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The Effect of Higher Energy Prices on the Competitive Position of Northeast Agriculture

Published online by Cambridge University Press:  10 May 2017

James W. Dunn*
Affiliation:
The Pennsylvania State University
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Extract

Major increases in energy prices since 1973 have raised considerable interest in the effect of a continuation of these increases on interregional competition. There is speculation in the Northeast that a general increase in energy prices will cause agricultural production to shift closer to the consumers. This production shift supposedly will lead to self-sufficiency in many products which were once grown in the Northeast and are now largely imported from other regions. This paper uses a simple interregional trade model to estimate the possible impact of higher energy prices on interregional competition, and on the Northeast in particular. It does this by assuming values for the relevant variables in the model and estimating the changes in the system. A range of values are used to estimate the sensitivity of the conclusions to the assumptions.

Type
Contributed Papers
Copyright
Copyright © Northeastern Agricultural and Resource Economics Association 

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References

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