Bibliographical Note to Chapter 3

The analysis of commodity price policies is discussed in many economics textbooks, treatises, and articles, but none of these sources approaches it in the context of the policy analysis matrix. Three recent books contain especially useful bibliographical references that deal with price policies. The bibliographical note to chapter 4, "Marketing Functions, Markets, and Food Price Formation," of C. Peter Timmer, Walter P. Falcon, and Scott R. Pearson, Food Policy Analysis (Baltimore: Johns Hopkins University Press, 1983), pp. 150-214, summarizes principal contributions to the literature through 1982 on agricultural markets and prices and on the effects of policies influencing them. That listing is extended and updated in C. Peter Timmer, Getting Prices Right: The Scope and Limits o f Agricultural Price Policy (Ithaca: Cornell University Press, 1986). A third review of the price policy literature, one not focusing on agriculture, appears in Anne O. Krueger, "Trade Policies in Developing Countries," in Handbook o f International Economics_, ed. Ronald W. Jones and Peter Kenen (Amsterdam: North-Holland, 1984), pp. 519-69.

Three textbooks offer especially useful adjuncts to the concepts developed in this chapter. William G. Tomek and Kenneth L. Robinson, Agricultural Product Prices (Ithaca: Cornell University Press, 1981), treats price formation and policy principally from the viewpoint of the agricultural sector of a single country; Richard E. Caves and Ronald W. Jones, World Trade and Payments: An Introduction (Boston: Little, Brown, 1981), discusses the theory of international price formation and of international trade policies; and Alex McCalla and Tim Josling, Agricultural Policies and World Markets (New York: Macmillan, 1985), analyzes the theory and application of domestic and international agricultural policies. These three texts also contain substantial citations.

The principles underlying the analysis of the effects of price policy on economic welfare can be found in the textbooks just cited. Detailed exposition of the concepts of producer and consumer surplus is provided in Richard Just, Darrell Hueth, and Andrew Schmitz, Applied Welfare Economics and Public Policy (Englewood Cliffs, N.J.: Prentice-Hall, 1982), chaps. 4-6. Extensions of these standard principles, with full references, appear in W. M. Corden, "The Normative Theory of International Trade," in Jones and Kenen, Handbook o f International Economics, pp_. 63-130; and in E. J. Mishan, Introduction to Normative Economics (New York: Oxford University Press, 1981).

A detailed analysis of price policies affecting rice in five countries is contained in Scott Pearson et al., Rice in West Africa: Policy and Economics (Stanford, Calif.: Stanford University Press, 1981); this book uses an approach that is an early variant of the PAM. An extensive PAM analysis of agricultural price policies affecting a wide variety of crops and livestock products in Portugal appears in Scott R. Pearson et al., Portuguese Agriculture in Transition (Ithaca: Cornell University Press, 1987). The literature on efficiency and price stabilization is vast; an empirical application of these concepts is provided in Cathy L. Jabara and Robert L. Thompson, "Agricultural Comparative Advantage under International Price Uncertainty: The Case of Senegal," American Journal of Agricultural Economics 62 (May 1980): 188-98. An empirical study of optimal policy choice that includes both economic welfare changes and implementation costs of trade and subsidy policies is reported in Eric Monke, "Tariffs, Implementation Costs and Optimal Policy Choice," Weltwirtscha ftliches Archiv 119 (June 1983): 281-96.