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Modeling the Welfare Implications of Agricultural Policies in Developing Countries

Author Info

Listed author(s):
  • Jonasson, Erik

    ()

    (Department of Economics, Lund University)

  • Filipski, Mateusz

    ()

    (University of California, Davis)

  • Brooks, Jonathan

    ()

    (OECD)

  • Taylor, J. Edward

    ()

    (University of California, Davis)

Abstract

This paper presents a new model which incorporates features of developing country agriculture that may be critical in shaping the welfare outcomes of alternative agricultural policies. The model features heterogeneous households linked through markets in a rural economy-wide structure, with endogenous market participation for farmers facing transactions costs. The model is used for policy simulations, including market price support, production subsidies, input subsidies, transaction cost removal, and unconditional cash transfers. Applications for six countries highlight the diversity of potential impacts of such policies. The simulation results suggest that there are circumstances under which some market interventions, such as input subsidies, may be only slightly less efficient at transferring incomes than direct payments.

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Paper provided by Lund University, Department of Economics in its series Working Papers with number 2012:11.

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Length: 23 pages
Date of creation: 15 May 2012
Publication status: Published as Jonasson, Erik, Mateusz Filipski, Jonathan Brooks and J. Edward Taylor, 'Modeling the Welfare Implications of Agricultural Policies in Developing Countries' in Journal of Policy Modeling, 2014, pages 63-82.
Handle: RePEc:hhs:lunewp:2012_011
Contact details of provider: Postal:
Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund,Sweden

Phone: +46 +46 222 0000
Fax: +46 +46 2224613
Web page: http://www.nek.lu.se/en

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Keywords: agricultural household model; agricultural policy; simulation; transaction costs;

Find related papers by JEL classification:

  • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
  • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
  • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
  • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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References listed on IDEAS
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  1. John Cockburn, 2002. "Trade Liberalisation and Poverty in Nepal: A Computable General Equilibrium Micro Simulation Analysis," CSAE Working Paper Series 2002-11, Centre for the Study of African Economies, University of Oxford.
  2. Winters, Paul & Davis, Benjamin & Carletto, Gero & Covarrubias, Katia & Quiñones, Esteban J. & Zezza, Alberto & Azzarri, Carlo & Stamoulis, Kostas, 2009. "Assets, Activities and Rural Income Generation: Evidence from a Multicountry Analysis," World Development, Elsevier, vol. 37(9), pages 1435-1452, September.
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  6. Alberto Zezza & Benjamin Davis & Carlo Azzarri & Katia Covarrubias & Luca Tasciotti & Gustavo Anriquez, 2008. "The Impact of Rising Food Prices on the Poor," Working Papers 08-07, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
  7. Jonathan Brooks & Mateusz Filipski & Erik Jonasson & J. Edward Taylor, 2011. "The Development Policy Evaluation Model (DEVPEM): Technical Documentation," OECD Food, Agriculture and Fisheries Papers 51, OECD Publishing.
  8. de Janvry, Alain & Fafchamps, Marcel & Sadoulet, Elisabeth, 1991. "Peasant Household Behaviour with Missing Markets: Some Paradoxes Explained," Economic Journal, Royal Economic Society, vol. 101(409), pages 1400-1417, November.
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  11. Davis, Benjamin & Winters, Paul & Carletto, Gero & Covarrubias, Katia & Quiñones, Esteban J. & Zezza, Alberto & Stamoulis, Kostas & Azzarri, Carlo & DiGiuseppe, Stefania, 2010. "A Cross-Country Comparison of Rural Income Generating Activities," World Development, Elsevier, vol. 38(1), pages 48-63, January.
  12. Rob Vos & Niek De Jong, 2003. "Trade Liberalization and Poverty in Ecuador: A CGE Macro-Microsimulation Analysis," Economic Systems Research, Taylor & Francis Journals, vol. 15(2), pages 211-232.
  13. 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.
  14. Joe Dewbre & Jesús Antón & Wyatt Thompton, 2001. "The Transfer Efficiency and Trade Effects of Direct Payments," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(5), pages 1204-1214.
  15. Jonathan Brooks & Mateusz Filipski & Erik Jonasson & J. Edward Taylor, 2011. "Modelling the Distributional Implications of Agricultural Policies in Developing Countries: The Development Policy Evaluation Model (DEVPEM)," OECD Food, Agriculture and Fisheries Papers 50, OECD Publishing.
  16. Cororaton, Caesar B. & Cockburn, John, 2007. "Trade reform and poverty--Lessons from the Philippines: A CGE-microsimulation analysis," Journal of Policy Modeling, Elsevier, vol. 29(1), pages 141-163.
  17. Nabil Annabi & Fatou Cissé & John Cockburn & Bernard Decaluwé, 2005. "Trade Liberalisation, Growth and Poverty in Senegal: a Dynamic Microsimulation CGE Model Analysis," Working Papers 2005-07, CEPII research center.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. About agricultural policies in developing economies
    by Economic Logician in Economic Logic on 2012-06-18 14:22:00
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Cited by:

  1. J. Edward Taylor & Karen Thome, 2012. "A Methodology for Local Economy-wide Impact Evaluation (LEWIE) of Cash Transfers," One Pager 183, International Policy Centre for Inclusive Growth.

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