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Measuring Effective Protection as a Superlative Index Number: An Application to European Agriculture

Jean-Christophe Bureau and Nicholas G. Kalaitzandonakes
American Journal of Agricultural Economics
Vol. 77, No. 2 (May, 1995), pp. 279-290
Stable URL: http://www.jstor.org/stable/1243538
Page Count: 12
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Measuring Effective Protection as a Superlative Index Number: An Application to European Agriculture
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Abstract

In this study duality and the theory of superlative index numbers are used to obtain a theoretically consistent Effective Protection Rate (EPR) index that imposes no a priori restrictions on input-output substitution possibilities. Within this framework, EPRs are estimated for European agriculture over the period 1973 to 1989. The empirical results demonstrate that maintaining zero input/output substitutability--a restriction embedded in all common protection measures--can lead to false results about the level of protection both across countries and time.

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