Dairy disaggregation and joint production in an economy-wide model
Charteris, Angus; Winchester, Niven
We examine the impact of dairy disaggregation and joint production on trade liberalisation outcomes in an economy-wide model. Depending on parameterisation, our model includes either (a) a single dairy commodity, (b) several dairy commodities without joint production, or (c) several dairy commodities with joint production. In a numerical application, we consider the removal of US tariffs on dairy exports from New Zealand (the world’s largest dairy exporter). We show that failing to account for joint production when dairy commodities are disaggregated leads to misleading results. Our preferred dairy production function differs from those used in otherapplied trade models.
Publisher: Department of Economics, University of Otago
Series number: 810
Keywords: Disaggregation; joint production; trade liberalisation
Research Type: Discussion Paper