Tradable input social price
Thus, if 0PCR1 : Feedlots have competitive advantage
PCR=1 : Feedlots are competitively neutral
0PCR1 : Feedlots have competitive disadvantage
Comparative Advantage
Entries in the second row of PAM are used to determine the comparative advantage of the industry. Comparative advantage indicator are obtain through
comparing the domestic cost with the difference between revenue and tradable cost, all expressed at a social price, written as Domestic Resource Cost DRC:
DRC =
�� −
Thus, if 0DRC1 : Feedlots have comparative advantage
DRC=1 : Feedlots are comparatively neutral
0DRC1 : Feedlots have comparative disadvantage
Impact of Policy Analysis
PAM is convenience to be used as analysis tools because it shows indirect estimations for competitive and comparative advantage. Furthermore, other
indicators such as policy to input, output, and both can also be evaluated from the information in the matrix. Its processes are as shown below: