Transfer Assessments and Efficiency in Quota-Regulated Markets

David Hennessy and Jutta Roosen

Staff General Research Papers Archive from Iowa State University, Department of Economics

Abstract: In order to fund production/marketing quota redistributions or reduce the amount of quota outstanding, regulators often tax quota asset market trades. This assessment is shown to impede the transfer of quota to more efficient producers if rental markets are prohibited. Inefficient producers will produce too much, and the magnitude of cost inefficiencies will increase with the size of the assessment tax. Possible remedies to the problem are also discussed.

Date: 1998-07-01
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Published in Canadian Journal of Agricultural Economics, July 1998, vol. 46 no. 2, pp. 191-200

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Persistent link: https://EconPapers.repec.org/RePEc:isu:genres:1350

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