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Modeling The U.S. Dairy Sector With Government Intervention


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  • Liu, Donald J.
  • Kaiser, Harry M.
  • Mount, Timothy D.
  • Forker, Olan D.


An econometric framework for estimating a two-regime dairy structural system is presented. Failure to account for switching between regimes due to government price intervention raises the problem of selectivity bias. Further, since a structural system of equations is involved, the problem is not limited to the market associated with the intervention. Rather, bias from a single source can distort all equations in the system. The ramifications of not correcting for the bias in policy analyses are investigated.

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Bibliographic Info

Article provided by Western Agricultural Economics Association in its journal Western Journal of Agricultural Economics.

Volume (Year): 16 (1991)
Issue (Month): 02 (December)

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Handle: RePEc:ags:wjagec:32602

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Keywords: Agricultural and Food Policy; Industrial Organization;

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  1. Jeffrey T. LaFrance & Harry D. Gorter, 1985. "Regulation in a Dynamic Market: The U.S. Dairy Industry," Development Research Unit Working Paper Series archive-34, Monash University, Department of Economics.
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Cited by:
  1. Bailey, Kenneth W., 2000. "Evaluating The Economic Impacts Of Regional Milk Pricing Authorities: The Case Of Dairy Compacts," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 29(2), October.
  2. Bailey, Kenneth W., 2009. "Documentation of a Dynamic and Simultaneous Econometric Model of the U.S. Dairy Industry," Staff Paper Series 48653, Pennsylvania State University, Department of Agricultural Economics and Rural Sociology.
  3. Kaiser, Harry M. & Forker, Olan D., 1993. "Analysis Of Generi<; Dairy Advertising Scenarios On Retail, Wholesale, And Farm Milk Markets," Research Bulletins 123010, Cornell University, Department of Applied Economics and Management.
  4. Kaiser, Harry M., 1995. "An Analysis of Generic Dairy Promotion in the United States," Research Bulletins 122997, Cornell University, Department of Applied Economics and Management.


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