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Cost of Protection of the U. S. Wool Sector

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  • EDITH CRAMMATTE
  • RACHEL DARDIS

Abstract

The present system of protection of the U. S. wool sector affords an opportunity for examining the interdependence of intermediate and final goods sectors when both are protected. It also illustrates the cumulative nature of protective devices. In this study an intermediate good model is employed to investigate the cost to the United States of maintaining the present method of protection for raw wool and wool products1. The concept of a net tariff is utilized to represent the actual protection afforded to a final good when its inputs are also protected. This net tariff is related to the effective protective rate which has been frequently mentioned in the literature. It is, however, more useful when the question of cost allocation between sectors is under consideration. The intermediate good model also permits an estimation of the gain from the removal of protection in either the raw wool or wool products sector as well as an estimation of the gain from adopting alternative methods of protection such as deficiency payments.

Suggested Citation

  • Edith Crammatte & Rachel Dardis, 1970. "Cost of Protection of the U. S. Wool Sector," The Economic Record, The Economic Society of Australia, vol. 46(1), pages 96-106, March.
    • Handle: RePEc:bla:ecorec:v:46:y:1970:i:1:p:96-106
    DOI: 10.1111/j.1475-4932.1970.tb02467.x
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    References listed on IDEAS

    as
    1. Harry G. Johnson, 1960. "The Cost of Protection and the Scientific Tariff," Journal of Political Economy, University of Chicago Press, vol. 68, pages 327-327.
    2. W. M. Corden, 1957. "The Calculation Op The Cost Op Protection," The Economic Record, The Economic Society of Australia, vol. 33(64), pages 29-51, April.
    3. Rachel Dardis & Janet Dennisson, 1969. "The Welfare Cost of Alternative Methods of Protecting Raw Wool in the United States," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 51(2), pages 303-319.
    4. W. M. Corden, 1966. "The Structure of a Tariff System and the Effective Protective Rate," Journal of Political Economy, University of Chicago Press, vol. 74, pages 221-221.
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