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Reassessing Producer Behaviour In A Policy-Modified Production Environment

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Abstract

This paper presents a new approach to assessing the impact of price support policies on producer behaviour. This approach takes explicit account of the impact of such policies on a producer's uncertain production environment and includes a numerical procedure for calculating ex ante price variability from ex post producer price data. The methodology is applied to European agricultural industries in which intervention purchasing schemes operate. Results show that price support policies can so severely distort the signal producers receive from world markets that their supply response is the opposite of that which would occur in the absence of the policy.
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Suggested Citation

  • Fraser, R., 1990. "Reassessing Producer Behaviour In A Policy-Modified Production Environment," The Warwick Economics Research Paper Series (TWERPS) 354, University of Warwick, Department of Economics.
    • Handle: RePEc:wrk:warwec:354
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