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Cost Pooling in Australian Grain Handling: A Common Property Analysis
Author(s) -
Quiggin John,
Fisher Brian S.,
Peterson Deborah C.
Publication year - 1994
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 - 10.2307/1243627
Subject(s) - pooling , veto , investment (military) , economics , microeconomics , property rights , property (philosophy) , public economics , business , philosophy , epistemology , artificial intelligence , politics , computer science , political science , law
The common property analysis of Rausser, Zusman, and Foster is expanded and applied to Australian grain transportation systems. With a conservative decision rule, a statically inefficient cost pooling system may lead to optimal investment decisions as benefits become pooled. With Ramsey pricing in contrast, losers may veto many investment decisions, so that allocations become ‘equitable’ but technically inefficient. Efficiency gains from price policy reform may not be achieved unless accompanied by property right reallocation.