Certified methodology
"Public Goods Valuation: A Production Approach"
Authors: Doc. Ing. Lukáš Čechura, Ph.D., Ing. Zdeňka Žáková Kroupová, Ph.D., Ing. Michaela Havlíková, Ph.D., Ing. Pavlína Hálová, Ph.D., Ing. Michal Malý, Ph.D., Department of Economics, FEM CULS Prague
Prague 2016
Reviewers: Prof. Ing. Věra Bečvářová, CSc. - Mendel University in Brno
Ing. David Kuna – Ministry of Agriculture of the Czech Republic
Summary
The aim of the methodology is to propose a way of valuing public goods based on the production approach and to provide the authorities of the governing sphere with the basis for deciding on the setting of the basic parameters of the agricultural policy. Public goods that are affected by this methodology belong to the group of goods that are created as part of agricultural production, or agricultural activities and for the valuation of which the production approach can be used, or production data. Another goal is to provide production indicators that will allow assessing the impacts of the chosen valuation method on the competitiveness of individual groups of agricultural producers.
The actual description of the methodology is the main part of this document (see the chapter no. 4) and provides a variant method of valuation of public goods produced by agricultural activity. The methodology presents this valuation in three variants – 1. income, 2. cost and 3. variant using methods of analogy and meta-analysis. These variants are further supplemented by estimates of productivity and efficiency and estimates of output/cost flexibility. This add-on can be used to analyze/simulate the impacts of set supports on the competitiveness of different groups of agricultural producers, as well as to assess or justify the setting of degressive payments.
Statement on "novelty of procedures": The novelty of the methodology consists in the application of an output and input distance function with many inputs and outputs using stochastic frontier analysis techniques to calculate functional/production characteristics and shadow prices based on a representative data set. This approach has not yet been applied in Czech conditions, and the outputs of the models can be considered completely unique. The proposed procedure of using production characteristics to value public goods does not yet appear in the existing literature. This also applies to the scope and scope of the presented calculations (see the chapter no. 2 for more details).
The chapter no. 5 provides a description of application of the methodology, definition and calculation of economic aspects related to it.
The list of used related literature and the list of publications is presented in the chapters no. 6 and 7.
Dedication
The research results presented in this methodology were created within a framework of the research project QJ1530286 "Optimization of the subsidy support system for agricultural producers with regard to the production of public goods" funded by the NAZV within the research program: Complex sustainable systems in agriculture 2012-2018 "KUS".
The full text of the Certified Methodology is in the attached PDF
