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Title:The impact of price regulations on regional welfare and agricultural productivity in China PDF Logo
Authors:Selim, Sheikh
Issue Date:2011
Series/Report no.:Cardiff Economics Working Papers E2011/2
Abstract:The nineties' agricultural reform in China that was aimed at deregulating the agricultural market eventually resulted in a huge drop in agricultural production and a high rate of inflation in agricultural prices; this apparently motivated the government to take over the control of agricultural prices in 1998. We examine how and to what extent this reform affected the productivity and welfare of grain farmers in China at the regional level. We find that the price regulation that destroyed the incentive to exert more effort adversely affected the growth in agricultural productivity but contributed to the growth in farmers. welfare. Although the price regulations resulted in short term improvement in welfare across all the regions, for the long run such regulations can result in larger drop in agricultural production because of its negative impact on incentives to produce more.
Subjects:China
Welfare
TFP
Agriculture
Grain Production
JEL:N55
O13
O53
Q12
Document Type:Working Paper
Appears in Collections:Cardiff Economics Working Papers, Cardiff Business School, Cardiff University

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