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 in the vanilla market, that also controls domestic production through a single-channel marketing system. Econometric estimates of the model are used for simulations of welfare and revenue gains and losses and internal redistribution of income from alternative pricing policies. The results indicate that Madagascar could have gained between 0.9 to 2.6 percent 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.
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Bibliographic InfoPaper provided by CERDI in its series Working Papers with number 199617.
Date of creation: 1996
Date of revision:
Publication status: Published in Review of Development Economics, February 2000, pages 1-20
Other versions of this item:
- de Melo, Jaime & Olarreaga, Marcelo & Takacs, Wendy, 2000. "Pricing Policy under Double Market Power: Madagascar and the International Vanilla Market," Review of Development Economics, Wiley Blackwell, vol. 4(1), pages 1-20, February.
- De Melo, J. & Olarreaga, M. & Takacs, W., 1996. "Pricing Policy Under Double Market Power: Madagascar and the International Vanilla Market," Research Papers by the Institute of Economics and Econometrics, Geneva School of Economics and Management, University of Geneva 96.06, Institut d'Economie et Econométrie, Université de Genève.
- 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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