Novel Indicators of the Trade and Welfare Effects of Agricultural Distortions in OECD Countries

Kym Anderson and Johanna Croser ()
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Johanna Croser: School of Economics, University of Adelaide

No 2010-09, Centre for International Economic Studies Working Papers from University of Adelaide, Centre for International Economic Studies

Abstract: Agricultural markets in OECD countries have long been highly distorted by government policies. Traditional weighted average aggregates of the price distortions they involve, such as producer and consumer support estimates (PSEs and CSEs), can be poor indicators of the trade restrictiveness and economic welfare losses associated with them, especially if a countryÂ’s support estimates vary a lot across the product range. Supplementing those measures with estimates of trade and welfare effects of price supports requires the use of a sectoral or economy wide model and price elasticity data. This paper shows that, in the absence of such a model, and a willingness to make simple assumptions about elasticities, it is possible to generate more satisfactory indicators than PSEs and CSEs using no more than the price and quantity data used to generate them. These new indexes provide an attractive supplement to the current policy monitoring regime developed by the OECD Secretariat.

Keywords: Distorted incentives; agricultural price and trade policies; trade restrictiveness index (search for similar items in EconPapers)
JEL-codes: F13 F14 Q17 Q18 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2010-03
New Economics Papers: this item is included in nep-int
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Novel Indicators of the Trade and Welfare Effects of Agricultural Distortions in OECD Countries (2010)
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