Restricting the Market for Quota: An Analysis of Tobacco Production Rights with Corroboration from Congressional Testimony
Regulatory programs that restrict output levels often impose restrictions on the transfer of rights to produce or to use particular inputs. In this paper, the authors use a unique cross-section, time-series data set from North Carolina to quantify the welfare effects of transfer restrictions for poundage quota under the U.S. flue-cured tobacco program. The authors find that the deadweight costs of such restrictions are small but that the distributional effects are substantial. The authors analyze congressional testimony on quota transfer legislation and conclude that their estimates of the distributional effects are consistent with expressed views of market participants. Copyright 1995 by University of Chicago Press.
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