Food pricing policy in Costa Rica: A general equilibrium analysis

Abstract

A computable general equilibrium model of Costa Rica is constructed to assess the impacts of food pricing policy on income distribution, resource allocation, and trade. The results of policy experiments support de Janvry's thesis that cheap food policies in Latin America bias agricultural production towards export crops, increase food crop imports, and benefit land and capital owners to the detriment of wage earners. This last effect, however, appears to be slight in the Costa Rican case.