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Market Conduct Under Government Price Intervention In The U.S. Dairy Industry

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  • Liu, Donald J.
  • Sun, Chin-Hwa
  • Kaiser, Harry M.

Abstract

The degree of market power exercised by fluid and manufactured processors in the U.S. dairy industry is estimated. Appelbaum's quantity-setting conjectural variation approach is cast into a switching regime framework to account for the two market regimes created by the existence of the dairy price support program: (a) government supported regime (market price is at the support price) and (b) market equilibrium regime (market price is above the support price). The model is also used to test whether government price intervention has a pro-competitive to anti-competitive influence on market conduct.

Suggested Citation

  • Liu, Donald J. & Sun, Chin-Hwa & Kaiser, Harry M., 1995. "Market Conduct Under Government Price Intervention In The U.S. Dairy Industry," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 20(2), pages 1-15, December.
    • Handle: RePEc:ags:jlaare:30772
    DOI: 10.22004/ag.econ.30772
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    References listed on IDEAS

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    Cited by:

    1. Chen, Kevin Z. & Weerahewa, Jeevika, 1998. "Regulation, Market Power, And Advertising Effectiveness," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 27(2), pages 1-9, October.
    2. Patrice Bougette & Oliver Budzinski & Frédéric Marty, 2019. "Exploitative Abuse and Abuse of Economic Dependence: What Can We Learn From an Industrial Organization Approach?," Revue d'économie politique, Dalloz, vol. 129(2), pages 261-286.
    3. Alexandre Gohin & Hervé Guyomard, 2000. "Measuring Market Power for Food Retail Activities: French Evidence," Journal of Agricultural Economics, Wiley Blackwell, vol. 51(2), pages 181-195, May.
    4. Sckokai, Paolo & Soregaroli, Claudio & Moro, Daniele, 2012. "Estimating Market Power By Retailers In A Dynamic Framework: The Case Of The Italian Pdo Cheese Market," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126703, International Association of Agricultural Economists.
    5. Soregaroli, Claudio & Sckokai, Paolo & Moro, Daniele, 2011. "Agricultural policy modelling under imperfect competition," Journal of Policy Modeling, Elsevier, vol. 33(2), pages 195-212, March.
    6. Benaissa Chidmi & Rigoberto A. Lopez & Ronald W. Cotterill, 2005. "Retail oligopoly power, dairy compact, and Boston milk prices," Agribusiness, John Wiley & Sons, Ltd., vol. 21(4), pages 477-491.
    7. Sckokai, Paolo & Soregaroli, Claudio & Moro, Daniele, 2009. "Estimating Market Power By Retailers In The Italian Parmigiano Reggiano And Grana Padano Cheese Market," 2009 Conference, August 16-22, 2009, Beijing, China 51425, International Association of Agricultural Economists.
    8. 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.
    9. Goddard, Ellen W. & Shank, Benjamin & Panter, Chris & Nilsson, Tomas K.H. & Cash, Sean B., 2007. "Canadian Chicken Industry: Consumer Preferences, Industry Structure and Producer Benefits from Investment in Research and Advertising," Project Report Series 52088, University of Alberta, Department of Resource Economics and Environmental Sociology.
    10. Rezitis Anthony & Kalantzi Maria, 2012. "Measuring Market Power and Welfare Losses in the Greek Food and Beverages Manufacturing Industry," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 10(1), pages 1-33, April.
    11. Parcell, Joseph L. & Kastens, Terry L. & Dhuyvetter, Kevin C. & Schroeder, Ted C., 2000. "Agricultural Economists' Effectiveness In Reporting And Conveying Research Procedures And Results," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 29(2), pages 1-10, October.
    12. Anthony N. Rezitis & Maria A. Kalantzi, 2016. "Evaluating the state of competition and the welfare losses in the Greek manufacturing sector: an extended Hall–Roeger approach," Empirical Economics, Springer, vol. 50(4), pages 1275-1302, June.
    13. Xiaowei Cai & Kyle W. Stiegert, 2013. "Economic analysis of the US fluid milk industry," Applied Economics Letters, Taylor & Francis Journals, vol. 20(10), pages 971-977, July.
    14. Adjemian, Michael & Brorsen, B. Wade & Hahn, William & Saitone, Tina L. & Sexton, Richard J., 2016. "Thinning Markets in U.S. Agriculture," Economic Information Bulletin 232928, United States Department of Agriculture, Economic Research Service.

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    Keywords

    Agricultural and Food Policy;

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