On Evaluating the Producer Benefits from Stabilisation

In this paper a new methodology for evaluating the producer benefits from price stabilisation is used to evaluate the Australian Wool Corporation's Reserve Price Scheme. One advantage of this methodology over that proposed by Newbery and Stiglitz (1981) is its more complex expected utility framework including explicit formulae to account for the guaranteed minimum price feature which is typical of price stabilisation schemes. Producer benefits estimated in this way are shown to be generally larger than previous estimates using the Newbery and Stiglitz methodology (Hinchy and Fisher 1988). These benefits are also compared with estimated costs of the Reserve Price Scheme.


Issue Date:
1989-03
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/230953
Total Pages:
22
Series Statement:
Discussion paper
3/89




 Record created 2017-04-01, last modified 2017-04-26

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