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The Local Impacts of Agricultural Subsidies: Evidence from the Canadian Prairies

Listed author(s):
  • Bollman, Ray

    (Rural Development Institute)

  • Ferguson, Shon

    ()

    (Research Institute of Industrial Economics (IFN))

We estimate the impact of the removal of a railway transportation subsidy on the local economies of Alberta, Saskatchewan and Manitoba, exploiting the large regional variation in these one-time freight rate increases. We find that higher freight rates – and hence lower farm gate prices – resulted in significantly lower farm revenues, farm asset values and farm numbers. Local employment in non-agricultural sectors systematically declined in areas that were hardest hit by the subsidy removal. The results suggest that the subsidy removal had detrimental spillover effects on local non-agricultural economy that are much larger than standard input-output models would predict.

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Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 1129.

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Length: 45 pages
Date of creation: 30 Jun 2016
Handle: RePEc:hhs:iuiwop:1129
Contact details of provider: Postal:
Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden

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