An Econometric Analysis of Price Dynamics in the Presence of a Price Floor: The Case of American Cheese

Jean-Paul Chavas () and Kwansoo Kim

Journal of Agricultural and Applied Economics, 2005, vol. 37, issue 01, 15

Abstract: In this paper, we present an econometric analysis for the effects of a price floor on price dynamics and price volatility. A price floor (implemented as a part of government pricing policy) provides a censoring mechanism for price determination. We specify and estimate a dynamic Tobit model under time-varying volatility. The model is applied to analyze the effects of a price support program on price dynamics and price volatility in the U.S. American cheese market. The econometric analysis provides useful insights on price dynamics in the presence of a government-determined price floor.

Keywords: Demand; and; Price; Analysis (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (2)

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Journal Article: An Econometric Analysis of Price Dynamics in the Presence of a Price Floor: The Case of American Cheese (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:joaaec:43628

DOI: 10.22004/ag.econ.43628

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