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Rice is a staple food in the West African nation of Sierra Leone with little difference in consumption between poor and wealthy households. Rice production is also an important source of livelihood with half of all households, three-quarters of rural households and about two-thirds of poor households grow rice. The final price of rice in the domestic market is an important policy issue. The policy challenge is complicated by the fact that poor households, which earn the bulk of their income from rice production, also purchase rice when own production is inadequate. Under the broad assumption that money income is a reasonable measure of well-being, this paper develops a simple model of the Sierra Leone rice sector and applies procedures to determine key outcomes in terms of domestic production, imports, and exports under conditions that maximize consumer's and producer's surplus. The paper finds that the rice sector is operating at a suboptimal level. In addition, simulations suggest that an optimal policy path to balance consumer and producer welfare and meet the higher societal objective of creating jobs requires a moderate level of tariff on imported rice, combined with structural policies to improve the productivity of the sector.

Agricultural Sector Economics --- Agriculture --- Consumer Surplus --- Demand Elasticity --- Food Security --- Producer Surplus --- Rice Price --- Supply Elasticity --- Supply Response --- Welfare

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Trade negotiators and policy advisors are keen to know the relative contribution of different farm policy instruments to international trade and economic welfare. Nominal rates of assistance or producer support estimates are incomplete indicators, especially when (especially in developing countries) some commodities are taxed and others are subsidized, in which case positive contributions can offset negative contributions. This paper develops and estimates a new set of more-satisfactory indicators to examine the relative contribution of different farm policy instruments to reductions in agricultural trade and welfare, drawing on recent literature on trade restrictiveness indexes and a recently compiled database on distortions to agricultural prices for 75 developing and high-income countries over the period 1960 to 2004. Results confirm earlier findings that border taxes are the dominant instrument affecting global trade and welfare, but they also suggest declines in export taxes contributed nearly as much as cuts in import protection to global welfare gains from agricultural policy reforms since the 1980s.

Aggregate demand --- Aggregate supply --- Agriculture --- Consumer surplus --- Consumers --- Economic Theory & Research --- Emerging Markets --- Exchange rates --- Free trade --- GDP --- Import barriers --- Income --- Index numbers --- International Economics and Trade --- International trade --- Macroeconomics and Economic Growth --- Markets and Market Access --- Open economy --- Price elasticity --- Private Sector Development --- Supply curves --- Taxation --- Taxation & Subsidies --- Trade policies --- Trade Policy --- World trade organization --- WTO

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Economic analyses of development projects and policies often involve assigning an economic value to changes in the risk of loss of human life. A typical term used in the economic analyses is the value of statistical life, which reflects the aggregation of individuals' willingness to pay for fatal risk reduction and therefore the economic value to society to reduce the statistical incidence of premature death in the population by one. Studies on the value of a statistical life have been extensively conducted in the developed world; however, few such studies can be found for developing countries. This paper presents a study that estimates individuals' willingness to pay for cancer risk prevention in three provinces of China. The results imply that the mean value of willingness to pay for a cancer vaccine that is effective for one year is 759 yuan, with a much lower median value of 171 yuan. The estimated income elasticity of willingness to pay is 0.42. Using data on the incidence of cancer illness and death in the population, these willingness to pay figures imply that the marginal value of reducing the anticipated incidence of cancer mortality by one in the population is 73,000 yuan and an average value of 795,000 yuan, which are about six and 60 times average household annual income, respectively. The big difference between the marginal value and the average value of fatal risk reduction corresponds to a very low estimated elasticity of willingness to pay with respect to fatal risk reduction. This finding challenges the validity of previous studies of the value of a statistical life, which are mostly based on average willingness-to-pay values of mortality risk reduction.

Air pollution --- Cancer --- Consumer surplus --- Contingent valuation --- Contingent valuation method --- Demographics --- Developed countries --- Developing country context --- Durable goods --- Economic Theory & Research --- Economic value --- Economics --- Environment --- Environmental --- Environmental Economics & Policies --- Environmental protection --- Health Monitoring & Evaluation --- Health, Nutrition and Population --- High unemployment --- Labor markets --- Labor Policies --- Macroeconomics and Economic Growth --- Population Policies --- Present value --- Social Protections and Labor --- Tradeoffs --- Wages --- Willingness to pay --- WTP

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The practice of setting a single price that all buyers pay is slowly becoming a thing of the past. Today's marketplace requires firms to develop innovative pricing strategies to remain competitive. Is it better to bundle goods or price them separately? What type of online auction will generate the most revenue? The purpose of this book is to use microeconomic theory to determine which pricing strategies will succeed, and under what conditions.

Pricing. --- Open price system. --- Internet auctions. --- Bundling --- common value auction --- consumer surplus --- Dutch auction --- dynamic pricing --- e-commerce --- English auction --- first-price sealed bid auction --- online auctions --- peak-load pricing --- price discrimination --- price elasticity --- price penetration --- price skimming --- pricing --- private value auction --- quality choices --- quantity discounts --- reference price --- Robinson- Patman Act --- second-price sealed bid auction --- surge pricing --- two-part tariffs --- tying --- winner's curse

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What is the welfare effect of a price change? This simple question is one of the most relevant and controversial questions in microeconomic theory and its different answers can lead to severe heterogeneity in empirical results. This paper returns to this question with the objective of providing a general framework for the use of theoretical contributions in empirical works, with a particular focus on poor people and poor countries. Welfare measures (such as Equivalent Variation or Consumer's Surplus) and computational methods (such as Taylor's approximations or the Vartia method) are compared to test how these choices result in different welfare measurement under different price shock scenarios. As a rule of thumb and irrespective of parameter choices, welfare measures converge to approximately the same result for price changes below 10 percent. Above this threshold, these measures start to diverge significantly. Budget shares play an important role in explaining such divergence, whereas the choice of demand system has a minor role. Under standard utility assumptions, the Laspeyers and Paasche variations are always the outer bounds of welfare estimates and consumer surplus is always the median estimate. The paper also introduces a new simple welfare approximation, clarifies the relation between Taylor's approximations and the income and substitution effects, and provides an example for treating nonlinear pricing. Stata codes for all computations are provided in annex.

Access to Markets --- Agriculture --- Choice --- Consumer Demand --- Consumer Preferences --- Consumer Surplus --- Consumers --- Consumption --- Cost of Living --- Data --- Demand --- Demand Curves --- Demand Function --- Developing Countries --- Distribution --- E-Business --- Econometrics --- Economic Research --- Economic Theory & Research --- Economics Literature --- Elasticity --- Electricity --- Emerging Markets --- Engel Curve --- Equity --- Exchange --- Expenditure --- Food Price --- Free Market --- Government Revenues --- Income --- Income Effects --- Index Numbers --- Information --- Interest --- International Economics & Trade --- Lorenz Curve --- Macroeconomics and Economic Growth --- Market Prices --- Markets & Market Access --- Money --- Nominal Income --- Normal Good --- Open Access --- Outputs --- Particular Country --- PC --- Price --- Price Adjustments --- Price Change --- Price Decreases --- Price Elasticity --- Price Increases --- Price Schedule --- Price Structure --- Price Variation --- Price_Index --- Pricing --- Private Sector Development --- Product --- Productivity --- Real Income --- Reliability --- Results --- Sales --- Savings --- Subsidies --- Substitute --- Substitute Goods --- Substitution --- Surplus --- Tax --- Tax Systems --- Transactions --- Utility --- Utility Function --- Utility Maximization --- Value --- Variables --- Wages --- Web --- Welfare --- Welfare Economics