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...
Main Authors: | , |
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Format: | Policy Research Working Paper |
Language: | English |
Published: |
2012
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Subjects: | |
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 |
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. |
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