We critiqued the PSE method as it is traditionally applied. It can be concluded that it has severe limitations when it is applied to Russian agriculture during transition to a market economy. Many of the conditions and assumptions taken for granted in mature market economies cannot be assumed for transition economies, so the validity of PSE measures is questionable. The specific approaches are applied to calculate PSEs for Russian agriculture, emphasizing the unique structure of production and marketing channels. The appropriate interpretations of PSE estimations for major agricultural commodities are provided.


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