The measurement of the effect of production subsidies

Varga, Tibor

A methodology of drafting subsidy impact studies is described. The procedure suitable for calculating three impact indices may be applied for the type of subsidies that can be interpreted as the increment of a specific expenditure. The recommended indices, providing numerical expressions for the spread (), concentrated () and accumulated () impact of various subsidies, are based on the measurability of the difference between the impact of a given expenditure with and without subsidy. Their application is recommended in preparing sector-policy decisions.

Full article