Welfare-maximizing and profit-maximizing agroindustry location: A comparison

Lin-Ti Tan ()
Additional contact information
Lin-Ti Tan: Institute of Economics, Academia Sinica, Nankang, Taipei 115, Taiwan

The Annals of Regional Science, 2000, vol. 34, issue 1, 69-82

Abstract: Traditionally, the location model has assumed that firms choose their location and input usage so as to maximize their profits. However, in the planning version of the location model, the industrial location might be selected on the basis of a welfare-maximizing objective. This paper attempts to develop systematically the theory of plant location for a welfare-maximizing agroindustrial firm and to compare it with its profit-maximizing counterpart. Our analysis shows that, unless the transport cost of raw materials is linear in distance and the firm's production function is homogeneous of degree one, the welfare-maximizing location chosen by a regulated agroindustrial firm always differs from that of its profit-maximizing counterpart. It also demonstrates that the results obtained previously for a non-agroindustrial firm cannot be applied directly to its agroindustrial counterpart.

Date: 2000-03-17
Note: Received: August 1998/Accepted: January 1999
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.de/link/service/journals/00168/papers/0034001/00340069.pdf (application/pdf)
Access to the full text of the articles in this series is restricted

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:anresc:v:34:y:2000:i:1:p:69-82

Ordering information: This journal article can be ordered from
http://link.springer.com/journal/168

Access Statistics for this article

The Annals of Regional Science is currently edited by Martin Andersson, E. Kim and Janet E. Kohlhase

More articles in The Annals of Regional Science from Springer, Western Regional Science Association Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().