Abstract
This chapter is designed to help policy analysts learn how a simple market model introduced in lessons on principles of economics can be used to analyse the effects of price policies. The chapter intends to describe the nature of price policies implemented by developing countries with special reference to the agricultural and food price policies implemented by the government of Sri Lanka. It demonstrates the theoretical effects of a floor price scheme, a price ceiling, and an input price subsidy when implemented in a perfectly competitive market and describes the steps to be undertaken in performing a simulation exercise to analyse a price policy using an econometrically estimated model and a synthetically calibrated model.
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References
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Recommended Readings
Policy Documents
Ratnasabapathy R (2018) Price controls in Sri Lanka—political theatre. Advocata Institute, Colombo. https://www.research.advocata.org/wp-content/uploads/2018/10/Price-Controls-in-Srilanka-Book.pdf. Accessed 19 Mar 2020
Empirical Applications in Sri Lanka
Weerahewa J, Kodithuwakku SS, Ariyawardana A (2010) The fertiliser subsidy programme in Sri Lanka. Rice trade liberalization and market reforms in Sri Lanka. https://ecommons.cornell.edu/handle/1813/55709. Accessed 19 Mar 2020
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Empirical Applications in Other Developing Countries
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Krueger AO (1991) The political economy of agricultural price policy. A synthesis of the political economy in developing countries 5. Johns Hopkins University Press for World Bank. http://siteresources.worldbank.org/INTTRADERESEARCH/Resources/544824-1146153362267/ThePoliticalEconomyofAg_Pricing_Policy_vol2_ASIA.pdf. Accessed 19 Mar 2020
Ministry of Finance (2010–2020) Government of Sri Lanka
National Fertilizer Secretariat (2010–2020) Ministry of Agriculture, Government of Sri Lanka
Wickramasinghe W, Samarasingha G, Epasinghe S (2009) Fertilizer policy on paddy farming. Evaluation of subsidy program 2005. Hector Kobbekaduwa Agrarian Research and Training Institute, Colombo
Weerahewa, J., Gedara PK and Kanthilanka H The evolution of food policy in Sri Lanka: 1948–2017. Reference module in food sciences. Elsevier, pp 1–19. https://doi.org/10.1016/B978-0-08-100596-5.21179-7. ISBN: 9780081005965
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Weerahewa, J. (2022). Partial Equilibrium Analysis of Agricultural Price Policies. In: Weerahewa, J., Jacque, A. (eds) Agricultural Policy Analysis. Springer, Singapore. https://doi.org/10.1007/978-981-16-3284-6_11
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DOI: https://doi.org/10.1007/978-981-16-3284-6_11
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