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MEASURING OLIGOPOLISTIC DISTORTION IN THE UK FROZEN POTATO PRODUCT SECTOR: A CALIBRATION MODELLING APPROACH
Author(s) -
Tiffin A L,
Dawson P J
Publication year - 1997
Publication title -
journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.157
H-Index - 61
eISSN - 1477-9552
pISSN - 0021-857X
DOI - 10.1111/j.1477-9552.1997.tb01156.x
Subject(s) - oligopoly , economics , distortion (music) , deadweight loss , welfare , economic surplus , competition (biology) , profit (economics) , product (mathematics) , microeconomics , econometrics , mathematics , market economy , telecommunications , ecology , computer science , biology , amplifier , geometry , bandwidth (computing)
This paper compares competition levels in the UK and Dutch frozen potato product sectors over the period 1980 to 1992 using a calibration model and conjectural variation analysis. We also obtain estimates of the trade and welfare effects of oligopolistic distortion in the UK frozen potato product sector. Results show that oligopolistic distortion in the UK raises Dutch imports by 25,700 tonnes in 1991/92 and by an annual average over the whole period of 13,000 tonnes. Further, the deadweight loss due to oligopolistic distortion in the UK is increasing to a level of £32.1m in 1991/92 which comprises of a fall in UK consumers' surplus of £170.2m and increases in UK and Dutch processors' profit of £131.9m and £6.2m respectively. We conclude that the trade and welfare costs of the UK sector's oligopolistic behaviour are high and increasing.