Assessing the impacts of EU's common agricultural policy on regional convergence: sub-national evidence from Germany

Heiko Hansen and Ramona Teuber

Applied Economics, 2011, vol. 43, issue 26, 3755-3765

Abstract: This article assesses the relationship between transfers arising from EU's Common Agricultural Policy (CAP) and convergence in both farmers' revenues and interpersonal income redistribution using a sample of 26 regions in the state of Hesse, Germany, over the period 1979 to 2004 and 1991 to 2004, respectively. We thereby combine the concept of sigma convergence with Shorrock's inequality decomposition in order to determine the driving forces in distributional dynamics of farmers' revenues. Additionally, we apply alternative methodologies to investigate how per capita incomes have evolved over time. Explicitly comparing the situations with and without transfers, our results indicate that the CAP tends to smooth differences in farmers' revenues across regions, but does not impede a strong divergence through time. The latter is mainly driven by increasing structural differences between the regions, while disparities in intensity turn out to be less important. The empirical analysis also shows that CAP transfers reduce income inequality within society as a whole. However, this impact proved to be negligible in explaining distributional dynamics and growth of per capita incomes.

Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/00036841003724395 (text/html)
Access to full text is restricted to subscribers.

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:taf:applec:v:43:y:2011:i:26:p:3755-3765

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/00036841003724395

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().