AbstractA strategy to convert quotas to tariffs is to auction the quota rights and use the realized auction prices as guides to setting tariffs. In the 1980s, New Zealand employed auctions to allocate quota licenses. We analyze the relationship between tariff-equivalents and auction prices for auctions with resale. Using panel data from New Zealand's quota license auctions, we estimate the expected value of the tariff equivalent. We exploit data from the secondary market prices to test the model's predictions. The predictions fail, suggesting either that auction prices may understate or that aftermarket prices overstate the true tariff equivalent.
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Bibliographic InfoArticle provided by The RAND Corporation in its journal RAND Journal of Economics.
Volume (Year): 30 (1999)
Issue (Month): 1 (Spring)
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Web page: http://www.rje.org
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- Arijit Sen & Anand V. Swamy, 2000.
"Taxation by Auction: Fund-Raising by 19th Century Indian Guilds,"
Department of Economics Working Papers
2000-11, Department of Economics, Williams College.
- Sen, Arijit & Swamy, Anand V., 2004. "Taxation by auction: fund raising by 19th century Indian guilds," Journal of Development Economics, Elsevier, vol. 74(2), pages 411-428, August.
- Arijit Sen & Anand V. Swamy, 2000. "Taxation by Auction: Fund-Raising by 19th Century Indian Guilds," Center for Development Economics 159, Department of Economics, Williams College.
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