题目：The Effects of the Government's Subsidy Program: Accessability beyond Affordability

主讲人：Xiao, Ping, University of Technology Sydney, Australia

时间：2018年11月12日（周一）下午3:00 - 4:30

地点：武东路100号上海财经大学中欧平台武东路校区114

摘要：

Rural consumers may face not only the challenge of affordability (i.e., the retail price is too high) but also the problem of limited accessibility (i.e., distribution of the product may be limited in the local market). Can a government’s subsidy program effectively address these issues? This paper examines the impact of a large-scale subsidy program, “Household Electric Appliances Going to the Countryside,” offered by the Chinese government. We consider two effects of the subsidy: lowering the retail price to make the product more affordable to consumers and encouraging manufacturers to expand their distribution coverage to make products more accessible to consumers. We build a dynamic model of oligopoly to study how firms adjust their distribution coverage, following Ericson and Pakes (1995). Conditional on the model estimates, we evaluate the program’s effects on consumer surplus, social welfare, and firms’ market performance and marketing channel decisions through counterfactual analyses. We find that the program helps increase social welfare significantly, which is reflected in large consumer surplus increases. In addition, the program plays a modest role in helping increase the size of firms’ distribution coverage, and larger distribution coverage benefits both consumers and firms in the long-run. The program’s social return, however, could be improved by applying a relatively lower subsidy rate.