Quota Deregulation and Organic versus Conventional Milk – A Bayesian Distance Function Approach

Milk quota trading rules differ across EU member countries. In Denmark a biannual milk quota exchange was set up in 1997 to promote a more efficient reallocation of milk quotas as well as to reduce transaction costs related to the searching and matching of sellers and buyers. Using two comprehensive panel data sets on organic and conventional milk farms this study attempts to disentangle the effects of the introduction of quota transferability on the production structure of those farms as well as the probability of market entry/exit. Bayesian estimation techniques are used to estimate an input oriented generalized Leontief distance function as well as a curvature constrained specification. The results suggest that the deregulation in the quota allocation mechanism led to an increased allocative efficiency of organic as well as conventional milk production as well as a relative shift of the PPF in favor of the production of organic milk.

Issue Date:
Publication Type:
Conference Paper/ Presentation
DOI and Other Identifiers:
Record Identifier:
PURL Identifier:
Total Pages:
Series Statement:
Selected Paper

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

Download fulltext

Rate this document:

Rate this document:
(Not yet reviewed)