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An Allais Measure Of Production Sector Waste Due To Quotas, Lilyan E. Fulginiti, Richard K. Perrin
An Allais Measure Of Production Sector Waste Due To Quotas, Lilyan E. Fulginiti, Richard K. Perrin
Department of Agricultural Economics: Faculty Publications
In this paper we adapt a partial equilibrium approach of Allais and Diewert to measure the efficiency loss in the producing sector due to quotas. The measure of waste is the additional profits available due to reallocation subject to constraints that the welfare of persons and firms outside the sector is unaffected. An example is presented using the tobacco quota program in the U.S.