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Agricultural Comparative Advantage under International Price Uncertainty: The Case of Senegal
Author(s) -
Jabara Cathy L.,
Thompson Robert L.
Publication year - 1980
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1239684
Subject(s) - comparative advantage , economics , agriculture , disadvantage , production (economics) , agricultural productivity , agricultural economics , international trade , microeconomics , international economics , ecology , political science , law , biology
This study draws upon recent theoretical contributions which have introduced uncertainty into trade theory to examine empirically the implications of international price uncertainty for agricultural comparative advantage in a small open economy assuming risk‐adverse policy makers. Utilizing a price endogenous, linear programming model developed for Senegal, it is shown that Senegal's comparative advantage in the production of peanuts and comparative disadvantage in the production of cereals is less clearcut when international price risk is considered. The results suggest a trade strategy of less specialization in peanuts and greater self‐sufficiency in cereals may be superior to free trade.