On the Hidden Revenue Effects of Wool Price Stabilisation in Australia: Initial Results‐ a Reply

Abstract

Richardson (1982) makes three direct criticisms of the paper dealing with hidden revenue effects of wool price stabilisation (Campbell et al. 1980). These criticisms relate, first, to a difference between the definition of hidden revenue and that advanced by Gruen (1964); second, to the basis of the choice of preferred functional form; and third, to a failure to consider the implications of the potential throughput destabilising impacts of price stabilisation. In discussing these points, Richardson's arguments that the conclusions were overstated and that there is a need t o reinterpret the results are considered, along with his suggestions that the results d o not provide a sound basis for policy decisions and that there is a need to focus on the state of knowledge concerning risk effects.Arising from these specific points, Richardson seems to be concerned that the results should not be misinterpreted as measuring hidden revenue impacts incurred directly by growers. Measure of RevenueIt is true that hidden effects were measured on gross sales revenues and, therefore, that the revenue definition differs from that used by Gruen. Consequently, we share Richardson's concern that the results should not be used as a direct measure of hidden transfers incurred directly by growers. This point was communicated to Watson and he refers to 'sales revenue' and not growers' revenues (Watson 1980, p. 90).

Counting the cost: the reserve price scheme for wool 1970‐2001

“…(Powell and Campbell ; Duloy and Parish ; Gruen ; Tisdell ; Ward ; Lewis ; Campbell et al . ; Haszler and Curran ; Richardson ). The main hidden gains and losses identified by the Australian agricultural economists were the impacts on grower revenue of the purchases and sale of stocks.…”

Antipodean agricultural and resource economics at 60: risk and uncertainty

“…The era of ‘stabilisation economics’ in AARES drew on these contributions, and also generated an arcane debate on the existence or otherwise of ‘hidden gains and losses’ (Gruen ; Campbell et al . ; Haszler and Curran ; Richardson ).…”

Combinations of Buffer‐stocks and Buffer‐funds for Wool Price Stabilisation in Australia*

“…The results show that thcre is considerable potential for cost savings to be made by combining buffer-fund and buffer-stock instruments. ample, Campbell, Gardiner and Haszler 1980;Richardson 1982 andCurran 1982). Another has been the impact of the scheme * This research was undertaken with the assistance of a postgraduate scholarship provided by the Australian Wool Corporation.…”