[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/ags/ucbecw/25098.html
   My bibliography  Save this paper

Milk Marketing Order Winners and Losers

Author

Listed:
  • Chouinard, Hayley H.
  • Davis, David E.
  • LaFrance, Jeffrey T.
  • Perloff, Jeffrey M.
Abstract
Do milk marketing orders affect various demographic groups differently? To answer this question, we use supermarket scanner data to estimate an incomplete demand system for dairy products. We use these estimates to simulate substitution among dairy products and the welfare impacts of price changes resulting from changes in milk marketing orders for various consumer groups. While we find little difference in own- and cross-price substitution elasticities of demand, the welfare effects of price changes vary substantially across demographic groups, with some losing and others winning from this government program.

Suggested Citation

  • Chouinard, Hayley H. & Davis, David E. & LaFrance, Jeffrey T. & Perloff, Jeffrey M., 2005. "Milk Marketing Order Winners and Losers," CUDARE Working Papers 25098, University of California, Berkeley, Department of Agricultural and Resource Economics.
    • Handle: RePEc:ags:ucbecw:25098
    DOI: 10.22004/ag.econ.25098
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/25098/files/wp051006.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.25098?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Peter Berck & Jeffrey M. Perloff, 1985. "A Dynamic Analysis of Marketing Orders, Voting, and Welfare," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(3), pages 487-496.
    2. Bergtold, Jason S. & Akobundu, Eberechukwu & Peterson, Everett B., 2004. "The FAST Method: Estimating Unconditional Demand Elasticities for Processed Foods in the Presence of Fixed Effects," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 29(2), pages 1-20, August.
    3. LaFrance, Jeffrey T., 2008. "The structure of US food demand," Journal of Econometrics, Elsevier, vol. 147(2), pages 336-349, December.
    4. Tsunemasa Kawaguchi & Nobuhiro Suzuki & Harry M. Kaiser, 2001. "Evaluating class I differentials in the new federal milk marketing order system," Agribusiness, John Wiley & Sons, Ltd., vol. 17(4), pages 527-538.
    5. Jensen, Kim, 1995. "Fluid Milk Purchase Patterns in the South: Effects of Use of Nutrition Information and Household Characteristics," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 27(2), pages 644-657, December.
    6. Deaton, Angus, 1988. "Quality, Quantity, and Spatial Variation of Price," American Economic Review, American Economic Association, vol. 78(3), pages 418-430, June.
    7. Jeffrey T. LaFrance & Harry de Gorter, 1985. "Regulation in a Dynamic Market: The U.S. Dairy Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(4), pages 821-832.
    8. Attfield, C. L. F., 1991. "Estimation and testing when explanatory variables are endogenous : An application to a demand system," Journal of Econometrics, Elsevier, vol. 48(3), pages 395-408, June.
    9. LaFrance, Jeffrey T. & Beatty, Timothy K. M. & Pope, Rulon D., 2004. "Building Gorman's Nest," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt2ws698td, Department of Agricultural & Resource Economics, UC Berkeley.
    10. Jeffrey T. LaFrance, 1991. "Consumer's Surplus versus Compensating Variation Revisited," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(5), pages 1496-1507.
    11. Jeffrey T. LaFrance, 1990. "Incomplete Demand Systems And Semilogarithmic Demand Models," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 34(2), pages 118-131, August.
    12. Pamela S. Haines & Barry M. Popkin & David K. Guilkey, 1988. "Modeling Food Consumption Decisions as a Two-Step Process," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(3), pages 543-552.
    13. Wales, T. J. & Woodland, A. D., 1983. "Estimation of consumer demand systems with binding non-negativity constraints," Journal of Econometrics, Elsevier, vol. 21(3), pages 263-285, April.
    14. Gould, Brian W. & Cox, Thomas L. & Perali, Carlo Federico, 1990. "The Demand For Fluid Milk Products In The U.S.: A Demand Systems Approach," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 15(1), pages 1-12, July.
    15. Robert T. Masson & Philip M. Eisenstat, 1980. "Welfare Impacts of Milk Orders and the Antitrust Immunities for Cooperatives," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 62(2), pages 270-278.
    16. Attfield, Clifford L. F., 1985. "Homogeneity and endogeneity in systems of demand equations," Journal of Econometrics, Elsevier, vol. 27(2), pages 197-209, February.
    17. Thomas L. Cox & Jean-Paul Chavas, 2001. "An Interregional Analysis of Price Discrimination and Domestic Policy Reform in the U.S. Dairy Sector," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(1), pages 89-106.
    18. Heien, Dale & Wessells, Cathy Roheim, 1990. "Demand Systems Estimation with Microdata: A Censored Regression Approach," Journal of Business & Economic Statistics, American Statistical Association, vol. 8(3), pages 365-371, July.
    19. Cotterill, Ronald W., 2003. "The Impact of the Northeastern Dairy Compact on New England Consumers: A Report from the Milk Policy Wars," Research Reports 25171, University of Connecticut, Food Marketing Policy Center.
    20. Dobson, William D. & Cropp, Robert A., 1995. "Economic Impacts of the GATT Agreement on the U.S. Dairy Industry," Marketing and Policy Briefing Papers 12703, University of Wisconsin-Madison, Department of Agricultural and Applied Economics.
    21. Huang, Kuo S. & Lin, Biing-Hwan, 2000. "Estimation of Food Demand Nutrient Elasticities from household Survey Data," Technical Bulletins 184370, United States Department of Agriculture, Economic Research Service.
    22. Heien, Dale, 1977. "The Cost of the U.S. Dairy Price Support Program: 1949-74," The Review of Economics and Statistics, MIT Press, vol. 59(1), pages 1-8, February.
    23. Huang, Kuo S. & Lin, Biing-Hwan, 2000. "Estimation Of Food Demand And Nutrient Elasticities From Household Survey Data," Technical Bulletins 33579, United States Department of Agriculture, Economic Research Service.
    24. Jorge Cornick & Thomas L. Cox & Brian W. Gould, 1994. "Fluid Milk Purchases: A Multivariate Tobit Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(1), pages 74-82.
    25. LaFrance, Jeffrey T., 2004. "Integrability of the linear approximate almost ideal demand system," Economics Letters, Elsevier, vol. 84(3), pages 297-303, September.
    26. Blaylock, James R. & Smallwood, David M., 1983. "Effects of Household Socioeconomic Features on Dairy Purchases," Technical Bulletins 157654, United States Department of Agriculture, Economic Research Service.
    27. Jeffrey T. LaFrance, 1993. "Weak Separability in Applied Welfare Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(3), pages 770-775.
    28. Daniel A. Sumner, 1999. "Domestic Price Regulations and Trade Policy: Milk Marketing Orders in the United States," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 47(5), pages 5-16, December.
    29. Jeffrey T. LaFrance & W. Michael Hanemann, 1989. "The Dual Structure of Incomplete Demand Systems," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(2), pages 262-274.
    30. repec:cdl:agrebk:623332 is not listed on IDEAS
    31. LaFrance, Jeffrey T., 1985. "Linear demand functions in theory and practice," Journal of Economic Theory, Elsevier, vol. 37(1), pages 147-166, October.
    32. J. S. Shonkwiler, 1991. "Consumer's Surplus Revisited," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(2), pages 410-414.
    33. Deaton, Angus, 1986. "Demand analysis," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 3, chapter 30, pages 1767-1839, Elsevier.
    34. Ippolito, Richard A & Masson, Robert T, 1978. "The Social Cost of Government Regulation of Milk," Journal of Law and Economics, University of Chicago Press, vol. 21(1), pages 33-65, April.
    35. Dale M. Heien & Cathy Roheim Wessells, 1988. "The Demand for Dairy Products: Structure, Prediction, and Decomposition," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(2), pages 219-228.
    36. John L. Park & Rodney B. Holcomb & Kellie Curry Raper & Oral Capps, 1996. "A Demand Systems Analysis of Food Commodities by U.S. Households Segmented by Income," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(2), pages 290-300.
    37. LaFrance, Jeffrey T., 1991. "When Is Expenditure "Exogenous" In Separable Demand Models?," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 16(1), pages 1-14, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhen Miao & John C. Beghin & Helen H. Jensen, 2012. "Taxing Sweets: Sweetener Input Tax Or Final Consumption Tax?," Contemporary Economic Policy, Western Economic Association International, vol. 30(3), pages 344-361, July.
    2. Zhen Miao & John C. Beghin & Helen H. Jensen, 2013. "Accounting For Product Substitution In The Analysis Of Food Taxes Targeting Obesity," Health Economics, John Wiley & Sons, Ltd., vol. 22(11), pages 1318-1343, November.
    3. Zhang, Wei, 2021. "California's Climate Policy and the Dairy Manufacturing Industry: How Does a Federal Milk Marketing Order Matter?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 46(3), September.
    4. Xiaowei Cai & Kyle W. Stiegert, 2013. "Economic analysis of the US fluid milk industry," Applied Economics Letters, Taylor & Francis Journals, vol. 20(10), pages 971-977, July.
    5. Berning, Joshua P. & Chouinard, Hayley & McCluskey, Jill J., 2009. "Measuring the Impact of Nutrition Labels on Food Purchasing Decisions: A field experiment with scanner data," Research Reports 153338, University of Connecticut, Food Marketing Policy Center.
    6. Davis, Christopher G. & Dong, Diansheng & Blayney, Donald P. & Yen, Steven T. & Stillman, Richard, 2012. "U.S. Fluid Milk Demand: A Disaggregated Approach," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 15(1), pages 1-26, February.
    7. Borneman, Darand L. & Ingham, Steve, 2014. "Evaluating Wisconsin dairy producer compliance and potential eligibility for international markets under existing European Union and United States Grade “A” bulk tank somatic cell count compliance cri," Food Policy, Elsevier, vol. 46(C), pages 150-156.
    8. Jackson Jeremy Jay & Thraen Cameron S. & Bozic Marin, 2013. "Conflict over Cooperation: Why So Much Disagreement over the Proposed Dairy Market Stabilization Program?," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 11(1), pages 129-138, November.
    9. Capps, Jr., Oral J. & Gao, Long, 2023. "A Comparison of Demand System Models Peculiar to a Granular Array of Dairy Products," Journal of Food Distribution Research, Food Distribution Research Society, vol. 54(03), November.
    10. Fan, Zaifeng & Jump, Jeff & Tse, Yiuman & Yu, Linda, 2023. "Volatility in US dairy futures markets," Journal of Commodity Markets, Elsevier, vol. 29(C).
    11. Davis, Christopher G. & Dong, Diansheng & Blayney, Donald P. & Owens, Ashley, 2010. "An Analysis of U.S. Household Dairy Demand," Technical Bulletins 184308, United States Department of Agriculture, Economic Research Service.
    12. Wolf, Christopher A. & Tonsor, Glynn T., 2013. "Dairy Farmer Policy Preferences," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 38(2), pages 1-15, August.
    13. Davis, Christopher G. & Blayney, Donald P. & Muhammad, Andrew & Yen, Steven T. & Cooper, Joseph C., 2010. "A Cross-Sectional Analysis of U.S. Yogurt Demand," Journal of Food Distribution Research, Food Distribution Research Society, vol. 41(2), pages 1-10, July.
    14. Wolf, Christopher A. & Widmar, Nicole J. Olynk, 2014. "Adoption of Milk and Feed Forward Pricing Methods by Dairy Farmers," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 46(4), pages 527-541, November.
    15. Ghazaryan, Armen & Bonanno, Alessandro & Carlson, Andrea, 2023. "I Say Milk, You Say Mylk. Demand Separability in a Broadened Milk Category," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 48(2), May.
    16. Davis, Chris & Blayney, Don & Yen, Steven & Cooper, Joseph C., 2009. "An analysis of at-home demand for ice cream in the United States," MPRA Paper 24782, University Library of Munich, Germany.
    17. Lee L. Schulz & John M. Crespi, 2012. "Presence of Check‐Off Programs and Industry Concentration in the Food Manufacturing Sector," Agribusiness, John Wiley & Sons, Ltd., vol. 28(2), pages 148-156, March.
    18. Glauber, Joseph W. & Effland, Anne, 2016. "United States agricultural policy: Its evolution and impact:," IFPRI discussion papers 1543, International Food Policy Research Institute (IFPRI).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chouinard, Hayley H & Davis, David E. & LaFrance, Jeffrey T. & Perloff, Jeffrey M, 2005. "The Effects of a Fat Tax on Dairy Products," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt60t1f3tn, Department of Agricultural & Resource Economics, UC Berkeley.
    2. LaFrance, Jeffrey T., 2008. "The structure of US food demand," Journal of Econometrics, Elsevier, vol. 147(2), pages 336-349, December.
    3. Eldon V. Ball & Ricardo Cavazos & Jeffrey T. LaFrance & Rulon Pope & Jesse Tack, 2010. "Aggregation and Arbitrage in Joint Production," Monash Economics Working Papers archive-22, Monash University, Department of Economics.
    4. Okrent, Abigail M. & Alston, Julian M., 2011. "Demand for Food in the United States: A Review of Literature, Evaluation of Previous Estimates, and Presentation of New Estimates of Demand," Monographs, University of California, Davis, Giannini Foundation, number 251908, December.
    5. Biing‐Hwan Lin & Steven T. Yen & Diansheng Dong & David M. Smallwood, 2010. "Economic Incentives For Dietary Improvement Among Food Stamp Recipients," Contemporary Economic Policy, Western Economic Association International, vol. 28(4), pages 524-536, October.
    6. Femenia, Fabienne, 2019. "A Meta-Analysis of the Price and Income Elasticities of Food Demand," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 68(2), June.
    7. Chouinard Hayley H & Davis David E & LaFrance Jeffrey T & Perloff Jeffrey M, 2007. "Fat Taxes: Big Money for Small Change," Forum for Health Economics & Policy, De Gruyter, vol. 10(2), pages 1-30, June.
    8. LaFrance, Jeffrey T., 1999. "U.S. Food and Nutrient Demand and the Effects of Agricultural Policies," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt52h9v4dq, Department of Agricultural & Resource Economics, UC Berkeley.
    9. Fang, Cheng & Beghin, John C., 2002. "Urban Demand for Edible Oils and Fats in China: Evidence from Household Survey Data," Journal of Comparative Economics, Elsevier, vol. 30(4), pages 732-753, December.
    10. Caro, Juan Carlos & Ng, Shu Wen & Taillie, Lindsey Smith & Popkin, Barry M., 2017. "Designing a tax to discourage unhealthy food and beverage purchases: The case of Chile," Food Policy, Elsevier, vol. 71(C), pages 86-100.
    11. Bilgic, Abdulbaki & Yen, Steven T., 2013. "Household food demand in Turkey: A two-step demand system approach," Food Policy, Elsevier, vol. 43(C), pages 267-277.
    12. Alston, Julian M. & Balagtas, Joseph Valdes & Brunke, Henrich & Sumner, Daniel A., 2006. "Supply and demand for commodity components: implications of free trade versus the AUSFTA for the US dairy industry," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(2), pages 1-22, June.
    13. Olivier Allais & Patrice Bertail & Véronique Nichèle, 2010. "The Effects of a Fat Tax on French Households' Purchases: A Nutritional Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(1), pages 228-245.
    14. Jeffrey T. LaFrance & Rulon D. Pope, 2010. "Duality Theory for Variable Costs in Joint Production," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(3), pages 755-762.
    15. Fabiosa, Jacinto F. & Jensen, Helen H. & Yan, Dong, 2005. "Household Welfare Cost of the Indonesian Macroeconomic Crisis," 2005 Annual meeting, July 24-27, Providence, RI 19311, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    16. Lanfranco, Bruno A. & Ames, Glenn C.W. & Huang, Chung L., 2002. "Comparisons Of Hispanic Households' Demand For Meats With Other Ethnic Groups," Journal of Food Distribution Research, Food Distribution Research Society, vol. 33(1), pages 1-10, March.
    17. Gould, Brian W., 1996. "Factors Affecting U.S. Demand For Reduced-Fat Fluid Milk," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 21(1), pages 1-14, July.
    18. Okrent, Abigail M. & Alston, Julian M., 2012. "The Demand for Disaggregated Food-Away-from-Home and Food-at-Home Products in the United States," Economic Research Report 132469, United States Department of Agriculture, Economic Research Service.
    19. McCullough, Ellen & Zhen, Chen & Shin, Soye & Lu, Meichen & Arsenault, Joanne, 2022. "The role of food preferences in determining diet quality for Tanzanian consumers," Journal of Development Economics, Elsevier, vol. 155(C).
    20. Phaneuf, Daniel J. & Smith, V. Kerry, 2006. "Recreation Demand Models," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 2, chapter 15, pages 671-761, Elsevier.

    More about this item

    Keywords

    Demand and Price Analysis; Livestock Production/Industries;

    JEL classification:

    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:ucbecw:25098. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/dabrkus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.