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Policy Analysis in Welfare and Policy Spaces: Applications to the Labyrinthine U.S. Ethanol Policy Literature

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  • Bullock David S.

    (Department of Agricultural and Consumer Economics, University of Illinois, 326 Mumford Hall 1301 W. Gregory Dr., Urbana, IL 61801, USA)

  • Couleau Anabelle

    (Department of Agricultural and Consumer Economics, University of Illinois, 326 Mumford Hall 1301 W. Gregory Dr., Urbana, IL 61801, USA)

Abstract

We discuss the analysis of policy in three “spaces”: the customary (q, p) space, “policy space,” and “welfare space.” Specific advantages of conducting policy analysis in welfare and policy spaces are as follows: (1) it makes clearer the distributional consequences of policy change instead of focusing solely on the aggregate welfare consequences of policy change; (2) it facilitates covering a very wide array of available policy options, instead of examining just a few; (3) it is a powerful tool for analyzing the effects of simultaneous use of multiple policy instruments; and (4) it clarifies what it means for policies to be more/less “efficient,” and for policy instruments to make each other more/less “efficient.” We demonstrate the usefulness of our framework in comparing and critiquing various conclusions recently expressed in the U.S. ethanol policy literature.

Suggested Citation

  • Bullock David S. & Couleau Anabelle, 2014. "Policy Analysis in Welfare and Policy Spaces: Applications to the Labyrinthine U.S. Ethanol Policy Literature," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 12(1), pages 35-51, January.
    • Handle: RePEc:bpj:bjafio:v:12:y:2014:i:1:p:17:n:5
    DOI: 10.1515/jafio-2013-0019
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    References listed on IDEAS

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    1. David S. Bullock, 1992. "Redistributing Income Back to European Community Consumers and Taxpayers through the Common Agricultural Policy," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(1), pages 59-67.
    2. Xiaodong Du & Dermot J. Hayes & Mindy L. Mallory, 2009. "A Welfare Analysis of the U.S. Ethanol Subsidy," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 31(4), pages 669-676, December.
    3. Lapan, Harvey E. & Moschini, GianCarlo, 2009. "Biofuels Policies and Welfare: Is the Stick of Mandates Better Than the Carrot of Subsidies?," Staff General Research Papers Archive 13076, Iowa State University, Department of Economics.
    4. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    5. Bullock, David S. & Salhofer, Klaus, 1998. "A Note On The Efficiency Of Income Redistribution With Simple And Combined Policies," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 27(2), pages 1-4, October.
    6. Mindy L. Baker, 2008. "Welfare Changes from the U.S. Ethanol Tax Credit: The Role of Uncertainty and Interlinked Commodity Markets," Center for Agricultural and Rural Development (CARD) Publications 08-wp483, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    7. Harry de Gorter & David R. Just, 2010. "The Social Costs and Benefits of Biofuels: The Intersection of Environmental, Energy and Agricultural Policy," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 32(1), pages 4-32.
    8. David S. Bullock, 1994. "In Search of Rational Government: What Political Preference Function Studies Measure and Assume," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(3), pages 347-361.
    9. Bullock, David S, 1995. "Are Government Transfers Efficient? An Alternative Test of the Efficient Redistribution Hypothesis," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1236-1274, December.
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