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 – a country that controls domestic production through a single-channel marketing system and is the leader in the vanilla market. 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 0.9–2.6% 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.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1447.
Date of creation: Aug 1996
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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 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.
- 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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