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Impact of domestic content requirement on the US tobacco and cigarette industries

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  • Beghin, John C.
  • Blake Brown, A.
  • Hasyim Zaini, M.

Abstract

Using a log-linear equilibrium displacement model we quantify the impact of the recent domestic tobacco content requirement on US cigarette manufacturing. We investigate effects on US growers and manufacturers, and competing tobacco imports. The policy increased domestic use of US-grown tobacco, but induced a small negative output effect. Tobacco imports decreased substantially. The paper also discusses the political-economic incentives for US manufacturers to comply with such policies. The political cooperation between US growers and manufacturers decreases the opposition of the latter to protectionist policies championed by the former.
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Suggested Citation

  • Beghin, John C. & Blake Brown, A. & Hasyim Zaini, M., 1997. "Impact of domestic content requirement on the US tobacco and cigarette industries," Agricultural Economics, Blackwell, vol. 15(3), pages 201-212, January.
  • Handle: RePEc:eee:agecon:v:15:y:1997:i:3:p:201-212
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    1. Beghin, John C & Sumner, Daniel A, 1992. "Domestic Content Requirements with Bilateral Monopoly," Oxford Economic Papers, Oxford University Press, vol. 44(2), pages 306-316, April.
    2. Beghin, John C & Lovell, C A Knox, 1993. "Trade and Efficiency Effects of Domestic Content Protection: The Australian Tobacco and Cigarette Industries," The Review of Economics and Statistics, MIT Press, vol. 75(4), pages 623-631, November.
    3. Beghin, John & Chang, Ruey-er, 1992. "Differentiated products and supply controls in the analysis of agricultural policy reform: the case of tobacco," Agricultural Economics, Blackwell, vol. 7(3-4), pages 301-315, October.
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    Cited by:

    1. Metcalfe, Mark R., 2002. "Environmental Regulation And Implications For Competitiveness In International Pork Trade," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 27(01), July.
    2. Gale, H. Frederick, Jr. & Foreman, Linda F. & Capehart, Thomas C., Jr., 2000. "Tobacco And The Economy: Farms, Jobs, And Communities," Agricultural Economics Reports 34007, United States Department of Agriculture, Economic Research Service.
    3. Metcalfe, Mark R., 2001. "Environmental Regulation And Implications For Competitiveness In International Pork Trade," International Trade in Livestock Products Symposium, January 18-19, 2001, Auckland, New Zealand 14565, International Agricultural Trade Research Consortium.
    4. Metcalfe, Mark R., 2000. "Environmental Regulation And Implications For U.S. Pork Exports," 2000 Annual meeting, July 30-August 2, Tampa, FL 21808, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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