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Theory and Measurement of Producer Response Under Quotas (The)


  • Fulginiti, Lilyan E.
  • Perrin, Richard


Tobin and Houthakker's (1950-51) work on consumer behavior under quantity rationing has been extended by many authors, especially through the use of duality theory. This paper uses duality theory to extend the work on demand theory under rationing to the case of producer behavior under quotas. These results permit estimation of otherwise unobservable market supply and demand structures. The structure of the farm economy operating under a tobacco quota system is estimated, and the theory is utilized to infer that the supply elasticity of tobacco would be about 7.0 if the quotas were removed. Estimates such as this are not normally attainable without the theory outlined here, even though they are essential for the evaluation of policy changes.
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  • Fulginiti, Lilyan E. & Perrin, Richard, 1993. "Theory and Measurement of Producer Response Under Quotas (The)," Staff General Research Papers Archive 778, Iowa State University, Department of Economics.
  • Handle: RePEc:isu:genres:778

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    References listed on IDEAS

    1. Gordon C. Rausser, 1982. "Political Economic Markets: PERTs and PESTs in Food and Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 64(5), pages 821-833.
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    Cited by:

    1. Raper, Kellie Curry & Love, H. Alan, 1999. "MONOPSONY POWER IN MULTIPLE INPUT MARKETS: A Nonparametric Approach," Staff Papers 11656, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    2. Alejandro Plastina & Lilyan Fulginiti, 2012. "Rates of return to public agricultural research in 48 US states," Journal of Productivity Analysis, Springer, vol. 37(2), pages 95-113, April.
    3. World Bank, 2017. "Gaining Momentum in Peruvian Agriculture," World Bank Other Operational Studies 27517, The World Bank.
    4. Jongeneel, Roelof A. & Ge, Lan, 2005. "Explaining Growth in Dutch Agriculture: Prices, Public R&D, and Technological Change," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24573, European Association of Agricultural Economists.
    5. Viaggi, Davide & Raggi, Meri & Gomez y Paloma, Sergio, 2011. "Farm-household investment behaviour and the CAP decoupling: Methodological issues in assessing policy impacts," Journal of Policy Modeling, Elsevier, vol. 33(1), pages 127-145, January.
    6. Squires, Dale, 2016. "Firm behavior under quantity controls: The theory of virtual quantities," Journal of Environmental Economics and Management, Elsevier, vol. 79(C), pages 70-86.
    7. Daniel J. Phaneuf & Catherine L. Kling & Joseph A. Herriges, 2000. "Estimation and Welfare Calculations in a Generalized Corner Solution Model with an Application to Recreation Demand," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 83-92, February.
    8. Sckokai, Paolo, 2001. "The Common Agricultural Policy In Econometric Models," Working Papers 14800, National Institute of Agricultural Economics, Italy INEA, Osservatorio Sulle Politiche Agricole dell'UE.
    9. Thanh Viet Nguyen & Lars Ravn-Jonsen & Niels Vestergaard, 2016. "Marginal Damage Cost of Nutrient Enrichment: The Case of the Baltic Sea," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 64(1), pages 109-129, May.
    10. F. Bonnieux & P. Rainelli & D. Vermersch, 1998. "Estimating the Supply of Environmental Benefits by Agriculture: A French Case Study," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 11(2), pages 135-153, March.
    11. Barbara Hutniczak, 2014. "Increasing Pressure on Unregulated Species Due to Changes in Individual Vessel Quotas: An Empirical Application to Trawler Fishing in the Baltic Sea," Marine Resource Economics, University of Chicago Press, vol. 29(3), pages 201-217.
    12. Kelly Tiller & Shiferaw Feleke & Jane Starnes, 2013. "Federal excise tax increase and its effects on U.S. tobacco production," Empirical Economics, Springer, vol. 44(2), pages 701-717, April.
    13. Jean-Christophe Bureau & Herve Guyomard & Laurent Morin & Vincent Requillart, 1995. "Quota mobility in the european sugar regime," Post-Print hal-01607840, HAL.
    14. Xavier Delache & Catherine Goudounèche & Hervé Guyomard & Xavier Irz & Louis-Pascal Mahé, 1995. "Analyse micro-économique d'un marché des droits à produire en agriculture : application aux quotas laitiers en France," Économie et Prévision, Programme National Persée, vol. 117(1), pages 61-75.
    15. Aldanondo, Ana Maria & Puertolas, Javier, 2002. "International Quota Transfer and Intermediate Goods," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24851, European Association of Agricultural Economists.
    16. Antonio Alvarez & Carlos Arias & Luis Orea, 2006. "Explaining Differences in Milk Quota Values: The Role of Economic Efficiency," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(1), pages 182-193.
    17. Marcel ADENÄUER & Kamel LOUHICHI & Bruno HENRY DE FRAHAN & Heinz Peter WITZKE., "undated". "Impact of the "Everything but Arms" Initiative on the EU Sugar Sub-Sector," EcoMod2004 330600001, EcoMod.
    18. Tiller, Kelly & Feleke, Shiferaw T. & Starnes, Jane H., 2011. "Economic Welfare Effects of the FDA Regulation of Tobacco Products on Tobacco Growers," Review of Applied Economics, Review of Applied Economics, vol. 7(1-2).
    19. Rucker, Randal R & Thurman, Walter N & Sumner, Daniel A, 1995. "Restricting the Market for Quota: An Analysis of Tobacco Production Rights with Corroboration from Congressional Testimony," Journal of Political Economy, University of Chicago Press, vol. 103(1), pages 142-175, February.
    20. Lansink, Alfons Oude, 2003. "Technical efficiency and CO2 abatement policies in the Dutch glasshouse industry," Agricultural Economics, Blackwell, vol. 28(2), pages 99-108, March.
    21. Alfons Oude Lansink, 2001. "Long and Short Term Economies of Scope in Dutch Vegetable Production," Journal of Agricultural Economics, Wiley Blackwell, vol. 52(1), pages 123-138.

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