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A Note: A Clarification Of The Role Of Yield Uncertainty In Influencing Over-Quota Production

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  • Fraser, Rob W.

Abstract

The literature shows that the influence of yield uncertainty on production relative to quota is ambiguous in the case of a single market. This paper uses a two-market framework (quota market and secondary market) with multiplicative yield uncertainty to show that if over-quota production in the absence of yield uncertainty is profitable, then the presence of yield uncertainty is unambiguously a further stimulus to over-quota production. The analysis is discussed in the context of recent changes to the marketing arrangements for Western Australian potatoes.

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Bibliographic Info

Article provided by Australian Agricultural and Resource Economics Society in its journal Australian Journal of Agricultural Economics.

Volume (Year): 39 (1995)
Issue (Month): 02 (August)
Pages:

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Handle: RePEc:ags:ajaeau:22402

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Keywords: Production Economics;

References

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  1. 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), December.
  2. 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.
  3. Fraser, R W, 1986. "Uncertainty and Production Quotas," The Economic Record, The Economic Society of Australia, vol. 62(178), pages 338-42, September.
  4. 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, 06.
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Cited by:
  1. Hennessy, David A. & Wei, W., 2000. "Decisions and Tradeable Production Quota When Yield is Uncertain," Staff General Research Papers 1701, Iowa State University, Department of Economics.

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