Does Regulation Reduce Productivity? Evidence From Regulation of the U.S. Beet-Sugar Manufacturing Industry During the Sugar Acts, 1934-74

Benjamin Bridgman, Shi Qi and James Schmitz

No 438, 2006 Meeting Papers from Society for Economic Dynamics

Abstract: Despite the pervasiveness of industry regulation, there are few studies of its impact on industry productivity. Assessing regulation's impact on productivity has been difficult for a number of reasons, including the complexity of regulations and the difficulty measuring productivity. We study an industry, the U.S. beet-sugar industry, where these problems and others are much less severe than is usual. While the U.S. beet-sugar industry has been protected from foreign competition since its inception over 100 years ago, it has been heavily regulated only during the 40 year period of the Sugar Acts, 1934-74. Regulations in this period were of two major forms. First, the government set up a mechanism to control both the amount of acres planted to sugar beets and beet-sugar produced by factories. Second, the government attempted to redistribute some of the "rents" earned in the industry. It sent checks to farmers based on the amount of sugar they "produced." Farmers produced sugar-in-the-crop, which we denote S, which equals the tons of beets harvested (T) multiplied by the fraction of sugar in the beet (q), or S=qâ‹…T. It also taxed factories on the amount of white sugar, or sugar-in-the-bag, they produced, which we denote Y. (Y is produced from S and, obviously, Y

Keywords: regulation; productivity (search for similar items in EconPapers)
JEL-codes: L0 (search for similar items in EconPapers)
Date: 2006
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Working Paper: Does regulation reduce productivity? Evidence from regulation of the U.S. beet-sugar manufacturing industry during the Sugar Acts, 1934-74 (2007)
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