The producer welfare effects of trade liberalization when goods are perishable and habit-forming: the case of asparagus
Article first published online: 13 APR 2013
Published 2013. This article is a US Government work and is in the public domain in the USA.
Volume 45, Issue 2, pages 129–141, March 2014
How to Cite
Ferrier, P. and Zhen, C. (2014), The producer welfare effects of trade liberalization when goods are perishable and habit-forming: the case of asparagus. Agricultural Economics, 45: 129–141. doi: 10.1111/agec.12020
- Issue published online: 4 MAR 2014
- Article first published online: 13 APR 2013
- Manuscript Revised: 24 JAN 2013
- Manuscript Accepted: 24 JAN 2013
- Manuscript Received: 20 NOV 2012
- Free trade agreements;
- Andean Trade Preference Act;
- Equilibrium displacement model;
Asparagus is a perishable, highly seasonal crop. We find that out-of-season imports of asparagus caused habit formation that increased demand in the U.S. growing seasons. We find that habit effects offset about 64% of the welfare losses to U.S. asparagus producers from increased Mexican imports under NAFTA and all of the U.S. producer welfare losses from increased Peruvian imports under the Andean Trade Preference Act. We estimate that the U.S. producer welfare losses from NAFTA are less than the annualized value of market loss assistance provided them in the 2008 Farm Bill.