The Australian Wool Corporation's Reserve Price Scheme: An Assessment of Price Stabilisation and Producer Benefits

Robert Fraser and A.J. Murrell

No 232295, Discussion Papers from University of Western Australia, School of Agricultural and Resource Economics

Abstract: This paper presents a new framework for evaluating the producer benefits from price stabilisation schemes. The methodology includes formulae for explicitly characterising the floor price feature typical of such schemes. This methodology is applied to an analysis of the Australian Wool Corporation's (AWC) Reserve Price Scheme (RPS) for wool. Using post intervention data to generate values of ex ante (unstabilised) and ex post (stabilised) price variability, results indicate that the coefficient of variation of wool prices has declined in response to the operation of the RPS by 41 per cent. A large decrease in price instability from historical levels to the level estimated in this paper is also observed. It is suggested that some of this reduction in price instability may be attributed to an existence effect of the RPS. As a consequence, ignoring this existence effect may lead to an understatement of the benefits from price stabilisation.

Keywords: Livestock; Production/Industries (search for similar items in EconPapers)
Pages: 19
Date: 1990
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/232295/files/u ... onpapers-006-090.pdf (application/pdf)

Related works:
Working Paper: The Australian Wool Corporation's Reserve Price Scheme: An Assessment of Price Stabilisation and Producer Benefits (1990)
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:ags:uwapdp:232295

DOI: 10.22004/ag.econ.232295

Access Statistics for this paper

More papers in Discussion Papers from University of Western Australia, School of Agricultural and Resource Economics Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().