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

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Listed author(s):
  • 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.

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File URL: http://purl.umn.edu/14661
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Article provided by Agricultural Economics Association of Georgia in its journal Journal of Agribusiness.

Volume (Year): 18 (2000)
Issue (Month): 2 ()
Pages:

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Handle: RePEc:ags:jloagb:14661
Contact details of provider: Postal:
301 Conner Hall, University of Georgia, Athens, GA 30602-7509

Web page: http://www.agecon.uga.edu/~jab/

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Keywords: dairy compacts; dairy demand; price instability; scanner data; Demand and Price Analysis;

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  1. Rothschild, Michael, 1973. "Models of Market Organization with Imperfect Information: A Survey," Journal of Political Economy, University of Chicago Press, vol. 81(6), pages 1283-1308, Nov.-Dec..
  2. Suzuki, Nobuhiro & Kaiser, Harry M., 1997. "Imperfect Competition Models and Commodity Promotion Evaluation: The Case of U.S. Generic Milk Advertising," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 29(02), pages 315-325, December.
  3. Chung, Chanjin & Kaiser, Harry M., 1998. "Determinants of Temporal Variations in Advertising Effectiveness," Research Bulletins 122689, Cornell University, Department of Applied Economics and Management.
  4. Green, Geoffrey M. & Park, John L., 1998. "Retail Demand For Whole Vs. Low-Fat Milk: New Perspectives On Loss Leader Pricing," 1998 Annual meeting, August 2-5, Salt Lake City, UT 20827, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  5. Turnovsky, Stephen J & Shalit, Haim & Schmitz, Andrew, 1980. "Consumer's Surplus, Price Instability, and Consumer Welfare," Econometrica, Econometric Society, vol. 48(1), pages 135-152, January.
  6. Boehm, William T., 1975. "The Household Demand For Major Dairy Products In The Southern Region," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 7(02), December.
  7. Frank Asche & Cathy R. Wessells, 1997. "On Price Indices in the Almost Ideal Demand System," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(4), pages 1182-1185.
  8. Pagan, Adrian, 1984. "Econometric Issues in the Analysis of Regressions with Generated Regressors," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 25(1), pages 221-247, February.
  9. Philip R. Vande Kamp & Harry M. Kaiser, 1999. "Irreversibility in Advertising-Demand Response Functions: An Application to Milk," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(2), pages 385-396.
  10. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June.
  11. Boehm, William T., 1975. "The Household Demand for Major Dairy Products in the Southern Region," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 7(02), pages 187-196, December.
  12. Oral Capps Jr. & Rodolfo M. Nayga Jr., 1990. "Effect of Length of Time on Measured Demand Elasticities: The Problem Revisited," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 38(3), pages 499-512, November.
  13. 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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Cited by:

  1. 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).
  2. 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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