The Effect of the Arab Boycott on Israel: The Automobile Market

C. Fershtman, N. Gandal

Research output: Working paperDiscussion paperOther research output

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Abstract

Recent progress towards a comprehensive peace in the Middle East has led to a relaxation of the enforcement of the Arab economic boycott of Israel.This in turn has led to the entry of all the major Japanese and Korean automobile manufacturers into the Israeli market.In this paper, we examine the effect of the Arab economic boycott on this market.Using recent advances in estimating discrete-choice models of product differentiation, we estimate that had the boycott continued, the welfare loss per purchaser would have been approximately $790 in 1994.This benefit can be interpreted as a "peace dividend".Since approximately 113,000 new automobiles were sold in 1994, the welfare gain to consumers was more than $89 million that year
Original languageEnglish
Place of PublicationTilburg
PublisherMicroeconomics
Number of pages22
Volume1996-08
Publication statusPublished - 1996

Publication series

NameCentER Discussion Paper
Volume1996-08

Fingerprint

Boycott
Israel
Automobile market
Economics
Automobile
Discrete choice models
Product differentiation
Welfare gains
Peace
Enforcement
Peace dividend
Middle East
Welfare loss

Keywords

  • Car Industry
  • Economic Sanctions
  • Israel
  • Arab Countries

Cite this

Fershtman, C., & Gandal, N. (1996). The Effect of the Arab Boycott on Israel: The Automobile Market. (CentER Discussion Paper; Vol. 1996-08). Tilburg: Microeconomics.
Fershtman, C. ; Gandal, N. / The Effect of the Arab Boycott on Israel : The Automobile Market. Tilburg : Microeconomics, 1996. (CentER Discussion Paper).
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Fershtman, C & Gandal, N 1996 'The Effect of the Arab Boycott on Israel: The Automobile Market' CentER Discussion Paper, vol. 1996-08, Microeconomics, Tilburg.

The Effect of the Arab Boycott on Israel : The Automobile Market. / Fershtman, C.; Gandal, N.

Tilburg : Microeconomics, 1996. (CentER Discussion Paper; Vol. 1996-08).

Research output: Working paperDiscussion paperOther research output

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Fershtman C, Gandal N. The Effect of the Arab Boycott on Israel: The Automobile Market. Tilburg: Microeconomics. 1996. (CentER Discussion Paper).