The Welfare Cost of Alternative Methods of Protecting Raw Wool in the United States
1969
Dardis, Rachel | Dennisson, Janet
Partial equilibrium analysis was employed to estimate the gain or loss accruing to the United States in adopting alternative methods of protection for raw wool. The cost estimates, which were calculated for 1963, indicated that the economy had gained from the adoption of a partial deficiency payments system in 1954. However, further gains could have been made if the raw wool and compensatory wool products tariffs had been replaced by increased deficiency payments. The cost to the economy of maintaining the present system of protection for raw wool ranged from $13 to $26 million, depending on the particular elasticity of demand used. The results demonstrate the necessity for considering interaction between intermediate and final goods in evaluating alternative methods of protection.
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