Price, Quality, and International Agricultural Trade

Darian Woods and Andrew Coleman

No 291403, Motu Working Papers from Motu Economic and Public Policy Research

Abstract: The average value of a particular class of agricultural exports varies widely across different destinations. This raises the question: in the event of a supply shock, such as the implementation of the Emissions Trading Scheme, can farmers offset higher costs by raising their average prices by contracting exports to lower value destinations? If the difference in value reflects different prices because producers have market power, the answer will be “yes”. If the difference in value reflects differences in the quality of goods exported to different destinations, the answer is “no.” This paper use a variety of trade data and techniques to examine which explanation is most likely to be relevant. While the answers are not definitive, there is little support for the hypothesis that exports are curtailed to lower value destinations when supply costs increase.

Keywords: Agricultural and Food Policy; Demand and Price Analysis (search for similar items in EconPapers)
Pages: 41
Date: 2012-07
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Persistent link: https://EconPapers.repec.org/RePEc:ags:motuwp:291403

DOI: 10.22004/ag.econ.291403

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