Producer Price Equalization

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.

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Journal Article
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Review of Marketing and Agricultural Economics, 56, 03
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 Record created 2017-04-01, last modified 2018-11-28

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