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Efficient Redistribution Using Quotas and Subsidies in the Presence of Misrepresentation and Cheating

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  • Konstantinos Giannakas
  • Murray Fulton

Abstract

This paper introduces misrepresentation and cheating into the policy analysis of output quotas and subsidies. Analytical results show that when cheating occurs output quotas are a less efficient means of income redistribution than is traditionally believed. As well, cheating increases the transfer efficiency of output subsidies. The result is that an all-or-nothing choice between quotas and subsidies will generally favor the use of subsidies. A combination of quotas and subsidies, however, usually remains the most efficient means of income redistribution through market intervention. Copyright 2000, Oxford University Press.

Suggested Citation

  • Konstantinos Giannakas & Murray Fulton, 2000. "Efficient Redistribution Using Quotas and Subsidies in the Presence of Misrepresentation and Cheating," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 347-359.
    • Handle: RePEc:oup:ajagec:v:82:y:2000:i:2:p:347-359
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    File URL: http://hdl.handle.net/10.1111/0002-9092.00030
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    Cited by:

    1. Giannakas, Konstantinos & Fulton, Murray, 2000. "The economics of coupled farm subsidies under costly and imperfect enforcement," Agricultural Economics, Blackwell, vol. 22(1), pages 75-90, January.
    2. Lucio Biggiero & Enrico Sevi, 2009. "Opportunism by cheating and its effects on industry profitability. The CIOPS model," Computational and Mathematical Organization Theory, Springer, vol. 15(3), pages 191-236, September.
    3. Konstantinos Giannakas, 2003. "Economics of export subsidies under costly and imperfect enforcement," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(4), pages 541-562, December.
    4. Julian M. Alston & Davide Gaeta, 2021. "Reflections on the Political Economy of European Wine Appellations," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 7(2), pages 219-258, July.
    5. Bullock, David S. & Salhofer, Klaus, 2003. "Judging agricultural policies: a survey," Agricultural Economics, Blackwell, vol. 28(3), pages 225-243, May.
    6. Giannakas, Konstantinos, 2009. "The Normative Efficiency Ranking of Output and Export Subsidies under Costly and Imperfect Enforcement," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 10(1).
    7. Salhofer, Klaus & Schmid, Erwin, 2004. "Distributive leakages of agricultural support: some empirical evidence," Agricultural Economics, Blackwell, vol. 30(1), pages 51-62, January.
    8. Giannakas Konstantinos & Fulton Murray, 2003. "Costly (Dis)Agreement: Optimal Intervention, Income Redistribution, and Transfer Efficiency of Output Quotas in the Presence of Cheating," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 1(1), pages 1-14, March.
    9. Fulton, Murray E. & Giannakas, Konstantinos & Yunlai, Xiao, 2003. "Implicit Contracts and the Grey Market for Fertilizer in China," CAFRI: Current Agriculture, Food and Resource Issues, Canadian Agricultural Economics Society, issue 4, pages 1-15, March.
    10. Bullock, David S. & Dadakas, Dimitrios & Katranidis, Stelios D., 2009. "Measuring the Effects of Technology Change in Multiple Markets : Application to the Greek Cotton Yarn Industry," MPRA Paper 67204, University Library of Munich, Germany, revised 2012.
    11. Giannakas, Konstantinos & Kaplan, Jonathan D., 2002. "Conservation Compliance On Highly Erodible Land: An Empirical Auditing Game," 2002 Annual meeting, July 28-31, Long Beach, CA 19607, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    12. Ciaian, Pavel & Swinnen, Johan F.M., 2008. "Credit Market Imperfections And The Distribution Of Policy Rents: The Common Agricultural Policy In The New Eu Member States," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6591, European Association of Agricultural Economists.
    13. repec:lic:licosd:18307 is not listed on IDEAS
    14. Castillo-Valero, Juan S. & Sanchez-Garcia, Mercedes & Garcia-Cortijo, Mari Carmen, 2016. "Predicting grower choices in a regulated environment," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 20(1), November.

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