The name is absent

theory advanced, β2 could be positive or negative and β3 should be negative.

Ordinary Least Squares for Equation 6) results are reported as Equations 6.1 and 6.2 in
Table 2. All of the estimated coefficients except that on Alpha*D1965-71 are significant in the
regression using MAMS as the competitor coffee. The estimate for β1 is equal to 0.45, while the
estimate for β3 is -0.40, both as expected. In the regression using Other Milds as the competitor
coffee, neither of the interactive dummies is significant, though they have the same signs as
before. The estimate for β1 is 0.5. It appears that Brazil’s use of avisos caused Brazil's coffee
export price to rise relative to those of its competitors, but by only about half as much as the unit
export tax rebate itself. As a result, the net export price fell and importers (or their customers)
gained greatly during 1980-1986. Brazil effectively transferred a large share of its domestic
quota rents from the Federal Treasury to recipients of export tax rebates.

The results from the OLS regressions are biased and inconsistent since the price of
Brazilian coffee and those of its competitors are simultaneously determined in world markets.
Further, the emission of Brazil’s export tax rebates was contractually tied to the difference
between the prices of Brazilian coffee and a weighted-average of the prices of Other Milds and
Robusta coffees. Thus, the emission of avisos was also endogenous. Indeed, if the amounts
exported from different countries were a function of the prevailing relative coffee prices, even
the relative supply variable was endogenous. I thus estimated the effect of the export tax rebates
on the international price of Brazilian coffee using Three Stage Least Squares. The system
estimated contained four equations, Equations 7), 8), 9), and 10), one each for the price of
Brazilian coffee, the price of a competitor’s coffee, the unexpected changes in the supply of
Brazilian coffee relative to that of its competitors, and the number of avisos emitted by the IBC.

their use then terminated, the results reported utilize 1980-88 as the omitted period.

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