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The importance of demand and supply elasticities in dairy policy analysis

Author

Listed:
  • Richard L. Kilmer

    (Food and Resource Economics Department, University of Florida)

  • Xiling Wu

    (Food and Resource Economics Department, University of Florida)

Abstract

A quarterly model is used to determine the effect of alternative government programs evaluated over a range of elasticities on the total income of farmers, government expenditures, and the cost to plants of raw milk. A reduction in price supports reduces farmers' revenue by more than three times with price support when compared to quota and more than nine times with assessment when compared to quota. The higher the elasticities, the smaller the total revenue loss to dairy farmers and the smaller the total revenue difference among policies.

Suggested Citation

  • Richard L. Kilmer & Xiling Wu, 1988. "The importance of demand and supply elasticities in dairy policy analysis," Agribusiness, John Wiley & Sons, Ltd., vol. 4(3), pages 217-231.
    • Handle: RePEc:wly:agribz:v:4:y:1988:i:3:p:217-231
    DOI: 10.1002/1520-6297(198805)4:3<217::AID-AGR2720040302>3.0.CO;2-A
    as

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    References listed on IDEAS

    as
    1. Jeffrey T. LaFrance & Harry de Gorter, 1985. "Regulation in a Dynamic Market: The U.S. Dairy Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(4), pages 821-832.
    2. Jean-Paul Chavas & Richard M. Klemme, 1986. "Aggregate Milk Supply Response and Investment Behavior on U.S. Dairy Farms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(1), pages 55-66.
    3. Whipple, Glen D. & Powe, Charles & Gray, Morgan, 1985. "An Economic Analysis of Selected U. S. Dairy Program Changes," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 17(2), pages 181-192, December.
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