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Classical Horizontal Inequities in the Provision of Agricultural Income Support

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  • Paul Allanson

Abstract

This article explores the redistributive effects of classical horizontal inequities induced by agricultural policy. Within-farm type horizontal inequity is associated with differences in the level of support received by farms of a given type and level of pre-support income. Between-farm type horizontal inequity arises from systematic differences in support levels between commodity regimes. The overall redistributive effect of such inequities in Scottish agriculture is shown to be substantial, though systematic discrimination between farm types is not the major cause. The imperfect targeting of support revealed by the empirical findings has implications for the design of policy.
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Suggested Citation

  • Paul Allanson, 2005. "Classical Horizontal Inequities in the Provision of Agricultural Income Support," Dundee Discussion Papers in Economics 177, Economic Studies, University of Dundee.
  • Handle: RePEc:dun:dpaper:177
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    File URL: http://www.dundee.ac.uk/media/dundeewebsite/economicstudies/documents/discussion/DDPE_177.pdf
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    References listed on IDEAS

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    1. van de Ven, Justin & Creedy, John & Lambert, Peter J, 2001. " Close Equals and Calculation of the Vertical, Horizontal and Reranking Effects of Taxation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 63(3), pages 381-394, July.
    2. Paul Allanson, 2003. "CAP Reform and the Distribution of Farm Income in Scotland {Revised}," Dundee Discussion Papers in Economics 147, Economic Studies, University of Dundee.
    3. Peter Lambert, & Xavier Ramos, 1995. "Vertical redistribution and horizontal inequity," IFS Working Papers W95/01, Institute for Fiscal Studies.
    4. Peter Sasieni, 1998. "An adaptive variable span running line smoother," Stata Technical Bulletin, StataCorp LP, vol. 7(41).
    5. Jean-Marc Bourgeon & Robert G. Chambers, 2000. "Stop-and-Go Agricultural Policies," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(1), pages 1-13.
    6. Juan Gabriel Rodríguez & Rafael Salas & Irene Perrote, 2005. "Partial Horizontal Inequity Orderings: A Non-parametric Approach," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 67(3), pages 347-368, June.
    7. John E. Floyd, 1965. "The Effects of Farm Price Supports on the Returns to Land and Labor in Agriculture," Journal of Political Economy, University of Chicago Press, vol. 73, pages 148-148.
    8. David Neumark, 1988. "Employers' Discriminatory Behavior and the Estimation of Wage Discrimination," Journal of Human Resources, University of Wisconsin Press, vol. 23(3), pages 279-295.
    9. Aronson, J Richard & Johnson, Paul & Lambert, Peter J, 1994. "Redistributive Effects and Unequal Income Tax Treatment," Economic Journal, Royal Economic Society, vol. 104(423), pages 262-270, March.
    10. Nanak C. Kakwani & Peter J. Lambert, 1999. "Measuring Income Tax Discrimination," The Review of Economics and Statistics, MIT Press, vol. 81(1), pages 27-31, February.
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    Cited by:

    1. Schmid, Erwin & Sinabell, Franz & Hofreither, Markus F., 2006. "Distributional effects of CAP instruments on farm household incomes in Austria," 2006 Annual meeting, July 23-26, Long Beach, CA 21467, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Hansen, Heiko & Herrmann, Roland, 2012. "The two dimensions of policy impacts on economic cohesion: Concept and illustration for the CAP," Food Policy, Elsevier, vol. 37(4), pages 483-491.
    3. Paul Allanson, 2005. "The Impact of Farm Income Support on Absolute Inequality," Dundee Discussion Papers in Economics 178, Economic Studies, University of Dundee.
    4. Sahrbacher, Amanda, 2012. "Impacts of CAP reforms on farm structures and performance disparities: An agent-based approach," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 65, number 65.
    5. Paul Allanson, 2008. "On the Characterisation and Measurement of the Redistributive Effect of Agricultural Policy," Journal of Agricultural Economics, Wiley Blackwell, vol. 59(1), pages 169-187, February.
    6. Elsholz, Rudiger & Harsche, Johannes, 2011. "Price Changes, Policy Impacts and Instability in Farmers’ Revenues," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114342, European Association of Agricultural Economists.
    7. Deppermann, Andre & Grethe, Harald & Offermann, Frank, 2011. "Distributional Effects of the CAP on Western German Farm Incomes and Regional Farm Income Disparity," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114442, European Association of Agricultural Economists.
    8. Franz Sinabell & Erwin Schmid & Markus Hofreither, 2013. "Exploring the distribution of direct payments of the Common Agricultural Policy," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 40(2), pages 325-341, May.
    9. Paul Allanson & Benedetto Rocchi, 2008. "A comparative analysis of the redistributive effects of agricultural policy in Tuscany and Scotland," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 86(1), pages 35-56.
    10. Rudiger Elsholz & Johannes Harsche, 2014. "Determinants of regional disparities in farm income: markets or policy?," ECONOMIA AGRO-ALIMENTARE, FrancoAngeli Editore, vol. 16(1), pages 13-36.
    11. Elsholz, Rudiger & Harsche, Johannes, 2008. "Common Agricultural Policy Impacts on Farm Revenues," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44409, European Association of Agricultural Economists.

    More about this item

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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