Novel Indicators of the Trade and Welfare Effects of Agricultural Distortions in OECD Countries

Agricultural markets in OECD countries have long been highly distorted by government policies. Traditional weighted average aggregates of the price distortions involved, such as producer and consumer support estimates can be poor indicators of the...

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Bibliographic Details
Main Authors:	Anderson, Kym, Croser, Johanna
Format:	Policy Research Working Paper
Language:	English
Published:	2012
Subjects:	ABSOLUTE VALUE AGGREGATE TRADE AGRICULTURAL COMMODITIES AGRICULTURAL INCENTIVES AGRICULTURAL MARKETS AGRICULTURAL PRICE AGRICULTURAL PRICES AGRICULTURAL PRODUCTION AGRICULTURAL PRODUCTS AGRICULTURAL SUPPORT AGRICULTURAL TRADE AGRICULTURE AVERAGE PRICE AVERAGE TARIFF BARLEY BORDER PRICE BORDER PROTECTION COARSE GRAINS COMMODITIES COMMODITY CONSUMER PRICE CONSUMER PRICES CONSUMERS COTTON DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPMENT ECONOMICS DIRECT PAYMENTS DOMESTIC CONSUMPTION DOMESTIC DEMAND DOMESTIC DISTORTIONS DOMESTIC PRICE DOMESTIC PRODUCTION ECONOMETRIC ESTIMATES ECONOMIC DEVELOPMENT ECONOMIC EFFECTS ECONOMIC MODELS ECONOMIC POLICY ECONOMIC WELFARE ELASTICITY ASSUMPTION EQUILIBRIUM EXCHANGE RATE EXCHANGE RATES EXPORT SUBSIDIES EXPORT TAX EQUIVALENTS EXPORT TAXES FACTOR MARKETS FAO FARM FARMERS FARMING FOOD PRODUCTS FREE TRADE GARLIC GENERAL EQUILIBRIUM MODEL GLOBAL MARKET GLOBAL TRADE GRAINS IMPORT BARRIERS IMPORT PROTECTION IMPORT TARIFFS INCOME INCOMES INDEX NUMBERS INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE INTERNATIONAL TRADE INTERNATIONAL TRADE POLICY LESS DEVELOPED COUNTRIES MAIZE MARKET INDEXES MARKET PRICE OILSEEDS OPEN ECONOMY OUTPUT PEAS PEPPER POULTRY PRICE CHANGE PRICE CHANGES PRICE DISTORTION PRICE DISTORTIONS PRICE ELASTICITY PRICE ELASTICITY OF SUPPLY PRICE SUPPORT PRODUCER PRICE PRODUCER PRICES QUANTITATIVE RESTRICTIONS RA RAPESEED RYE SORGHUM SOYBEAN SUGAR SUNFLOWER TARIFF DATA TAX TAX RATE TAXATION TOBACCO TRADE ASSOCIATION TRADE COSTS TRADE EFFECTS TRADE POLICIES TRADE POLICY TRADE TAX TRANSITION ECONOMIES TRANSPARENCY TROPICAL CROPS VEGETABLES VOLUME OF TRADE WELFARE IMPACTS WELFARE LOSS WELFARE LOSSES WHEAT WTO
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100826082556 http://hdl.handle.net/10986/3888

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Summary:	Agricultural markets in OECD countries have long been highly distorted by government policies. Traditional weighted average aggregates of the price distortions involved, such as producer and consumer support estimates can be poor indicators of the trade restrictiveness and economic welfare losses associated with them, especially if a country's support estimates vary a lot across the product range. Certainly estimates of trade and welfare effects of price supports can be obtained from sector or economy-wide models using price elasticity estimates, but the results can be contentious if there is no consensus on what model specification and elasticity parameters to use. This paper shows that, if there is a willingness to accept simple assumptions about elasticities, it is possible to generate indicators of the welfare and trade restrictiveness of agricultural policies using no more than the price and quantity data needed to generate producer and consumer support estimates. These new indexes thus provide an attractive supplement to the current policy monitoring regime developed by the OECD Secretariat.

Novel Indicators of the Trade and Welfare Effects of Agricultural Distortions in OECD Countries

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