IDEAS home Printed from https://ideas.repec.org/a/rae/jourae/v92y2011i1p5-23.html
   My bibliography  Save this article

Home bias in preferences and the political economics of agricultural protection

Author

Listed:
  • Clas Eriksson

    (Malardalen University College, P.O. Box 883, S-721 23 Västerås, Sweden)

Abstract

Some consumers are willing to pay extra for food if it is of domestic origin. This paper theoretically examines the consequences of such home biased behavior for agricultural policy, assuming that the policy is decided by the median voter. The analysis is conducted in the framework of a small open economy, with a Ricardian production structure. Consumers differ with respect to how much extra they are willing to pay for a domestically produced agricultural good. For a tariff we find that, if there would be some home biased choices (no matter how few) in a laissez-faire regime, the political equilibrium will imply a strictly positive tariff. This tariff is high if the productivity in the agricultural sector of this country is low. A political equilibrium with a strictly positive subsidy requires stronger home bias than a tariff.

Suggested Citation

  • Clas Eriksson, 2011. "Home bias in preferences and the political economics of agricultural protection," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 92(1), pages 5-23.
    • Handle: RePEc:rae:jourae:v:92:y:2011:i:1:p:5-23
    as

    Download full text from publisher

    File URL: http://ageconsearch.umn.edu/bitstream/189336/2/92%20%281%29%2c%205-23.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Buchanan, James M & Tullock, Gordon, 1975. "Polluters' Profits and Political Response: Direct Controls Versus Taxes," American Economic Review, American Economic Association, vol. 65(1), pages 139-147, March.
    2. Lilyan E. Fulginiti & Jason F. Shogren, 1992. "Agricultural Protection in Developing Countries," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(3), pages 795-801.
    3. Assar Lindbeck & Jörgen Weibull, 1987. "Balanced-budget redistribution as the outcome of political competition," Public Choice, Springer, vol. 52(3), pages 273-297, January.
    4. Johan F. M. Swinnen & Harry De Gorter, 1993. "Why Small Groups And Low Income Sectors Obtain Subsidies: The “Altruistic” Side Of A “Self‐Interested” Government," Economics and Politics, Wiley Blackwell, vol. 5(3), pages 285-293, November.
    5. Beghin, John C & Kherallah, Mylene, 1994. "Political Institutions and International Patterns of Agricultural Protection," The Review of Economics and Statistics, MIT Press, vol. 76(3), pages 482-489, August.
    6. Philippidis, George & Hubbard, Lionel, 2003. "Varietal utility and patriotic preference: the cas of European agriculture," Cahiers d'Economie et de Sociologie Rurales (CESR), Institut National de la Recherche Agronomique (INRA), vol. 66.
    7. Rakhal Sarker & Karl Meilke & Michael Hoy, 1993. "The Political Economv of Svstematic Government Intervention in Agriculture," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 41(3), pages 289-309, November.
    8. Ehmke, Mariah D., 2006. "International Differences in Consumer Preferences for Food Country-of-Origin: A Meta-Analysis," 2006 Annual meeting, July 23-26, Long Beach, CA 21193, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Gawande, Kishore & Hoekman, Bernard, 2006. "Lobbying and Agricultural Trade Policy in the United States," International Organization, Cambridge University Press, vol. 60(3), pages 527-561, July.
    10. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-850, September.
    11. Frode Alfnes & Kyrre Rickertsen, 2003. "European Consumers' Willingness to Pay for U.S. Beef in Experimental Auction Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(2), pages 396-405.
    12. Johan F. M. Swinnen, 1994. "A Positive Theory of Agricultural Protection," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(1), pages 1-14.
    13. Becker, Tilman, 1999. ""Country of origin" as a cue for quality and safety of fresh meat," 67th Seminar, October 28-30, 1999, LeMans, France 241034, European Association of Agricultural Economists.
    14. Alessandro Olper & Valentina Raimondi, 2008. "Explaining National Border Effects in the QUAD Food Trade," Journal of Agricultural Economics, Wiley Blackwell, vol. 59(3), pages 436-462, September.
    15. Brenna D. Ellison & Jayson L. Lusk & Brian C. Briggeman, 2010. "Taxpayer Beliefs about Farm Income and Preferences for Farm Policy," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 32(2), pages 338-354.
    16. Alessandro Olper & Valentina Raimondi, 2008. "Market Access Asymmetry in Food Trade," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 144(3), pages 509-537, October.
    17. Paul S. Armington, 1969. "A Theory of Demand for Products Distinguished by Place of Production (Une théorie de la demande de produits différenciés d'après leur origine) (Una teoría de la demanda de productos distinguiénd," IMF Staff Papers, Palgrave Macmillan, vol. 16(1), pages 159-178, March.
    18. McCallum, John, 1995. "National Borders Matter: Canada-U.S. Regional Trade Patterns," American Economic Review, American Economic Association, vol. 85(3), pages 615-623, June.
    19. De Gorter, Harry & Swinnen, Johan, 2002. "Political economy of agricultural policy," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 2, chapter 36, pages 1893-1943, Elsevier.
    20. Frode Alfnes, 2004. "Stated preferences for imported and hormone-treated beef: application of a mixed logit model," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 31(1), pages 19-37, March.
    21. Lopez, Rigoberto A. & Pagoulatos, Emilio & Gonzalez, Maria A., 2006. "Home bias and U.S. imports of processed food products," The North American Journal of Economics and Finance, Elsevier, vol. 17(3), pages 363-373, December.
    22. Lancaster, Kelvin, 1991. "The 'product variety' case for protection," Journal of International Economics, Elsevier, vol. 31(1-2), pages 1-26, August.
    23. Gary S. Becker, 1983. "A Theory of Competition Among Pressure Groups for Political Influence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 98(3), pages 371-400.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Moritz Bosbach & Ornella Wanda Maietta & Hannah Marquardt, 2015. "Domestic Food Purchase Bias: A Cross-Country Case Study of Germany, Italy and Serbia," CSEF Working Papers 409, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    2. Liam Pippinato & Simone Blanc & Teresina Mancuso & Filippo Brun, 2020. "A Sustainable Niche Market: How Does Honey Behave?," Sustainability, MDPI, vol. 12(24), pages 1-14, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Eriksson, Clas, 2011. "Home bias in preferences and the political economics of agricultural protection," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement (RAEStud), Institut National de la Recherche Agronomique (INRA), vol. 92(1).
    2. Bellemare, Marc F. & Carnes, Nicholas, 2015. "Why do members of congress support agricultural protection?," Food Policy, Elsevier, vol. 50(C), pages 20-34.
    3. Swinnen, Johan F. M. & Banerjee, Anurag N. & Gorter, Harry de, 2001. "Economic development, institutional change, and the political economy of agricultural protection: An econometric study of Belgium since the 19th century," Agricultural Economics, Blackwell, vol. 26(1), pages 25-43, October.
    4. repec:lic:licosd:27911 is not listed on IDEAS
    5. Kym Anderson & Gordon Rausser & Johan Swinnen, 2013. "Political Economy of Public Policies: Insights from Distortions to Agricultural and Food Markets," Journal of Economic Literature, American Economic Association, vol. 51(2), pages 423-477, June.
    6. Alessandro Olper & Johan Swinnen, 2013. "Mass Media and Public Policy: Global Evidence from Agricultural Policies," The World Bank Economic Review, World Bank, vol. 27(3), pages 413-436.
    7. John C. Beghin & William E. Foster & Mylene Kherallah, 1996. "Institutions And Market Distortions: International Evidence For Tobacco," Journal of Agricultural Economics, Wiley Blackwell, vol. 47(1‐4), pages 355-365, January.
    8. Dutt, Pushan & Mitra, Devashish, 2009. "Explaining Agricultural Distortion Patterns : The Roles of Ideology, Inequality, Lobbying and Public Finance," Agricultural Distortions Working Paper Series 50299, World Bank.
    9. Olper, Alessandro, 2017. "The political economy of trade-related regulatory policy: environment and global value chain," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 5(3), February.
    10. Swinnen, Johan F.M., 2008. "The Political Economy of Agricultural Protection: Europe in the 19th and 20th Century," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 43859, European Association of Agricultural Economists.
    11. Wenshou Yan & Kaixing Huang, 2018. "Determinants of agricultural protection in China and the rest of the world," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 32(2), pages 64-75, November.
    12. De Gorter, Harry & Swinnen, Jo, 1995. "The Political Economy and Institutional Determinants of Public Policy in Agriculture," 1994 Conference, August 22-29, 1994, Harare, Zimbabwe 183390, International Association of Agricultural Economists.
    13. Persson, Torsten & Tabellini, Guido, 2002. "Political economics and public finance," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 24, pages 1549-1659, Elsevier.
    14. Johannes Urpelainen, 2012. "How do electoral competition and special interests shape the stringency of renewable energy standards?," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 14(1), pages 23-34, January.
    15. Harry de Gorter & Johan F. M. Swinnen, 1994. "The Economic Polity Of Farm Policy," Journal of Agricultural Economics, Wiley Blackwell, vol. 45(3), pages 312-326, September.
    16. Alessandro Olper & Jan Fałkowski & Johan Swinnen, 2014. "Political Reforms and Public Policy: Evidence from Agricultural and Food Policies," The World Bank Economic Review, World Bank, vol. 28(1), pages 21-47.
    17. Kassas, Bachir & Cao, Xiang & Gao, Zhifeng & House, Lisa A. & Guan, Zhengfei, 2023. "Consumer preferences for country of origin labeling: Bridging the gap between research estimates and real-world behavior," Journal of choice modelling, Elsevier, vol. 48(C).
    18. Yuan Li & Bo Xiong & John C Beghin, 2017. "The Political Economy of Food Standard Determination: International Evidence from Maximum Residue Limits," World Scientific Book Chapters, in: John Christopher Beghin (ed.), Nontariff Measures and International Trade, chapter 14, pages 239-267, World Scientific Publishing Co. Pte. Ltd..
    19. Wallace E. Oates & Paul R. Portney & Wallace E. Oates & Paul R. Portney, 2004. "The Political Economy of Environmental Policy," Chapters, in: Environmental Policy and Fiscal Federalism, chapter 1, pages 3-30, Edward Elgar Publishing.
    20. Mockshell, Jonathan & Birner, Regina, 2015. "Donors and domestic policy makers: Two worlds in agricultural policy-making?," Food Policy, Elsevier, vol. 55(C), pages 1-14.
    21. Robert-Nicoud, Frederic & Sbergami, Federica, 2004. "Home-market vs. vote-market effect: Location equilibrium in a probabilistic voting model," European Economic Review, Elsevier, vol. 48(1), pages 155-179, February.

    More about this item

    Keywords

    agriculture; trade; home bias; tariff; subsidy;
    All these keywords.

    JEL classification:

    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rae:jourae:v:92:y:2011:i:1:p:5-23. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Nathalie Saux-Nogues (email available below). General contact details of provider: https://edirc.repec.org/data/inrapfr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.