Transcript Kamel Elouhichi, Louvain-LN: Policy parameters for the market model

CAPRI
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Common Agricultural Policy Regional Impact
 POLICIES DATA COLLECTED FOR NOECD COUNTRIES
 THE AGGREGATION METHOD
 DEMANDE SYSTEM ESTIMATION
 SENSITIVITY TEST WITH THE MARKET MODULE
 PROJECT PLANNING FOR THE THIRD YEAR AT UCL
Kamel ELOUHICHI
Belgium Team
3rd CAP-STRAT Workshop, 24./25.03.2003, Bologna
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POLICY DATA COLLECTED FOR
NOECD COUNTRIES
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 TRQ : Tariff rate quota
•TRQNT : the TRQ in tons
•TAPREF : ad valorem tariff applied inside the TRQ
•TAMF : ad valorem tariff outside the TRQ
 TARS : Most favourite nation specific tariff
 PSE : Producer subsidy equivalent
 CSE : Consumer subsidy equivalent
 Expsub : Per unit export subsidy
 Exps : Subsidized exports
 Qute : WTO quantity limit on subsidized exports
 Cpri : Consumer price
 Ppri : Producer price
 Padm : Administrative price
3rd CAP-STRAT Workshop, 24./25.03.2003, Bologna
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ORGANISATION OF COUNTRY DATA POLICIES
3rd CAP-STRAT Workshop, 24./25.03.2003, Bologna
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AGREGATION RULE
Import quantity of jth
country
Aggregation
coefficient
Wj  
Imp j
 Imp
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Domestic sale of
jth country
 (1   )
j
Dsale j
 Dsale
j
j
j
  0.5
j  R(region )
Import quantity of regional
aggregation (CEE, ACP, MAD…)
3rd CAP-STRAT Workshop, 24./25.03.2003, Bologna
Domestic sale
of regional
aggregation
(CEE, ACP,…)
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INTRODUCTION OF DATA POLICIES IN THE MODEL
3rd CAP-STRAT Workshop, 24./25.03.2003, Bologna
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Bologna : 25-26/03/2003
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POLICY DATA COVERAGE FOR NOECD COUNTRIES
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CEE
CAD
MED
CHN
IND
ACP
ROW
(11 C)
(19 C)
(11 C)
(1 C)
(1 C)
(74 C)
(91 C)
TRQ
Most
Most
Most
Most
Most
Most
Most
AMAD/GTAP 5
TARS
Most
Most
Most
Most
Most
Most
Most
AMAD/WTO
PSE
All
None
Few
All
None
None
Few
OECD (2002)
CSE
All
None
Few
All
None
None
Few
OECD (2002)
Expsub
Most
Few
Few
None
None
Few
Few
WTO / GTAP 5
Exps
Most
Few
Few
None
None
Few
Few
WTO
Qute
Most
Few
Few
None
None
Few
Few
WTO
Cpri
All
None
Few
All
None
None
Few
OECD (2002)
Ppri
All
None
Few
All
None
None
Few
OECD (2002)
Padm
All
None
Few
All
None
None
Few
OECD (2002)
Import
All
All
All
All
All
Most
Most
FAO (2002)
D. sale
All
All
All
All
All
Most
Most
FAO (2002)
3rd CAP-STRAT Workshop, 24./25.03.2003, Bologna
Sources
THE ALMOST IDEAL DEMAND SYSTEM
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(AIDS MODEL)
Budget share
allocated to ith good
Price of the jth good
Total
expenditure
X
Wi   i    ij1ogPj   i 1og( )
p
j
1ogP   w j 1ogPj
j
Stone’s price
index for
the group
3rd CAP-STRAT Workshop, 24./25.03.2003, Bologna
THEORETICAL PROPERTIES OF LA/AIDS MODEL
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Homogeneity
   1,    0 ,    0
i
i
ij
i
i
i
Adding-up
  ij  0
j
Symmetry
 ij   ji
3rd CAP-STRAT Workshop, 24./25.03.2003, Bologna
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APPROACH USED TO ESTIMATING DEMAND
ELASTICITIES FROM THE LA/AIDS MODEL
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Price elasticities
ij   ij 
 ij
The Kronecker delta
3rd CAP-STRAT Workshop, 24./25.03.2003, Bologna
wi
Share of total
expenditure
allocated to
ith good
Bologna : 25-26/03/2003
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GROUPS OF PRODUCTS (SEPARABILITY ASSUMPTIONS)
CEREALS
and
SUGAR
• SOFT
WHEAT
• DURUM
WHEAT
•RYE AND
MESLIN
• BARLEY
• OATS
• MAIZE
• OTHER
CEREALS
• RICE
MILLED
• STARCH
• SUGAR
OILSEEDS and
VEGETABLES
OILS
DAIRY
PRODUCTS
• OLIVES FOR OIL
• OTHER OILSEEDS
• PULSES
•POTATOES
•TOMATOES
• OTHER
VEGETABLES
•RAPE
SEED OIL
•SUNFLOWER
SEED OIL
• SOYA
OIL
• OLIVE
OIL
• COW MILK
• BUTTER
• SKIMMED MILK
POWDER
• CHEESE
• FRESH MILK
PRODUCTS
• CREAMS
•CONCENTRATED MILK
•WHOLE MILK
POWDER
FRUITS
•APPLES
PEAR &
PEACHES
•CITRUS
• OTHER
FRUITS
•TABLE
GRAPES
3rd CAP-STRAT Workshop, 24./25.03.2003, Bologna
MEATS
and EGGS
• BEEF
• VEAL
• PORK
• SHEEP &
GOAT
•POULTRY
•EGGS
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WINE
•TABLE
WINE
• OTHER
WINE
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PRELIMINARY RESULTS BASED ON THE GROUP OF
CEREALS LA/AIDS MODEL
1
SOFT WHEAT
2
DURUM WHEAT
3
MAIZE
4
OTHER CEREALS
(RYE AND MESLIN,
BARLEY,OATS, OTHER CEREALS)
3rd CAP-STRAT Workshop, 24./25.03.2003, Bologna
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ESTIMATED MARSHALLIAN ELASTICITIES AT THE SAMPLE MEAN
PRELIMINARY RESULTS – FRENCH MARKET - CEREALS - LA/AIDS MODEL
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PRICE
SOFT
WHEAT
SOFT
WHEAT
DURUM
WHEAT
MAIZE
DURUM
WHEAT
MAIZE
OTHER
CEREALS
-2,094**
(1.257)
EXP
1,118*
(0.109)
-4,911*
(1.138)
0,557**
(0.336)
7,797
(18.355)
OTHER
CEREALS
Note 1 : standard errors are in parentheses
Note 2 : *significant at the 5%
Note 3 : **significant
at the
10%
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0.571
(1.413)
-15,911*
(4.921)
-1.371*
(0.475)
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SENSIBILITY ANALYSIS
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The first example of sensitivity test
Change the Armington elasticities (1, 2) of wheat
at the EU and we observe the change of :
SP1 : CES scale parameter
SP2 : CES scale parameter second stage
dp : CES distribution parameter
3rd CAP-STRAT Workshop, 24./25.03.2003, Bologna
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TWO STAGE ARMINGTON SYSTEM
First stage Armington
quantity aggregate
Armington
parameter

Arm1i ,r  sp1i ,r dpi ,r ,rw Arm 2
 1
i ,r
Domestic
sales
 dpi ,r ,r DSales

 2 
Arm 2i ,r  sp 2i ,r  dpi ,r ,r1Streamsi ,r ,r1 
 r1

1
1
  1;
2
1  1
1  2
Second stage
Armington
quantity
aggregate
Elasticity of
substitution
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1
 1
i ,r

1
1
2
Trade streams from r1
to r
3rd CAP-STRAT Workshop, 24./25.03.2003, Bologna
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SENSIBILITY ANALYSIS
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The second example of sensitivity test
 Change the shift factor in the supply equation to
increase supply for the EU by 10% and compare :
Production
Price
Imports and exports
Arm1 : Armington first stage aggregate
Arm2 : Armington second stage aggregate
Arm1p : Average price of foreign origins
Arm2p : Average price of foreign an domestic origins
For different sets of Armington elasticities
Supply for output i
Shift factor
and region r
Supply i , r  asi , r   bsi , j , r
j
3rd CAP-STRAT Workshop, 24./25.03.2003, Bologna
Producer price
ppri j , r
pindex, r
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PROJECT PLANNING FOR THE THIRD YEAR AT UCL
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WP 1 : CAPRI Data Base
1. Collection of data premium for Bel. and Lux.
2. Verification of grassland yields for Bel. and Lux.
3. Verification of cost estimations for Bel. and Lux.
WP 4 : Regional Disaggregation of the Market
Module
Access to additional sources to complete the
policy database for NOECD
3rd CAP-STRAT Workshop, 24./25.03.2003, Bologna
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PROJECT PLANNING FOR THE THIRD YEAR AT UCL
WP 8 : Revision of the Market Module
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1. Continuation of the estimation of the elasticities
of the demand for human consumption
2. Sensibility tests of Armington elasticities of
substitution
3. Estimation of Armington elasticities of
substitution
4. Validation of the market module from the
calibration years 1997-1998-1999 to the validation
years 2000-2000-2002
WP 11 : reference run
WP 12 : Simulation run
3rd CAP-STRAT Workshop, 24./25.03.2003, Bologna
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3rd CAP-STRAT Workshop, 24./25.03.2003, Bologna