Measuring the Marginal Welfare Impacts of Government Regulation: The Case of Supply Management
Gerrit van Kooten and
Keith F. Taylor
Canadian Journal of Economics, 1989, vol. 22, issue 4, 892-903
The focus in this paper is on the income leakage or loss that occurs when income is transferred from consumers to producers in regulated industries. The marginal leakage measure that is developed only requires knowledge about the demand price, the supply price, and the point elasticity of demand; and it can be used to estimate the degree of monopoly power exercised by the regulated firms. In the empirical section, the Canadian supply-managed agricultural sectors are examined.
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