Testing the Efficient Redistribution Hypothesis: An Application to Japanese Beef Policy

We discuss and model the structure of the political economy of Japanese beef markets, and we apply Bullock's statistical test of the efficient redistribution hypothesis to our model to study the Pareto efficiency of Japanese beef policy in 1990 and 1991. We found that, under the hypothesis that our modeled political economy adequately reflects the true Japanese beef political economy, we could not reject at the 5% significance level that Japanese beef policy was inefficient in 1990 and in 1991; however, we could reject inefficiency in 1991 at a 7% level of significance.