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

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Author Info
Fraser, R.

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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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Publisher 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;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Alston, J.M. & Quilkey, J.J., 1980. "Insurance Milk," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 24(03), December. [Downloadable!]
  2. Alston, J.M. & Freebairn, J.W., 1988. "Producer Price Equalization," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 56(03), December. [Downloadable!]
  3. Fraser, R W, 1986. "Uncertainty and Production Quotas," The Economic Record, The Economic Society of Australia, vol. 62(178), pages 338-42, September.
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