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Modelling of Agricultural Behavior under the CAP Regime: Policy Effectiveness and Design

  • Constadina Passa

    ()

    (Department of Economics, University of Crete, Greece)

  • Anastasios Xepapadeas

    ()

    (Department of Economics, University of Crete, Greece)

The paper discusses the design of optimal regulatory policies under an alternative analytical framework of unbounded and bounded rationality, by considering the mechanism that provides the type of the optimal CAP instruments that ensure the collective attainment of a social environmental target, along with the type of interdependence characterizing them. The problem of the optimal regulation of an unboundedly rational population of farmers is discussed in both a static and a dynamic context. The long-run viability of the Agenda 2000 CAP reform is also examined under the assumption of bounded rationality by employing the evolutionary framework of replicator dynamics. Analysis indicated that.it may be socially desirable on environmental grounds not only to maintain coupled payments but also to impose on farmers a set of charges on the various aspects of farming activity.

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File URL: http://economics.soc.uoc.gr/wpa/docs/Passa,Xepapadeas-CAP-PolicyDesign-2July.pdf
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Paper provided by University of Crete, Department of Economics in its series Working Papers with number 0819.

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Length: 26 pages
Date of creation: 10 Dec 2007
Date of revision: 01 Jul 2008
Handle: RePEc:crt:wpaper:0819
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  1. Fennell, Rosemary, 1997. "The Common Agricultural Policy: Continuity and Change," OUP Catalogue, Oxford University Press, number 9780198288572, March.
  2. Wu, JunJie & Babcock, Bruce A., 2001. "Spatial Heterogeneity and the Choice of Instruments to Control Nonpoint Pollution," Staff General Research Papers 1012, Iowa State University, Department of Economics.
  3. Anastasios Xepapadeas & Constadina Passa, 2005. "Design of Public Voluntary Environmental Programs for Nitrate Pollution in Agriculture: An Evolutionary Approach," Working Papers 0512, University of Crete, Department of Economics.
  4. Joelle Noailly, Jeroen van den Bergh, Cees Withagen, 2001. "Evolution of Harvesting Strategies: Replicator and Resource Dynamics," Computing in Economics and Finance 2001 263, Society for Computational Economics.
  5. Anastasios Xepapadeas, . "Observability And Choice Of Instrument Mix In The Control Of Externalities," Working Papers 9401, University of Crete, Department of Economics.
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