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Economic welfare analysis of policy‐induced structural change in the Indonesian poultry industry
Author(s) -
Suwartini Endang,
Coffin H. Garth,
Gunjal Kisan
Publication year - 1997
Publication title -
agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.29
H-Index - 82
eISSN - 1574-0862
pISSN - 0169-5150
DOI - 10.1111/j.1574-0862.1997.tb00458.x
Subject(s) - indonesian , economics , welfare , order (exchange) , distribution (mathematics) , production (economics) , economic welfare , variable (mathematics) , supply and demand , public economics , microeconomics , market economy , philosophy , linguistics , mathematical analysis , mathematics , finance
The performance of the poultry industry in Indonesia is analyzed in terms of changes in producer and consumer welfare as a result of public policy intended to limit the size of production units in order to distribute growth opportunities to smallet farms. Elasticities of supply and demand are estimated using the seemingly unrelated system of equations. The hypothesis of a policy‐induced structural change, estimated through a dummy variable accounting for a shift in supply associated with implementation of the policy, shows a negative impact on the output supplied and the welfare of producers and consumers to the tune of about Rp 94 billion or roughly about 0.1% of national income as of 1983. The study suggests an important trade‐off between more equitable income distribution and economic efficiency.