Supply Management: Analyzing the Values of Tradeable Output Quotas

This paper is coocemed with the analysis of some economic impacts of supply-management quota schemes based on evidence fran some of the Canadian quota programmes. Reasons underlying the wide acceptance of these programmes and the use of cost-increasing methods of quota administration are briefly explored. Some evidence from Canadian quota programmes is presented to illustrate the economic effects of restrictive quota transfer policies. An econometric analysis of economic factors affecting the supply of and demand for transferable output quotas is presented. The results of a single-equation model of the derived demand for quotas are compared to the results of a simultaneous equation model of demand and supply for quotas. Econometric analysis of quota price and transaction data provides useful insights into the behavioor of the marlcet for quotas.