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Estimation of the Impact of CAP Reform on the Structure of Farming in the Disadvantaged Areas of Ireland


  • Eithne Murphy
  • Breda Lally

    () (Department of Economics, National University of Ireland, Galway)


In this paper the Johansen model was used to examine the impact of CAP Reform on the structure of farming in the Disadvantaged Areas of Ireland. The model is essentially a policy impact model using an elasticity set. Application of the model requires information on all relevant elasticities of outputs and inputs with respect to all output and input prices. These elasticities were estimated directly for a translog profit function from a combination of cross section and time series data. In order to test the usefulness of the model, a validation exercise was undertaken for the period 1992-1995. The model performed reasonably well in that the predicted direction of change in the volume of outputs and inputs was generally in the same direction as actual volume changes in outputs and inputs over the period tested.

Suggested Citation

  • Eithne Murphy & Breda Lally, 1997. "Estimation of the Impact of CAP Reform on the Structure of Farming in the Disadvantaged Areas of Ireland," Working Papers 17, National University of Ireland Galway, Department of Economics, revised 1997.
  • Handle: RePEc:nig:wpaper:0017

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    References listed on IDEAS

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    JEL classification:

    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture


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