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Economic Welfare Analysis: An Application To The Swopsim Modeling Framework

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  • Haley, Stephen L.
  • Dixit, Praveen M.

Abstract

This report presents an overview of 'welfare economics relevant to international trade issues. It describes and analyzes the strengths and weaknesses of various welfare measures commonly used in empirical trade research and concludes that the Marshallian welfare measures of consumer and producer surplus are best suited for use in the SWOPSIM modeling framework. The report then describes the procedure for creating and modifying specific spreadsheets for welfare analysis. This SWOPSIM welfare calculation framework can deal with a variety of theoretical issues in welfare analysis. These issues include the path dependency problem, producer and consumer subsidy equivalents in a multigood setting, the distinction between intermediate and final goods, joint products, and mandatory supply controls. The framework is useful for evaluating and measuring potential gains from trade, especially in the context of trade liberalization negotiations.

Suggested Citation

  • Haley, Stephen L. & Dixit, Praveen M., 1988. "Economic Welfare Analysis: An Application To The Swopsim Modeling Framework," Staff Reports 278002, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uerssr:278002
    DOI: 10.22004/ag.econ.278002
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    References listed on IDEAS

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    1. Willig, Robert D, 1976. "Consumer's Surplus without Apology," American Economic Review, American Economic Association, vol. 66(4), pages 589-597, September.
    2. Harberger, Arnold C, 1971. "Three Basic Postulates for Applied Welfare Economics: An Interpretive Essay," Journal of Economic Literature, American Economic Association, vol. 9(3), pages 785-797, September.
    3. Gadson, Kenneth E. & Price, J. Michael & Salathe, Larry E., 1982. "Food And Agricultural Policy Simulator (Fapsim): Structural Equations And Variable Definitions," Staff Reports 276743, United States Department of Agriculture, Economic Research Service.
    4. Roningen, Vernon Oley, 1986. "A Static World Policy Simulation (Swopsim) Modeling Framework," Staff Reports 277898, United States Department of Agriculture, Economic Research Service.
    5. Malcolm D. Bale & Ernst Lutz, 1981. "Price Distortions in Agriculture and Their Effects: An International Comparison," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 63(1), pages 8-22.
    6. Dixit, Praveen M. & Roningen, Vernon Oley, 1986. "Modeling Bilateral Trade Flows With The Static World Policy Simulation (Swopsim) Modeling Framework," Staff Reports 277920, United States Department of Agriculture, Economic Research Service.
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    Cited by:

    1. Krissoff, Barry & Sullivan, John & Wainio, John & Johnston, Brian, 1990. "Agricultural Trade Liberalization and Developing Countries," Staff Reports 278335, United States Department of Agriculture, Economic Research Service.
    2. Gunasekera, H. Don B.H. & Andrews, Neil P. & Haszler, Henry C. & Chapman, John N., 1991. "Agricultural policy reform in China," Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) Archive 316170, Australian Government, Australian Bureau of Agricultural and Resource Economics and Sciences.
    3. Kane, Sally & Reilly, John & Tobey, James, 1991. "Climate Change: Economic Implications for World Agriculture," Agricultural Economic Reports 308153, United States Department of Agriculture, Economic Research Service.
    4. Tobey, James A. & Reilly, John M. & Kane, Sally, 1992. "Economic Implications Of Global Climate Change For World Agriculture," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 17(1), pages 1-10, July.
    5. Haixiao Huang, Walter C. Labys, 2002. "Environment and trade: a review of issues and methods," International Journal of Global Environmental Issues, Inderscience Enterprises Ltd, vol. 2(1/2), pages 100-160.
    6. Sullivan, John & Wainio, John & Roningen, Vernon, 1989. "A Database For Trade Liberalization Studies," Staff Reports 278178, United States Department of Agriculture, Economic Research Service.

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    Keywords

    Agricultural and Food Policy;

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