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A Dynamic Analysis of Marketing Orders, Voting , and Welfare

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  • Berck, Peter
  • Perloff, Jeffrey M

Abstract

This paper presents a dynamic model of how profit-maximizing farmers would vote on marketing order rules given that new firms will enter, based on rational expectations (perfect foresight) about the path profits follow. Early entrants make large short-run gains while, in the long run, marginal firms break even. Welfare analyses under a dynamic model differ substantially from the static analyses normally reported.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Berck, Peter & Perloff, Jeffrey M, 1984. "A Dynamic Analysis of Marketing Orders, Voting , and Welfare," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt3d09786w, Department of Agricultural & Resource Economics, UC Berkeley.
    • Handle: RePEc:cdl:agrebk:qt3d09786w
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    References listed on IDEAS

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    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. Ippolito, Richard A & Masson, Robert T, 1978. "The Social Cost of Government Regulation of Milk," Journal of Law and Economics, University of Chicago Press, vol. 21(1), pages 33-65, April.
    3. Dahlgran, Roger A., 1981. "Dairy Marketing And Policy Analysis: A Critical Review Of Recent Empirical Studies," Department of Economics and Business - Archive 259651, North Carolina State University, Department of Economics.
    4. Minami, Dwight D. & French, Ben C. & King, Gordon A., 1979. "An Econometric Analysis of Market Control in the California Cling Peach Industry," Monographs, University of California, Davis, Giannini Foundation, number 251909.
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    Cited by:

    1. Elizabeth Hoffman & Gary D. Libecap, 1994. "Political Bargaining and Cartelization in the New Deal: Orange Marketing Orders," NBER Chapters, in: The Regulated Economy: A Historical Approach to Political Economy, pages 189-222, National Bureau of Economic Research, Inc.
    2. Hayley H. Chouinard & David E. Davis & Jeffrey T. LaFrance & Jeffrey M. Perloff, 2010. "Milk Marketing Order Winners and Losers," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 32(1), pages 59-76.
    3. Epperson, James E. & Huang, Wan-Tran, 1992. "The Potential For Intraseasonal Market Flow Management Of Southeastern Sweet Potatoes," Journal of Food Distribution Research, Food Distribution Research Society, vol. 23(2), pages 1-8, June.
    4. 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).
    5. John M. Crespi & Adriana Chacón-Cascante, 2004. "Do U.S. marketing orders have much market power? An examination of the Almond Board of California," Agribusiness, John Wiley & Sons, Ltd., vol. 20(1), pages 1-15.
    6. Fan, Zaifeng & Jump, Jeff & Tse, Yiuman & Yu, Linda, 2023. "Volatility in US dairy futures markets," Journal of Commodity Markets, Elsevier, vol. 29(C).
    7. Makus, Larry D. & Guenthner, Joseph F. & Lin, Biing-Hwan, 1992. "Factors Influencing Producer Support For A State Mandatory Seed Law: An Empirical Analysis," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 17(2), pages 1-8, December.
    8. Kinney, William & Green, Richard & Carman, Hoy & O'Connell, John, 1987. "An Analysis of Economic Adjustments in the California-Arizona Lemon Industry," Research Reports 251939, University of California, Davis, Giannini Foundation.
    9. Epperson, James E. & Huang, Wan-Tran, 1994. "The Potential For Supply Management Of Southeastern Sweet Onions," Journal of Food Distribution Research, Food Distribution Research Society, vol. 25(2), pages 1-7, September.
    10. Nicholas J. Powers, 1991. "Effects of marketing order prorate suspensions on California-Arizona navel oranges," Agribusiness, John Wiley & Sons, Ltd., vol. 7(3), pages 203-229.
    11. Zheng, Zijuan & Saghaian, Sayed H. & Reed, Michael R., 2012. "Factors Affecting the Export Demand for U.S. Pistachios," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 15(3), pages 1-16, September.

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