The effect of the Arab boycott on Israel : the automobile market

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The effect of the Arab boycott on Israel : the automobile market

Author Info

Fershtman, C.
Gandal, N. (Tilburg University, Center for Economic Research)

Additional information is available for the following registered author(s):

Chaim Fershtman

Abstract

Recent progress towards a comprehensive peace in the Middle East has led to a relaxation of the enforcement of the Arab economic boycott of Israel. This in turn has led to the entry of all the major Japanese and Korean automobile manufacturers into the Israeli market. In this paper, we examine the effect of the Arab economic boycott on this market. Using recent advances in estimating discrete-choice models of product differentiation, we estimate that had the boycott continued, the welfare loss per purchaser would have been approximately $790 in 1994. This benefit can be interpreted as a "peace dividend". Since approximately 113,000 new automobiles were sold in 1994, the welfare gain to consumers was more than $89 million that year.

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Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 8.

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Date of creation: 1996
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Handle: RePEc:dgr:kubcen:19968

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Article
- Chaim Fershtman & Neil Gandal, 1998. "The Effect of the Arab Boycott on Israel: The Automobile Market," RAND Journal of Economics, The RAND Corporation, vol. 29(1), pages 193-214, Spring. [Downloadable!] (restricted)
Paper
- Chaim Fershtman & Neil Gandal, 1996. "The Effect of the Arab Boycott on Israel: The Automobile Market," Economics, University of Texas at Austin 9607, Center for Applied Research in Economics. [Downloadable!]
- Chaim Fershtman & Neil Gandal, 1995. "The Effect of the Arab Boycott on Israel: The Automobile Market," International Trade 9511001, EconWPA. [Downloadable!]
- Fershtman, C. & Gandal, N., 1995. "The Effect of the Arab Boycott on Israel: The Automobile Market," Papers 39-95, Tel Aviv.

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

Goldberg, Pinelopi Koujianou, 1995. "Product Differentiation and Oligopoly in International Markets: The Case of the U.S. Automobile Industry," Econometrica, Econometric Society, vol. 63(4), pages 891-951, July. [Downloadable!] (restricted)
Caplin, Andrew & Nalebuff, Barry, 1991. "Aggregation and Imperfect Competition: On the Existence of Equilibrium," Econometrica, Econometric Society, vol. 59(1), pages 25-59, January. [Downloadable!] (restricted)
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- Andrew Caplin & Barry Nalebuff, 1990. "Aggregation and Imperfect Competition: On the Existence of Equilibrium," Cowles Foundation Discussion Papers 937, Cowles Foundation, Yale University. [Downloadable!]
- Caplin, A. & Nalebuff, B., 1989. "Aggregation And Imperfect Competition: On The Existence Of Equilibrium," Discussion Papers 1989_30, Columbia University, Department of Economics.
Shane Greenstein, 1994. "From Superminis to Supercomputers: Estimating Surplus in the Computing Market," NBER Working Papers 4899, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
- Shane M. Greenstein, 1996. "From Superminis to Supercomputers: Estimating Surplus in the Computing Market," NBER Chapters, in: The Economics of New Goods, pages 329-372 National Bureau of Economic Research, Inc. [Downloadable!]
Anderson, Simon P & de Palma, Andre, 1992. "Multiproduct Firms: A Nested Logit Approach," Journal of Industrial Economics, Blackwell Publishing, vol. 40(3), pages 261-76, September. [Downloadable!] (restricted)
Other versions:
- Simon P. Anderston & Andre de Palma, 1991. "Multiproduct Firms: A Nested Logit Approach," Discussion Papers 973, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
Steven T. Berry, 1994. "Estimating Discrete-Choice Models of Product Differentiation," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 242-262, Summer. [Downloadable!] (restricted)
Trajtenberg, Manuel, 1989. "The Welfare Analysis of Product Innovations, with an Application to Computed Tomography Scanners," Journal of Political Economy, University of Chicago Press, vol. 97(2), pages 444-79, April. [Downloadable!] (restricted)
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Hansen, Lars Peter & Singleton, Kenneth J, 1982. "Generalized Instrumental Variables Estimation of Nonlinear Rational Expectations Models," Econometrica, Econometric Society, vol. 50(5), pages 1269-86, September. [Downloadable!] (restricted)

Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Sofronis Clerides, 2004. "Gains from Trade in Used Goods: Evidence from the Global Market for Automobiles," University of Cyprus Working Papers in Economics 6-2004, University of Cyprus Department of Economics. [Downloadable!]
Other versions:
- Clerides, Sofronis, 2005. "Gains From Trade in Used Goods: Evidence from the Global Market for Automobiles," CEPR Discussion Papers 4859, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Kim, Donghun, 2004. "Estimation of the Effects of New Brands on Incumbents' Profits and Consumer Welfare: The U.S. Processed Cheese Market Case," Research Reports 25192, University of Connecticut, Food Marketing Policy Center. [Downloadable!]
Fershtman, Chaim & Gandal, Neil & Markovich, Sarit, 1999. "Estimating the Effects of Tax Reform in Differentiated Product Oligopolistic Markets," CEPR Discussion Papers 2107, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Other versions:
- Fershtman, C. & Gandal, N. & Markovich, S., 1997. "Estimating the Effect of Tax Reform in Differentiated Product Oligopolistic Markets," Papers 29-97, Tel Aviv.
Larry Chavis & Phillip Leslie, 2009. "Consumer boycotts: The impact of the Iraq war on French wine sales in the U.S," Quantitative Marketing and Economics, Springer, vol. 7(1), pages 37-67, March. [Downloadable!] (restricted)
Itai Agur, 2006. "Firm Heterogeneity and the Two Sources of Gains from Trade," Economics Working Papers ECO2006/38, European University Institute. [Downloadable!]

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