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EXPLAINING THE DISTRIBUTION OF QUOTA RENTS FROM US CHEESE IMPORTS
Author(s) -
Hornig Ellen,
Boisvert Richard N.,
Blandford David
Publication year - 1990
Publication title -
australian journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.683
H-Index - 49
eISSN - 1467-8489
pISSN - 0004-9395
DOI - 10.1111/j.1467-8489.1990.tb00489.x
Subject(s) - economic rent , economics , distribution (mathematics) , international economics , microeconomics , econometrics , business , mathematics , mathematical analysis
A theoretical model is outlined to illustrate how rents are generated from import quotas. The model is used to estimate rents from US cheese import quotas; rents are substantial. Relative rent capture by importers and exporters is explained by estimating an industrial organisation‐type model. Unequal market power is important in explaining the distribution of rents between importers and exporters. Exporters tend to maintain price‐cost margins and let importers capture a larger share as rent size increases.