Milk Marketing Order Winners and Losers

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. Based on these estimates, we simulate substitution effects 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. Families with young children suffer from marketing orders, while wealthier childless couples benefit. Additionally, we find that households with lower incomes pay a larger percentage of their income due to marketing orders than those with higher income levels.


Issue Date:
2006
Publication Type:
Conference Paper/ Presentation
DOI and Other Identifiers:
Record Identifier:
https://ageconsearch.umn.edu/record/21238
PURL Identifier:
http://purl.umn.edu/21238
Total Pages:
36
Series Statement:
Selected Paper




 Record created 2017-04-01, last modified 2020-10-28

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