Subsidies under uncertainty: Modeling of input- and output-oriented policies
Mei-xia Chen and
Ashok Mishra ()
Economic Modelling, 2020, vol. 85, issue C, 39-56
Agricultural subsidies play an essential role in agricultural and rural development in many developed economies. Countries have implemented agricultural subsidy policies with a focus on food security and environmental protection. Agricultural production is risky and uncertain, influencing the efficiency of agricultural subsidies. This study develops a theoretical framework to analyze the effects of production uncertainties on the efficiency of agricultural subsidy policies under the double constraints of food security and environmental protection. The basic model is investigated under six different conditions, and expanded research also is presented. Our models show that uncertainty, including output, cost, and price uncertainties, and technology conversion efficiency significantly affects the efficiency of agricultural subsidies. Under high technology conversion efficiency, output-oriented subsidies are appropriate for food security and environmental protection goals. Policymakers should take both uncertainty and production efficiency into consideration when choosing between input-oriented and output-oriented subsidy policies.
Keywords: Uncertainty; Subsidy; Efficiency; Food security; Environmental protection (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:85:y:2020:i:c:p:39-56
Access Statistics for this article
Economic Modelling is currently edited by S. Hall and P. Pauly
More articles in Economic Modelling from Elsevier
Bibliographic data for series maintained by Catherine Liu ().