On Evaluating the Producer Benefits from Stabilisation

Robert Fraser

No 230953, Discussion Papers from University of Western Australia, School of Agricultural and Resource Economics

Abstract: In this paper a new methodology for evaluating the producer benefits from price stabilisation is used to evaluate the Australian Wool Corporation's Reserve Price Scheme. One advantage of this methodology over that proposed by Newbery and Stiglitz (1981) is its more complex expected utility framework including explicit formulae to account for the guaranteed minimum price feature which is typical of price stabilisation schemes. Producer benefits estimated in this way are shown to be generally larger than previous estimates using the Newbery and Stiglitz methodology (Hinchy and Fisher 1988). These benefits are also compared with estimated costs of the Reserve Price Scheme.

Keywords: Demand and Price Analysis; International Development (search for similar items in EconPapers)
Pages: 22
Date: 1989-03
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uwapdp:230953

DOI: 10.22004/ag.econ.230953

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