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Measuring assistance to the agricultural industry in Australia using a Production Assistance Index

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  • MacLaren, Donald
  • Lloyd, Peter J.

Abstract

The history of the reforms of the assistance given to Australian agriculture over the past fifty years is a remarkable story, especially when contrasted with the experiences of most other OECD countries. The effects of these reforms have been captured by the Productivity Commission (and its predecessors) and by Lloyd through time series of the nominal rates of assistance to individual agricultural commodities and to the industry as a whole. In this paper the concept of a partial equilibrium production assistance index is developed to obtain a more accurate picture of the implicit welfare consequences of this assistance for the period 1955-59 to 2000-04. This index is a mean of order 2. It is shown that the conventional average, the mean of order 1, substantially underestimates the mean of order 2, which is the correct definition of the average level of assistance.

Suggested Citation

  • MacLaren, Donald & Lloyd, Peter J., 2008. "Measuring assistance to the agricultural industry in Australia using a Production Assistance Index," 2008 Conference (52nd), February 5-8, 2008, Canberra, Australia 6033, Australian Agricultural and Resource Economics Society.
    • Handle: RePEc:ags:aare08:6033
    DOI: 10.22004/ag.econ.6033
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    File URL: https://ageconsearch.umn.edu/record/6033/files/cp08ma01.pdf
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    References listed on IDEAS

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    1. Feenstra, Robert C., 1995. "Estimating the effects of trade policy," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 30, pages 1553-1595, Elsevier.
    2. Kym Anderson & Peter Lloyd & Donald Maclaren, 2007. "Distortions to Agricultural Incentives in Australia Since World War II," The Economic Record, The Economic Society of Australia, vol. 83(263), pages 461-482, December.
    3. James E. Anderson & J. Peter Neary, 2005. "Measuring the Restrictiveness of International Trade Policy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262012200, December.
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    Cited by:

    1. Anderson, Kym & Lloyd, Peter J & Croser, Johanna L., 2009. "Global Distortions to Agricultural Markets: New Indicators of Trade and Welfare Impacts, 1955 to 2007," CEPR Discussion Papers 7160, C.E.P.R. Discussion Papers.

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    Keywords

    Research Methods/ Statistical Methods; Agricultural and Food Policy;

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