WIPO Journal - World Intellectual Property Organization

More documents

Recommendations

Info

164 The <strong>WIPO</strong> <strong>Journal</strong> Q output P output price X 1 input factor 1 (land) X 2 input factor 2 (all other inputs including fertiliser, seeds, and labour) W 1 price of X 1 (land) W 2 price of X 2 (other inputs) Totally differentiating equations (1–6) and expressing the results as relative changes yields equations in terms of the relative changes and elasticities, the effect of a change in the price of one factor on the quantity demanded. The solution consists of linear equations expressing these relative changes in endogenous (internally determined) prices and quantities as functions of the parameters (such as demand and supply elasticities, elasticity of substitution, factor cost shares) and exogenous shifters. The shift variables, B1 and B2, take particular forms to represent the price and quantity effects of a subsidy on an output or an input; they take different values, combined with extreme elasticity assumptions, to represent a quota on an output or an input. Alston and James derived price and quantity effects of subsidies or quotas in terms of cost shares and elasticities, as reported in Table 3. Table 3: Price and quantity effects of supply/demand shifters in a two-factor model 29 k 1 k 2 η ε 1 ε 2 σ cost share X 1 cost share X 2 such that k 1 + k 2 = 1 elasticity demand for Q (absolute value) elasticity supply for X 1 elasticity supply for X 2 elasticity substitution between X 1 and X 2 29 Source: Alston and James, “The incidence of agricultural policy” in Handbook of Agricultural Policy 2002. (2011) 2 W.I.P.O.J., Issue 2 © 2011 Thomson Reuters (Professional) UK Limited
The Economic Effects of Geographical Indications on Developing Country Producers 165 Applying model to GIs GIs, as is noted above, function by restricting production to a defined area and limiting sales to a quality standard set by the managing group or body. We define the output Q as farm product; hence the relevant inputs would be land and other farm inputs (labour, fertiliser, etc.). If our interest was to examine the effects on processors (i.e. middlemen), then inputs would include farm product and other marketing inputs. The model does not have any specific functional form (equations reflecting the production relationships) and is very simple in its structure, making it readily adaptable to apply to GI analysis in the following way: • Restrict area to the defined GI: this functions similarly to an input quota in the agriculture policy model by cutting off product produced outside that region. Within the Alston and James model, the effects of an input (here land) quota can be represented by making its effective supply perfectly inelastic (i.e. for land setting ε 1=0) and defining the amount of displacement of production as -δ 1. For some products where a GI has become a near-generic name for the product, the quantity displacement will be very substantial. • Quality enhancements: this can be represented as a shift in demand (η) treated in the Alston and James context as an output subsidy. When producers of high quality product (e.g. Darjeeling tea) certify their product by a competent authority it signals quality to consumers, enabling the charging of a price premium. This quality enhancement results in a shift in demand (η) similar in concept to an output subsidy. GI certification which restricts the area of production (land) and/or enhances the quality of the output by defining minimum standards for the product affects the factor suppliers by inducing a shift in the demand for each factor. For example, whether suppliers of land (land owners) benefit from GI certification depends on whether the derived resulting demand for land is induced to rise or fall. This in turn depends on prices of all the other factors and cross elasticities or elasticity of substitution, the degree to which one input can replace another. The benefits from GIs are distributed among consumers and factor owners (land, labour, capital and other purchased inputs), with the proportions depending on selected parameters. Here, as is explained above, we use demand and supply shifts over a moderate range to represent the effects of GIs. Under these conditions, benefits to consumers are approximately proportional to the percentage change in quantity consumed: and the benefits to suppliers of land (X 1) and other inputs (X 2) are approximately proportional to the percentage change in the use of the factor: A large component of analysing the distribution of benefits from GIs using our model is then quantifying the proper values of parameters such as η, ε 1, and ε 2. An aspect of estimating these elasticities will be econometric analysis using production and consumption data, but some of the changes will be so large as to lie outside the range of historical data meaning some judgment is required as well. (2011) 2 W.I.P.O.J., Issue 2 © 2011 Thomson Reuters (Professional) UK Limited
Page 1 and 2: THE WIPO JOURNAL: ANALYSIS OF INTEL
Page 3 and 4: The WIPO Journal Table of Contents
Page 5 and 6: The Juridification of Indigenous Kn
Page 7 and 8: Indigenous knowledge systems and ex
Page 9 and 10: One of the unresolved issues was wh
Page 11 and 12: The Juridification of Indigenous Kn
Page 13 and 14: Registration of traditional knowled
Page 15 and 16: ight to equitable remuneration and
Page 17 and 18: Asia and America where it is sold c
Page 19 and 20: The Economic Effects of Geographica
Page 23 and 24: minimum quality standards for regio
Page 25: Belletti et al. used a case-study a
Page 31 and 32: Sensitivity analysis As shown in Ta
Page 33 and 34: the domestic perspective. This addi
Page 35 and 36: Filing date requirements under the
Page 39 and 40: • while some provisions of the PL
Page 41 and 42: If an applicant files the internati
Page 43 and 44: However, it was noted in the Workin
Page 47 and 48: Before the Reform of the PCT in vie
Page 49 and 50: — where the priority application
Page 53 and 54: “Bending” of PCT articles in th
Page 57 and 58: Not introducing the PLT requirement
Page 59 and 60: on the future direction of global I
Page 61 and 62: IP in Global Governance: A Venture
Page 63 and 64: negotiated. 28 Similarly, the WIPO
Page 65 and 66: IP overreach: The dangers of a boom
Page 67 and 68: As part of the social cost or the
Page 73 and 74: “geographical, historical and reg
Page 75 and 76: facilitated the integration of the
Page 77 and 78:
IP in Global Governance: A Venture
Page 79 and 80:
Competition Law and IP Abuse Preven
Page 81 and 82:
Although the TRIPS Agreement has be
Page 83 and 84:
vertical licensing agreements; and
Page 85 and 86:
“• the refusal relates to a pro
Page 87 and 88:
Nevertheless, so far as s.51(1) is
Page 89 and 90:
“In bridging the different polici
Page 91 and 92:
a third party’s access to their I
Page 93 and 94:
Competition Law and IP Abuse Preven
Page 95 and 96:
should further take into account
Page 97 and 98:
Cumulative Index This index has bee
Page 99 and 100:
Parallel imports economics and law,
Page 101:
*412409* 2011 VOLUME 2 ISSUE 2 THE
show all

WIPO Journal - World Intellectual Property Organization

Create successful ePaper yourself

Delete template?

Save as template?