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This paper compares and evaluates two recent studies of the impact of the Northeast Dairy Compact. On May 2, 2001 we released “The Public Interest and Private Economic Power: A Case Study of the Northeast Dairy Compact.” A year earlier Professor Kenneth Bailey, Pennsylvania State University released “Report on the Operation and Performance of the Northeast Interstate Dairy Compact” (Bailey, 2000). This comparative evaluation of these two studies is part of our response (Cotterill and Franklin, 2001c) to a recent peer review of our study that Professor Bailey completed at the request of the Northeast Dairy Compact Commission. Bailey’s review is, at best, a confused and confusing analysis of our study. The public deserves a more lucid explanation and critique of work in this area. So that the debate on the merits of the Compact can proceed on a firmer scientific foundation, we have written this paper. We would add that the criticisms of Bailey (2000) also carry over to the Bailey (2001) paper. That paper also misuses the proportional markup model to obtain an estimate of the impact of the Dairy Compact that is flawed and not credible.


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