A Note: A Clarification Of The Role Of Yield Uncertainty In Influencing Over-Quota Production
The literature shows that the influence of yield uncertainty on production relative to quota is ambiguous in the case of a single market. This paper uses a two-market framework (quota market and secondary market) with multiplicative yield uncertainty to show that if over-quota production in the absence of yield uncertainty is profitable, then the presence of yield uncertainty is unambiguously a further stimulus to over-quota production. The analysis is discussed in the context of recent changes to the marketing arrangements for Western Australian potatoes.
Volume (Year): 39 (1995)
Issue (Month): 02 (August)
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