Pricing Policy under Double Market Power: Madagascar and the International Vanilla Market
AbstractThis paper uses a price-leadership model of the international vanilla market to study the welfare consequences of alternative pricing policies for Madagascar, the leader, that also controls domestic production through a single-channel marketing system. Econometric estimates of the model are used for simulations of welfare and revenue changes and internal redistribution of income. Results indicate that Madagascar could have gained between 0.9% and 2.6% of GDP per year on average over the period 1981-91 by following optimal pricing policies, and that producers were overtaxed suggesting that political economy considerations played a role in the pricing decisions. Copyright 2000 by Blackwell Publishing Ltd
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Review of Development Economics.
Volume (Year): 4 (2000)
Issue (Month): 1 (February)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=1363-6669
Other versions of this item:
- De Melo, J. & Olarreaga, M. & Takacs, W., 1996. "Pricing Policy Under Double Market Power: Madagascar and the International Vanilla Market," Research Papers by the Department of Economics, University of Geneva 96.06, Département des Sciences Économiques, Université de Genève.
- Jaime MELO DE & OLARREAGA & TAKACS, 1996. "Pricing policy under Double Market Power: Madagascar and the International Vanilla Market," Working Papers 199617, CERDI.
- de Melo, Jaime & Olarreaga, Marcelo & Takacs, Wendy E, 1996. "Pricing Policy Under Double Market Power: Madagascar and the International Vanilla Market," CEPR Discussion Papers 1447, C.E.P.R. Discussion Papers.
- D33 - Microeconomics - - Distribution - - - Factor Income Distribution
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
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- Rakotoarisoa, Manitra A. & Shapouri, Shahla, 2001. "Market power and the pricing of commodities imported from developing countries: the case of US vanilla bean imports," Agricultural Economics, Blackwell, vol. 25(2-3), pages 285-294, September.
- Morisset, Jacques, 1997. "Unfair trade? Empirical evidence in world commodity markets over te past 25 years," Policy Research Working Paper Series 1815, The World Bank.
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