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Explaining Differences in Milk Quota Values: The Role of Economic Efficiency
Author(s) -
Alvarez Antonio,
Arias Carlos,
Orea Luis
Publication year - 2006
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1111/j.1467-8276.2006.00846.x
Subject(s) - uncorrelated , economics , order (exchange) , economic efficiency , government (linguistics) , panel data , scale (ratio) , econometrics , public economics , microeconomics , statistics , mathematics , finance , linguistics , philosophy , physics , quantum mechanics
This article explores the relationship between milk quota values and economic efficiency in order to analyze government interventions in quota allocations among producers. For this purpose, we estimate quota values using a panel of Spanish dairy farms. Quota values are then decomposed into economic efficiency, price, and scale effects in order to assess the relative influence of these factors. We find that efficiency is important in explaining quota values but is uncorrelated with observable farm characteristics. This casts doubts on the government's ability to allocate quotas to efficient farms.