Measuring the effectiveness of U.S. rice export promotion programs

Three issues are examined relating to U.S. rice export promotion. First, the responsiveness of U.S. rice export demand with respect to U.S. rice export promotion is measured to determine the quantity impacts of these programs. Second, the overall effectiveness of the programs is examined in terms of whether the benefits exceed the cost. Finally, the optimality of U.S. rice export promotion in terms of expenditure levels is investigated. A double logarithmic econometric export demand equation is estimated to compute the export promotion elasticity while controlling for other demand determinants such as own price, the export price of competing countries, incomes, and exchange rates. Average benefit-cost ratios are computed for U.S. rice export promotion based on a range of excess supply own-price elasticities to compute the effectiveness of the programs. Finally, a marginal simulation analysis is conducted to explore the optimality of the investment in rice export promotion. [JEL Codes: Q17, Q18, Q13]. © 2009 Wiley Periodicals, Inc.