Endogenous Participation in Agricultural Support Programs and Ad Valoremequivalent Modelling

29 Pages Posted: 26 Jul 2010 Last revised: 20 Jan 2015

See all articles by John Whalley

John Whalley

University of Western Ontario - Department of Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute); Centre for International Governance and Innovation (CIGI)

Randall Wigle

Wilfrid Laurier University - School of Business & Economics; Balsillie School of International Affairs

Date Written: May 1988

Abstract

This paper argues that a price wedge treatment of agricultural supports can seriously misrepresent their welfare and quantity effects. We make our point by focusing on pre-1985 US wheat programs, but features of programs in many other countries lead to comparable problems with the ad valorem approach. This line of argument raises questions over the current approach in the multilateral trade negotiations of negotiating on producer subsidy equivalents (PSEs), or some other subsidy-like measure.

Suggested Citation

Whalley, John and Wigle, Randall, Endogenous Participation in Agricultural Support Programs and Ad Valoremequivalent Modelling (May 1988). NBER Working Paper No. w2583. Available at SSRN: https://ssrn.com/abstract=1648366

John Whalley (Contact Author)

University of Western Ontario - Department of Economics ( email )

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Randall Wigle

Wilfrid Laurier University - School of Business & Economics ( email )

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Balsillie School of International Affairs ( email )

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Waterloo, ON N2L 6C2
Canada
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