Actual and revealed comparative advantage in OECD agriculture : (1986-2002)

Abstract

This thesis explains the variation in the revealed comparative advantage of OECD agriculture between 1986 and 2002, using panel data techniques. Specifically, it empirically assesses, on the one hand, the degree of consistence or correspondence between revealed and actual comparative advantage of agricultural sector in reference countries, and the relative importance of actual comparative advantage and government intervention as determinants of revealed comparative advantage of agriculture on the other. The results showed that actual comparative advantage is positively and significantly related to agriculture's revealed comparative advantage, indicating that Hillman's correspondence between the RCA index and the relative factor endowments in cross-country comparisons of comparative advantage obtains even in a world with distortions. Furthermore, agricultural protection and agriculture's share in economy appear to have the most important influences on the RCA index.|Keywords: Revealed comparative advantage, comparative advantage, producer support estimate, nominal assistance coefficient, pooled ordinary least squares.