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Declining U.S. Tobacco Exports to Australia: A Derived Demand Approach to Competitiveness

Author

Listed:
  • Beghin, John C.
  • Hu, Fan

Abstract

The loss of competitiveness of U.S. tobacco leaf exports to Australia is empirically investigated, using industry-level time-series market data. Tobacco-relative prices, market structure, scale, Australian market distortions, and changing characteristics of cigarettes are accounted for in the investigation. A decomposition analysis reveals that a switch to lighter cigarettes and changes in the Australian domestic tobacco content policy are the major contributors to the decline of U.S. tobacco exports. Tobacco price differences between the U.S. and its competitors, alone, cannot explain the loss of competitiveness of U.S. tobacco in Australian cigarette manufacturing.

Suggested Citation

  • Beghin, John C. & Hu, Fan, 1995. "Declining U.S. Tobacco Exports to Australia: A Derived Demand Approach to Competitiveness," Staff General Research Papers Archive 1606, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genres:1606
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    Cited by:

    1. Beghin, John C. & Blake Brown, A. & Hasyim Zaini, M., 1997. "Impact of domestic content requirement on the US tobacco and cigarette industries," Agricultural Economics, Blackwell, vol. 15(3), pages 201-212, January.

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