Welfare Effects Of Turkey'S European Union Acession On Food Consumers

Abstract

Welfare effects of Turkey's European Union Acession on food consumers "Agriculture" is one of the most challenging issues that Turkey will face during full accession negotiations. This paper aims to estimate the changes in consumer welfare due to the changes in food prices which occur as a result of harmonization with the European Union during the accession process and after full membership. The Slutsky compensating variation is calculated for rural, urban and overall Turkish households for every quintile ordered by expenditure. Share of the food products used in tins application in total food consumption expenditures is 20% approximately. Results of the calculations suggest that on average (for overall Turkish households) the welfare loss per capita is 6.3%. The welfare loss for rural households and urban households are 8.6% and 5.7% respectively. Additionally, food price increases cause a higher welfare loss for low-income quintiles. Assuming that socio-economic situation of Turkey is the same as in 2008, the total losses in consumer welfare for rural, urban and overall Turkish households are approximately 6.5 billion TL, 15.6 billion TL and 22 billion TL respectively.