Commodity price stabilisation: an empirical analysis

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Avebury, Aug 1, 1993 - Business & Economics - 145 pages
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The author develops a theoretical model of agricultural supply and demand response which is consistent with microeconomic theory and at the same time formally accounts for several specific types of risk and uncertainty. An empirical version of the model is estimated using Australian wool and lamb industry data, and the estimated model is used to assess the producer welfare effects of hypothetical lamb price stabilization scheme. The effects of stabilization are measured using analytical approximations suggested by David Newbery and Joseph Stiglitz, and are later verified using stochastic simulation. The book is an excellent example of applied econometrics - it identifies an interesting economics issue, reviews the relevant microeconomics literature, identifies shortfalls in the economic theory, develops models which extend the margins and applications of the theory, estimates some unusual econometric models, and quantitatively assesses a particular price stabilization scheme.

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The Australian lamb and wool producing industries
The theory of price stabilisation
The economic model

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