TY  - JOUR
AU  - Irwin,Douglas A.
TI  - The Optimal Tax on Antebellum U.S. Cotton Exports
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8689
PY  - 2001
Y2  - December 2001
UR  - http://www.nber.org/papers/w8689
L1  - http://www.nber.org/papers/w8689.pdf
N1  - Author contact info:
Douglas A. Irwin
Department of Economics
Dartmouth College
Hanover, NH  03755
Tel: 603/646-2942
Fax: 603/646-2122
E-Mail: douglas.irwin@dartmouth.edu
AB  - The United States produced about 80 percent of the world's cotton in the decades prior to the Civil War.  How much monopoly power did the United States possess in the world cotton market and what would have been the effect of an optimal export tax?  This paper estimates the elasticity of foreign demand for U.S. cotton exports and uses the elasticity in a simple partial equilibrium model to calculate the optimal export tax and its effect on prices, trade, and welfare.  The results indicate that the export demand elasticity for U.S. cotton was about -1.7 and that the optimal export tax of about 50 percent would have raised U.S. welfare by about $6 million, about 0.1 percent of U.S. GDP or about 0.5 percent of the South's GDP.
ER  -