The Economic Fisibility Of Import Barriers to Protect The Hawaii Macadamia Industry
Cahyono, Bambamg Tri (Adv.: Frank S. Scott, Jr.), Frank S. Scott, Jr.
The primary objective of this study is to investigate the feasibility of higher tariffs on imported macadamias in order to preserve the Hawaii macadamia industry, which is the fourth most important agricultural enterprise in Hawaii after sugar, pineapple. and flower and nursery products. The fulfillment of this objective is carried out by: 1) estimating the price elasticities of demand and supply of macadamias from time-series and cross-sectional data. 2) the construction of an empirical tariff model which weighs the oYeral1 benefits against costs of various effects of a tariff. 3) comparing the tariffs.with production subsidies on their effects on the welfare of the Hawaii economy. The research results indicate that the imposition of higher tariff duties on imported macadamias is feasibie from t~e producers' point of view, but not for the Hawaii economy as a whole. This conclusion is based on the following findings: 1) the estimated demand elasticity of macadamias is inelastic. 2) the overall benefits of a higher tariffs are lower than the overall costs to the economy as determined by theoretical and empirical tariff models under assumption of a small country case. The study indicates that production subsidies would be preferable to imposing tariffs, both theoretically and empirically, to protect the Hawaii macadamia industry. this
conclusion is supported by the lower elasticity of supply as compared to elasticity of demand of the commodity. Increased production supported by market development and better transportation facilities, would be expected to increase the competitiveness of the Hawaii macadamia industry in the world ma~ket, based on findings for the almond industry, a close competitive commodity which has a more developed and mature market.
Kata Kunci : Economic Fisibility, import barriers, welfare, Estimated Consumer Demand Fuctions.
