Estimation of the impact of CAP reform on the structure of farming in the disadvantaged areas of Ireland
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Date
1997-09Author
Murphy, Eithne
Lally, Breda
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Murphy,E. & Lally, B. (1997). "Estimation of the impact of CAP reform on the structure of farming in the disadvantaged areas of Ireland" (Working Paper No. 017) Department of Economics, National University of Ireland, Galway.
Abstract
In this paper the Johansen model was used to examine the impact of
CAP Reform on the structure of farming in the Disadvantaged Areas of
Ireland. The model is essentially a policy impact model using an elasticity
set. Application of the model requires information on all relevant elasticities
of outputs and inputs with respect to all output and input prices.
These elasticities were estimated directly for a translog profit function from
a combination of cross section and time series data. In order to test the
usefulness of the model, a validation exercise was undertaken for the period
1992-1995. The model performed reasonably well in that the predicted direction
of change in the volume of outputs and inputs was generally in the
same direction as actual volume changes in outputs and inputs over the
period tested.