A DYNAMIC ANALYSIS OF US EXPORT WHEAT PRICING AND MARKET SHARES

The economics of a higher loan rate to support US wheat prices is analysed. Utilising optimal control theory, a dynamic wheat trade model is developed. The basic premise underlying the model is that the United States finds itself having transient monopoly power in the wheat market. An expression for the optimal pricing policy which maximises the present value of expected profits over the indefinite future is derived. Results from both the theoretical and empirical models demonstrate that the US wheat pricing strategy depends on its costs relative to competitors' costs, the discount rate and the competitors' response function. The main policy implication of the analysis is for the dominant wheat exporting country constantly to seek to lower costs relative to competitors and to maintain a price exceeding unit cost without encouraging competitors' expansion.     

Emerging differences in state grain trading: Australia and Canada

The Australian Wheat Board (AWB) and Canadian Wheat Board (CWB) have attracted attention recently because they are two of the largest state trading enterprises (STEs) engaged in agricultural trade. They have traditionally been viewed as nearly sister agencies. Among major STEs in the world market, these two agencies historically had similar characteristics including: price pooling, cost pooling, export sales monopolies, monopoly powers within domestic markets, grain quality control, and government underwriting of initial producer prices and export credit. However, during the past 6 years, similarities between the AWB and CWB have begun to diverge and the importance of their differences is becoming increasingly apparent. This paper identifies major emerging differences between the AWB and CWB and explores potential explanations (hypotheses) for these dissimilarities. A major point is that reforms in institutional design and legislative changes have given rise to emerging differences in key aspects of the marketing systems and performance.     

STRATEGY DEVELOPMENT AS A SOCIAL PROCESS

This article argues that the development of strategy in organizations will be more effective if it is seen as predominantly a social rather than analytical process. Using the notion of organizations as negotiated order, it is suggested that designed Group Decision Support Systems can play an important role in facilitating the negotiation of strategy. Six ‘support systems’are discussed, and the implication is that planners might see themselves as facilitators managing both ‘socially negotiated order’and ‘negotiated social order'.     

USER-FRIENDLY ECONOMETRIC SOFTWARE: A REVIEW

Economics Department, University of Edinburgh
Micro TSP Version 5.0. Program by David M. Lilien, User's manual by Robert E. Hall and David M. Lilien.
PC ECOS Version 1.2. Program and manual by Chris Birchenhall and Jon Stewart, London: McGraw-Hill, 1986
LINREG. Program and manual by William H. Greene, New York (528 4th Street, Brooklyn, NY 11215, USA). 1986     

Coal: For Miners or Consumers?

Nationalisation promised to run the coal industry efficiently in the public interest. But nationalisation is politicisation. The consumer is replaced by party politics. Despite surplus stocks, the National Union of Mineworkers under Arthur Scargill resists concentration on the most efficient pits. The industry has become an engine not for coal production but for Job preservation.     

Unit Roots and Cointegration Analysis: The Impact on Empirical Analysis in Economics

The purpose of this paper is to examine some of the impacts of the theoretical literature relating to unit roots and cointegration on empirical analysis in economics. The results of a survey of time-series-related empirical papers in seven journals in 1995 indicate that about 40 per cent and 30 per cent of papers include tests for unit roots and cointegration , respectively. In testing for unit roots, the Augmented Dickey- Fuller procedure is clearly the most commonly used test. In testing for cointegration, the closely related Engle-Granger procedure is the most commonly used test but its dominance is not as pronounced.     

Price or Quantity Competition? Oligopolistic Structures in International Commodity Markets

International commodity markets may be characterized by price or quantity competition and by product differentiation. As an illustration, this paper presents a set of models of the Japanese market for imported beef. The models are evaluated using a non-nested econometric test. The one which best fits the data is a Stackelberg model with price leadership by Australia. This result provides evidence on the explicit nature of the game being played by exporters, unlike the applied conjectural variations approach which provides only an index of how competitive the market is.     

A statistical identity linking folded and censored distributions

This paper models expected future values of Gaussian stochastic processes that are bounded by reflecting barriers. Such expectations are of course crucial to any model with forward looking agents. The approach is illustrated by applying it to an exchange rate target zone. By adopting a distributional approach, the formal analysis can be both simple and somewhat elegant. In doing so, we show that the first moments of folded and censored distributions are related in a surprisingly neat way. The setting is discrete-time, though where appropriate we extend the analysis to the continuous-time analogue of reflected Brownian motion.     

Pesticide Productivity and Transgenic Cotton Technology: The South African Smallholder Case

This paper empirically investigates how the productivity of pesticide differs in Bt versus non‐Bt technology for South African cotton smallholders, and what the implications for pesticide use levels are in the two technologies. This is accomplished by applying a damage control framework to farm‐level data from Makhathini flats, KwaZulu‐Natal. Contrary to findings elsewhere, notably China, that farmers over‐use pesticides and that transgenic technology benefits farmers by enabling large reductions in pesticide use, the econometric evidence here indicates that non‐Bt smallholders in South Africa under‐use pesticide. Thus, the main potential contribution of the new technology is to enable them to realise lost productivity resulting from under‐use. By providing a natural substitute for pesticide, the Bt technology enables the smallholders to circumvent credit and labour constraints associated with pesticide application. Thus, the same technology that greatly reduces pesticide applications but only mildly affects yields, when used by large‐scale farmers in China and elsewhere, benefits South‐African smallholder farmers primarily via a yield‐enhancing effect.