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| Choi, E. Kwan; Feinerman, Eli. |
| This paper investigates the effects of first-best policies to regulate nitrogen application. Some nitrogen fertilizer is applied ex ante before a random rainfall, but sidedressed nitrogen may be applied ex post. First-best policy is a tax or a quota on ex ante application, because sidedressed nitrogen is not leached. Since a risk-averse farmer uses more nitrogen ex ante than a risk-neutral farmer, a higher tax must be imposed on the former. Action equivalent first-best taxes and quotas are also welfare equivalent. An empirical model for wheat in Israel was used to demonstrate the analytical findings. |
| Tipo: Journal Article |
Palavras-chave: Environmental Economics and Policy. |
| Ano: 1995 |
URL: http://purl.umn.edu/30925 |
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| Babcock, Bruce A.; Choi, E. Kwan; Feinerman, Eli. |
| The risk premium and the probability premium are used to determine appropriate coefficients of absolute risk aversion under CARA utility. A defensible range of risk aversion coefficients is defined by the coefficients that correspond to risk premiums falling between 1 and 99% of the amount at risk or to probability premiums falling between .005 and .49 for a lottery that pays or loses a given sum. The consequences of ignoring risk premiums when selecting risk-aversion coefficients for representative decision makers are illustrated by calculation of the implied risk premium associated with the levels of absolute risk aversion assumed in six selected studies. |
| Tipo: Journal Article |
Palavras-chave: Risk and Uncertainty. |
| Ano: 1993 |
URL: http://purl.umn.edu/30810 |
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| Choi, E. Kwan; Lapan, Harvey E.. |
| This paper investigates optimal trade policies for a developing small open economy which faces international price uncertainty. Trade taxes are used to finance provision of a public good, which enters the utility function of consumers. If demands for private goods are independent of the public good, the optimal composite tariff dominates the optimal quota. If the optimal state-contingent tariff increases with the foreign price, the optimal specific tariff also dominates the optimal quota, regardless of risk aversion. However, the ranking of the optimal specific tariff and the optimal quota generally depends on risk attitudes as well as ordinal preferences. |
| Tipo: Working or Discussion Paper |
Palavras-chave: International Relations/Trade. |
| Ano: 1990 |
URL: http://purl.umn.edu/51263 |
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| Choi, E. Kwan; Johnson, Stanley R.. |
| This paper investigates whether a small country facing foreign price instability benefits from active stabilization of the domestic price of the importable. If the random tariff revenue is rebated ex post, domestic price stabilization increases income instability, and nonintervention is optimal. If an ex ante rebating scheme is employed, a small country can benefit from domestic price stabilization, and there exists a partial stabilization policy that dominates free trade. Partial stabilization of the domestic price with the ex ante rebate requires a variable import levy inversely related to the foreign price. |
| Tipo: Working or Discussion Paper |
Palavras-chave: Demand and Price Analysis; International Relations/Trade. |
| Ano: 1990 |
URL: http://purl.umn.edu/51265 |
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| Choi, E. Kwan; Beladi, Hamid. |
| This paper shows that free trade reduces the welfare of a small country with unemployment unless the free trade price if the importable falls below the autarky equivalent price. A decline in the price of the importable from the autarky level not only improves the terms of trade but also reduces employment and production in the importable sector. A numerical example illustrates that the autarky equivalent price of the importable can be substantially lower than the autarky price. If an optimal tariff is used, however, restricted trade improves welfare above the autarky level. |
| Tipo: Working or Discussion Paper |
Palavras-chave: International Relations/Trade. |
| Ano: 1998 |
URL: http://purl.umn.edu/18513 |
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