The name is absent

hypothesized. The coefficient on the dummy for Alpha during the period 1965-71 was always
insignificant, suggesting that the effect of the export tax rebates during this period could not be
distinguished from 1980-88, when an export quota was also in effect. The 1965-71 dummy was
not included in the final regression. Each of the coefficients on the competitor’s price is positive
and significant, as expected, and the coefficients on the relative supply variable are negative,
again as expected, and significant when MAMS is used as the competitor coffee. The dummies
for supply disturbances in 1977 and 1979 are always significant.

In the equation for the price of competitor’s coffee, PCOMPETITOR, the coefficient on Alpha
is positive in the MAMS equation and negative in the Other Milds equation. Although the
coefficient is not statistically significant in either equation, the result suggests the possibility that
Brazil’s use of export tax rebates could have caused a decrease in the prices of its competitors'
coffees by improving Brazil’s competitive position. The coefficient on PSANTOS4 is positive and
highly significant, as expected. The coefficient on relative supply is negative and significant
when both MAMS and Other Milds are used as the competitor coffee. A negative coefficient
was unexpected, but plausible if the increase in Brazilian supply was sufficient to cause the
prices of all coffee to decline. The supply of Brazilian coffee was highly variable from year to
year and this variation was the main determinant of price variability in all coffees traded
internationally during the period studied.

Little information is available regarding the determinants of Brazil’s export tax rebates
except that these were contractually tied to the difference between the international price of
Brazil’s coffee and those of its competitors. Each of these prices was therefore included as an
independent variable in the equation explaining the level of Alpha.²² A dummy was also

²² Because export tax rebates increased the international price of Brazilian coffee and perhaps reduced those of its
competitors, any rebate should have been self-reinforcing, increasing future rebates and thereby transferring

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