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Agricultural policy modelling under imperfect competition

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  • Soregaroli, Claudio
  • Sckokai, Paolo
  • Moro, Daniele

Abstract

This study evaluates the role of imperfect competition in determining the agri-food policies impact assessment outcomes. In most impact studies, the supply chain between agricultural production and final consumption is modelled in a perfectly competitive framework. However, there is a growing attention of stakeholders for the presence of imperfectly competitive markets, with the retail sector often being under investigation. This issue is empirically analysed with an application to the dairy industry. First, the degree of market power is estimated using a multi-output demand and price transmission equation system. Then, this model is used for policy simulation with the perfect competition outcome taken as a benchmark to evaluate the impact of imperfect competition. Results show a significant degree of market power in the dairy industry with implications on the projected policy scenarios. Moreover, the imperfect competition model alters the price transmission mechanisms, generating more flexible price trends.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Policy Modeling.

Volume (Year): 33 (2011)
Issue (Month): 2 (March)
Pages: 195-212

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Handle: RePEc:eee:jpolmo:v:33:y:2011:i:2:p:195-212

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Web page: http://www.elsevier.com/locate/inca/505735

Related research

Keywords: Policy evaluation Imperfect competition Common agricultural policy Dairy sector;

References

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