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Agricultural policy regime change assessment: Austrian accession to the European union

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Abstract

Policy regime change evaluation involves assessing what would have been had the policy not changed. In this paper, we empirically assess the impact on Austrian pig producers of the 1995 decision of Austria to join the European Union. Applying a recently developed Hausman–Wu-Type cointegration test, we confirm the existence of a cointegrating relationship between Austrian and EU pig prices series. This relationship is used to forecast the counterfactual time path of prices. Within an expected utility framework, we compute the Austrian producer’s willingness to pay to remain under the pre-accession policy. Accounting for the dual income and insurance effects, we found producers to have been under-compensated. Conventional welfare measures which do not include the insurance component would significantly underestimate the total welfare impact.

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Author notes

  1. Y. Bae

    Present address: School of Economics, University of Seoul, Siripdae-gil 13, Dongdaemun-gu, Seoul, 130-743, Korea

Authors and Affiliations

  1. Department of Agricultural, Environmental, and Development Economics, The Ohio State University, 2120 Fyffe Road, Columbus, OH, 43210, USA

    S. R. Thompson

  2. Department of Economics, Lehigh University, 621 Taylor Street, Bethlehem, PA, 18015, USA

    Y. Bae

  3. Department of Economics and Social Sciences, University of Natural Resources and Applied Life Sciences, Feistmantelstraße 4, 1180, Vienna, Austria

    M. Kniepert

Authors
  1. S. R. Thompson
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  2. Y. Bae
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  3. M. Kniepert
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Corresponding author

Correspondence to S. R. Thompson.

Additional information

The authors wish to thank the co-ordinating editor and the helpful comments of two anonymous reviewers. We also benefitted greatly from the early contributions of Dr. Nobuyuki Iwai, University of Florida.

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Thompson, S.R., Bae, Y. & Kniepert, M. Agricultural policy regime change assessment: Austrian accession to the European union. Empir Econ 39, 291–302 (2010). https://doi.org/10.1007/s00181-009-0314-6

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  • DOI: https://doi.org/10.1007/s00181-009-0314-6

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