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The producer welfare effects of trade liberalization when goods are perishable and habit‐forming: the case of asparagus
Author(s) -
Ferrier Peyton,
Zhen Chen
Publication year - 2014
Publication title -
agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.29
H-Index - 82
eISSN - 1574-0862
pISSN - 0169-5150
DOI - 10.1111/agec.12020
Subject(s) - asparagus , economics , habit , welfare , agricultural economics , free trade , liberalization , offset (computer science) , agricultural science , international economics , horticulture , biology , market economy , psychology , computer science , psychotherapist , programming language
Asparagus is a perishable, highly seasonal crop. We find that out‐of‐season imports of asparagus caused habit formation that increased demand in the U.S. growing seasons. We find that habit effects offset about 64% of the welfare losses to U.S. asparagus producers from increased Mexican imports under NAFTA and all of the U.S. producer welfare losses from increased Peruvian imports under the Andean Trade Preference Act. We estimate that the U.S. producer welfare losses from NAFTA are less than the annualized value of market loss assistance provided them in the 2008 Farm Bill.