The Effect of the Arab Boycott on Israel: The Automobile Market
AbstractRecent 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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Bibliographic InfoPaper provided by The University of Texas at Austin, Center for Applied Research in Economics in its series CARE Working Papers with number 9607.
Length: 11 pages
Date of creation: Feb 1996
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Other versions of this item:
- 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.
- Fershtman, C. & Gandal, N., 1996. "The Effect of the Arab Boycott on Israel: The Automobile Market," Discussion Paper 1996-08, Tilburg University, Center for Economic Research.
- Fershtman, C. & Gandal, N., 1995. "The Effect of the Arab Boycott on Israel: The Automobile Market," Papers 39-95, Tel Aviv.
- Chaim Fershtman & Neil Gandal, 1995. "The Effect of the Arab Boycott on Israel: The Automobile Market," International Trade 9511001, EconWPA.
- L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
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