Evaluating the Market and Welfare Impacts of Agricultural Policies in Developed Countries: Comparison of Partial and General Equilibrium Measures |
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| Authors: | Alexandre Gohin GianCarlo Moschini |
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| Institution: | Alexandre Gohin is a researcher at INRA, Rennes, France, and an associate economist with CEPII, Paris, France.;GianCarlo Moschini is a professor of economics and Pioneer Chair in Science and Technology Policy at Iowa State University, Ames, Iowa. |
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| Abstract: | We revisit the question of choosing partial equilibrium or general equilibrium modeling in applied policy analysis in the context of evaluating the effects of a complete phase-out of the Common Agricultural Policy (CAP) of the European Union. We compare the results of three models—two three-sector general equilibrium models (one with an additional major distortion in the nonagricultural sector) and a two-sector partial equilibrium model. We find that the market effects of a complete phase-out of the CAP are quite comparable across these models. On the other hand, the measured welfare impacts may depend on the modeling choice. |
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