Calculation of Domestic Resource Cost and Net Social Profitability

摘要

The paper provides a detailed description of the methodology and data needed to analyze the impacts of current policies and the potential impacts of new policies on Egypt's cotton industry, including production, ginning, marketing, and yarn manufacture. Considerable confusion and controversy surround the use of two measures--domestic resource costs (DRC) and net social profitability (NSP). The paper attempts to clarify the rationale behind DRC and NSP and the way they are calculated. World prices are used to evaluate outputs and intermediate inputs and are shown to imply a set of shadow prices for factors of production.