Welfare gains and losses under the Malaysian rice pricing policy and their relationships to the self-sufficiency level

An applied welfare economics approach was utilised to analyse the impact of public policy on the rice industry arising from the adoption of a price control programme. Taking market clearing equilibrium price under the assumption of a closed economy, the imposition of price control was found to favou...

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Main Author:	Nik Hasim Mustapha
Format:	Article
Published:	Penerbit Universiti Kebangsaan Malaysia 1998
Online Access:	http://journalarticle.ukm.my/1347/ http://journalarticle.ukm.my/1347/

id	ukm-1347
recordtype	eprints
spelling	ukm-13472011-08-16T02:43:11Z http://journalarticle.ukm.my/1347/ Welfare gains and losses under the Malaysian rice pricing policy and their relationships to the self-sufficiency level Nik Hasim Mustapha, An applied welfare economics approach was utilised to analyse the impact of public policy on the rice industry arising from the adoption of a price control programme. Taking market clearing equilibrium price under the assumption of a closed economy, the imposition of price control was found to favour consumers at the expense of producers. Based on the 1992 equilibrium price level, welfare gain accrued to the consumers as represented by the consumeris surplus, was estimated at consumers as represented by the consumeris surplus, was estimated at RM205 thousand per year, while a reduction in the producer's surplus, constituting a welfare loss, was estimated at RM188 thousand. Excess demand resulting from the existing pricing policy was supplemented by rice imports, amounting to 2,535 metric tons during the year. The amount of government spending on rice import was RM248 thousand for the year. In total, there was a negative net welfare effect of RM232 thousand for the year analysed. The paper also discussed the interrelationship between pricing policy and the level of self-sufficiency, since for every level of controlled prices, corresponding quantities of rice supplied and demanded can be obtained. Hence, an appropriate pricing policy may be chosen to acquired level of rice self-sufficiency in the industry Penerbit Universiti Kebangsaan Malaysia 1998 Article PeerReviewed Nik Hasim Mustapha, (1998) Welfare gains and losses under the Malaysian rice pricing policy and their relationships to the self-sufficiency level. Jurnal Ekonomi Malaysia, 32 . ISSN 0127-1962 http://www.ukm.my/~penerbit
repository_type	Digital Repository
institution_category	Local University
institution	Universiti Kebangasaan Malaysia
building	UKM Institutional Repository
collection	Online Access
description	An applied welfare economics approach was utilised to analyse the impact of public policy on the rice industry arising from the adoption of a price control programme. Taking market clearing equilibrium price under the assumption of a closed economy, the imposition of price control was found to favour consumers at the expense of producers. Based on the 1992 equilibrium price level, welfare gain accrued to the consumers as represented by the consumeris surplus, was estimated at consumers as represented by the consumeris surplus, was estimated at RM205 thousand per year, while a reduction in the producer's surplus, constituting a welfare loss, was estimated at RM188 thousand. Excess demand resulting from the existing pricing policy was supplemented by rice imports, amounting to 2,535 metric tons during the year. The amount of government spending on rice import was RM248 thousand for the year. In total, there was a negative net welfare effect of RM232 thousand for the year analysed. The paper also discussed the interrelationship between pricing policy and the level of self-sufficiency, since for every level of controlled prices, corresponding quantities of rice supplied and demanded can be obtained. Hence, an appropriate pricing policy may be chosen to acquired level of rice self-sufficiency in the industry
format	Article
author	Nik Hasim Mustapha,
spellingShingle	Nik Hasim Mustapha, Welfare gains and losses under the Malaysian rice pricing policy and their relationships to the self-sufficiency level
author_facet	Nik Hasim Mustapha,
author_sort	Nik Hasim Mustapha,
title	Welfare gains and losses under the Malaysian rice pricing policy and their relationships to the self-sufficiency level
title_short	Welfare gains and losses under the Malaysian rice pricing policy and their relationships to the self-sufficiency level
title_full	Welfare gains and losses under the Malaysian rice pricing policy and their relationships to the self-sufficiency level
title_fullStr	Welfare gains and losses under the Malaysian rice pricing policy and their relationships to the self-sufficiency level
title_full_unstemmed	Welfare gains and losses under the Malaysian rice pricing policy and their relationships to the self-sufficiency level
title_sort	welfare gains and losses under the malaysian rice pricing policy and their relationships to the self-sufficiency level
publisher	Penerbit Universiti Kebangsaan Malaysia
publishDate	1998
url	http://journalarticle.ukm.my/1347/ http://journalarticle.ukm.my/1347/
first_indexed	2023-09-18T19:33:05Z
last_indexed	2023-09-18T19:33:05Z
_version_	1777405091854155776

Welfare gains and losses under the Malaysian rice pricing policy and their relationships to the self-sufficiency level

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