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Policy analysis matrices: beyond simple sensitivity analysis


  • Jamie Morrison

    (Agricultural Economics and Business Management, Imperial College at Wye, Ashford, Kent, UK)

  • Kelvin Balcombe

    (Agricultural Economics and Business Management, Imperial College at Wye, Ashford, Kent, UK)


As an analytical methodology, the Policy Analysis Matrix (PAM) can be used to provide indicators of the incentives faced by producers in a given policy and institutional environment. However, the methodology suffers from the limitation that the analyst is unable to attach any level of confidence to the results, other than that generated through sensitivity analysis. In this paper the technique of bootstrapping is introduced as a general method for assessing the degree of uncertainty surrounding indicators derived from PAMs. The example of wheat production in Slovakia is used to demonstrate the usefulness of the additional information generated by this approach. Copyright © 2002 John Wiley & Sons, Ltd.

Suggested Citation

  • Jamie Morrison & Kelvin Balcombe, 2002. "Policy analysis matrices: beyond simple sensitivity analysis," Journal of International Development, John Wiley & Sons, Ltd., vol. 14(4), pages 459-471.
  • Handle: RePEc:wly:jintdv:v:14:y:2002:i:4:p:459-471 DOI: 10.1002/jid.887

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    References listed on IDEAS

    1. Shujie Yao, 1997. "Comparative Advantages And Crop Diversification: A Policy Analysis Matrix For Thai Agriculture," Journal of Agricultural Economics, Wiley Blackwell, vol. 48(1-3), pages 211-222.
    2. K. G. Balcombe & L. E. D. Smith, 1999. "Refining the use of Monte Carlo techniques for risk analysis in project planning," Journal of Development Studies, Taylor & Francis Journals, vol. 36(2), pages 113-135.
    3. Kydd, Jonathan & Pearce, Richard & Stockbridge, Michael, 1997. "The economic analysis of commodity systems: Extending the Policy Analysis Matrix to account for environmental effects and transactions costs," Agricultural Systems, Elsevier, vol. 55(2), pages 323-345, October.
    4. Johann Kirsten & Julian May & Sheryl Hendriks & Charles L. Machethe & Cecelia Punt & Mike Lyne, 2007. "South Africa," Chapters,in: Beyond Food Production, chapter 8 Edward Elgar Publishing.
      • Nick Vink & Gavin Williams & Johann Kirsten, 2004. "South Africa," Chapters,in: The World's Wine Markets, chapter 12 Edward Elgar Publishing.
    5. Yao, Shujie, 1997. "Rice production in Thailand seen through a policy analysis matrix," Food Policy, Elsevier, vol. 22(6), pages 547-560, December.
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