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A MICROECONOMETRIC ANALYSIS OF MILK QUOTA TRANSFER: APPLICATION TO FRENCH PRODUCERS
Author(s) -
Guyomard Hervé,
Delache Xavier,
Irz Xavier,
Mane LouisPascal
Publication year - 1996
Publication title -
journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.157
H-Index - 61
eISSN - 1477-9552
pISSN - 0021-857X
DOI - 10.1111/j.1477-9552.1996.tb00685.x
Subject(s) - shadow price , lease , economics , production (economics) , microeconomics , sample (material) , transfer (computing) , industrial organization , finance , mathematical optimization , chemistry , mathematics , chromatography , computer science , parallel computing
In this paper, we use the duality theory framework and the concept of virtual or shadow price of a rationed good to analyse producer behaviour under output quota when individual quota rights can be leased or rented for one production cycle. We propose a formal model of tradable quota rights which allows us to determine the lease price of quota and the exchanged quantity at equilibrium. The implications of trading On farmers' decisions (output choice level and traded licences), and on their incomes, are derived formally. The theoretical framework is applied to a sample of French milk producers for the year 1991. We then determine efficiency gains and regional shifts in production that such a market would generate.