Date of Award

2011

Document Type

Thesis

Degree Name

Master of Science (MS)

Department

Agricultural Economics

First Advisor

Jefferson-Moore, Kenrett Dr.

Abstract

Because of Argentina's drastic change in its domestic export tax rate, there was a shortage of soybean supply in the global market and global soybean prices were inflated. Simultaneous equations are used to develop supply and demand equations for the global soybean market. The variables used in the simultaneous equations to help explain global quantity supplied and demanded for soybeans are: the price of soybeans (Psoy), the price of corn (Pcorn), export taxes (Tax), the technology (Tech), a dummy variable (novice), and real gross domestic product (Rgdp). The outcome of the simultaneous equations estimates that there is an inverse relationship between Argentina’s export tax rate and global supply of soybeans. Thus, a 1% change in Argentina’s export tax rate will cause the quantity supplied of soybeans in the world market to decline by .079%. Essentially, the export tax positively affects U.S production and helps create jobs in the United States.

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