Countries in the region rely considerably on international trade to promote economic growth. However, instability in export earnings has been a cause of concern for policy makers in the economic sphere. Export earnings instability is analysed for four developing South Pacific countries, Papua New Guinea, Solomon Islands, Tonga and Western Samoa. Variability in total export earnings over time is
... [Show full abstract] decomposed into variability which can be attributed directly to export revenue instability for major export commodities and revenue interaction effects between these commodities. Variability in export revenue of individual commodities is decomposed into its price, quantity and price-quantity interaction components. A comparison is made of differences in the sources of export instability among the four countries studied and results are discussed in terms of their usefulness for formulating stabilization policies in the South Pacific region.-Authors