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A multi-regional general equilibrium model to assess policy effects at regional level

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  • Lovo, Stefania
  • Magnani, Riccardo
  • Perali, Carlo Federico

Abstract

This paper develops a multi-regional general equilibrium model (MEG-R) to compare the social desirability of the CAP reform in the three Italian macro-regions: North, Center and South. The model employs a mixed complementary framework that allows for the decision of not producing a particular crop in one or more regions and presents an attempt to model interregional trade flows. The model incorporates the links between production and consumption that characterize farm household’s behavior and allows for heterogeneous household responses across regions. Results show a general tendency to reallocations from cereal crops to forage that appear more severe in the South. In this region, the reduction in crops cannot be translated into an effective expansion of fodder and could lead to the “deactivation” of the land.

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Bibliographic Info

Paper provided by European Association of Agricultural Economists in its series 122nd Seminar, February 17-18, 2011, Ancona, Italy with number 98996.

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Date of creation: 10 Feb 2011
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Handle: RePEc:ags:eaa122:98996

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Keywords: Multi-regional general equilibrium model; farm households; interregional trade; Agricultural and Food Policy; C68; R13; Q18;

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  1. Hans L�fgren & Sherman Robinson, 1999. "Nonseparable Farm Household Decisions in a Computable General Equilibrium Model," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(3), pages 663-670.
  2. Magnani, Riccardo & Perali, Carlo Federico & Polinori, Paolo, 2003. "A General Equilibrium Analysis of the Mid Term Review of the CAP on Italian Agriculture," Policy Reform and Adjustment Workshop, October 23-25, 2003, Imperial College London, Wye Campus 15744, International Agricultural Policy Reform and Adjustment Project (IAPRAP).
  3. Keuning, Steven J & de Ruijter, Willem A, 1988. "Guidelines to the Construction of a Social Accounting Matrix," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 34(1), pages 71-100, March.
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