Measuring Agricultural Bias: General Equilibrium Analysis of Fifteen Developing Countries

TY - UNPB

T1 - Measuring Agricultural Bias

T2 - General Equilibrium Analysis of Fifteen Developing Countries

AU - Jensen, Henning Tarp

AU - Robinson, Sherman

AU - Tarp, Finn

N1 - JEL classification: D58, O10, Q18

PY - 2008

Y1 - 2008

N2 - The measurement issue is the key issue in the literature on trade policy-induced agri-cultural price incentive bias. This paper introduces a general equilibrium effective rate of protection (GE-ERP) measure, which extends and generalizes earlier partial equilibrium nominal protection measures. For the 15 sample countries, the results indicate that the agricultural price incentive bias, which was generally perceived to exist during the 1980s, was largely eliminated during the 1990s. The results also demonstrate that general equilibrium effects and country-specific characteristics - including trade shares and intersectoral linkages - are crucial for determining the sign and magnitude of trade policy bias. The GE-ERP measure is therefore uniquely suited to capture the full impact of trade policies on agricultural price incentives. A Monte Carlo procedure confirms that the results are robust with respect to tradability assumptions.

AB - The measurement issue is the key issue in the literature on trade policy-induced agri-cultural price incentive bias. This paper introduces a general equilibrium effective rate of protection (GE-ERP) measure, which extends and generalizes earlier partial equilibrium nominal protection measures. For the 15 sample countries, the results indicate that the agricultural price incentive bias, which was generally perceived to exist during the 1980s, was largely eliminated during the 1990s. The results also demonstrate that general equilibrium effects and country-specific characteristics - including trade shares and intersectoral linkages - are crucial for determining the sign and magnitude of trade policy bias. The GE-ERP measure is therefore uniquely suited to capture the full impact of trade policies on agricultural price incentives. A Monte Carlo procedure confirms that the results are robust with respect to tradability assumptions.

M3 - Working paper

SN - 9788792087782

BT - Measuring Agricultural Bias

PB - Institute of Food and Resource Economics, University of Copenhagen

ER -