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Understanding the world wool market : trade, productivity and grower incomes

by Verikios, George

Abstract (Summary)
[Truncated abstract] The core objective of this thesis is summarised by its title: “Understanding the World Wool Market: Trade, Productivity and Grower Incomes”. Thus, we wish to aid understanding of the economic mechanisms by which the world wool market operates. In doing so, we analyse two issues trade and productivity and their effect on, inter alia, grower incomes. To achieve the objective, we develop a novel analytical framework, or model. The model combines two long and rich modelling traditions: the partial-equilibrium commodity-specific approach and the computable-general-equilibrium approach. The result is a model that represents the world wool market in detail, tracking the production of greasy wool through five off-farm production stages ending in the production of wool garments. Capturing the multistage nature of the wool production system is a key pillar in this part of the model . . . The estimated welfare gain for China is 0.1% of real income; this is a significant welfare gain. For three losing regions Italy, Germany and Japan the results are robust and we can be highly confident that these regions are the largest losers from the complete removal of 2005 wool tariffs. In both wool tariff liberalisation scenarios, regions whose exports are skewed towards wool textiles and garments gain the most as it is these wool products that have the highest initial tariff rates. The overall finding of this work is that a sophisticated analytical framework is necessary for analysing productivity and trade issues in the world wool market. Only a model of this kind can appropriately handle the degree of complexity of interactions between members (domestic and foreign) of the multistage wool production system. Further, including the nonwool economy in the analytical framework allows us to capture the indirect effects of changes in the world wool market and also the effects on the nonwool economy itself.
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Source Type:Master's Thesis

Keywords:wool marketing econometric models industry mathematical forecasting equilibrium economics economic aspects world market technical change trade computable general heterogeneous commodities

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Date of Publication:01/01/2007

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