TRADE IN AGRICULTURAL GOODS AND CULTURAL GOODS
Lee, Kwan Young
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My dissertation examines agricultural economics and international economics. In the first chapter, I create a model with pre- and post-harvest tasks and transportation network to study how a shortage in the pre-harvest labor market affects the post-harvest labor market and downstream commodity markets. To understand the effects of a pre-harvest labor shortage on the post-harvest labor and output commodity markets, we consider an economy that comprises two input markets and two output markets. Both output markets draw employment from each input labor market. The input markets are the pre-harvest and post-harvest labor markets. The output markets we consider are the U.S. pome (apple) and prunus (peach) commodity markets. We place the two input and two output markets into an equilibrium displacement Muth model. Then I shock the model to examine welfare changes. The contributions are threefold: (1) I examine pre- and post-harvest labor markets which are the first work partitioning labor into pre- and post-harvest labor, (2) I partition output into two related goods that allows to observe different impacts from pre- and post-harvest labor shortage that may be hidden if studying in aggregate level, and (3) I apply transportation network into Muth model by utilizing spoilage rate which is important but missing in most studies. In my second chapter, I use a restricted source differentiated almost ideal demand system (Restricted SDAIDS) model to estimate the impacts on traded volumes of the 50% Indian tariff. I also use a compensating variation technique to estimate the welfare effects of gradually eliminating such tariff. The findings suggest that a 1% decrease in the price of U.S. apples would increase the demand by 3.83%. Also, I found that if India eliminates the tariff on all imported fresh apples, the increase in Indian consumer welfare is 89% in India’s imported fresh apple market. The third chapter investigates how a cultural proximity affects international trade flows by developing the gravity model with a bilateral preference. The results show that the higher preference on K-pop or J-pop music of an importing country positively affects its amount of imports from South Korea or Japan.