Notes on market failure and the Paretian (Kaldor-Hicks) relevance and irrelevance of unfavourable externalities

The following are notes that have been distributed by me over the last few years to students in Environmental Economics at The University of Queensland. They give particular attention to whether externalities are Pareto or Kaldor-Hicks relevant from a policy point of view. Externalities are Kaldor-Hicks or Pareto irrelevant if no change is possible for which gainers could compensate losers. Both absolute and marginal externalities may be Kaldor-Hicks relevant. Infra-marginal negative externalities are often, but not always, Kaldor-Hicks irrelevant. There are at least two cases where such externalities can be relevant. First, the absolute impact of the negative externality may be so great that the source of the externality should be eliminated. Secondly, if the externality arises from production, its nature may depend on the type of production technique adopted. Although for the technique adopted, an infra-marginal negative externality occurs. That is Paretian irrelevant given that choice of this technique is the only available possibility, alternative techniques may actually be available in practice. Some of these may generate even smaller total external effects and be socially preferable. Both cases are outlined and illustrated in these notes. The analysis reveals the dangers of relying on marginalism for deciding on environmental policy. Total (external) effects are often of great social and economic importance and appropriate social choices cannot be made on the basis of marginalism alone.

Testing for Market Power in Multiple-Input, Multiple-Output Industries: The Australian Grains and Oilseeds Industries

Recent empirical studies have found significant evidence of departures from competition in the input side of the Australian bread, breakfast cereal and margarine end-product markets. For example, Griffith (2000) found that firms in some parts of the processing and marketing sector exerted market power when purchasing grains and oilseeds from farmers. As noted at the time, this result accorded well with the views of previous regulatory authorities (p.358). In the mid-1990s, the Prices Surveillence Authority (PSA 1994) determined that the markets for products contained in the Breakfast Cereals and Cooking Oils and Fats indexes were "not effectively competitive" (p.14). The PSA consequently maintained price surveillence on the major firms in this product group. The Griffith result is also consistent with the large number of legal judgements against firms in this sector over the past decade for price fixing or other types of non-competitive behaviour. For example, bread manufacturer George Weston was fined twice during 2000 for non-competitive conduct and the ACCC has also recently pursued and won cases against retailer Safeway in grains and oilseeds product lines.

International market selection: Developing a model from Australian case studies

This paper develops a theory that firms seek out new country markets on the basis of expected commercial returns. These expectations depend on judgements about the attractiveness of the market and the firm's competitive position in it, which in turn are influenced by informants. It is the number and strengths of these informants that will underlie the probability of a country being identified and assessed as a new market by any firm.

The English-only movement: A communication analysis of changing perceptions of language vitality

This paper reexamines the potential impact of the English-only movement on linguistic minorities and Anglos' perceptions of their own and minority groups' language vitality. Of particular interest is the Hispanic population-the fastest growing minority in the U.S. Communication scholars have paid only scant attention to the English-only movement and how it affects the social and communication climate for Latinos. However, literature reviews prepared for the American Psychological Association and for the Teachers of English to Speakers of Other Languages (in 1991 and 1995, respectively) concluded that English-only initiatives have negative consequences for limited-English proficiency groups. Revisiting this still-growing issue in the light of more recent studies across disciplines and media reports, we examine how Anglo support for English-only policies limits the use, promotion, and salience of minority languages like Spanish in institutional settings and in the linguistic landscape and suggest directions for future research.

The changing face of ciguatera

Ciguatera is a global disease caused by the consumption of certain warm-water fish (ciguateric fish) that have accumulated orally effective levels of sodium channel activator toxins (ciguatoxins) through the marine food chain. Symptoms of ciguatera include a range of gastrointestinal, neurological and cardiovascular disturbances. This review examines progress in our understanding of ciguatera from the work of Banner in the late 1950s to the present. Similarities and differences in ciguatera in the Pacific Ocean, Indian Ocean and Caribbean Sea are highlighted, and future research directions are suggested. (C) 2000 Elsevier Science Ltd. All rights reserved.

Changing pay systems, occupational concentration and the gender pay gap: Evidence from Australia and the UK

While aggregate level pay equity comparisons between Australia and the UK confirm expectations based on their different wage distributions and regulatory systems, observation of trends and occupational level analysis reveal additional complexity. Our analysis suggests the need for a multi-faceted approach to closing the average gender pay gap.