets : Application to the Greek Cotton Yarn Industry," MPRA Paper 67204, University Library of Munich, Germany, revised 2012.
    3. Raper, Kellie Curry & Love, H. Alan, 1999. "MONOPSONY POWER IN MULTIPLE INPUT MARKETS: A Nonparametric Approach," Staff Paper Series 11656, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    4. Alston, Julian M. & Freebairn, John W. & James, Jennifer S., 2004. "Levy-funded research choices by producers and society," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 48(1), pages 1-32.
    5. Laborde, David & Mamun, Abdullah & Martin, Will & Pineiro, Valeria & Vos, Rob, 2020. "Modeling the Impacts of Agricultural Support Policies on Emissions from Agriculture," Conference papers 333141, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    6. Louis-Pascal Mahé & Carole Ropars, 1998. "Régulation de l'exploitation d'une ressource renouvelable : inefficacité d'un rationnement d'input et efficacité des quotas individuels transférables (QIT)," Post-Print hal-02349927, HAL.
    7. Wright, Brian D., 1996. "Crop genetic resource policy: towards a research agenda," EPTD discussion papers 19, International Food Policy Research Institute (IFPRI).
    8. Sckokai, Paolo, 2001. "The Common Agricultural Policy In Econometric Models," Working Papers 14800, National Institute of Agricultural Economics, Italy - INEA, Osservatorio Sulle Politiche Agricole dell'UE.
    9. Tiffany Shih & Brian Wright, 2011. "Agricultural Innovation," NBER Chapters, in: Accelerating Energy Innovation: Insights from Multiple Sectors, pages 49-85, National Bureau of Economic Research, Inc.
    10. Martin, William J., 2013. "Productivity Growth, Trade & Poverty," 2013: Productivity and Its Impacts on Global Trade, June 2-4, 2013. Seville, Spain 152395, International Agricultural Trade Research Consortium.
    11. Pavel Ciaian & d’Artis Kancs & Johan Swinnen, 2010. "EU Land Markets and the Common Agricultural Policy," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 53(3), pages 1-31.
    12. Strappazzon, Loris & Eigenraam, Mark & Wimalasuriya, Rukman & Stoneham, Gary, 2002. "Estimating Research Benefits When there is Input and Output Substitution: An Applied Analysis," 2002 Conference (46th), February 13-15, 2002, Canberra, Australia 125167, Australian Agricultural and Resource Economics Society.
    13. Foster, William E. & Babcock, Bruce A., 1993. "Commodity Policy, Price Incentives, and the Growth in Per-Acre Yields," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 25(1), pages 253-265, July.
    14. Hahn, Robert W., 2000. "The Impact of Economics on Environmental Policy," Journal of Environmental Economics and Management, Elsevier, vol. 39(3), pages 375-399, May.
    15. Rucker, Randal R & Thurman, Walter N & Sumner, Daniel A, 1995. "Restricting the Market for Quota: An Analysis of Tobacco Production Rights with Corroboration from Congressional Testimony," Journal of Political Economy, University of Chicago Press, vol. 103(1), pages 142-175, February.
    16. Pavel Ciaian & d'Artis Kancs & Jo Swinnen, 2008. "Static and Dynamic Distributional Effects of Decoupled Payments," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 51(2), pages 20-47.
    17. Templeton, Deborah J. & Griffith, Garry R. & Piggott, Roley R. & O'Donnell, Christopher J., 2004. "Measuring the Impact of Staple Strength-Enhancing Technologies on Australian Wool Producer Profits: A Duality-Based Approach," Working Papers 12922, University of New England, School of Economics.
    18. Philip G. Pardey & Julian M. Alston & Connie Chan-Kang & Eduardo C. Magalhães & Stephen A. Vosti, 2006. "International and Institutional R&D Spillovers: Attribution of Benefits among Sources for Brazil's New Crop Varieties," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(1), pages 104-123.
    19. Will Martin, 2002. "Outgrowing Resource Dependence: Theory and Evidence," Working Papers Central Bank of Chile 143, Central Bank of Chile.
    20. Minten, Bart & Reardon, Thomas & Singh, K.M. & Sutradhar, Rajib, 2010. "The benefit of cold storages: Evidence from Bihar," MPRA Paper 54345, University Library of Munich, Germany, revised 14 Dec 2010.

    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:kap:atlecj:v:30:y:2002:i:4:p:403-413. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.