Ko, Chia Chiun, Frijters, Paul and Foster, Gigi (2018) A tale of cyclones, exports and surplus forgone in Australia's protected banana industry. Economic Record, 94 (306). pp. 276-300. ISSN 0013-0249
Full text not available from this repository.Abstract
This paper examines the welfare loss caused by import restrictions on bananas in Australia, which we argue to be a classic rent‐seeking policy. We propose a new micro‐model of agricultural production under uncertainty and production delays and ask whether, due to cyclones and the timing of planting decisions, Australian banana import restrictions have turned into a form of export promotion. We exploit two cyclones as exogenous supply shocks, and use new data to estimate the price elasticity of demand for bananas in Australia to be around −0.5. We estimate the total welfare loss of Australia's banana import restrictions to be over A$150 million per year, implying a yearly subsidy of more than a quarter of a million dollars per banana grower.
| Item Type: | Article |
|---|---|
| Official URL: | https://onlinelibrary.wiley.com/journal/14754932 |
| Additional Information: | © 2018 Economic Society of Australia |
| Divisions: | Centre for Economic Performance |
| Subjects: | H Social Sciences > HB Economic Theory |
| Date Deposited: | 23 Aug 2018 10:09 |
| Last Modified: | 13 Sep 2024 13:20 |
| Projects: | DP 150104169 |
| Funders: | Australian Research Council |
| URI: | http://eprints.lse.ac.uk/id/eprint/90084 |
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