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

  • MacLaren, Donald
  • Lloyd, Peter J.

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.

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File URL: http://purl.umn.edu/6033
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Paper provided by Australian Agricultural and Resource Economics Society in its series 2008 Conference (52nd), February 5-8, 2008, Canberra, Australia with number 6033.

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Date of creation: 2008
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Handle: RePEc:ags:aare08:6033
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  1. 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.
  2. Robert C. Feenstra, 1995. "Estimating the Effects of Trade Policy," NBER Working Papers 5051, National Bureau of Economic Research, Inc.
  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, June.
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