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Abstract
The performance of the poultry industry in Indonesia is analyzed in terms of changes in producer and consumer welfare as a result of
public policy intended to limit the size of production units in order to distribute growth opportunities to smaller farms. Elasticities of supply
and demand are estimated using the seemingly unrelated system of equations. The hypothesis of a policy-induced structural change,
estimated through a dummy variable accounting for a shift in supply associated with implementation of the policy, shows a negative impact
on the output supplied and the welfare of producers and consumers to the tune of about Rp 94 billion or roughly about 0.1% of national
income as of 1983. The study suggests an important trade-off between more equitable income distribution and economic efficiency. © 1997
Elsevier Science B.V.