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The Impact of Agricultural Subsidies on Farm Production: A Synthetic Control Method Approach

Author

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  • Matej Opatrny

    (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nabrezi 6, 111 01 Prague 1, Czech Republic)

Abstract

Czech farmers experienced an enormous exogenous shock when they joined the common agricultural market (CAM) and the Common Agricultural Policy (CAP) in 2004. Using the World Bank's dataset, we apply the synthetic control method to establish a counterfactual case of the Czech Republic food production index in the absence of the CAM and CAP. The results show that the Czech Republic would have had a higher food index if it had not entered the CAM and CAP. Moreover, we show that the CAP and CAM had different impacts on farms in the Czech Republic and Bulgaria, which have the most comparable agriculture according to the results of the synthetic control method.

Suggested Citation

  • Matej Opatrny, 2018. "The Impact of Agricultural Subsidies on Farm Production: A Synthetic Control Method Approach," Working Papers IES 2018/31, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Oct 2018.
    • Handle: RePEc:fau:wpaper:wp2018_31
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    File URL: http://ies.fsv.cuni.cz/sci/publication/show/id/5906/lang/cs
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    Cited by:

    1. Agnė Žičkienė & Rasa Melnikienė & Mangirdas Morkūnas & Artiom Volkov, 2022. "CAP Direct Payments and Economic Resilience of Agriculture: Impact Assessment," Sustainability, MDPI, vol. 14(17), pages 1-24, August.

    More about this item

    Keywords

    Common Agriculture Policy; Common Agricultural Market; Subsidies; Farms; Synthetic Control Method;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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