help: pam dialog:

Title

pam: Policy Analysis Matrix (PAM)

Table of Contents

Syntax

Options

Description

Saved Results

References

*** PAM Applications

*** Examples

Authors

Syntax

pam Pd Pw [if] [in] , [ dtc(vars) wtc(vars) ddf(vars) wdf(vars) ] save(file_name) nolist

Options

varlist Two Variables only Pd & Pw respectively:
1- (Pd) Private Total Revenue (Financial Price)
2- (Pw) Social Total Revenue (Economic Price)

dtc(vars) Private Tradable Inputs Costs (Financial Price)
wtc(vars) Social Tradable Inputs Costs (Economic Price)
variables in both dtc(vars) and wtc(vars) must be in the same order respectively

ddf(vars) Private Domestic Factors Costs (Financial Price)
wdf(vars) Social Domestic Factors Costs (Economic Price)
variables in both ddf(vars) and wdf(vars) must be in the same order respectively

nolist Don't Display All Indicators.
save(file_name) Save PAM Model Results in File (*.txt).

*** Important Notes:
pam generates some variables names starting with prefix "_", i.e,:
_PVA, _SVA, _NPCO, _NPRO, _NPCI, _NPRI, _EPC, _EPR
So, you must avoid to include variables names with these prefixes

Description

pam estimates Policy Analysis Matrix (PAM).

Policy Analysis Matrix Describes the distorions in the market price of inputs and outputs
to know support or taxes imposed on the producer and consumer, and indicators to measure economic efficiency
and comparative advantage. PAM consists of revenues and costs, represented in Tradable inputs and domestic
factors, via using both domestic prices and world prices,
the difference between domestic prices and world (border) prices is called transfers, whether surplus (support), or (deficit) taxes.

(PAM) aims to analyze the impact of governmental intervention policies. represented in the policies for goods, such as support and taxes on inputs and outputs.

** Components of Policy Analysis Matrix (PAM)
(1) Production Revenue:

- value of main product is calculated by domestic price when estimating value added at domestic prices

- value of main product is calculated by border price when estimating value added at world prices

- value of secondary product is calculated by domestic price if has no foreign trade

- value of secondary product is calculated by border price if has foreign trade

(2) Production Costs: It is divided into two sections:
(A) Tradable Inputs that have foreign trade:
(Seeds - chemical fertilizers - Pesticides - Fuel )
(B) Domestic Factors:
(Manure - Feed - Incidental Expenses - Workers Wages - Machines Wages - Rent - Capital)

Working capital consists of: value of inventory, which is enough liquid cash to meet cash expenses
such as salaries, administrative expenses and marketing, and others, consumption of electricity, water, maintenance, transport and transfer ... etc.

** Structure of Policy Analysis Matrix (PAM)

Policy Analysis Matrix (PAM)

* Item | Revenue | Tradable | Domestic | Profit *
* | | Inputs | Factors | *

* Private Price | A | B | C | D *

* Social Price | E | F | G | H *

* Transfer | I | J | K | L *

Where :
** Private Price:
A = Private Total Revenue at (Financial Price)
B = Private Tradable Inputs Costs
C = Private Domestic Factors Costs
D = Private Profit at (Financial Price)
** Social Price:
E = Social Total Revenue at (Economic Price)
F = Social Tradable Inputs Costs
G = Social Domestic Factors Costs
H = Social Profits at (Economic Price)

================================================================
** (PAM) Economic Indicators:
pam can estimate 30 Economic Indicators as follows:

1 Private Value Added (PVA) = A - B
2 Social Value Added (SVA) = E - F
3 Private Profit (PP) = D = A - B - C
4 Social Profit (SP) = H = E - F - G
5 Private Cost (PC) = B + C
6 Social Cost (SC) = F + G
7 Output Transfer (OT) = I = A - E
8 Input Transfer (IT) = J = B - F
9 Factor Transfer (FT) = K = C - G
10 Net Transfer (NT) = L = D - H = I - J - K
11 Economic Surplus Ratio (ESR) = L ÷ D
12 Nominal Protection Coefficient on Tradable Outputs (NPCO) = A ÷ E
13 Nominal Protection Rate on Tradable Outputs (NPRO) = NPCO - 1
14 Nominal Protection Coefficient on Tradable Inputs (NPCI) = B ÷ F
15 Nominal Protection Rate on Tradable Inputs (NPRI) = NPCI - 1
16 Effective Protection Coefficient (EPC) = (A - B) ÷ (E - F)
17 Effective Protection Rate (EPR) = EPC - 1
18 Domestic Resource Cost (DRC) = G ÷ (E - F)
19 Private Cost Ratio (PCR) = C ÷ (A - B)
20 Profitability Coefficient (PCO) = (ABC) ÷ (EFG) = D ÷ H
21 Subsidy Ratio to Producer (SRP) = (D - H) ÷ E = L ÷ E
22 Private Cost-Benefit Ratio (PCBR) = (B + C) ÷ A
= Private Cost-Revenue Ratio (PCRR) = (A - D) ÷ A
23 Social Cost-Benefit Ratio (SCBR) = (F + G) ÷ E
= Social Cost-Revenue Ratio (SCRR) = (E - H) ÷ E
24 Private Profitability Ratio (PPR) = (A - B - C) ÷ A = D ÷ A
25 Social Profitability Ratio (SPR) = (E - F - G) ÷ E = H ÷ E
26 Private Cost Adjustment coefficient (PCAC) = A ÷ (B + C) - 1
27 Social Cost Adjustment coefficient (SCAC) = E ÷ (F + G) - 1
28 Private Value Added Ratio (PVAR) = (A - B) ÷ A
29 Social Value Added Ratio (SVAR) = (E - F) ÷ E
30 Domestic Factors Ratio (DOFAR) = C ÷ G
================================================================

** Interpretation of (PAM) Results:

** (1) Private Value Added (PVA) = A - B
(PVA) = Revenue - Tradable Inputs (Pd)

** (2) Social Value Added (SVA) = E - F
(SVA) = Revenue - Tradable Inputs (Pw)

** (3) Private Profit (PP) = D = A - B - C
(PP) = Revenue - Tradable Inputs - Domestic Factors (Pd)

** (4) Social Profit (SP) = H = E - F - G
(SP) = Revenue - Tradable Inputs - Domestic Factors (Pw)

** (5) Private Cost (PC) = B + C
(PC) Tradable Inputs + Domestic Factors (Pd)

** (6) Social Cost (SC) = F + G
(SC) Tradable Inputs (Pw) + Domestic Factors (shadow price)
- Tradable Inputs are evaluated at (FOB) for export price or (CIF) for import price
- Domestic Factors are evaluated at Shadow Price.

** (7) Output Transfer (OT) = I = A - E
(OT) = Revenue (Pd) - Revenue (Pw)
- Increasing Output Transfer (surplus) means producer support (+) Producer Subsidy
- Decreasing Output Transfer (deficit) means taxes on producer (-) Producer Taxes

** (8) Input Transfer (IT) = J = B - F
(IT) = Tradable Inputs (Pd) - Tradable Inputs (Pw)

- Increasing Input Transfer (surplus) means taxes on producer (+) Producer Taxes
Because of increasing Tradable Inputs prices
- Decreasing Input Transfer (deficit) means producer support (-) Producer Subsidy
Because of decreasing Tradable Inputs prices

** (9) Factor Transfer (FT) = K = C - G
(FT) = Domestic Factors (Pd) - Domestic Factors (shadow price)

- Increasing Factor Transfer (surplus) means taxes on producer (+) Producer Taxes
Because of increasing Domestic Factors prices
- Decreasing Factor Transfer (deficit) means producer support (-) Producer Subsidy
Because of decreasing Domestic Factors prices

** (10) Net Transfer (NT) = L = D - H = I - J - K
(NT) = Private Profit (Pd) - Social Profit (Pw)

- Increasing Net Transfer (surplus) means producer support (+) Producer Subsidy
Because of increasing Domestic Price than World Price
- Decreasing Net Transfer (deficit) means taxes on producer (-) Producer Taxes
Because of decreasing Domestic Price than World Price

** (11) Economic Surplus Ratio (ESR) = L ÷ D
(ESR) = Net Transfer (NT) ÷ Private Profit (Pd)

** (12) Nominal Protection Coefficient on Tradable Outputs (NPCO) = A ÷ E
(NPCO) = Domestic Price ÷ World (Border) Price

- Gross NPC = Domestic Price (Pd) ÷ World Price (Pw) [Unadjusted World (Border) Price]
- Net NPC = Domestic Price (Pd) ÷ World Price (Pw) [ Adjusted World (Border) Price]

* (NPCO = 1): Neutral Policy, where state does not impose taxes on producer or consumer,
and do not take any protectionist policy to support the producer or the consumer.
* (NPCO > 1): Protection Policy to support the producer, because domestic price exceeds world price,
and therefore supports the producer and impose taxes on consumer.
* (NPCO < 1): Taxing Policy on producer if commodity is export oriented,
and support or Protection Policy for consumer if commodity import oriented,
due to the decrease in domestic market prices.

** (13) Protection Rate Coefficient on Tradable Outputs (NPRO) = NPCO - 1
(NPRO) = (NPCO) - 1

* (NPRI = 0): Neutral Policy, state does not impose taxes and does not support producer or consumer.
* (NPRI > 0): Protection Policy to support producer, and Taxing Policy for consumer.
* (NPRI < 0): Taxing Policy on producer, and Protection Policy to support consumer.

** (14) Nominal Protection Coefficient on Tradable Inputs (NPCI) = B ÷ F
(NPCI) = Tradable Outputs (Pd) ÷ Tradable Outputs (Pw)

* (NPCI = 1): Neutral Policy, state not subsidies or impose taxes on Tradable Inputs prices.
* (NPCI > 1): Taxing Policy on producer to impose taxes on Tradable Inputs (Negative Transfer),
because the prices of domestic Tradable Inputs are greater than the world prices.
* (NPCI < 1): Protection Policy to support Tradable Inputs, and it is called Positive Transfer,
because the prices of domestic Tradable Inputs are less than world prices.

** (15) Nominal Protection Rate on Tradable Inputs (NPRI) = NPCI - 1
* (NPRI = 0): Neutral Policy, which state not subsidies or impose taxes on Tradable Inputs prices.
* (NPRI > 0): Taxing Policy on prices of Tradable Inputs.
* (NPRI < 0): Protection Policy to support prices of Tradable Inputs.

** (16) Effective Protection Coefficient (EPC) = (A - B) ÷ (E - F)
(EPC) = Value Added (Pd) ÷ value added (Pw)

- Gross EPC = Value Added (Pd) ÷ Value Added (Pw) [Unadjusted World (Border) Price]
- Net EPC = Value Added (Pd) ÷ Value Added (Pw) [ Adjusted World (Border) Price]

* (EPC = 1): Neutral Policy , where state does not impose taxes on the producer or consumer,
and does not take any Protection Policy to support producer or consumer.
This shows that value-added at local price equal to value added at border price
* (EPC > 1): Protection Policy to support producer, because domestic price exceeds world price,
and therefore supports producer and impose a tax on consumer.
* (EPC < 1): Taxing Policy on producer if commodity is export oriented,
and support or Protection Policy for consumer if commodity import oriented,
due to the decrease in domestic market prices.

EPC shows the joint effect of policy transfer affecting both
Tradable outputs and Tradable inputs.
Both EPC and NPC ignore the effects of transfers in factor market and therefore
do not reflect the full extent of incentives to producers.

** (17) Effective Protection Rate (EPR) = EPC - 1
* (EPR = 0): Neutral Policy, meaning failure to protect or to impose taxes on producer and consumer.
* (EPR > 0): Protection Policy to support producer, and Taxing Policy for consumer.
* (EPR < 0): Taxing Policy on producer , and Protection Policy to support consumer.

** (18) Domestic Resource Cost (DRC) = G ÷ (E - F)
(DRC) = Domestic Factors (shadow price) ÷ (Revenue - Tradable Inputs) (Pw)
(DRC) = Domestic Factors (shadow price) ÷ Value Added (Pw)

DRC illustrates Comparative Advantage of the commodity at the level of national economy,
in terms of the possibility of continuity in domestic production, or to rely on imports.
Thus, the activities of low value for the cost of local resources to be more efficient,
and those resources should be directed in the production process.

* (DRC < 1): Comparative Advantage in production of commodity.
Because costs of local resources at shadow prices less than value added at world price.
It is advisable to increase local production and decrease dependence on imports.
where get profits if commodity is exported, or provide foreign currency if imported.
* (DRC > 1): No Comparative Advantage in the production of commodity.
Because costs of local resources at shadow prices higher than value added at world price.
It is advisable to decrease production and increase dependence on imports.
* (DRC = 1): balance status, because the state dont gain or sace of local production of that commodity.

There is another criterion for judging the comparative advantage:
Shadow Exchange Rate (SER):
SER = EER ÷ OER
EER = Effective Exchange Rate
OER = Official Exchange Rate

* (SER > DRC): Comparative Advantage: must increase production and increase export commodity.
* (SER < DRC): No Comparative Advantage: must decrease production and increase import commodity.

** (19) Private Cost Ratio (PCR) = C ÷ (A - B)
(PCR) = Domestic Factors ÷ (Revenue - Tradable Inputs) (Pd)
(PCR) = Domestic Factors ÷ Value Added (Pd)

(PCR) is a criterion to measure Competitive Advantage of the commodity at domestic prices.

* (PCR < 1): Competitive Advantage in the production of commodity.
Because costs of Domestic Factors at domestic prices less than Private Value Added.
(PCR) clarifies that spending on Domestic Factors is less than value added,
and the rest of the ratio represents profits for producer.
* (PCR > 1): No Competitive Advantage in the production of commodity.
Because costs of Domestic Factors at domestic prices greater than Private Value Added.
(PCR) clarifies that spending on Domestic Factors is more than value added,
and the rest of the ratio represents losses for producer.
* (PCR = 1): No Competitive Advantage in the production of commodity.
Because costs of Domestic Factors at domestic prices equal Private Value Added.

** (20) Profitability Coefficient (PCO) = (A - B - C) ÷ (E - F - G) = D ÷ H
(PCO) = Private Profit (Pd) ÷ Social Profit (Pw)

(PCO) measures all transfers effects on Private Profit

* (PCO < 1): Low profitability of producer with respect to state
(policy of imposing taxes on the producer).
Because Private Profit of producer is less than Social Profit of state.
* (PCO > 1): High profitability of producer with respect to state
(Protection Policy to support producer).
Because Private Profit of producer is greater than Social Profit of state.

** (21) Subsidy Ratio to Producer (SRP) = (D - H) ÷ E = L ÷ E
(SRP) = {Private Profit (Pd) ÷ Social Profit (Pw)} ÷ Revenue (Pw)

(SRP) measures all transfers effects on increasing or decreasing Social Revenue,
and measures the net transfers of producer as a ratio social revenue.

* (SRP = 0): balance status, because of no transfers.
* (SRP < 0): Taxing Policy on producer,
thus increasing net transfers to state at the expense of producer.
* (SRP > 0): Protection Policy to producer,
thus increasing net transfers to producer at the expense of state.

** (22) Private Cost-Benefit Ratio (PCBR) = (B + C) ÷ A
(PCBR) = (Tradable Inputs + Domestic Factors) ÷ Revenue (Pd)
(PCBR) measures the ratio of costs revenue with respect to producer at domestic price.
(PCBR) is called also as: Private Cost-Revenue Ratio (PCRR) = (A-D) / A

* (PCBR < 1): Costs < Revenue (producer gains).
* (PCBR > 1): Costs > Revenue (producer losses).
* (PCBR = 1): Costs = Revenue (producer does not achieve either gains or losses).

** (23) Social Cost-Benefit Ratio (SCBR) = (F + G) ÷ E
(SCBR) = (Tradable Inputs + Domestic Factors) ÷ Revenue (Pw)
(SCBR) measures the ratio of costs revenue at with respect to state world price.
(SCBR) is called also as: Social Cost-Revenue Ratio (SCRR) = (E-H) / E

* (SCBR < 1): Costs < Revenue (state gains).
* (SCBR > 1): Costs > Revenue (state losses).
* (SCBR = 1): Costs = Revenue (state does not achieve either gains or losses).

** (24) Private Profitability Ratio (PPR) = (A - B - C) ÷ A = D ÷ A
(PPR) = Profit ÷ Revenue (Pd)

(PPR) measures the ratio of profit to revenue with respect to producer at domestic price.
* (PPR < 1): Profit < Costs (low profits).
* (PPR > 1): Profit > Costs (high profits).

** (25) Social Profitability Ratio (SPR) = (E - F - G) ÷ E = H ÷ E
(SPR) = Profit ÷ Revenue (Pw)

(SPR) measures the ratio of profit to revenue with respect to state at world price.
* (SPR < 1): Profit < Costs (low profits).
* (SPR > 1): Profit > Costs (high profits).

** (26) Private Cost Adjustment coefficient (PCAC) = A ÷ (B + C) - 1
(PCAC) =(Revenue ÷ Costs) - 1 (Pd)

(PCAC) measures the coverage ratio of revenue to costs with respect to producer at domestic price.

* (PCAC = 0): Revenue = Costs: producer does not achieve either gains or losses.
* (PCAC < 1): Profit < Costs.
* (PCAC > 1): Profit > Costs.

** (27) Social Cost Adjustment coefficient (SCAC) = E ÷ (F + G) - 1
(SCAC) =(Revenue ÷ Costs) - 1 (Pd)

(SCAC) measures the coverage ratio of revenue to costs with respect to state at world price.
* (SCAC = 0): Revenue = Costs: state does not achieve either gains or losses.
* (SCAC < 1): Profit < Costs.
* (SCAC > 1): Profit > Costs.

** (28) Private Value Added Ratio (PVAR) = (A - B) ÷ A
(PVAR) = (Revenue - Tradable Inputs) ÷ Revenue (Pd)

(PVAR) measures the coverage ratio of value added to revenue with respect to producer at domestic price.
* Increase (PVAR): shows Increasing Value Added contribution in Private Revenue of the producer.
* Decrease (PVAR): shows Decreasing Value Added contribution in Private Revenue of the producer.

** (29) Social Value Added Ratio (SVAR) = (E - F) ÷ E
(SVAR) = (Revenue - Tradable Inputs) ÷ Revenue (Pw)

(SVAR) measures the coverage ratio of value added to revenue with respect to state at domestic price.
* Increase (SVAR): shows Increasing Value Added contribution in Private Revenue of the state.
* Decrease (SVAR): shows Decreasing Value Added contribution in Private Revenue of the state.

** (30) Domestic Factors Ratio (DOFAR) = C ÷ G
(DOFAR) = Domestic Factors (Pd) ÷ Domestic Factors (Pw)

(DOFAR) measures the ratio coverage of Domestic Factors at domestic price
to Domestic Factors at shadow price

* (DOFAR = 1): Producer buys Domestic Factors at domestic prices equal to world prices.
* (DOFAR < 1): Producer buys Domestic Factors at domestic prices less than world prices.
Positive transfer to producer, and Negative transfers to state
* (DOFAR > 1): Producer buys Domestic Factors at domestic prices greater than world prices.
Positive transfer to state, and Negative transfers to producer

Saved Results

pam saves the following results in e():

Matrixes
e(pam) PAM Model Results

References

Bale, Malcolm D. & Ernst Lutz (1981)
"Price Distortions in Agriculture and Their Effects: An International Comparison",
Am. J. Ag. Econ., Vol. 63, No. 1, Feb., 1981; 8-22.

Monke, Eric & Scott R. Perason (1989)
"The Policy Analysis Matrix For Agricultural Development",
Cornell Univ. Press, London, UK.

Sadoulet, Elisabeth & Alain Dejanvry (1993)
"Quantitative Development Policy Analysis",
Agric. and Resource Econ., Univ. of California, USA.

Tsakok, Isabelle (1990)
"Agricultural Price Policy: A Practitioner's Guide to Partial Equilibrium Analysis",
Cornell Univ. Press, London, UK.

PAM Applications:

* Rice Border Price

FOB ($/ton) 150 1	= 1
Freight & Insurance ($/ton) 20 2	= 2
CIF Import Price ($/ton) 170 3	= 1 + 2
Exchange rate (Rp/$) 9,000 4	= 4
Exchange rate premium (%) 0.0 5	= 5
Equilibrium exchange rate (Rp/$) 9,000 6	= 4(1 + 5)
CIF Import Price (Rp/ton) 1,530,000	7	= 3 * 6
Weight conversion factor (kg/ton) 1,000 8	= 8
CIF Import Price (Rp/kg) 1,530 9	= 7 / 8
Transportation costs to wholesale market (Rp/kg) 133 10	= 10
Value before processing (Rp/kg) 1,663 11	= 9 + 10
Processing conversion factor (%) 0.64 12	= 12
Cost of rice milling net of value of rice bran 50 13	= 13
Distribution costs to farm (Rp/kg)	50 14	= 14
Import parity value at farm gate (Rp/kg) 964.3 15	= 11*12-13-14
Import parity value at farm gate (Rp/ton) 0.964 16 = 15/1000

Item	Type Quantity	P-Price	S-Price	P-Value	S-Value

* Tradable Inputs:
Fertilizer
Urea 240	1.1	1.1	264.0	264.0
SP-36 100	1.4	1.4	140.0	140.0
KCl 20	1.6	1.6	32.0	32.0
ZA 150	1.0	1.0	150.0	150.0
Liquid Pesticide 3	25.0	33.4	75.0	100.2
Granulated Pesticide	15	8.0	10.0	120.0	150.0
Seed 35	2.5	2.5	87.5	87.5
Fuel 65	1.5	1.5	97.5	97.5
-----------------------------------------------------------------------
* Total Tradable Inputs 966.0 1021.2

* Domestic Factors:
Labor
Seedbed Prep 100	1.6	1.6	160.0	160.0
Crop Care 600	1.6	1.6	960.0	960.0
Harvesting 200	1.6	1.6	320.0	320.0
Threshing 150	1.6	1.6	240.0	240.0
Capital
Working Capital	2000	5%	8%	100	160
Tractor Services	20	12.5	12.5	250.0	250.0
Thresher 35	1.5	1.5	52.5	52.5
-----------------------------------------------------------------------
* Total Domestic Factors 2082.5 2142.5

* Total Revenue 6000 1.205 0.964 7230.0 5784.0

Policy Analysis Matrix (PAM)

* Item | Revenue | Tradable | Domestic | Profit *
* | | Inputs | Factors | *

* Private Price | A | B | C | D *

* Social Price | E | F | G | H *

* Transfer | I | J | K | L *

* Item | Revenue | Tradable | Domestic | Profit *
* | | Inputs | Factors | *

* Private Price | 7230.0 | 966.0 | 2082.5 | 4181.5 *

* Social Price | 5784.0 | 1021.2 | 2142.5 | 2620.3 *

* Transfer | 1446.0 | -55.2 | -60.0 | 1561.2 *

1 Private Value Added (PVA) = A – B = 6264.0
2 Social Value Added (SVA) = E - F = 4762.8
3 Private Profit (PP) = D= A - B - C = 4181.5
4 Social Profit (SP) = H= E - F - G = 2620.3
5 Private Cost (PC) = B + C = 3048.5
6 Social Cost (SC) = F + G = 3163.7
7 Output Transfer (OT) = I= A – E = 1446.0
8 Input Transfer (IT) = J= B – F = -55.20
9 Factor Transfer (FT) = K= C – G = -60.00
10 Net Transfer (NT) = L= D – H = I - J - K = 1561.2
11 Economic Surplus Ratio (ESR) = L ÷ D = 0.37
12 NPC on Tradable Outputs (NPCO) = A ÷ E = 1.25
13 NPR on Tradable Outputs (NPRO) = NPCO – 1 = 0.25
14 NPC on Tradable Inputs (NPCI) = B ÷ F = 0.95
15 NPR on Tradable Inputs (NPRI) = NPCI - 1 = -0.05
16 Effective Protection Coefficient (EPC) = (A - B) ÷ (E - F) = 1.32
17 Effective Protection Rate (EPR) = EPC – 1 = 0.32
18 Domestic Resource Cost (DRC) = G ÷ (E - F) = 0.45
19 Private Cost Ratio (PCR) = C ÷ (A - B) = 0.33
20 Profitability Coefficient (PCO) = (A-B-C) ÷ (E-F-G) = D÷H = 1.60
21 Subsidy Ratio to Producer (SRP) = (D - H) ÷ E = L ÷ E = 0.27
22 Private Cost Benefit Ratio (PCBR) = (B + C) ÷ A = 0.42
23 Social Cost Benefit Ratio (SCBR) = (F + G) ÷ E = 0.55
24 Private Profitability Ratio (PPR) = (A - B - C) ÷ A = D ÷ A = 0.58
25 Social Profitability Ratio (SPR) = (E - F - G) ÷ E = H ÷ E = 0.45
26 Private Cost Adjustment (PCAC) = A ÷ (B + C) - 1 = 1.37
27 Social Cost Adjustment (SCAC) = E ÷ (F + G) - 1 = 0.83
28 Private Value Added Ratio (PVAR) = (A - B) ÷ A = 0.87
29 Social Value Added Ratio (SVAR) = (E - F) ÷ E = 0.82
30 Domestic Factors Ratio (DOFAR) = C ÷ G = 0.97

Examples:

clear all

sysuse pam1.dta, clear

list

pam pd pw , dtc(dtc) wtc(wtc) ddf(ddf) wdf(wdf) save(D:\pam)

pam pd pw in 1/1 , dtc(dtc) wtc(wtc) ddf(ddf) wdf(wdf) save(D:\pam)

pam pd pw in 2/3 , dtc(dtc) wtc(wtc) ddf(ddf) wdf(wdf) save(D:\pam)

matlist e(pam)

clear all

sysuse pam2.dta, clear

pam pd pw , dtc(dtc1 dtc2 dtc3 dtc4 dtc5 dtc6 dtc7 dtc8) wtc(wtc1 wtc2 wtc3 wtc4 wtc5 wtc6 wtc7 wtc8) ddf(ddf1 ddf2 ddf3 ddf4 ddf5 ddf6 ddf7) wdf(wdf1 wdf2 wdf3 wdf4 wdf5 wdf6 wdf7) save(D:\pam)

. clear all
. sysuse pam1.dta, clear
. list

+--------------------------------------------------+
| pd pw dtc wtc ddf wdf |
|--------------------------------------------------|
1. | 7230 5784 966 1021.2 2082.5 2142.5 |
2. | 27.42 22.79 9.53 11.79 7.4 7.97 |
3. | 1214 3009 119 83 468 297 |
4. | 1836 4552 181 128 709 362 |
5. | 450 456 17.41 13.26 532.79 498.76 |
|--------------------------------------------------|
6. | 2000 2100 1100 1050 800 800 |
+--------------------------------------------------+

. pam pd pw , dtc(dtc) wtc(wtc) ddf(ddf) wdf(wdf) save(D:\pam)

======================================================================
Policy Analysis Matrix (PAM)
----------------------------------------------------------------------
* Item | Revenue | Tradable | Domestic | Profit *
* | | Inputs | Factors | *
----------------------------------------------------------------------
* Private Price | A | B | C | D *
----------------------------------------------------------------------
* Social Price | E | F | G | H *
----------------------------------------------------------------------
* Transfer | I | J | K | L *
----------------------------------------------------------------------

---------------------------------------------------------------------------
* (1) (PVA) Private Value Added: A - B

+--------+
| _PVA |
|--------|
1. | 6264 |
2. | 17.89 |
3. | 1095 |
4. | 1655 |
5. | 432.59 |
|--------|
6. | 900 |
+--------+
---------------------------------------------------------------------------
* (2) (SVA) Social Value Added: E - F

+--------+
| _SVA |
|--------|
1. | 4762.8 |
2. | 11 |
3. | 2926 |
4. | 4424 |
5. | 442.74 |
|--------|
6. | 1050 |
+--------+
---------------------------------------------------------------------------
* (3) (PP) Private Profit: D = A - B - C

+--------+
| _PP |
|--------|
1. | 4181.5 |
2. | 10.49 |
3. | 627 |
4. | 946 |
5. | -100.2 |
|--------|
6. | 100 |
+--------+
---------------------------------------------------------------------------
* (4) (SP) Social Profit: H = E - F - G

+-----------+
| _SP |
|-----------|
1. | 2620.3 |
2. | 3.030001 |
3. | 2629 |
4. | 4062 |
5. | -56.02001 |
|-----------|
6. | 250 |
+-----------+
---------------------------------------------------------------------------
* (5) (PC) Private Cost: B + C

+--------+
| _PC |
|--------|
1. | 3048.5 |
2. | 16.93 |
3. | 587 |
4. | 890 |
5. | 550.2 |
|--------|
6. | 1900 |
+--------+
---------------------------------------------------------------------------
* (6) (SC) Social Cost: F + G

+--------+
| _SC |
|--------|
1. | 3163.7 |
2. | 19.76 |
3. | 380 |
4. | 490 |
5. | 512.02 |
|--------|
6. | 1850 |
+--------+
---------------------------------------------------------------------------
* (7) (OT) Output Transfer: I = A - E

+----------+
| _OT |
|----------|
1. | 1446 |
2. | 4.629999 |
3. | -1795 |
4. | -2716 |
5. | -6 |
|----------|
6. | -100 |
+----------+
---------------------------------------------------------------------------
* (8) (IT) Input Transfer: J = B - F

+-----------+
| _IT |
|-----------|
1. | -55.20001 |
2. | -2.26 |
3. | 36 |
4. | 53 |
5. | 4.15 |
|-----------|
6. | 50 |
+-----------+
---------------------------------------------------------------------------
* (9) (FT) Factor Transfer: K = C - G

+-----------+
| _FT |
|-----------|
1. | -60 |
2. | -.5699997 |
3. | 171 |
4. | 347 |
5. | 34.02997 |
|-----------|
6. | 0 |
+-----------+
---------------------------------------------------------------------------
* (10) (NT) Net Transfer: L = D - H = I - J - K

+-----------+
| _NT |
|-----------|
1. | 1561.2 |
2. | 7.459999 |
3. | -2002 |
4. | -3116 |
5. | -44.17997 |
|-----------|
6. | -150 |
+-----------+
---------------------------------------------------------------------------
* (11) (ESR) Economic Surplus Ratio: L ÷ D

+-----------+
| _ESR |
|-----------|
1. | .3733588 |
2. | .7111534 |
3. | -3.192982 |
4. | -3.293869 |
5. | .4409179 |
|-----------|
6. | -1.5 |
+-----------+
---------------------------------------------------------------------------
* (12) (NPCO) Nominal Protection Coefficient on Tradable Outputs: A ÷ E

+----------+
| _NPCO |
|----------|
1. | 1.25 |
2. | 1.203159 |
3. | .4034563 |
4. | .4033392 |
5. | .9868421 |
|----------|
6. | .952381 |
+----------+
---------------------------------------------------------------------------
* (13) (NPRO) Nominal Protection Rate on Tradable Outputs: NPCO - 1

+-----------+
| _NPRO |
|-----------|
1. | .25 |
2. | .2031592 |
3. | -.5965437 |
4. | -.5966609 |
5. | -.0131579 |
|-----------|
6. | -.047619 |
+-----------+
---------------------------------------------------------------------------
* (14) (NPCI) Nominal Protection Coefficient on Tradable Inputs: B ÷ F

+--------------------------+
| _NPCI _NPCI_dtc_wtc |
|--------------------------|
1. | .9459459 .9459459 |
2. | .8083121 .8083121 |
3. | 1.433735 1.433735 |
4. | 1.414063 1.414063 |
5. | 1.312971 1.312971 |
|--------------------------|
6. | 1.047619 1.047619 |
+--------------------------+
---------------------------------------------------------------------------
* (15) (NPRI) Nominal Protection Rate on Tradable Inputs: NPCI - 1

+---------------------------+
| _NPRI _NPRI_dtc_wtc |
|---------------------------|
1. | -.0540541 -.0540541 |
2. | -.1916879 -.1916879 |
3. | .4337349 .433735 |
4. | .4140625 .4140625 |
5. | .3129714 .3129713 |
|---------------------------|
6. | .0476191 .047619 |
+---------------------------+
---------------------------------------------------------------------------
* (16) (EPC) Effective Protection Coefficient: (A - B) ÷ (E - F)

+----------+
| _EPC |
|----------|
1. | 1.315193 |
2. | 1.626364 |
3. | .374231 |
4. | .3740958 |
5. | .9770746 |
|----------|
6. | .8571429 |
+----------+
---------------------------------------------------------------------------
* (17) (EPR) Effective Protection Rate: EPC - 1

+-----------+
| _EPR |
|-----------|
1. | .3151927 |
2. | .6263635 |
3. | -.625769 |
4. | -.6259042 |
5. | -.0229254 |
|-----------|
6. | -.1428571 |
+-----------+
---------------------------------------------------------------------------
* (18) (DRC) Domestic Resource Cost: G ÷ (E - F)

+----------+
| _DRC |
|----------|
1. | .4498404 |
2. | .7245454 |
3. | .1015038 |
4. | .0818264 |
5. | 1.12653 |
|----------|
6. | .7619048 |
+----------+
---------------------------------------------------------------------------
* (19) (PCR) Private Cost Ratio: C ÷ (A - B)

+----------+
| _PCR |
|----------|
1. | .3324553 |
2. | .4136389 |
3. | .4273973 |
4. | .4283988 |
5. | 1.231628 |
|----------|
6. | .8888889 |
+----------+
---------------------------------------------------------------------------
* (20) (PCO) Profitability Coefficient: (A - B - C) ÷ (E - F - G) = D ÷ H

+----------+
| _PCO |
|----------|
1. | 1.59581 |
2. | 3.462045 |
3. | .2384937 |
4. | .2328902 |
5. | 1.788646 |
|----------|
6. | .4 |
+----------+
---------------------------------------------------------------------------
* (21) (SRP) Subsidy Ratio to Producer: (D - H) ÷ E = L ÷ E

+-----------+
| _SRP |
|-----------|
1. | .269917 |
2. | .3273365 |
3. | -.6653373 |
4. | -.6845343 |
5. | -.0968859 |
|-----------|
6. | -.0714286 |
+-----------+
---------------------------------------------------------------------------
* (22) (PCBR) Private Cost-Benefit Ratio: (B + C) ÷ A

+----------+
| _PCBR |
|----------|
1. | .4216459 |
2. | .6174325 |
3. | .4835255 |
4. | .4847495 |
5. | 1.222667 |
|----------|
6. | .95 |
+----------+
---------------------------------------------------------------------------
* (23) (SCBR) Social Cost-Benefit Ratio: (F + G) ÷ E

+----------+
| _SCBR |
|----------|
1. | .5469744 |
2. | .8670469 |
3. | .1262878 |
4. | .107645 |
5. | 1.122851 |
|----------|
6. | .8809524 |
+----------+
---------------------------------------------------------------------------
* (24) (PPR) Private Profitability Ratio: (A - B - C) ÷ A = D ÷ A

+-----------+
| _PPR |
|-----------|
1. | .5783541 |
2. | .3825675 |
3. | .5164745 |
4. | .5152506 |
5. | -.2226666 |
|-----------|
6. | .05 |
+-----------+
---------------------------------------------------------------------------
* (25) (SPR) Social Profitability Ratio: (E - F - G) ÷ E = H ÷ E

+-----------+
| _SPR |
|-----------|
1. | .4530256 |
2. | .1329531 |
3. | .8737122 |
4. | .892355 |
5. | -.1228509 |
|-----------|
6. | .1190476 |
+-----------+
---------------------------------------------------------------------------
* (26) (PCAC) Private Cost Adjustment coefficient: A ÷ (B + C) - 1

+-----------+
| _PCAC |
|-----------|
1. | 1.371658 |
2. | .6196102 |
3. | 1.068143 |
4. | 1.062921 |
5. | -.1821156 |
|-----------|
6. | .0526316 |
+-----------+
---------------------------------------------------------------------------
* (27) (SCAC) Social Cost Adjustment coefficient: E ÷ (F + G) - 1

+-----------+
| _SCAC |
|-----------|
1. | .8282391 |
2. | .1533401 |
3. | 6.918421 |
4. | 8.289796 |
5. | -.1094098 |
|-----------|
6. | .1351351 |
+-----------+
---------------------------------------------------------------------------
* (28) (PVAR) Private Value Added Ratio: (A - B) ÷ A

+----------+
| _PVAR |
|----------|
1. | .86639 |
2. | .6524435 |
3. | .9019769 |
4. | .9014161 |
5. | .9613111 |
|----------|
6. | .45 |
+----------+
---------------------------------------------------------------------------
* (29) (SVAR) Social Value Added Ratio: (E - F) ÷ E

+----------+
| _SVAR |
|----------|
1. | .823444 |
2. | .4826679 |
3. | .9724161 |
4. | .9718805 |
5. | .970921 |
|----------|
6. | .5 |
+----------+
---------------------------------------------------------------------------
* (30) (DOFAR) Domestic Factors Ratio: C ÷ G

+---------------------------+
| _DOFAR _DOFAR_ddf_wdf |
|---------------------------|
1. | .9719954 .9719954 |
2. | .9284818 .9284818 |
3. | 1.575758 1.575758 |
4. | 1.958564 1.958564 |
5. | 1.068229 1.068229 |
|---------------------------|
6. | 1 1 |
+---------------------------+
---------------------------------------------------------------------------

===========================================================================
*** Policy Analysis Matrix (PAM) Results: ***
===========================================================================

+------------------------------------------------------------------------------------------+
| | r1 r2 r3 r4 r5 r6 |
|-----------------+------------------------------------------------------------------------|
| _PVA | 6264.0000 17.8900 1095.0000 1655.0000 432.5900 900.0000 |
|-----------------+------------------------------------------------------------------------|
| _SVA | 4762.7998 11.0000 2926.0000 4424.0000 442.7400 1050.0000 |
|-----------------+------------------------------------------------------------------------|
| _PP | 4181.5000 10.4900 627.0000 946.0000 -100.2000 100.0000 |
|-----------------+------------------------------------------------------------------------|
| _SP | 2620.3000 3.0300 2629.0000 4062.0000 -56.0200 250.0000 |
|-----------------+------------------------------------------------------------------------|
| _PC | 3048.5000 16.9300 587.0000 890.0000 550.2000 1900.0000 |
|-----------------+------------------------------------------------------------------------|
| _SC | 3163.7000 19.7600 380.0000 490.0000 512.0200 1850.0000 |
|-----------------+------------------------------------------------------------------------|
| _OT | 1446.0000 4.6300 -1795.0000 -2716.0000 -6.0000 -100.0000 |
|-----------------+------------------------------------------------------------------------|
| _IT | -55.2000 -2.2600 36.0000 53.0000 4.1500 50.0000 |
|-----------------+------------------------------------------------------------------------|
| _FT | -60.0000 -0.5700 171.0000 347.0000 34.0300 0.0000 |
|-----------------+------------------------------------------------------------------------|
| _NT | 1561.2000 7.4600 -2002.0000 -3116.0000 -44.1800 -150.0000 |
|-----------------+------------------------------------------------------------------------|
| _ESR | 0.3734 0.7112 -3.1930 -3.2939 0.4409 -1.5000 |
|-----------------+------------------------------------------------------------------------|
| _NPCO | 1.2500 1.2032 0.4035 0.4033 0.9868 0.9524 |
|-----------------+------------------------------------------------------------------------|
| _NPRO | 0.2500 0.2032 -0.5965 -0.5967 -0.0132 -0.0476 |
|-----------------+------------------------------------------------------------------------|
| _NPCI | 0.9459 0.8083 1.4337 1.4141 1.3130 1.0476 |
|-----------------+------------------------------------------------------------------------|
| _NPCI_dtc_wtc | 0.9459 0.8083 1.4337 1.4141 1.3130 1.0476 |
|-----------------+------------------------------------------------------------------------|
| _NPRI | -0.0541 -0.1917 0.4337 0.4141 0.3130 0.0476 |
|-----------------+------------------------------------------------------------------------|
| _NPRI_dtc_wtc | -0.0541 -0.1917 0.4337 0.4141 0.3130 0.0476 |
|-----------------+------------------------------------------------------------------------|
| _EPC | 1.3152 1.6264 0.3742 0.3741 0.9771 0.8571 |
|-----------------+------------------------------------------------------------------------|
| _EPR | 0.3152 0.6264 -0.6258 -0.6259 -0.0229 -0.1429 |
|-----------------+------------------------------------------------------------------------|
| _DRC | 0.4498 0.7245 0.1015 0.0818 1.1265 0.7619 |
|-----------------+------------------------------------------------------------------------|
| _PCR | 0.3325 0.4136 0.4274 0.4284 1.2316 0.8889 |
|-----------------+------------------------------------------------------------------------|
| _PCO | 1.5958 3.4620 0.2385 0.2329 1.7886 0.4000 |
|-----------------+------------------------------------------------------------------------|
| _SRP | 0.2699 0.3273 -0.6653 -0.6845 -0.0969 -0.0714 |
|-----------------+------------------------------------------------------------------------|
| _PCBR | 0.4216 0.6174 0.4835 0.4847 1.2227 0.9500 |
|-----------------+------------------------------------------------------------------------|
| _SCBR | 0.5470 0.8670 0.1263 0.1076 1.1229 0.8810 |
|-----------------+------------------------------------------------------------------------|
| _PPR | 0.5784 0.3826 0.5165 0.5153 -0.2227 0.0500 |
|-----------------+------------------------------------------------------------------------|
| _SPR | 0.4530 0.1330 0.8737 0.8924 -0.1229 0.1190 |
|-----------------+------------------------------------------------------------------------|
| _PCAC | 1.3717 0.6196 1.0681 1.0629 -0.1821 0.0526 |
|-----------------+------------------------------------------------------------------------|
| _SCAC | 0.8282 0.1533 6.9184 8.2898 -0.1094 0.1351 |
|-----------------+------------------------------------------------------------------------|
| _PVAR | 0.8664 0.6524 0.9020 0.9014 0.9613 0.4500 |
|-----------------+------------------------------------------------------------------------|
| _SVAR | 0.8234 0.4827 0.9724 0.9719 0.9709 0.5000 |
|-----------------+------------------------------------------------------------------------|
| _DOFAR | 0.9720 0.9285 1.5758 1.9586 1.0682 1.0000 |
|-----------------+------------------------------------------------------------------------|
| _DOFAR_ddf_wdf | 0.9720 0.9285 1.5758 1.9586 1.0682 1.0000 |
+------------------------------------------------------------------------------------------+

*** Save Policy Analysis Matrix (PAM) ***
*** Policy Analysis Matrix (PAM) Results File Has Been saved in:

Data Directory: D:\Stata

Open File: D:\pam.txt
--------------------------------------------------

Authors

- Emad Abd Elmessih Shehata
Professor (PhD Economics)
Agricultural Research Center - Agricultural Economics Research Institute - Egypt
Email: emadstat@hotmail.com
WebPage at IDEAS: http://ideas.repec.org/f/psh494.html
WebPage at EconPapers: http://econpapers.repec.org/RAS/psh494.htm

- Sahra Khaleel A. Mickaiel
Professor (PhD Economics)
Cairo University - Faculty of Agriculture - Department of Economics - Egypt
Email: sahra_atta@hotmail.com
WebPage at IDEAS: http://ideas.repec.org/f/pmi520.html
WebPage at EconPapers: http://econpapers.repec.org/RAS/pmi520.htm

PAM Citation

Shehata, Emad Abd Elmessih & Sahra Khaleel A. Mickaiel (2013)

PAM: "Stata Module to Estimate Policy Analysis Matrix (PAM)"

http://ideas.repec.org/c/boc/bocode/s457738.html

http://econpapers.repec.org/software/bocbocode/s457738.htm

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