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Modeling the Welfare Implications of Agricultural Policies in Developing Countries

Author

Listed:
  • 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.

Suggested Citation

  • Jonasson, Erik & Filipski, Mateusz & Brooks, Jonathan & Taylor, J. Edward, 2012. "Modeling the Welfare Implications of Agricultural Policies in Developing Countries," Working Papers 2012:11, Lund University, Department of Economics.
    • Handle: RePEc:hhs:lunewp:2012_011
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    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 19:22:00

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    Cited by:

    1. J. Edward Taylor & Karen Thome, "undated". "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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    More about this item

    Keywords

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

    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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