A NOTE: A CLARIFICATION OF THE ROLE OF YIELD UNCERTAINTY IN INFLUENCING OVER-QUOTA PRODUCTION

Robert Fraser

Australian Journal of Agricultural Economics, 1995, vol. 39, issue 2, 5

Abstract: The literature shows that the influence of yield uncertainty on production relative to quota is ambiguous in the case of a single market. This paper uses a two-market framework (quota market and secondary market) with multiplicative yield uncertainty to show that if over-quota production in the absence of yield uncertainty is profitable, then the presence of yield uncertainty is unambiguously a further stimulus to over-quota production. The analysis is discussed in the context of recent changes to the marketing arrangements for Western Australian potatoes.

Keywords: Production; Economics (search for similar items in EconPapers)
Date: 1995
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:ajaeau:22402

DOI: 10.22004/ag.econ.22402

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