Explaining Inefficient Policy Instruments

Distorted incentives, agricultural and trade policy reforms, national agricultural development, Agricultural and Food Policy, International Relations/Trade, F13, F14, Q17, Q18,

On the regulation of unobserved emissions

Regulation of nonpoint source pollution often relies in one way or another on policy instruments based on ambient indicators. For well-known reasons, enforcement of ambient-based policies is, at best, limited. If no individual choices or actions are observed, than ambient-based regulation might be the only feasible approach. Often, some relevant individual indicators, such as output or certain inputs, are observable. For such cases, we offer a regulation mechanism that does away with ambient indicators. The mechanism implements the optimal output-abatement-emission allocation and gives rise to the full information outcome when the social cost of transfers is nil. Special attention is given to the regulation of (unobserved) abatement.Nonpoint source pollution, abatement, asymmetric information, regulation mechanism, implementation., Environmental Economics and Policy,

BIOFUELS AND LEAKAGES IN THE FUEL MARKET

Leakage in the fuel market differs, depending on whether ethanol production is determined by a tax credit or consumption mandate. Two components of market leakage are distinguished: domestic and international. Leakage with both a tax credit and a consumption mandate depends on market elasticities and consumption/production shares, with the former having a bigger impact. Leakage is also more sensitive to changes in market supply and demand elasticities in the country not introducing biofuels. Although positive with a tax credit, market leakage can be negative with a consumption mandate, meaning that one gallon of ethanol can replace more than a gallon of gasoline. We also show that being a small country biofuels producer does not necessarily mean that leakage for this country is 100 percent. Our numerical estimates show that one gallon of ethanol replaces approximately 0.2-0.3 gallons of gasoline in the U.S.Agricultural and Food Policy, Crop Production/Industries, Environmental Economics and Policy, International Relations/Trade, Resource /Energy Economics and Policy,

Capital income taxation in Europe; trends and trade-offs

The EU capital market integrates. Portfolios become more international, cross border mergers are the order of the day, and never before has there been so much foreign direct investment. This links national tax systems. Residents pay foreign capital income tax, foreigners pay domestic capital income tax, and no member state can afford to overlook the danger of capital flight. What is the appropriate policy response? To do nothing? To coordinate tax systems at the European level? The data do not unequivocally support the tax-race-to-the-bottom hypothesis. On the one hand, member states decrease their statutory capital income tax rates. On the other, they broaden their capital income tax bases. Thus, fear for an economy-wide undertaxation of capital income -the main tenet of tax competition theory- is as yet ungrounded. Nevertheless, tax coordination may be beneficial. It resolves relative undertaxation of particular kinds of capital, forces convergence of capital income tax rates, and creates order in the costly European tax maze. Unfortunately, it simultaneously infringes upon the sovereignty of member states, and sidelines the disciplining force that tax competition exerts on government spending. This study assesses the most important proposals for capital income tax coordination against a background of the recent trends in capital income taxation and the trade offs between distinct policy objectives. It is a guide to the debate that is easy to read, yet firmly grounded in empirical evidence and economic theory.

A conceptual and empirical framework to analyze the economics of consumer food waste

We develop a microeconomic model to understand food waste of consumers. We capture at-home and away-from home food consumption and distinguish between food purchases and food consumption. We allow the consumer to choose the rate of food waste at home optimally to maximize her utility. We show that consumer purchases can decline or increase with a cut in the rate of consumer waste, depending on the elasticity of food demand. Using the UK data for poultry in 2012, we also show a case where for a price elastic demand food consumption increases with a reduction in the food waste rate, but food purchases (retail sales) increase

An Econometric Model of the European Economic Community's Wheat Sector

Crop Production/Industries,

THE CANADA- U.S. TRADE DISPUTES ON DAIRY AND POULTRY: A GOOD EXAMPLE

International Relations/Trade,

Agricultural Policies and the GATT: Reconciling Protection, Support and Distortion

This paper analyzes the relationship between the theory of protection, farm income support and international trade distortion. To parallel those of protection, a measure of distortion is derived which compares trade volumes under support policies with those which would occur under multilateral free trade. Estimates are made of these measures for the European Community and the United States for a selection of commodities. The relationship between measures of protection and economic efficiency is also highlighted. The conclusion is that present measures of protection such as the Producer Subsidy Equivalent are confusing as measures of either trade distortion or income support. Some implications are drawn for the GAIT negotiations on agriculture and for the design of domestic policies which minimize trade distortion.Agricultural and Food Policy, International Relations/Trade,

ISSUES IN THE ADMINISTRATION OF TARIFF-RATE IMPORT QUOTAS IN THE AGREEMENT ON AGRICULTURE IN THE WTO: AN INTRODUCTION

International Relations/Trade,

DISENTANGLING THE PRODUCTION AND EXPORT CONSEQUENCES OF DIRECT FARM INCOME PAYMENTS

This paper formalizes the production and export consequences of direct farm payments. Taxpayer financed direct payments distort exit and production incentives, while consumer financed subsidies also imply that the risks of domestic and export production differ. Welfare decompostion and empirical calibration illustrate the potential for import barriers to cross-subsidize exports.Agricultural and Food Policy, International Relations/Trade,