A Structural Model of the World Wool Market

This paper summarises the development, structure and data sources of the Western Australian World Wool Model. The model is a comparative static, partial equilibrium model of the world wool market. The technique used for the model is applied general equilibrium (AGE) modelling. Western Australia is separated from the rest of Australia as a production region. A key feature of the model is that raw wool is broken down into 9 different qualities, which determine the end use of the wool. The construction of a database containing these wool qualities is detailed. Potential uses for the model are outlined, and results are compared and contrasted with earlier structural models of the world wool market. Finally, advantages and disadvantages of the approach taken are outlined.