Novel indicators of the trade and welfare effects of agricultural distortions in OECD countries

Kym Anderson and Johanna Croser

No 5404, Policy Research Working Paper Series from The World Bank

Abstract: Agricultural markets in OECD countries have long been highly distorted by government policies. Traditional weighted average aggregates of the price distortions involved, such as producer and consumer support estimates can be poor indicators of the trade restrictiveness and economic welfare losses associated with them, especially if a country's support estimates vary a lot across the product range. Certainly estimates of trade and welfare effects of price supports can be obtained from sector or economy-wide models using price elasticity estimates, but the results can be contentiousif there is no consensus on what model specification and elasticity parameters to use. This paper shows that, if there is a willingness to accept simple assumptions about elasticities, it is possible to generate indicators of the welfare and trade restrictiveness of agricultural policies using no more than the price and quantity data needed to generate producer and consumer support estimates. These new indexes thus provide an attractive supplement to the current policy monitoring regime developed by the OECD Secretariat.

Keywords: Economic Theory&Research; Markets and Market Access; Emerging Markets; Crops&Crop Management Systems; Free Trade (search for similar items in EconPapers)
Date: 2010-08-01
New Economics Papers: this item is included in nep-agr
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Novel indicators of the trade and welfare effects of agricultural distortions in OECD countries (2011)
Working Paper: Novel Indicators of the Trade and Welfare Effects of Agricultural Distortions in OECD Countries (2010)
Working Paper: Novel Indicators of the Trade and Welfare Effects of Agricultural Distortions in OECD Countries (2010)
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