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Welfare Comparisons of U.S. Dairy Policies with and without Mandatory Supply Control
Author(s) -
Kaiser Harry M.,
Streeter Deborah H.,
Liu Donald J.
Publication year - 1988
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 - 10.2307/1241926
Subject(s) - welfare , economics , control (management) , government (linguistics) , public economics , consumer welfare , econometric model , microeconomics , business , market economy , econometrics , linguistics , philosophy , management
The existence of costly dairy surpluses has led some policy makers to argue in favor of mandatory supply controls as an alternative to existing dairy policy. A dynamic econometric model is used to simulate the changes in equilibrium prices, quantities, producer and consumer welfare, and government costs that would occur if mandatory controls were adopted. The results show that while such a change in policy would eliminate the costs associated with current price supports, the benefits accruing to producers would be achieved at the expense of consumers and processors.