Abstract
Black coal is Australia's most important export commodity, but the profitability of the domestic coal industry has been low relative to the mining sector average. As a consequence, a key policy issue in Australia has been the extent to which Japan's coal pricing and investment policies have influenced coal market outcomes. In this paper, a regional hedonic pricing model of Australia's coking coal exports is estimated for the period JFY1989 to 1996. Non-Japan regional intercept dummy variables were found to be significantly different from zero, although these varied across coal categories and years. However, the empirical evidence indicates that Japan does not pay significantly lower prices relative to other major export markets for coking coal of a given quality.
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