Jc. Bureau et Ng. Kalaitzandonakes, MEASURING EFFECTIVE PROTECTION AS A SUPERLATIVE INDEX NUMBER - AN APPLICATION TO EUROPEAN AGRICULTURE, American journal of agricultural economics, 77(2), 1995, pp. 279-290
In this study duality and the theory of superlative index numbers are
used to obtain a theoretically consistent Effective Protection Rate (E
PR) index that imposes no a priori restrictions on input-output substi
tution possibilities. Within this framework, EPRs are estimated for Eu
ropean agriculture over the period 1973 to 1989. The empirical results
demonstrate that maintaining zero input/output substitutability-a res
triction embedded in all common protection measures-can lead to false
results about the level of protection both across countries and time.