The Impact of Price Regulations on Regional Welfare and Agricultural Productivity in China

Sheikh Selim ()

No E2011/2, Cardiff Economics Working Papers from Cardiff University, Cardiff Business School, Economics Section

Abstract: The nineties' agricultural reform in China that was aimed at deregulating the agricultural market eventually resulted in a huge drop in agricultural production and a high rate of inflation in agricultural prices,this apparently motivated the government to take over the control of agricultural prices in 1998. We examine how and to what extent this reform affected the productivity and welfare of grain farmers in China at the regional level. We find that the price regulation that destroyed the incentive to exert more effort adversely affected the growth in agricultural productivity but contributed to the growth in farmers. welfare. Although the price regulations resulted in short term improvement in welfare across all the regions, for the long run such regulations can result in larger drop in agricultural production because of its negative impact on incentives to produce more.

Keywords: China; Welfare; TFP; Agriculture; Grain Production (search for similar items in EconPapers)
JEL-codes: N55 O13 O53 Q12 (search for similar items in EconPapers)
Pages: 9 pages
Date: 2011-01
New Economics Papers: this item is included in nep-agr, nep-eff, nep-reg and nep-tra
References: Add references at CitEc
Citations:

Downloads: (external link)
http://carbsecon.com/wp/E2011_2.pdf (application/pdf)

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:cdf:wpaper:2011/2

Access Statistics for this paper

More papers in Cardiff Economics Working Papers from Cardiff University, Cardiff Business School, Economics Section Contact information at EDIRC.
Bibliographic data for series maintained by Yongdeng Xu ().