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A Tale of Cyclones, Exports and Surplus Forgone in Australia's Protected Banana Industry.
- Source :
- Economic Record; Sep2018, Vol. 94 Issue 306, p276-300, 25p, 5 Charts, 4 Graphs, 1 Map
- Publication Year :
- 2018
-
Abstract
- This paper examines the welfare loss caused by import restrictions on bananas in Australia, which we argue to be a classic rent‐seeking policy. We propose a new micro‐model of agricultural production under uncertainty and production delays and ask whether, due to cyclones and the timing of planting decisions, Australian banana import restrictions have turned into a form of export promotion. We exploit two cyclones as exogenous supply shocks, and use new data to estimate the price elasticity of demand for bananas in Australia to be around −0.5. We estimate the total welfare loss of Australia's banana import restrictions to be over A$150 million per year, implying a yearly subsidy of more than a quarter of a million dollars per banana grower. [ABSTRACT FROM AUTHOR]
- Subjects :
- IMPORTS
AGRICULTURAL productivity
BANANAS
SUPPLY & demand
INTERNATIONAL trade
Subjects
Details
- Language :
- English
- ISSN :
- 00130249
- Volume :
- 94
- Issue :
- 306
- Database :
- Complementary Index
- Journal :
- Economic Record
- Publication Type :
- Academic Journal
- Accession number :
- 131861906
- Full Text :
- https://doi.org/10.1111/1475-4932.12414