Urgent Yet Ineffective? The Welfare Impacts of Potato Price Stabilization in Peru

Chris M. Boyd
2020 unpublished
Preference for price stabilization and its impacts on farmers have been addressed extensively using the expected utility theory framework, but very few studies tested their predictions empirically. This paper evaluates the welfare impacts of a temporary price support policy for potato farmers in Peru. I exploit the geographical discontinuity of the policy to assess its impacts using regression discontinuity and differencesin-differences as empirical strategies. For the whole sample, results are
more » ... sample, results are not always significant, but they suggest a positive impact of the price stabilization policy on welfare. Heterogenous effects consistently show that net consumers, smaller farmers, and farmers living closer to capital cities are the ones positively impacted by the policy. Moreover, the relative importance of potato on the total value of the farm production does not bring differential impacts on welfare.
doi:10.22004/ag.econ.304293 fatcat:vhek5bjeabbvtljrrwekl5hgem