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Insurance Milk

Author

Listed:
  • Julian M. Alston
  • John J. Quilkey

Abstract

Where the production of milk for sale on the fresh milk market at 'controlled' prices is subject to nontransferable quotas the holders of quota who wish to maximise profits have a motive to maintain production above the quota level to insure against variations in demand for over-quota sales and yield. The concept of 'production of milk as insurance' is used to clarify the way in which such behaviour gives rise to social costs which could be avoided in a competitive market, by a permissive attitude to arbitrage, or where quotas can be traded.
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Suggested Citation

  • Julian M. Alston & John J. Quilkey, 1980. "Insurance Milk," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 24(3), pages 283-290, December.
    • Handle: RePEc:bla:ajarec:v:24:y:1980:i:3:p:283-290
    DOI: j.1467-8489.1980.tb00583.x
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    References listed on IDEAS

    as
    1. Harris, Tom & Candler, Wilfred V., 1960. "A Normative Approach To The Operation Of The New South Wales Milk Board," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 4(2), pages 1-9, December.
    2. R. M. Parish, 1962. "The Costs Of Protecting The Dairying Industry," The Economic Record, The Economic Society of Australia, vol. 38(82), pages 167-182, June.
    3. Tom Harris & Wilfred V. Candler, 1960. "A Normative Approach To The Operation Of The New South Wales Milk Board," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 4(2), pages 106-114, December.
    4. Neutze, G.M., 1961. "Saleable City Milk Supply Quotas," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 5(2), pages 1-3, December.
    5. G.M. Neutze, 1961. "Saleable City Milk Supply Quotas," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 5(2), pages 136-138, December.
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    Cited by:

    1. Fraser, Rob W., 1995. "A Note: A Clarification Of The Role Of Yield Uncertainty In Influencing Over-Quota Production," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 39(2), pages 1-5, August.
    2. Freebairn, John W., 1992. "Dairy Industry Policy," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 60(01), pages 1-19, April.

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