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| Content Provider | AgEcon Search |
|---|---|
| Author | Overton, Benny Beghin, John C. Foster, William E. |
| Abstract | This paper examines the effects of the use of increasingly-popular phytosanitary regulations on production costs, and output and factor trade flows. The case addressed is that of the European regulation of maximum chemical residues in cigarettes manufactured with tobacco containing maleic hydrazide. The paper presents simulations of the effects of tightening the input/output market linkages and on the substitution away from the residue-contaminated U.S. input to residue-free non-U.S. inputs. This induced substitution results in higher costs, lower quantity supplied of the final product, and higher prices for U.S. cigarettes in Europe. Cross-price effects lead to higher quantities of EU cigarettes sold and a corresponding increase in the use of all inputs, including U.S. tobacco. When the U.S. tobacco price is allowed to fall, direct price effects stimulate the EU derived demand for U.S. tobacco. Although the regulation is protectionist in the output market, it leads to increased EU imports of the residue-contaminated input. When the price of U.S. tobacco adjusts, the regulation is actually antiprotective for EU growers. The regulation also indirectly influences production practices of U.S. tobacco growers and leads to lower levels of MH residues on U.S. leaf. |
| Related Links | https://ageconsearch.umn.edu/record/31587/files/24020221.pdf |
| Ending Page | 231 |
| Page Count | 11 |
| Starting Page | 221 |
| File Format | |
| DOI | 10.22004/ag.econ.31587 |
| Journal | Agricultural and Resource Economics Review |
| Issue Number | 2 |
| Volume Number | 24 |
| Language | English |
| Publisher | Northeastern Agricultural and Resource Economics Association (NAREA) |
| Publisher Date | 1995-01-01 |
| Access Restriction | Open |
| Subject Keyword | Applied Economics Agricultural Economics Agri-economic Open Access Database Research in Applied Economics Research in Agricultural Economics Higher Study On Agricultural Economics Higher Study On Applied Economics Agricultural Research Documents Agrarian Economy & Research Higher Study Agri-economics Research in Economics Agri-economic Open Access Repository Statistics in Agricultural Economics Agricultural and Food Policy |
| Content Type | Text |
| Resource Type | Article |
| Subject | Economics, Econometrics and Finance |
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