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Evaluating Supply Control Policies for Frozen Concentrated Orange Juice with an Industrial Dynamics Model
Author(s) -
Raulerson Richard C.,
Langham Max R.
Publication year - 1970
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 - 10.2307/1237490
Subject(s) - orange (colour) , system dynamics , control (management) , orange juice , supply and demand , environmental economics , economics , industrial organization , business , computer science , microeconomics , chemistry , food science , management , artificial intelligence
Economists are increasingly being asked to study problems that require a systems approach. This paper reports an empirical application of industrial dynamics to a problem of an industry system. A second generation model was developed and used to appraise alternative supply control policies designed to reduce fluctuations in marketings of frozen concentrated orange juice and grower profits. Policies that controlled long‐run supplies by constraining tree plantings appeared to have the most potential for success. Policies designed to control market supplies on a year‐to‐year basis actually encouraged new tree plantings which created long‐run supply problems.