Distributional Welfare Implications of an Irrigation Water Subsidy

William Foster, Linda Calvin, Grace M. Johns and Patricia Rottschaefer

American Journal of Agricultural Economics, 1986, vol. 68, issue 4, 778-786

Abstract: The distributional welfare implications of a subsidy for irrigation water for California rice producers are analyzed. A more general equilibrium approach than that used in previous studies is taken in order to determine the effects of subsidy on consumers, subsidized producers, and unsubsidized producers. The two important policy conclusions of the results are that unsubsidized producers bear part of the cost of a subsidy through lower prices, and that consumers (taxpayers) may gain by sponsoring increased production through a selective subsidy.

Date: 1986
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