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Modeling the welfare impacts of agricultural policies in developing countries

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  • Jonasson, Erik
  • Filipski, Mateusz
  • Brooks, Jonathan
  • Taylor, J. Edward

Abstract

This paper presents a new model incorporating features of developing country agriculture likely to shape the welfare outcomes of alternative agricultural policies. The model features heterogeneous households linked through markets in a rural economy-wide structure, with endogenous market participation for farmers facing transactions costs. We use it to simulate the impacts on rural welfare of market price supports, production subsidies, input subsidies, and the removal of transaction costs. Applications to six countries demonstrate the diversity of potential impacts, exhibit some systemic differences compared with impacts in developed countries, and identify specific circumstances under which market interventions may be only slightly less efficient than direct payments at transferring incomes to rural households.

Suggested Citation

  • Jonasson, Erik & Filipski, Mateusz & Brooks, Jonathan & Taylor, J. Edward, 2014. "Modeling the welfare impacts of agricultural policies in developing countries," Journal of Policy Modeling, Elsevier, vol. 36(1), pages 63-82.
  • Handle: RePEc:eee:jpolmo:v:36:y:2014:i:1:p:63-82
    DOI: 10.1016/j.jpolmod.2013.10.002
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    More about this item

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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