Price Policies and the Domestic and International Distribution of Commodity Quality

Theory and application to EU wheat
  • Julian M. Alston
  • Jennifer S. James


Most studies of agricultural commodity price policies ignore quality responses.1 Typically, it is assumed that the commodity of interest is homogeneous, and no allowance is made for any policy-induced changes in quality or in the distribution of quality (i.e., average quality).2 This might be a good approximation in some cases. Recently, however, James (2000a) reported a closed-economy model of stereotypical domestic agricultural commodity policies, in which she found that quality responses might be significant and could substantially alter the welfare implications of policy alternatives.3 In this chapter, we adopt the same general approach, and adapt and extend it to evaluate the quality impacts of both domestic and border policies applied to agricultural commodities in an open-economy setting.


European Union Average Quality Export Subsidy Import Tariff Agric Econ 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Alchian, A. A., and Allen, W. R., 1964, University Economics, Wadsworth Publishing Co, Inc., Belmont, CA.Google Scholar
  2. Alston, J. M., Carter, C. A., and Smith, V. H., 1993, Rationalizing agricultural export subsidies, Am J Agric Econ 75: 1000–1009.CrossRefGoogle Scholar
  3. Anderson, J. E., 1985, The relative inefficiency of quotas: The cheese case, Am Econ Rev 75: 178–190.Google Scholar
  4. Armington, P. S., 1969, A theory of demand for products distinguished by place of production, Int Monet Fund Staff Papers 16:159–178.CrossRefGoogle Scholar
  5. Barzel, Y., 1976, An alternative approach to the analysis of taxation, J Polit Econ 84:1177–1197.CrossRefGoogle Scholar
  6. de Goiter, H., and Meilke, K. D., 1987, The EEC’s wheat price policies and international trade in differentiated products, Am J Agric Econ 69:223–229.CrossRefGoogle Scholar
  7. de Goiter, H., and Meilke, K. D., 1989, Efficiency of alternative policies for the EC’s common agricultural policy, Am J Agric Econ 71:592–603.CrossRefGoogle Scholar
  8. Feenstra, R. C., 1988, Quality change under trade restrictions in Japanese autos, Q J Econ 103:131–146.CrossRefGoogle Scholar
  9. Houthakker, H. S., 1952, Compensated changes in quantities and qualities consumed, Rev Econ Stud 19:155–164.CrossRefGoogle Scholar
  10. International Wheat Council, 1987, International Wheat Statistics, London.Google Scholar
  11. James, J. S., 2000a, Quality Responses to Agricultural Policies, paper presented at 44th Annual Conference of the Australian Agricultural and Resource Economics Society, Jan. 23–25, 2000, Sydney.Google Scholar
  12. James, J. S., 2000b, Quality Responses to Commodity Policies, Ph.D. disc. (unpub.), Department of Agricultural and Resource Economics, University of California, Davis.Google Scholar
  13. James, J. S., 2000c, Taxes and Quality: Theoretical Results from a Market-Level Analysis, paper presented at 44“ Annual Conference of the Australian Agricultural and Resource Economics Society, Jan. 23–25, 2000, Sydney.Google Scholar
  14. Johnson, P. R., and Norton, D. T., 1983, The social cost of the tobacco program redux, Am J Agric Econ 65: 117–119.CrossRefGoogle Scholar
  15. Meilke, K. D., and de Goiter, H., 1988, Impacts of the common agricultural policy on international wheat prices, J Agric Econ 39: 217–229.CrossRefGoogle Scholar
  16. Seagraves, J. A., 1983, The Life Cycle of the Flue-Cured Tobacco Program, Faculty Working Paper No. 34, Department of Economics and Business, North Carolina State University, Raleigh.Google Scholar
  17. Smith, T. J., 1997, European Agricultural Statistics, Statistical Bulletin No. 937, Economic Research Service,U.S. Department of Agriculture, Washington, DC.Google Scholar
  18. Theil, H., 1952, Qualities, prices and budget enquiries, Rev Econ Stud 19:129–147.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media New York 2002

Authors and Affiliations

  • Julian M. Alston
    • 1
  • Jennifer S. James
    • 2
  1. 1.Department of Agricultural and Resource EconomicsUniversity of CaliforniaDavisUSA
  2. 2.Department of Agricultural Economics and Rural SociologyPennsylvania State UniversityUSA

Personalised recommendations