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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:The price elasticity of demand for Ghana's cocoa: some estimates and policy implications
Authors:Blomqvist, A.G.
Haessel, Walter
Year:1972
Periodical:The Economic Bulletin of Ghana
Volume:2
Issue:3
Pages:15-29
Language:English
Geographic term:Ghana
Subjects:prices
cocoa
Abstract:One frequently hears the claim that an expansion of the output of cocoa is not a profitable course of action because of the low price elasticity of demand for Ghana's cocoa. A 25 per cent increase in the producer price, such as has recently been proposed in Ghana, would likely lead to such an expansion. This paper attempts to estimate the marginal social profitability of cocoa output in Ghana through a comparison between marginal social revenue and cost of cocoa production. Attempted is to show that the prise elasticity of demand for Ghana's cocoa may actually be substantially larger in absolute value than is often assumed; some reasons are suggested why there has been a tendency to underestimate it. Introducing world market factors the price elasticity of demand and the social marginal revenue are computed under various assumptions. Finally a discussion of the resulting marginal social profitability estimates. Ref., notes, tables.
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