Articles
WELFARE LOSSES DERIVED FROM PRICE INSTABILITY IN THE SPANISH HORTICULTURAL SECTOR.
Article number
155_14
Pages
83 – 88
Language
Abstract
Instability in the horticultural sector is a fact widely admitted.
Even though an assumed stabilization would encounter difficulties, because of the perishable nature of the products, stabilization gains estimation could be of interest, especially because these gains are equivalent to the losses in which the sector falls into, due to instability.
In our work we try to apply the Massell Model to stabilization total gains and redistributive effects estimates on Spanish horticultural sector.
Accordingly with the results, it is observed that welfare losses derived from instability represent a little percentage of the consumption value, in most horticultural products.
As for redistributive effects, instability involves a very important income redistribution, in favour of consumers and against producers; redistribution that has not, however, a high social cost.
Some theoretical difficulties, that may be opposed to Massell assumptions, are mentioned.
Such assumptions may be accepted in a first aproximation on the basis of several considerations relative to the special production system prevailing in most horticultural exploitations.
Even though an assumed stabilization would encounter difficulties, because of the perishable nature of the products, stabilization gains estimation could be of interest, especially because these gains are equivalent to the losses in which the sector falls into, due to instability.
In our work we try to apply the Massell Model to stabilization total gains and redistributive effects estimates on Spanish horticultural sector.
Accordingly with the results, it is observed that welfare losses derived from instability represent a little percentage of the consumption value, in most horticultural products.
As for redistributive effects, instability involves a very important income redistribution, in favour of consumers and against producers; redistribution that has not, however, a high social cost.
Some theoretical difficulties, that may be opposed to Massell assumptions, are mentioned.
Such assumptions may be accepted in a first aproximation on the basis of several considerations relative to the special production system prevailing in most horticultural exploitations.
Publication
Authors
L. Vila, J. Alvarez-Coque
Keywords
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