Evaluation of the Effects of Optimum Combination of Policy Instruments on Bread Consumers in Different Income Classes

Document Type : Research Article

Authors

• A. Nikoukar ¹
• S.S. Hosseini ²
• A. Dourandish ³

¹ Agricultural Economics, Payam-e- Noor Khorasan-e Razavi Brench

² Department of Agricultural Economics, University of Tehran

³ Department of Agricultural Economics, Faculty of Agricultural, Ferdowsi University of Mashhad

10.22067/jead2.v1389i4.8194

Abstract

Abstract
The objective of this study is evaluation of government’s optimum combination of policy instruments on per capita consumption of bread and the share of this product in food cost of families in different income classes. The minimization of changes in dead weight loss function is used in this study. By using boot strop method and on base of normal distribution for supply elasticity and demand elasticity, statistical properties of optimum combination of the policy instruments and the welfare outcomes were analyzed. The results of the welfare outcomes in wheat market show that government protects consumers more than producers by using consumption subsidy and guarantee price simultaneously. The optimizations of governments’ policy in wheat market reduce governments’ cost and dead weight loss by reduction in protection from consumers. Results also show that per capita consumption and the share of bread in food cost of families change considerably after using optimum combination policy instruments and the effect of using optimum combination policy instruments on the share of bread in food cost of rural families is more than urban families and for low income classes is more than high income classes.

Keywords: Income class, Dead weight loss, Guarantee price, Subsidy price, Bread

20.1001.1.20084722.1389.24.4.7.6

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