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Interregional Price Flexibilities: An Application to the Fed Beef Industry

Published online by Cambridge University Press:  05 September 2016

Jamal Kalantar ,
Russell L. Gum  and
Elmer L. Menzie
Jamal Kalantar
Affiliation:
Jundi-Shapur University, Ahway, Iran
Russell L. Gum
Affiliation:
Natural Resource Economics Division, Economic Research Service, U. S. Department of Agriculture, and Department of Agricultural Economics, University of Arizona, Tuscon
Elmer L. Menzie
Affiliation:
University of Guelph, Ontario, Canada, and Department of Agricultural Economics, University of Arizona, Tuscon
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Extract

Within spatially complex economic systems, it is given that change in a commodity's production in one region engaged in interregional competition will influence the price of that commodity in all trading regions. Mathematical programming models provide useful tools to predict such price alterations for specified production changes. Unfortunately, only running and analyzing many alternative formulations of such a model can generate an understanding of the relationships among regions involved in interregional competition. Specifically, this paper addresses itself to formalizing this process and providing quantitative measures summarizing the impact of regional changes in production upon prices in all regions. This paper is concerned with quantitatively estimating the influence of a change in fed beef production for given regions upon prices of fed beef for all regions of the United States. From estimates of these relationships, economic measures of isolation of regions and the impact of changes in import levels upon regional prices will be developed. Thus, unlike much previous research in the area of interregional competition in the beef industry, focused upon finding an “optimum” solution to a mathematical programming model, this research examines the basic economic relationships among regional production and regional prices implied by an interregional competition model.

Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 7 , Issue 2 , December 1975 , pp. 129 - 133
Copyright
Copyright © Southern Agricultural Economics Association 1975

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References

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