Market Power Effects of Supply Control and Dairy Market Deregulation
AbstractThis paper uses the Bresnahan-Lau framework to analyze whether policy reforms specifically affecting Swedish dairy cooperatives, i.e. the two-price system (an input quota, 1986-1991) and the general deregulation of dairy policy (1991-1994), had any market power effects on the Swedish butter market. It is hypothesized that the two-price system enhanced market power, while the deregulation, making exports of butter less profitable, led to a lower level of market power exercised by dairy cooperatives. To account for non-stationary variables, a dynamic error correction model is adopted. The results show that the null hypotheses of no market power effect, for either of the two reforms, cannot be rejected at any reasonable significance level.
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Bibliographic InfoPaper provided by Umeå University, Department of Economics in its series Umeå Economic Studies with number 721.
Length: 22 pages
Date of creation: 02 Nov 2007
Date of revision:
Contact details of provider:
Postal: Department of Economics, Umeå University, S-901 87 Umeå, Sweden
Phone: 090 - 786 61 42
Fax: 090 - 77 23 02
Web page: http://www.econ.umu.se/
More information through EDIRC
agricultural policy; cooperatives; market power;
Find related papers by JEL classification:
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
- L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
- Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
- Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
This paper has been announced in the following NEP Reports:
- NEP-AGR-2007-11-10 (Agricultural Economics)
- NEP-ALL-2007-11-10 (All new papers)
- NEP-COM-2007-11-10 (Industrial Competition)
- NEP-REG-2007-11-10 (Regulation)
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