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Declining U.S. Tobacco Exports to Australia: A Derived Demand Approach to Competitiveness

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  • John Beghin
  • Fan Hu

Abstract

The loss of competitiveness of U.S. tobacco leaf exports to Australia is empirically investigated, using industry-level time-series market data. Tobacco-relative prices, market structure, scale, Australian market distortions, and changing characteristics of cigarettes are accounted for in the investigation. A decomposition analysis reveals that a switch to lighter cigarettes and changes in the Australian domestic tobacco content policy are the major contributors to the decline of U.S. tobacco exports. Tobacco price differences between the U.S. and its competitors, alone, cannot explain the loss of competitiveness of U.S. tobacco in Australian cigarette manufacturing.

Suggested Citation

  • John Beghin & Fan Hu, 1995. "Declining U.S. Tobacco Exports to Australia: A Derived Demand Approach to Competitiveness," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(2), pages 260-267.
    • Handle: RePEc:oup:ajagec:v:77:y:1995:i:2:p:260-267.
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    File URL: http://hdl.handle.net/10.2307/1243536
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    Cited by:

    1. 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.

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