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Abstract

A dynamic framework is presented for analyzing regulations affecting the use of spoilage-reducing inputs with potential negative environmental effects, such as pesticides, growth regulators, chemical preservatives, and irradiation. Such regulations change intertemporal consumption patterns as well as total output. Consumers may benefit from restrictions on storage technology, giving them a reason to support regulation even when it may not be warranted to correct environmental externalities. Static analyses do not take into account changes in intertemporal consumption, and thus may give misleading depictions of the effects of imposing new regulations. Implications of the framework for development and trade policy are discussed, as are extensions to cases of uncertainty and multiple time periods.

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