Analysis of the effects of eliminating the preferred currency of imported inputs on the welfare of consumers

Shabanzadeh Khoshrody, Mehdi; Gilanpour, Omid; Javdan, Ebrahim; Rafati, Mohsen

doi:10.22054/qjsd.2022.65532.2296

Analysis of the effects of eliminating the preferred currency of imported inputs on the welfare of consumers

Document Type : Research Paper

Authors

Mehdi Shabanzadeh Khoshrody ¹

Omid Gilanpour ²

Ebrahim Javdan ¹

Mohsen Rafati ¹

¹ Assistant Professor of Agricultural Economics, Institute of Planning Research, Agricultural Economics and Rural Development, Tehran, Iran

² Associate Professor of Agricultural Economics, Institute of Planning Research, Agricultural Economics and Rural Development, Tehran, Iran.

https://doi.org/10.22054/qjsd.2022.65532.2296

Abstract

in this study, the supply and demand functions of products including red meat, chicken, eggs and milk were first specified and then estimated in the form of a system of simultaneous equations.Then, the demand elasticity of the models was used to calculate the changes in the welfare of consumers of protein products under in two cases, after removing the subsidy of the preferred currency and the 35,000 Toman currency scenario. The results of estimating the supply function of red meat, chicken, egg and milk showed that the supply of livestock and protein products is inelastic than the price and with the increase of input prices, the supply of these products decreases. Based on the results of the demand function, the prices of red meat, chicken, eggs and milk have a negative and significant effect on the demand for these products. Also based on the results of red meat, chicken and fish are substitutes; In addition, red meat, chicken, eggs and milk are considered necessary commodities for consumers. Finally, the results showed that by removing the preferential currency subsidy and changing the price of each kilogram of red meat, chicken meat, eggs and milk in the market to 191,324, 55,236, 38,564 and 12,513 tomans, respectively, the welfare surplus of protein product consumers is equal to 318,468 thousand billion Toman has decreased.

Keywords

Preferential Currency Subsidy Policy

Livestock and Protein Products

Supply and Demand Function

Consumer Welfare

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