Does ‘Protection for Sale’ Apply to the US Food Industries?

Authors

  • Rigoberto A. Lopez

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      Rigoberto A. Lopez is a Professor in the Department of Agricultural and Resource Economics at the University of Connecticut, Storrs, CT 06268, USA. E-mail: rigoberto.lopez@uconn.edu for correspondence. Funding from the Storrs Agricultural Experiment Station and from the Food Marketing Policy Center is gratefully acknowledged. Comments by Emilio Pagoulatos, Ian Sheldon and two anonymous referees are gratefully acknowledged. The content of the paper, however, is the sole responsibility of the author.


JEL classifications: F13, F1, L66, C12.

Abstract

This paper tests the Protection for Sale model in terms of the structure of protection and how realistic the estimated domestic welfare weight is relative to campaign contributions. Using data from US food manufacturing, empirical results support the key predictions for the structure of protection when either all food manufacturing industries or most of the general population is assumed to be politically organised. The domestic welfare weight is estimated as low as 0.837, the lowest econometric estimate to date, underlining that protection is for sale and that, with a qualified ‘yes’, the model fits the data for these industries.

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