@article{Philippidis:332682,
      recid = {332682},
      author = {Philippidis, George and Waschik, Robert},
      title = {Removal of EU Milk Quotas Using a CGE Model with Imperfect  Competition and Heterogeneous Firms},
      address = {2016},
      year = {2016},
      note = {Presented at the 19th Annual Conference on Global Economic  Analysis, Washington DC, USA},
      abstract = {The year 2015 marked the end of one of the longest  surviving legacies of the `old' Common Agricultural Policy  (CAP) – the elimination of the milk quota. A review of the  modelling literature reveals a number of ex ante impact  assessments of quota abolition. The general consensus is  that quota abolition will benefit aggregate EU milk and  dairy output, largely through the mechanism of market price  falls as quota rents dissipate. Despite evidence to the  contrary in the dairy industry, a further common feature to  all these studies is the assumption of perfect competition  and constant returns to scale to characterise producer, as  well as homogeneous product preferences. This study seeks  to fill this gap in the literature by focusing on the  export potential of EU dairy producers under conditions of  imperfect competition, employing the latest developments in  the applied modelling literature. When the dairy sector is  modelled as a `Melitz' sector, quota removal results in a  drop in price charged by average firm.  This price drop is  slightly greater in France and Rest of EU than it is in  Germany, but there is a large increase in the quantity and  productivity of the average firm in France and the Rest of  EU.  Against a baseline of stagnant or declining output,  the abolition of EU milk quotas in 2015 should lead to  strong growth in EU dairy output.  When dairy is modelled  as an imperfectly competitive `Melitz' sector, stronger  productivity growth in France and the Rest of EU lead to  stronger growth in dairy output.},
      url = {http://ageconsearch.umn.edu/record/332682},
}