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Economic Surplus and the Distributional Consequences of Deregulating Tobacco Production

Published online by Cambridge University Press:  09 September 2016

S. Sureshwaran ,
C.S. Thompson ,
M.S. Henry  and
M.I. Loyd
S. Sureshwaran
Affiliation:
Department of Agribusiness and Economics, South Carolina State College
C.S. Thompson
Affiliation:
Department of Agricultural Economics and Rural Sociology, Clemson University
M.S. Henry
Affiliation:
Department of Agricultural Economics and Rural Sociology, Clemson University
M.I. Loyd
Affiliation:
Department of Agricultural Economics and Rural Sociology, Clemson University
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Abstract

Reservations on technical and theoretical grounds in the use of the consumer surplus approach to measure benefits of government programs have often appeared in the literature. Therefore, this paper uses an alternative approach in a case study to estimate the annual economic surplus created in South Carolina from deregulating tobacco production. Impacts of deregulation on cropping patterns and income on representative tobacco farms, and distribution of benefits in the economy are examined. Results of this study indicate that deregulation stimulates the economy and would increase the net value added by $5.8 million in the long run.

Keywords

tobacco programderegulationlinear programming modelinput-output modelvalue addeddistributional consequenceseconomy of South Carolina
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 22 , Issue 2 , December 1990 , pp. 117 - 127
Copyright
Copyright © Southern Agricultural Economics Association 1990

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