Analysing the impact of subsidies on the Albanian agriculture sector

Engjell Skreli, Edmira Shahu Ozuni, Attila Jambor, Drini Imami, Merita Gecaj

Abstract: This paper analyses the impact of government subsidy schemes on the Medicinal and Aromatic Plants (MAPs) sector in Albania, applying the Propensity Score Matching Method combined with the “veteran” approach. The paper is based on a structured survey applied in 2015 in the region of Shkodra (northern Albania), the region where MAPs cultivation is concentrated. Results suggest that subsidies have affected the planted area in the year when they are obtained, and partially the yields, but have no impact on price (proxy for quality). The paper contributes to the literature not only in terms of the relevant empirical findings but also regarding the benefit of applying combined methods in policy impact assessment.

Keywords: agricultural subsidies; Albania; aromatic plant; impact assessment; medicinal plant; propensity; score matching; veteran approach

Date published: 2019-12-05