IDEAS home Printed from https://ideas.repec.org/a/ags/remaae/9120.html
   My bibliography  Save this article

Supply And Demand Stabilization And Economic Welfare In Agriculture: Some Dynamic Considerations

Author

Listed:
  • Wolanowski, A.M.
  • Strong, S.M.

Abstract

Much previous work on agricultural stabilization has emphasized price stabilization. Stabilization is given a different meaning here. Additive error terms are attached to linear supply and demand functions, and the effects on consumers' and producers' surpluses of reducing these error terms are studied. That is, the error terms are assumed to have their variances reduced, and the expected values of the surpluses are derived and compared with their expected values corresponding to the original error term variances. The results are not favourable, and suggest that, with the particular criterion used here, stabilization of supply and demand functions is not as desirable as generally believed. Further results, allowing for shifts in the functions and the introduction of risk aversion are less unequivocal, and require empirical knowledge for conclusions to be reached.

Suggested Citation

  • Wolanowski, A.M. & Strong, S.M., 1977. "Supply And Demand Stabilization And Economic Welfare In Agriculture: Some Dynamic Considerations," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 45(03), pages 1-9, September.
    • Handle: RePEc:ags:remaae:9120
    DOI: 10.22004/ag.econ.9120
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/9120/files/45030071.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.9120?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. James P. Houck, 1974. "Some Economic Aspects of Agricultural Regulation and Stabilization," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 56(5), pages 1113-1124.
    2. Stephen J. Turnovsky, 1974. "Price Expectations and the Welfare Gains from Price Stabilization," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 56(4), pages 706-716.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ray, Daryll E. & Richardson, James W. & Collins, Glenn S., 1975. "A Simulation Analysis of a Reserve Stock Management Policy for Feed Grains and Wheat," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 7(1), pages 81-87, July.
    2. Fertő, Imre, 1995. "A mezőgazdasági árak stabilizálásának problémáiról [On the problems of stabilizing agricultural prices]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(3), pages 256-269.
    3. repec:dau:papers:123456789/5384 is not listed on IDEAS
    4. Elodie Maître d'Hôtel & Tristan Le Cotty & Thom Jayne, 2013. "Trade Policy Inconsistency and Maize Price Volatility: An ARCH Approach in Kenya," African Development Review, African Development Bank, vol. 25(4), pages 607-620, December.
    5. Bigman, David, 1982. "Buffer stocks operation with different supply specification: A simulation analysis," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 24(1), pages 77-87.
    6. Schrader, J.-V., 1976. "Stabilisierungspolitik im Hinblick auf den Milch- und Rindfleischmarkt," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 13.
    7. Freebairn, John W., 1976. "Welfare Implications Of More Accurate Rational Forecast Prices," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 20(2), pages 1-11, August.
    8. Jesse, Edward V., 1979. "Social Welfare Implications of Federal Marketing Orders for Fruits and Vegetables," Technical Bulletins 157853, United States Department of Agriculture, Economic Research Service.
    9. Subotnik, Abraham & Houck, James P., 1975. "An Economic Analysis Of Stabilizing Schemes," Staff Papers 13643, University of Minnesota, Department of Applied Economics.
    10. Creti, Anna & Villeneuve, Bertrand, 2008. "Equilibrium Storage in a Markov Economy," MPRA Paper 11944, University Library of Munich, Germany.
    11. Anna Creti & Bertrand Villeneuve, 2013. "Commodity storage with durable shocks : A simple Markovian model," Post-Print hal-01517436, HAL.
    12. Phil Simmons, 1988. "A Theoretical Discussion Of The Economic Effects Of Buffer Stocks And Buffer Funds," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 32(2-3), pages 129-141, 08-12.
    13. Kamal Saggi & Mark Wu, 2018. "Understanding Agricultural Price Range Systems as Trade Restraints: Peru–Agricultural Products," World Scientific Book Chapters, in: Kamal Saggi (ed.), Economic Analysis of the Rules and Regulations of the World Trade Organization, chapter 20, pages 455-482, World Scientific Publishing Co. Pte. Ltd..
    14. Christophe Gouel, 2012. "Agricultural Price Instability: A Survey Of Competing Explanations And Remedies," Journal of Economic Surveys, Wiley Blackwell, vol. 26(1), pages 129-156, February.
    15. K. L. Robinson, 1975. "Unstable Farm Prices: Economic Consequences and Policy Options," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 57(5), pages 769-777.
    16. J. W. Freebairn, 1976. "The Value and Distribution of the Benefits of Commodity Price Outlook Information," The Economic Record, The Economic Society of Australia, vol. 52(2), pages 199-212, June.
    17. Heifner, Richard G. & Plato, Gerald E., 1979. "Wheat Price Bands And Welfare: An Analysis Of Stabilization Alternatives," Risk Management in Agriculture: Behavioral, Managerial, and Policy Issues, January 25-26, 1979, San Francisco, California 271466, Regional Research Projects > W-149: An Economic Evaluation of Managing Market Risks in Agriculture.
    18. 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), pages 1-34, December.
    19. Montague J. Lord, 1980. "Commodity Export Instability and Growth in the Latin American Economies," NBER Chapters, in: Commodity Markets and Latin American Development: A Modeling Approach, pages 213-244, National Bureau of Economic Research, Inc.
    20. Womack, Abner W. & Johnson, Stanley R. & Meyers, William H. & Young, Robert E., II, 1984. "An Evaluation Of The 1981 Farm Program For Crops: Implications For The 1985 Farm Bill," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 16(1), pages 1-11, July.
    21. repec:dau:papers:123456789/2280 is not listed on IDEAS
    22. Flåm, Sjur Didrik & Gaasland, Ivar & Vårdal, Erling, 2006. "On Stabilizing or Deregulating Food Prices," Working Papers in Economics 08/06, University of Bergen, Department of Economics.

    More about this item

    Keywords

    Demand and Price Analysis;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:remaae:9120. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaresea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.