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Dairy disaggregation and joint production in an economy-wide model

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  • Angus Charteris

    ()
    (Ministry of Foreign Affairs and Trade, Wellington, New Zealand)

  • Niven Winchester

    ()
    (Department of Economics, University of Otago)

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    Abstract

    We examine the impact of dairy disaggregation and joint production on trade liberalisation outcomes in an economy-wide model. Depending on parameterisation, our model includes either (a) a single dairy commodity, (b) several dairy commodities without joint production, or (c) several dairy commodities with joint production. In a numerical application, we consider the removal of US tariffs on dairy exports from New Zealand (the world's largest dairy exporter). We show that failing to account for joint production when dairy commodities are disaggregated leads to misleading results. Our preferred dairy production function differs from those used in other applied trade models.

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    File URL: http://www.business.otago.ac.nz/econ/research/discussionpapers/DP_0810.pdf
    File Function: First version, 2008
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    Bibliographic Info

    Paper provided by University of Otago, Department of Economics in its series Working Papers with number 0810.

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    Length: 28 pages
    Date of creation: Nov 2008
    Date of revision: Nov 2008
    Handle: RePEc:otg:wpaper:0810

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    Related research

    Keywords: Disaggregation; joint production; trade liberalisation;

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    References

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    1. Allan Rae & Anna Strutt, 2004. "Multilateral agricultural trade reform: Potential impacts of current negotiations on New Zealand," New Zealand Economic Papers, Taylor & Francis Journals, vol. 38(2), pages 175-205.
    2. Alston, Julian M. & Balagtas, Joseph Valdes & Brunke, Henrich & Sumner, Daniel A., 2006. "Supply and demand for commodity components: implications of free trade versus the AUSFTA for the US dairy industry," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(2), June.
    3. Jason H. Grant & Thomas W. Hertel & Thomas F. Rutherford, 2007. "Tariff line analysis of U.S. and international dairy protection," Agricultural Economics, International Association of Agricultural Economists, vol. 37(s1), pages 271-280, December.
    4. Kym Anderson & Dominique van der Mensbrugghe, 2007. "Effects of multilateral and preferential trade policy reform in Africa: The case of Uganda," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 16(4), pages 529-550.
    5. Julian M. Alston & Joseph V. Balagtas & Henrich Brunke & Daniel A. Sumner, 2006. "Supply and demand for commodity components: implications of free trade versus the AUSFTA for the US dairy industry ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(2), pages 131-152, 06.
    6. Robinson, Sherman & Thierfelder, Karen, 2002. "Trade liberalisation and regional integration: the search for large numbers," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 46(4), December.
    7. Francois Joseph F & Wignaraja Ganeshan, 2008. "Economic Implications of Asian Integration," Global Economy Journal, De Gruyter, vol. 8(3), pages 1-48, September.
    8. Robert Scollay & John Gilbert, 2000. "Measuring the Gains from APEC Trade Liberalisation: An Overview of CGE Assessments," The World Economy, Wiley Blackwell, vol. 23(2), pages 175-197, 02.
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