Elevator Pitch

The goal of my research is to analyze the extent to which subsidies generate social benefits.  I decided to focus on federal agricultural subsidies because most of what I have heard about them has been negative criticism (such as, only big corporate farms benefit from these policies).  Therefore I decided to measure social benefits by the amount of taxes paid by corporate agriculture.  Assuming that the government buys up all excess produce, subsidies yield higher profits for big farms.  This implies higher tax revenue and higher tax revenue means greater income redistribution.  I also test whether the subsidy reform of 1996 lowered the incentive for farmers to cheat (up until 1996, subsidies were determined by the type and amount of crop grown).  While my results were inconclusive on the effect subsidies have on the amount of corporate taxes paid, I did find that the incentive to cheat fell after the agricultural subsidy reform.

Advertisements

About this entry