A cross-commodity appraisal of demand-raising research benefits : pork and chicken in Australia

Research output: Journal PublicationsJournal Article (refereed)

Abstract

A multi-commodity model is developed for evaluating the gains from research which raises the demand for a commodity, and applied to the pig and chicken industries in Australia. The major finding is that the gain to pork producers is larger, and the gain to consumers smaller, with a cross-commodity consideration than without. Bigger differences in results are observed with larger values of the cross-price elasticity between pork and chicken, and with a larger shift in demand for chicken. However, the aggregate benefits to the Australian pig industry are not significantly affected by price changes in the market for chicken. The implication of the analysis is that, by ignoring the cross-market feedback between commodities closely related in consumption, consumers (or taxpayers) of the commodity experiencing a rise in demand may bear a higher-than-optimal outlay on public research directed to increasing the demand for that commodity.
Original languageEnglish
Pages (from-to)243-247
Number of pages5
JournalJournal of Agricultural Economics
Volume43
Issue number2
DOIs
Publication statusPublished - 1 May 1992
Externally publishedYes

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