Evaluating the European Union’s Common Agricultural Policy

This research proposal aims to investigate the spatial allocation and impact of agricultural subsidies, particularly focusing on the Common Agricultural Policy (CAP) in the European Union (EU). With the agricultural sector’s significant contribution to environmental externalities and substantial government support, questions arise regarding subsidy targeting, its influence on agricultural production types and locations, and consequent environmental outcomes. The study plans to utilize firm-level subsidy data to analyze subsidy targeting effectiveness and develop a structural model to understand CAP’s influence on agricultural markets, considering factors like farm productivity and land allocation decisions. Counterfactual scenarios will be explored to assess alternative subsidy targeting rules and their environmental implications, aiming to identify optimal economic and environmental subsidy schemes. Through these methods, the research aims to provide insights into improving subsidy policies for sustainable agriculture and environmental conservation.

This grant is made possible by the Goldsmith Research Fund, a gift from Carl H. Goldsmith (W ‘88).

Arthur van Benthem

Associate Professor of Business Economics and Public Policy

Arthur van Benthem is an expert in environmental and energy economics, exploring the economic efficiency of energy policy. He is a faculty fellow at the Kleinman Center and an associate professor of Business Economics and Public Policy at Wharton.

Prakash Mishra

PhD Candidate in Applied Economics, Wharton School

Prakash Mishra is a fifth-year doctoral student at Wharton. He is an environmental economist using tools from industrial organization and trade to analyze the joint spatial allocation of environmental and economic activities.

Mathias Reynaert

Professor of Economics, Toulouse School of Economics

Mathias Reynaert is a Professor of Economics at the Toulouse School of Economics. His fields of interest are empirical industrial organization and environmental economics. He is a research affiliate at the CEPR and an editorial board member at the Review of Economic Studies.

Augusto Ospital

Assistant Professor, LMU Munich, Department of Economics

Augusto Ospital is an economist with research interests in trade and spatial economics, environmental economics, and industrial organization. He is an Assistant Professor at LMU Munich.

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