The Importance of Substitution

Abstract

The objectives of this study were discussed earlier. At this point it is sufficient briefly to reaffirm the interest of this analysis in the measurement of agricultural levels of protection, in general, and with the rate of protection given to the different livestock production activities of British agriculture, in particular. It is hoped that such a measurement exercise will provide an indication of the possible effects on resource allocation that this agricultural policy action may have had over time. Amongst the measures estimated was the ERP and, from the calculated Effective Rates for different enterprises, a Relative Scale of Protection was constructed. Since a particular characteristic of Effective Rates is that they can be shown to be directly linked with the concept of the margin or value-added associated with a production activity, the Relative Scale would apparently be of use to economists whose prime concern is assessing the productive effects of protection. The Effective Rate was also seen to be able to involve several types of policy instrument in its calculation and hence produce an estimate of the net amount of protection of the primary factors associated with a specific value-adding process.

Everything’s got a moral, if only you can find it’, said the Duchess.

Lewis Carroll, Alice in Wonderland