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Empirical Tests Of The Argument That Consumers Value Stable Retail Milk Prices

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  • Maynard, Leigh J.

Abstract

Existing policy allows interstate dairy compacts if they serve a compelling public interest. Compact supporters argue consumers benefit from retail price stability, but no supporting evidence was found. Milk demand systems were estimated using scanner data and four measures of price volatility. Price volatility defined as forecast errors influenced demand, but did not systematically depress demand. Response was more elastic to unanticipated than anticipated price changes, possibly explaining the higher elasticities often observed in scanner data studies.

Suggested Citation

  • Maynard, Leigh J., 2000. "Empirical Tests Of The Argument That Consumers Value Stable Retail Milk Prices," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 18(2), pages 1-18.
    • Handle: RePEc:ags:jloagb:14661
    DOI: 10.22004/ag.econ.14661
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    References listed on IDEAS

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    1. McLaughlin, Patrick W. & Gleason, Stacy & Wilkin, Margaret, 2018. "Price Variability Across Food Product and Vendor Type in Food Benefit Redemptions Under the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC)," Economic Research Report 276225, United States Department of Agriculture, Economic Research Service.
    2. Veeramani, Venkat N. & Maynard, Leigh J., 2004. "Testing For The Existence Of Price Points In Retail Milk Scanner Data Using Microeconomic Theory," 2004 Annual meeting, August 1-4, Denver, CO 20378, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Davis, Christopher G. & Dong, Diansheng & Blayney, Donald P. & Yen, Steven T. & Stillman, Richard, . "U.S. Fluid Milk Demand: A Disaggregated Approach," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 15(01), pages 1-26.
    4. Maynard, Leigh J. & Liu, Deyu, 1999. "Fragility In Dairy Product Demand Analysis," 1999 Annual meeting, August 8-11, Nashville, TN 21679, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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