1030 WORKSHOP PROCEEDINGS

Attitudes Toward Beef in Hokkaido, Japan

P.L. Klein, K.K. Klein, and S. Yoshida Department of Economics, University of Lethbridge, Lethbridge, Alberta T1K 3M4

The objective of this study was to determine the attitude of consumers toward beef in Hokkaido, Japan. A survey was conducted of consumers in two cities (Sapporo and Kitami). Questions were asked on income and family characteristics of respondents, as well as their attitudes about beef in their diet.

The survey revealed a number of interesting attitudes of these Japanese con- sumers to the purchase of beef 1. Japanese consumers in Hokkaido eat very little beef at the present time, aver-

2. Only half the respondents had ever knowingly purchased foreign beef. 3. Hokkaido residents eat in western restaurants only once every two or three

weeks. 4. Beef consumption in Hokkaido seems to be sensitive to both income and prices.

Beef is seen to be very expensive by the vast majority of consumers. 5. Hokkaido consumers showed a surprising preference for steaks, among the

beef cuts available. 6. Quality of product is very important to Hokkaido consumers. 7. Consumers in Hokkaido have a strong preference for beef that is produced

aging less than one time per week in their meals.

domestically as compared to beef imported from foreign sources.

An Alternative Analysis of Smuggling

Jamie Oxley and Bruno Larue Department of Agricultural Economics and Business, University of Guelph,

Guelph, Ontario NIG 2WI

Analysis of the welfare effects of smuggling have been based on the traditional trade theoretical model. This type of model is based on two unappealing assump- tions. First, by assuming that lump sum transfers are costless, it implicitly assumed that governments can identify the rich, the poor, the non-smugglers and the smug- glers. Second, the presence of a tariff (providing incentives to smuggle) is justi- fied by non-economic arguments. To address these deficiencies, an alternative framework is developed in which the provision of a public good is financed by tariff revenues and consumers are categorized as smugglers and non-smugglers.

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It is shown that the social welfare effects of smuggling are ambiguous regardless of the weights put on smugglers and non-smugglers in the social welfare func- tion. It is also shown that the welfare or smugglers and non-smugglers can increase or decrease as smuggling increases.

The Demand for Wine in Ontario

Lorrie Mackinnon and Bruno Larue Department of Agriculture Economics and Business, University of Guelph, Guelph,

Ontario N1 G 2 W1

In 1987, the General Agreement on Trade and Tariffs ruled that the Ontario price mark-up policy characterized by a 66 percent mark-up on foreign wines and a 1 percent mark-up on domestic wines was discriminatory and needed to be modi- fied. Four possible responses by the Liquor Control Board of Ontario (LCBO) were investigated in this paper. In the first scenario, the domestic mark-up is progressively raised while the foreign mark-up is left unaltered. The opposite is done for the second scenario. The mark-up differential in the third scenario is narrowed by adjusting both domestic and foreign mark-ups. The last scenario, is a privatization scenario featuring a 25 percent mark-up and the removal of levies assessed by the LCBO. Because wine is a very heterogeneous product, two Almost Ideal Demand Systems were estimated. In the first one, wine is categorized according to its color (red/white) and origin (domestic/foreign). In the second demand system, wine is differentiated by country of origin (France, Germany, Italy, Canada, others). The results show that foreign wines tend to have higher income and own-price elasticities. It is also shown that the scenario chosen by the LCBO which calls for increasing the domestic mark-up while leaving the for- eign mark-up at 66 percent triggers the largest decrease in sales of domestic wines but raises the most revenues for the provincial government.