IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/67204.html
   My bibliography  Save this paper

Measuring the Effects of Technology Change in Multiple Markets : Application to the Greek Cotton Yarn Industry

Author

Listed:
  • Bullock, David S.
  • Dadakas, Dimitrios
  • Katranidis, Stelios D.

Abstract

Complications arise in the estimation of welfare changes in vertically and horizontally linked markets when technology affects production. Past research has dealt with these complications using single-equation models and dual approaches. We briefly discuss some of the limitations of these approaches, which include the single-equation approach’s poor statistical reliability, and the dual approach’s difficulties in incorporating expectations, dynamics, and expert advice. We propose a method that adapts Just, Hueth, and Schmit’z (2004) partial-equilibrium sequential integration approach to the case of prices changing because of technological change. Our approach addresses some of the limitations of the single-equation and dual approaches. Our methods can be applied to the estimation of welfare changes in either vertically or horizontally linked markets, when technology improvements and policy-induced multiple price changes affect the markets. This is a common occurrence in economic problems related to the estimation of welfare changes in agricultural and industrial commodities. We apply our method in an empirical study of the vertically linked market for Greek cotton.

Suggested Citation

  • Bullock, David S. & Dadakas, Dimitrios & Katranidis, Stelios D., 2009. "Measuring the Effects of Technology Change in Multiple Markets : Application to the Greek Cotton Yarn Industry," MPRA Paper 67204, University Library of Munich, Germany, revised 2012.
  • Handle: RePEc:pra:mprapa:67204
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/67204/1/MPRA_paper_67204.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. David S. Bullock & Nicholas Minot, 2006. "On Measuring the Value of a Nonmarket Good Using Market Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(4), pages 961-973.
    2. Giancarlo Moschini & Harvey Lapan & Andrei Sobolevsky, 2000. "Roundup ready® soybeans and welfare effects in the soybean complex," Agribusiness, John Wiley & Sons, Ltd., vol. 16(1), pages 33-55.
    3. Steve McCorriston & Ian M. Sheldon, 1994. "Selling Import Quota Licenses: The U.S. Cheese Case," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(4), pages 818-827.
    4. Giancarlo Moschini & Paolo Sckokai, 1994. "Efficiency of Decoupled Farm Programs Under Distortionary Taxation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(3), pages 362-370.
    5. Walter N. Thurman & Michael K. Wohlgenant, 1989. "Consistent Estimation of General Equilibrium Welfare Effects," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(4), pages 1041-1045.
    6. Niels Vestergaard, 1999. "Multiproduct Industries: The Case of Multispecies Individual Quota Fisheries," Canadian Journal of Economics, Canadian Economics Association, vol. 32(3), pages 729-743, May.
    7. Dimitrios Dadakas & Stelios Katranidis, 2008. "Single Versus Multi-market Approach: An Application to the Greek Cotton Market," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 36(4), pages 469-481, December.
    8. Catherine L. Kling & Richard J. Sexton, 1990. "Bootstrapping in Applied Welfare Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(2), pages 406-418.
    9. Nicholas Minot & Francesco Goletti, 1998. "Export Liberalization and Household Welfare: The Case of Rice in Vietnam," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(4), pages 738-749.
    10. Thurman, Walter N. & Easley, J. Jr., 1992. "Valuing changes in commercial fishery harvests: A general equilibrium derived demand analysis," Journal of Environmental Economics and Management, Elsevier, vol. 22(3), pages 226-240, May.
    11. Canning, Patrick N. & Vroomen, Harry, 1994. "Welfare Impacts of a Trade Restriction: An Equilibrium Approach and Application in the Potash Industry," Technical Bulletins 156762, United States Department of Agriculture, Economic Research Service.
    12. Just, Richard E & Hueth, Darrell L, 1979. "Welfare Measures in a Multimarket Framework," American Economic Review, American Economic Association, vol. 69(5), pages 947-954, December.
    13. Robert C. Feenstra & Robert E. Lipsey & Haiyan Deng & Alyson C. Ma & Hengyong Mo, 2005. "World Trade Flows: 1962-2000," NBER Working Papers 11040, National Bureau of Economic Research, Inc.
    14. Belinfante, Alexander, 1978. "The Identification of Technical Change in the Electricity Generating Industry," Histoy of Economic Thought Chapters, in: Fuss, Melvyn & McFadden, Daniel (ed.),Production Economics: A Dual Approach to Theory and Applications, volume 2, chapter 6, McMaster University Archive for the History of Economic Thought.
    15. Zvi Griliches, 1958. "Research Costs and Social Returns: Hybrid Corn and Related Innovations," Journal of Political Economy, University of Chicago Press, vol. 66(5), pages 419-419.
    16. Andrew Schmitz & Tefertiller Ken & William G. Boggess, 1995. "Regulations: Evidence from the Florida Dairy Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(5), pages 1166-1171.
    17. Daniel A. Sumner & Christopher A. Wolf, 1996. "Quotas without Supply Control: Effects of Dairy Quota Policy in California," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(2), pages 354-366.
    18. Fuss, Melvyn & McFadden, Daniel (ed.), 1978. "Production Economics: A Dual Approach to Theory and Applications," Elsevier Monographs, Elsevier, edition 1, number 9780444850133.
    19. Bruce A. Babcock & William E. Foster, 1992. "Economic Rents Under Supply Controls with Marketable Quota," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(3), pages 630-637.
    20. David S. Bullock, 1993. "Welfare Implications of Equilibrium Supply and Demand Curves in an Open Economy," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(1), pages 52-58.
    21. Derek Byerlee & Greg Traxler, 1995. "National and International Wheat Improvement Research in the Post-Green Revolution Period: Evolution and Impacts," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(2), pages 268-278.
    22. Fuss, Melvyn & McFadden, Daniel, 1978. "Production Economics: A Dual Approach to Theory and Applications (I): The Theory of Production," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, volume 1, number fuss1978.
    23. Constantine, John H & Alston, Julian M & Smith, Vincent H, 1994. "Economic Impacts of the California One-Variety Cotton Law," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 951-974, October.
    24. Nikolaus Gotsch & Kees Burger, 2001. "Dynamic Supply Response and Welfare Effects of Technological Change on Perennial Crops: The Case of Cocoa in Malaysia," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(2), pages 272-285.
    25. Jeong, Kyeong-Soo & Garcia, Philip & Bullock, David S., 2003. "A statistical method of multi-market welfare analysis applied to Japanese beef policy liberalization," Journal of Policy Modeling, Elsevier, vol. 25(3), pages 237-256, April.
    26. Stephen C. Cooke & W. Burt Sundquist, 1993. "The Incidence of Benefits from U.S. Soybean Productivity Gains in a Context of World Trade," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(1), pages 169-180.
    27. Fuss, Melvyn & McFadden, Daniel, 1978. "Production Economics: A Dual Approach to Theory and Applications (II): Applications of the Theory of Production," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, volume 2, number fuss1978a.
    28. Hareau, Guy G. & Mills, Bradford F. & Norton, George W., 2006. "The potential benefits of herbicide-resistant transgenic rice in Uruguay: Lessons for small developing countries," Food Policy, Elsevier, vol. 31(2), pages 162-179, April.
    29. Walter N. Thurman, 1991. "Applied General Equilibrium Welfare Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(5), pages 1508-1516.
    30. Derek Berwald & Colin A. Carter & Guillaume P. Gruère, 2006. "Rejecting New Technology: The Case of Genetically Modified Wheat," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(2), pages 432-447.
    31. Richard K. Perrin & Lilyan E. Fulginiti, 2001. "Technological Change and Welfare in an Open Economy with Distortions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(2), pages 455-464.
    32. Konstantinos Giannakas & Murray Fulton, 2000. "Efficient Redistribution Using Quotas and Subsidies in the Presence of Misrepresentation and Cheating," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 347-359.
    33. Dimitrios Dadakas & Stelios D. Katranidis, 2010. "The Effects of Trade Liberalization in Textiles and Clothing on the Greek Market for Cotton Yarn: A Multi‐Market Analysis," Review of International Economics, Wiley Blackwell, vol. 18(1), pages 138-152, February.
    34. Coelli, T J, 1996. "Measurement of Total Factor Productivity Growth and Biases in Technological Change in Western Australian Agriculture," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(1), pages 77-91, Jan.-Feb..
    35. John M. Antle, 1984. "The Structure of U.S. Agricultural Technology, 1910–78," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 66(4), pages 414-421.
    36. Gisser, Micha, 1993. "Price Support, Acreage Controls, and Efficient Redistribution," Journal of Political Economy, University of Chicago Press, vol. 101(4), pages 584-611, August.
    37. C. Richard Shumway, 1983. "Supply, Demand, and Technology in a Multiproduct Industry: Texas Field Crops," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 65(4), pages 748-760.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bullock, David S. & Salhofer, Klaus, 2003. "Judging agricultural policies: a survey," Agricultural Economics, Blackwell, vol. 28(3), pages 225-243, May.
    2. Dimitrios Dadakas & Stelios D. Katranidis, 2010. "The Effects of Trade Liberalization in Textiles and Clothing on the Greek Market for Cotton Yarn: A Multi‐Market Analysis," Review of International Economics, Wiley Blackwell, vol. 18(1), pages 138-152, February.
    3. Jean Paul CHAVAS & Thomas L. COX, 1996. "Abstract Of On Market Equilibrium Analysis," Staff Papers 393, University of Wisconsin Madison, AAE.
    4. Jean-Paul Chavas & Thomas L. Cox, 1997. "On Market Equilibrium Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(2), pages 500-513.
    5. David S. Bullock & Klaus Salhofer & Jukka Kola, 1999. "The Normative Analysis of Agricultural Policy: A General Framework and Review," Journal of Agricultural Economics, Wiley Blackwell, vol. 50(3), pages 512-535, September.
    6. H. Ahammad & N. Islam, 1999. "Estimating the WA Agricultural Production System: A profit function approach," Economics Discussion / Working Papers 99-11, The University of Western Australia, Department of Economics.
    7. Giancarlo Moschini, 1988. "A Model of Production with Supply Management for the Canadian Agricultural Sector," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(2), pages 318-329.
    8. Walter Briec & Kristiaan Kerstens & Philippe Venden Eeckaut, 2004. "Non-convex Technologies and Cost Functions: Definitions, Duality and Nonparametric Tests of Convexity," Journal of Economics, Springer, vol. 81(2), pages 155-192, February.
    9. George Gelauff & Sjef Ederveen & J.L.M. Pelkmans, 2006. "Assessing subsidiarity," CPB Document 133.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    10. Griffiths, William E. & O'Donnell, Christopher J. & Cruz, Agustina Tan, 2000. "Imposing regularity conditions on a system of cost and factor share equations," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 44(1), pages 1-21.
    11. Rulon D. Pope & Jeffrey T. LaFrance & Richard E. Just, 2007. "Imperfect Price Deflation in Production Systems," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(3), pages 738-754.
    12. Giancarlo Moschini, 1988. "The Cost Structure of Ontario Dairy Farms: A Microeconometric Analysis," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 36(2), pages 187-206, July.
    13. Zhao, Xueyan & Mullen, John D. & Griffith, Garry R. & Griffiths, William E. & Piggott, Roley R., 2000. "An Equilibrium Displacement Model of the Australian Beef Industry," Research Reports 28007, New South Wales Department of Primary Industries Research Economists.
    14. Elena Verdolini & Nick Johnstone & Ivan Hašcic, 2011. "Technological Change, Fuel Efficiency and Carbon Intensity in Electricity Generation: A Cross-Country Empirical Study," Working Papers 2011.92, Fondazione Eni Enrico Mattei.
    15. Leon Bettendorf & Michael P. Devereux & Albert Van Der Horst & Simon Loretz & Ruud A. de Mooij, 2010. "Corporate tax harmonization in the EU [Taxing corporate income]," Economic Policy, CEPR;CES;MSH, vol. 25(63), pages 537-590.
    16. Fulginiti, Lilyan E., 2001. "Griliches' K-Shift And Competitiveness: Commodity Progress In Us Agriculture," 2001 Annual meeting, August 5-8, Chicago, IL 20700, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    17. Sandhu, Gurmit S. & Phillips, W.E. & Percy, Mike, 1992. "Economic Structural Analysis of the Canadian Agricultural Production Sector," Staff Paper Series 232540, University of Alberta, Department of Resource Economics and Environmental Sociology.
    18. Aradhyula, Satheesh Venkata, 1989. "Policy structure, output supply and input demand for US crops," ISU General Staff Papers 198901010800009909, Iowa State University, Department of Economics.
    19. Barnett, William A. & Serletis, Apostolos, 2008. "Consumer preferences and demand systems," Journal of Econometrics, Elsevier, vol. 147(2), pages 210-224, December.
    20. Kala Krishna & Marie Thursby, 1994. "Structural Flexibility: A Partial Ordering," NBER Working Papers 4615, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    Single-Market Approach; Dual Approach; Multi-Market Approach; Technology; Bootstrap;
    All these keywords.

    JEL classification:

    • C00 - Mathematical and Quantitative Methods - - General - - - General
    • D60 - Microeconomics - - Welfare Economics - - - General
    • F1 - International Economics - - Trade

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:67204. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.