EconPapers    
Economics at your fingertips  
 

Subsidies under uncertainty: Modeling of input- and output-oriented policies

You-hua Chen, Mei-xia Chen and Ashok Mishra ()

Economic Modelling, 2020, vol. 85, issue C, 39-56

Abstract: 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)
Date: 2020
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)
http://www.sciencedirect.com/science/article/pii/S0264999318318807
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:85:y:2020:i:c:p:39-56

DOI: 10.1016/j.econmod.2019.05.005

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 ().

 
Page updated 2022-03-27
Handle: RePEc:eee:ecmode:v:85:y:2020:i:c:p:39-56