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Do U.S. Marketing Orders Have Much Market Power? An Examination Of The Almond Board Of California

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  • Crespi, John M.
  • Chacon-Cascante, Adriana

Abstract

This paper tests the conventional wisdom that U.S. marketing orders act as profit-maximizing cartels. The paper analyzes the marketing order for U.S. almonds in both the domestic and export markets. Such a case study is relevant to all U.S. marketing orders because the size and scope of the U.S. almond industry on the world market, and the legal authority of the almond marketing order makes it a likely prospect for exhibiting true cartel behavior. The authors find that the market power exerted by the Almond Board of California's reserve setting is significantly less than would be expected from a profit-maximizing cartel.

Suggested Citation

  • Crespi, John M. & Chacon-Cascante, Adriana, 2002. "Do U.S. Marketing Orders Have Much Market Power? An Examination Of The Almond Board Of California," 2002 Annual meeting, July 28-31, Long Beach, CA 19888, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  • Handle: RePEc:ags:aaea02:19888
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    References listed on IDEAS

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    1. Peter Berck & Jeffrey M. Perloff, 1985. "A Dynamic Analysis of Marketing Orders, Voting, and Welfare," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(3), pages 487-496.
    2. Filson, Darren, et al, 2001. "Market Power and Cartel Formation: Theory and an Empirical Test," Journal of Law and Economics, University of Chicago Press, vol. 44(2), pages 465-480, October.
    3. Aw, Bee Yan, 1992. "An empirical model of mark-ups in a quality-differentiated export market," Journal of International Economics, Elsevier, vol. 33(3-4), pages 327-344, November.
    4. Bresnahan, Timothy F., 1982. "The oligopoly solution concept is identified," Economics Letters, Elsevier, vol. 10(1-2), pages 87-92.
    5. Lee, Hyunok & Alston, Julian M. & Carman, Hoy F. & Sutton, William R., 1996. "Mandated Marketing Programs For California Commodities," Information Series 11919, University of California, Davis, Giannini Foundation.
    6. Lau, Lawrence J., 1982. "On identifying the degree of competitiveness from industry price and output data," Economics Letters, Elsevier, vol. 10(1-2), pages 93-99.
    7. Goldberg, Pinelopi Koujianou & Knetter, Michael M., 1999. "Measuring the intensity of competition in export markets," Journal of International Economics, Elsevier, vol. 47(1), pages 27-60, February.
    8. Kwoka, John E, Jr, 1977. "Pricing under Federal Milk Market Regulation," Economic Inquiry, Western Economic Association International, vol. 15(3), pages 367-384, July.
    9. Alston, Julian M. & Carman, Hoy F. & Christian, Jason E. & Dorfman, Jeffrey H. & Murua, Juan-Ramon & Sexton, Richard J., 1997. "Optimal Reserve and Export Policies for the California Almond Industry : Theory, Econometrics, and Simulations," Monographs, University of California, Davis, Giannini Foundation, number 11937.
    10. Kinnucan, Henry W. & Christian, Jason E., 1997. "A Method For Measuring Returns To Nonprice Export Promotion With Application To Almonds," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 22(01), July.
    11. repec:cdl:agrebk:623332 is not listed on IDEAS
    12. Shepard, Lawrence, 1986. "Cartelization of the California-Arizona Orange Industry, 1934-1981," Journal of Law and Economics, University of Chicago Press, vol. 29(1), pages 83-123, April.
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    14. George J. Stigler, 1974. "Free Riders and Collective Action: An Appendix to Theories of Economic Regulation," Bell Journal of Economics, The RAND Corporation, vol. 5(2), pages 359-365, Autumn.
    15. Bushnell, Peter G. & King, Gordon A., 1986. "The Domestic and Export Markets for California Almonds," Research Reports 11924, University of California, Davis, Giannini Foundation.
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    Cited by:

    1. Balagtas, Joseph Valdes & Masters, William J. & Zimmer, Timothy, 2005. "Cartel Pricing with Entry: the Experience of the Far West Marketing Order for Spearmint," 2005 Annual meeting, July 24-27, Providence, RI 19328, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Kachel, Yael & Finkelsthain, Israel, 2009. "Antitrust Legislation and Cooperation in Fish Marketing," Journal of Rural Cooperation, Hebrew University, Center for Agricultural Economic Research, vol. 37(2).
    3. Kent D. Messer & Todd M. Schmit & Harry M. Kaiser, 2005. "Optimal Institutional Mechanisms for Funding Generic Advertising: An Experimental Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(4), pages 1046-1060.

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