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Milk Marketing Order Winners and Losers

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Author Info
Hayley H. Chouinard
David E. Davis
Jeffrey LaFrance
Jeffrey M. Perloff () (School of Economic Sciences, Washington State University)

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Abstract

Determining the impacts on consumers of government policies affecting the demand for food products requires a theoretically consistent micro-level demand model. We estimate a system of demands for weekly city-level dairy product purchases by nonlinear three stage least squares to account for joint determination between quantities and prices. We analyze the distributional effects of federal milk marketing orders, and find results that vary substantially across demographic groups. Families with young children suffer, while wealthier childless couples benefit. We also find that households with lower incomes bear a greater regulatory burden due to marketing orders than those with higher income levels.

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File URL: http://www.ses.wsu.edu/PDFFiles/WorkingPapers/LaFrance/WP2009-03-CDLP-RAE-2-2009.pdf
File Format: application/pdf
File Function: First version, 2008
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Publisher Info
Paper provided by School of Economic Sciences, Washington State University in its series Working Papers with number 2009-03.

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Length: 40 pages
Date of creation: Dec 2008
Date of revision:
Handle: RePEc:wsu:wpaper:lafrance-5

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Related research
Keywords: Milk; marketing orders; dairy industry regulation;

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Find related papers by 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 - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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  1. Deaton, Angus, 1988. "Quality, Quantity, and Spatial Variation of Price," American Economic Review, American Economic Association, vol. 78(3), pages 418-30, June. [Downloadable!] (restricted)
    Other versions:
  2. 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, Southern Agricultural Economics Association, vol. 27(02), December. [Downloadable!]
  3. Bergtold, Jason & Akobundu, Ebere & 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(02), August. [Downloadable!]
    Other versions:
  4. Lafrance, Jeffrey T., 1990. "Incomplete Demand Systems And Semilogarithmic Demand Models," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 34(02), August. [Downloadable!]
  5. 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. [Downloadable!] (restricted)
  6. Gould, Brian W. & Cox, Thomas L. & Perali, 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(01), July. [Downloadable!]
  7. Attfield, Clifford L. F., 1985. "Homogeneity and endogeneity in systems of demand equations," Journal of Econometrics, Elsevier, vol. 27(2), pages 197-209, February. [Downloadable!] (restricted)
  8. 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 365-71, July.
  9. 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. [Downloadable!]
  10. LaFrance, Jeffrey T., 2004. "Integrability of the linear approximate almost ideal demand system," Economics Letters, Elsevier, vol. 84(3), pages 297-303, September. [Downloadable!] (restricted)
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  11. LaFrance, Jeffrey T., 1985. "Linear demand functions in theory and practice," Journal of Economic Theory, Elsevier, vol. 37(1), pages 147-166, October. [Downloadable!] (restricted)
  12. 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. [Downloadable!] (restricted)
  13. Ippolito, Richard A & Masson, Robert T, 1978. "The Social Cost of Government Regulation of Milk," Journal of Law & Economics, University of Chicago Press, vol. 21(1), pages 33-65, April.
  14. Lafrance, Jeffrey T., 1991. "When Is Expenditure "Exogenous" In Separable Demand Models?," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 16(01), July. [Downloadable!]
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This page was last updated on 2009-10-15.

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