A study of the effects of United Kingdom government possible alternative policies on New Zealand lamb receipts

New Zealand depends heavily on the United Kingdom as an outlet for its lamb. At present (December 1972), the United Kingdom is preparing to join the European Economic Community. Although there is no common European policy for sheepmeats, all member States do enforce the Common External Tariff of 20% (applicable to all imports). Various policy options are open to the British. If New Zealand could assess the implications, for its export revenue, of these different policies, it could try to ensure the implementation of the policy most favourable to New Zealand (or the least unfavourable). It is also important to determine the quantity of lamb that must be sold in other markets as a consequence of any restrictive decision by the Europeans. Therefore the primary objective of this thesis is to determine the lamb sales revenue accruing to New Zealand under different United Kingdom Government policies, and if possible to decide which is the “best” policy for New Zealand. Such policy evaluation involves the use of an econometrically based computer model. The thesis also has two secondary objectives. Firstly to test the structural sensitivity of any solution. Secondly to delineate aspects of lamb marketing strategies for New Zealand in which more research would be worthwhile. In order to place the present investigation in perspective Chapter 2 outlines some previous approaches to evaluation of economic policy alternatives. Chapter 3 develops the econometric model on which is based the computer model described in Chapter 4. To evaluate the alternative policies this computer model is altered by means of an experimentation phase (simulation) outlined in Chapter 5. Finally Chapter 6 presents the conclusions of the study