Agricultural trade liberalization and downstream market power: some extensions

Thumbnail Image
Date
2010-03-26
Authors
Hoque, Mohammad
Major Professor
Advisor
Committee Member
Journal Title
Journal ISSN
Volume Title
Publisher
Authors
Person
Schroeter, John
Professor Emeritus
Research Projects
Organizational Units
Organizational Unit
Economics

The Department of Economic Science was founded in 1898 to teach economic theory as a truth of industrial life, and was very much concerned with applying economics to business and industry, particularly agriculture. Between 1910 and 1967 it showed the growing influence of other social studies, such as sociology, history, and political science. Today it encompasses the majors of Agricultural Business (preparing for agricultural finance and management), Business Economics, and Economics (for advanced studies in business or economics or for careers in financing, management, insurance, etc).

History
The Department of Economic Science was founded in 1898 under the Division of Industrial Science (later College of Liberal Arts and Sciences); it became co-directed by the Division of Agriculture in 1919. In 1910 it became the Department of Economics and Political Science. In 1913 it became the Department of Applied Economics and Social Science; in 1924 it became the Department of Economics, History, and Sociology; in 1931 it became the Department of Economics and Sociology. In 1967 it became the Department of Economics, and in 2007 it became co-directed by the Colleges of Agriculture and Life Sciences, Liberal Arts and Sciences, and Business.

Dates of Existence
1898–present

Historical Names

  • Department of Economic Science (1898–1910)
  • Department of Economics and Political Science (1910-1913)
  • Department of Applied Economics and Social Science (1913–1924)
  • Department of Economics, History and Sociology (1924–1931)
  • Department of Economics and Sociology (1931–1967)

Related Units

Journal Issue
Is Version Of
Versions
Series
Department
Abstract

Exports of agricultural commodities to developed countries play a significant role in the economies of many developing countries. The elimination of import tariffs has the potential to benefit producers in the developing countries, but estimates of the effect of trade liberalization typically assume perfect competition. Significant concentration in the food processing and retailing sectors of the U.S. and the EU undermine the plausibility of this assumption in the case of agricultural trade, however. Sexton, Sheldon, McCorriston, and Wang (SSMW, 2007) developed a model of the effects of trade liberalization that accounts for the vertically-linked and concentrated characteristics of the developed countries’ food markets. Their principal qualitative finding is that an analysis based on the assumption of competitive conduct will overstate the effects of trade liberalization if food processing and retailing firms exercise market power. This result is sensitive to their choice of functional forms, however, as this paper demonstrates with an analysis in which SSMW’s linearity assumption is replaced by constant elasticity specifications for supply and demand. We also extend the SSMW analysis by considering ad valorem tariffs, a case for which the results exhibit both qualitative and quantitative differences from those for the unit tariff case.

Comments
Description
Keywords
Citation
DOI
Source
Subject Categories
Copyright
Collections