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Relative Cost‐Effectiveness Of Input And Output Subsidies


  • Ross M. Parish
  • Keith Robert McLaren


A subsidy on a single input is compared with an output subsidy as a means of stimulating output, and the conditions under which the single input subsidy is (a) more treasury cost-effective and (b) overall the more socially efficient measure, are explored. Rationalisations for input subsidies, particularly fertiliser subsidies, are examined in the light of the results.
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Suggested Citation

  • Ross M. Parish & Keith Robert McLaren, 1982. "Relative Cost‐Effectiveness Of Input And Output Subsidies," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 26(1), pages 1-13, April.
  • Handle: RePEc:bla:ajarec:v:26:y:1982:i:1:p:1-13
    DOI: j.1467-8489.1982.tb00404.x

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    References listed on IDEAS

    1. Randolph Barker & Yujiro Hayami, 1976. "Price Support versus Input Subsidy for Food Self-Sufficiency in Developing Countries," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 58(4_Part_1), pages 617-628.
    2. R.G. Mauldon, 1967. "Bounties For Fertilizers," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 11(2), pages 133-143, December.
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    Cited by:

    1. Scrimitore, Marcella, 2014. "Quantity competition vs. price competition under optimal subsidy in a mixed oligopoly," Economic Modelling, Elsevier, vol. 42(C), pages 166-176.
    2. Fisher, Brian S., 1985. "Frontiers in Agricultural Policy Research," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 53(02), August.
    3. Heisey, Paul W. & Mwangi, Wilfred, 1996. "Fertilizer Use and Maize Production in Sub-Saharan Africa," Economics Working Papers 7688, CIMMYT: International Maize and Wheat Improvement Center.
    4. Dixon, J.M., 1988. "Inorganic Fertiliser Inputs to Himalayan Agriculture: Some Issues in Pricing," 1988 Conference (32nd), February 8-11, 1988, Melbourne, Australia 144027, Australian Agricultural and Resource Economics Society.
    5. Crawford, Eric W. & Jayne, Thomas S. & Kelly, Valerie A., 2005. "Alternative Approaches for Promoting Fertilizer Use in Africa, with Particular Reference to the Role of Fertilizer Subsidies," Staff Papers 11557, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    6. Asraul Hoque, 1993. "Allocative Efficiency and Input Subsidy in Asian Agriculture," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 32(1), pages 87-99.
    7. Gautam, Madhur, 2015. "Agricultural Subsidies: Resurging Interest in a Perennial Debate," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 70(1).
    8. Rao, J. Mohan, 1989. "Agricultural Supply Response: A Survey," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 3(1), March.
    9. Joseph E. Aldy & Todd D. Gerarden & Richard L. Sweeney, 2018. "Investment versus Output Subsidies: Implications of Alternative Incentives for Wind Energy," NBER Working Papers 24378, National Bureau of Economic Research, Inc.
    10. Edwards, Geoff W., 1985. "Frontiers in Agricultural Policy Research: Discussion," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 53(02), August.
    11. Jarrett, Frank G., 1983. "The Balderstone Report: An Overview," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 27(02), August.

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