Measuring the Impact of Staple Strength-Enhancing Technologies on Australian Wool Producer Profits: A Duality-Based Approach

Wool tenderness is a significant problem in Australia, especially in areas where sheep graze under highly seasonal conditions. In this study, a duality-based modeling framework is implemented to assess the economic impact of staple strength-enhancing research on the profits of Australian woolgrowers. Within this framework, a normalized quadratic profit function is specified and estimated. The model is based on a number of fundamental characteristics of the Australian wool industry and the staple-strength enhancing technology being assessed. The model consists of a system of equations that are specified in terms of effective, rather than actual, prices. The interrelationships between the netputs are allowed for in the model in a manner that is consistent with the theoretical restrictions that arise as a result of assuming profit maximization, ensuring that the welfare calculations are unambiguous.


Issue Date:
2004
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/12922
Total Pages:
44
Series Statement:
Working Paper 2004-5




 Record created 2017-04-01, last modified 2017-08-23

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