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Testing for the Efficiency of a Policy Intended to Meet Objectives: General Model and Application

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  • Streicher, Gerhard
  • Schmid, Erwin
  • Salhofer, Klaus

Abstract

This study presents a general model demonstrating how to measure the (in)efficiency of a policy intended to meet objectives. If it is assumed that the government has available only those policy instruments it actually utilizes, our method is a test as to whether the government combines these instruments efficiently. In addition, one could also include other policy instruments, which are not actually used, but are available to the government. Our general model is applied to bread grain policy in Austria. The primary result is that the policy was quite inefficient in meeting the two main objectives of farm income support and self-sufficiency. The stochastic nature of our efficiency measures is acknowledged by taking into account the inherent uncertainty of model parameters. A response surface function is used to identify those parameters which contribute most to model output uncertainty.

Suggested Citation

  • Streicher, Gerhard & Schmid, Erwin & Salhofer, Klaus, 2006. "Testing for the Efficiency of a Policy Intended to Meet Objectives: General Model and Application," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 31(2), pages 1-22, August.
    • Handle: RePEc:ags:jlaare:8613
    DOI: 10.22004/ag.econ.8613
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    References listed on IDEAS

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    1. Jeong, Kyeong-Soo & Garcia, Philip & Bullock, David S., 2003. "A statistical method of multi-market welfare analysis applied to Japanese beef policy liberalization," Journal of Policy Modeling, Elsevier, vol. 25(3), pages 237-256, April.
    2. Harry de Gorter & Karl D. Meilke, 1989. "Efficiency of Alternative Policies for the EC's Common Agricultural Policy," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(3), pages 592-603.
    3. Winters, L Alan, 1987. "The Political Economy of the Agricultural Policy of Industrial," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 14(3), pages 285-304.
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    Cited by:

    1. Schmidt, Johannes & Leduc, Sylvain & Dotzauer, Erik & Kindermann, Georg & Schmid, Erwin, 2009. "Using Monte Carlo Simulation to Account for Uncertainties in the Spatial Explicit Modeling of Biomass Fired Combined Heat and Power Potentials in Austria," Discussion Papers DP-43-2009, University of Natural Resources and Life Sciences, Vienna, Department of Economics and Social Sciences, Institute for Sustainable Economic Development.
    2. repec:zbw:inwedp:432009 is not listed on IDEAS
    3. Johannes Schmidt & Sylvain Leduc & Erik Dotzauer & Georg Kindermann & Erwin Schmid, 2009. "Using Monte Carlo Simulation to Account for Uncertainties in the Spatial Explicit Modeling of Biomass Fired Combined Heat and Power Potentials in Austria," Working Papers 432009, University of Natural Resources and Life Sciences, Vienna, Department of Economics and Social Sciences, Institute for Sustainable Economic Development.
    4. Schmidt, Johannes & Leduc, Sylvain & Dotzauer, Erik & Kindermann, Georg & Schmid, Erwin, 2010. "Cost-effective CO2 emission reduction through heat, power and biofuel production from woody biomass: A spatially explicit comparison of conversion technologies," Applied Energy, Elsevier, vol. 87(7), pages 2128-2141, July.

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    Agricultural and Food Policy;

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