The Effects of Changes in Subsidies and Trade Interventions on the Sheep Industry

Show full item record

Title: The Effects of Changes in Subsidies and Trade Interventions on the Sheep Industry
Author: Deese, William Franklin
Advisors: Peter Bloomfield, Committee Member
Walter Thurman, Committee Chair
Matt Holt, Committee Member
Russell Lamb, Committee Member
Abstract: The purpose of this research is to analyze the dynamic response of an industry to production subsidies and to trade restrictions on a competing product. Specifically I examine the U.S. sheep industry and compare the effects of a production intervention similar to the Wool Act and to a tariff-rate quota. I begin with a dynamic profit function and derive an Euler equation. I use the iterated generalized method of moments to estimate the demand for slaughter lambs, the Euler equation, and the demand for domestic wool. These equations are estimated separately using instrumental variable techniques to adjust for the endogenous right hand side variables and for future-dated variables, in which the number of instruments exceeds the number of parameters. In each case, the iterated generalized method of moment estimator converges and produces reasonable estimates. Separately I estimate the demand for imported lamb meat using regression with autocorrelated errors. I then generate equilibrium slaughter lamb prices and breeding stock levels for a base case, for the production-subsidies case and for the tariff-rate quota case. The equilibrium quantities and prices are generated from the solution to a variable-coefficient difference equation. A feature of the model is the effects of joint outputs, slaughter lambs and wool, are included in the model. Results are that re-imposition of the Wool Act increases breeding stock levels relative to the base case, although breeding stock levels continue to decline, and slaughter lamb prices also initially increase. Implementation of the tariff-rate quota raises slaughter lamb prices and lowers breeding stock levels relative to the base case. Effects of the tariff-rate quota are small compared with the re-imposition of the Wool Act.
Date: 2003-06-23
Degree: PhD
Discipline: Economics
URI: http://www.lib.ncsu.edu/resolver/1840.16/3618


Files in this item

Files Size Format View
etd.pdf 648.5Kb PDF View/Open

This item appears in the following Collection(s)

Show full item record