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This article examines the influence of campaign contributions on agricultural subsidies. Empirical results revealed that rent‐seeking works, i.e. contributions, influence agricultural subsidies in the manner they best serve contributors' economic interests. Eliminating campaign contributions would significantly decrease agricultural subsidies, hurt farm groups, benefit consumers and taxpayers, and increase social welfare by approximately $5.5 billion. Although contributions are not the only determinants of agricultural subsidies, investment returns to farm PAC contributors are quite high ($1 in contributions brings about $2,000 in policy transfers). In fact, the results are in sharp contrast to the "truthful contributions" assumption of the Grossman–Helpman model.

This article examines the influence of campaign contributions on agricultural subsidies. Empirical results revealed that rent-seeking works, ie, contributions, influence agricultural subsidies in the manner they best serve contributors' economic interests. Eliminating campaign contributions would significantly decrease agricultural subsidies, hurt farm groups, benefit consumers & taxpayers, & increase social welfare by approximately $5.5 billion. Although contributions are not the only determinants of agricultural subsidies, investment returns to farm political action committee contributors are quite high ($1 in contributions brings about $2,000 in policy transfers). In fact, the results are in sharp contrast to the "truthful contributions" assumption of the Grossman-Helpman model. 3 Tables, 1 Appendix, 33 References. Adapted from the source document.

Using the Philippine sugar market as a case study, the author explores the political economy of government pricing decisions. The empirical results of his analysis support the notion that the Philippine goverment has responded to distributional concerns, with welfare weights determined by government principles and political leverage. (DÜI-Sen)

AbstractWe apply the Berry, Levinsohn and Pakes market equilibrium model to data from 30 brands of beer sold in 12 US cities over 20 quarters (1988–1992) to estimate consumers' preference for beer characteristics as well as for their cultural regions of origin. Consumer heterogeneity is accounted for with respect to age and income. Overall, our data is comprised of 7200 beer brand observations and 13 920 hypothetical consumer observations. Empirical results indicate that there is, indeed, home bias with respect to foreign beers, although it varies with consumer age and income.

AbstractThis article assesses the welfare impacts of structural adjustment‐induced peanut market reforms in Senegal. In the pre‐reform period, by keeping peanut prices low, price regulation favoured urban dwellers and processors to the detriment of farmers, although the latter benefited from subsidized credit and inputs. With the reforms, peanut prices increased but the ensuing benefits to farmers were outweighed by higher production costs. Consumers gained due to access to cheaper, imported vegetable oil and processors lost due to excess capacity from lower peanut production. Overall, social welfare decreased illustrating that unfettered market reforms can be detrimental when supportive market institutions are eliminated without addressing alternatives. Copyright © 2002 John Wiley & Sons, Ltd.