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Who Gains from Australian Generic Wine R&D and Promotion?

Author

Listed:
  • Xueyan Zhao

    (Monash University, Clayton, Australia)

  • Kym Anderson

    (School of Economics, University of Adelaide, Australia)

  • Glyn Wittwer

    (Monash University, Clayton, Australia)

Abstract

A multi-sectoral partial equilibrium model of the markets for two types of Australian grapes and wine (premium and non-premium) is developed to study the aggregate returns from different types of research and promotion investments by the industry and their distribution across actors in the market (grapegrowers, winemakers, wholesalers/retailers, domestic consumers, the tax office and foreign consumers). The distinction is made between premium and non-premium, since half the market is non-premium and yet virtually all the R&D and marketing efforts are focused on just premium products in an attempt to raise quality as consumers continue to move upmarket. The results show that most of the gains from cost-reducing R&D go to producers, with wineries faring better than grapegrowers; that producers get a far larger share of the benefit from promotion when it is targeted abroad than when it focuses on domestic consumers; and that foreign consumers of Australian wine enjoy a small share of the benefits.

Suggested Citation

  • Xueyan Zhao & Kym Anderson & Glyn Wittwer, 2002. "Who Gains from Australian Generic Wine R&D and Promotion?," Centre for International Economic Studies Working Papers 2002-04, University of Adelaide, Centre for International Economic Studies.
    • Handle: RePEc:adl:cieswp:2002-04
    as

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    File URL: http://www.adelaide.edu.au/cies/papers/0204.pdf
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    References listed on IDEAS

    as
    1. Kym Anderson & David Norman & Glyn Wittwer, 2019. "Globalisation of the World’s Wine Markets," World Scientific Book Chapters, in: Kym Anderson (ed.), The International Economics of Wine, chapter 2, pages 27-50, World Scientific Publishing Co. Pte. Ltd..
    2. Zhao, Xueyan & Griffiths, William E. & Griffith, Garry R. & Mullen, John D., 2000. "Probability distributions for economic surplus changes: the case of technical change in the Australian wool industry," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 44(1), pages 1-24.
    3. Xueyan Zhao & John D. Mullen & Gary R. Griffith, 1997. "Functional Forms, Exogenous Shifts, and Economic Surplus Changes," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(4), pages 1243-1251.
    4. William Griffiths & Xueyan Zhao, 2000. "A Unified Approach to Sensitivity Analysis in Equilibrium Displacement Models: Comment," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(1), pages 236-240.
    5. Michael K. Wohlgenant, 1993. "Distribution of Gains from Research and Promotion in Multi-Stage Production Systems: The Case of the U.S. Beef and Pork Industries," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(3), pages 642-651.
    6. Glyn Wittwer & Kym Anderson, 2019. "Impact of the GST and Wine Tax Reform on Australia’s Wine Industry: A CGE Analysis," World Scientific Book Chapters, in: Kym Anderson (ed.), The International Economics of Wine, chapter 17, pages 415-435, World Scientific Publishing Co. Pte. Ltd..
    7. Zhao, Xueyan & Griffith, Garry R. & Mullen, John D., 2000. "Returns to New Technologies in the Australian Beef Industry: On-farm Research versus Off-farm Research," 2000 Conference (44th), January 23-25, 2000, Sydney, Australia 123749, Australian Agricultural and Resource Economics Society.
    8. Glyn Wittwer & Nick Berger & Kym Anderson, 2019. "A Model of the World’s Wine Markets," World Scientific Book Chapters, in: Kym Anderson (ed.), The International Economics of Wine, chapter 1, pages 3-26, World Scientific Publishing Co. Pte. Ltd..
    9. Scobie, Grant M. & Mullen, John D. & Alston, Julian M., 1990. "The Returns to Farm R&D in the Australian Wool Industry," 1990 Conference (34th), February 13-15, 1990, Brisbane, Australia 145392, Australian Agricultural and Resource Economics Society.
    10. J. W. Freebairn & J. S. Davis & G. W. Edwards, 1982. "Distribution of Research Gains in Multistage Production Systems," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 64(1), pages 39-46.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Li, Kuo & Malcolm, Bill & Griffith, Garry & Kingwell, Ross, 2022. "A Model of the Southern Australian Grains Industry," Australasian Agribusiness Review, University of Melbourne, Department of Agriculture and Food Systems, vol. 30(2), April.
    2. Ambarawati, I Gusti Agung Ayu & Zhao, Xueyan & Griffith, Garry R. & Piggott, Roley R., 2003. "Distribution of Gains from Cattle Development in a Multi-Stage Production System: The Case of the Bali Beef Industry," 2003 Conference (47th), February 12-14, 2003, Fremantle, Australia 57829, Australian Agricultural and Resource Economics Society.
    3. James, Jennifer S. & Alston, Julian M., 2002. "Taxes and quality: A market-level analysis," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 46(3), pages 1-29.
    4. Xueyan Zhao, 2003. "Who bears the burden and who receives the gain?-The case of GWRDC R&D investments in the Australian grape and wine industry," Agribusiness, John Wiley & Sons, Ltd., vol. 19(3), pages 355-366.
    5. Rohr, Sarah & Mounter, Stuart & Baker, Derek & Godden, David, 2022. "The Distribution of Gains from Investments in the Australian Apple Industry: Projections Using an Equilibrium Displacement Model," Australasian Agribusiness Review, University of Melbourne, Department of Agriculture and Food Systems, vol. 30(4), October.
    6. Bullock, David S. & Salhofer, Klaus, 2003. "Judging agricultural policies: a survey," Agricultural Economics, Blackwell, vol. 28(3), pages 225-243, May.
    7. Li, Kuo & Griffith, Garry & Kingwell, Ross & Malcolm, Bill, 2017. "Measuring the Returns to Investment in Research and Development in the Australian Grains Industry," 2017 Conference (61st), February 7-10, 2017, Brisbane, Australia 258674, Australian Agricultural and Resource Economics Society.

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    More about this item

    Keywords

    Economics of R&D; Promotion; Wine; Equilibrium displacement modelling;
    All these keywords.

    JEL classification:

    • C69 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Other
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services

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