Effects of state regulations on marketing margins and price transmission asymmetry: Evidence from the New York City and upstate New York fluid milk markets

Robert Romain, Maurice Doyon and Mathieu Frigon
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Robert Romain: Department of Economics of Agrifood and Consumer Sciences, Faculty of Food and Agriculture Science, Université Laval, Québec, Canada G1K 7P4. E-mail: robert.romain@eac.ulaval.ca, maurice.doyon@eac.ulaval.ca, mfrigon@dfc-plc.ca, Postal: Department of Economics of Agrifood and Consumer Sciences, Faculty of Food and Agriculture Science, Université Laval, Québec, Canada G1K 7P4. E-mail: robert.romain@eac.ulaval.ca, maurice.doyon@eac.ulaval.ca, mfrigon@dfc-plc.ca
Maurice Doyon: Department of Economics of Agrifood and Consumer Sciences, Faculty of Food and Agriculture Science, Université Laval, Québec, Canada G1K 7P4. E-mail: robert.romain@eac.ulaval.ca, maurice.doyon@eac.ulaval.ca, mfrigon@dfc-plc.ca, Postal: Department of Economics of Agrifood and Consumer Sciences, Faculty of Food and Agriculture Science, Université Laval, Québec, Canada G1K 7P4. E-mail: robert.romain@eac.ulaval.ca, maurice.doyon@eac.ulaval.ca, mfrigon@dfc-plc.ca
Mathieu Frigon: Department of Economics of Agrifood and Consumer Sciences, Faculty of Food and Agriculture Science, Université Laval, Québec, Canada G1K 7P4. E-mail: robert.romain@eac.ulaval.ca, maurice.doyon@eac.ulaval.ca, mfrigon@dfc-plc.ca, Postal: Department of Economics of Agrifood and Consumer Sciences, Faculty of Food and Agriculture Science, Université Laval, Québec, Canada G1K 7P4. E-mail: robert.romain@eac.ulaval.ca, maurice.doyon@eac.ulaval.ca, mfrigon@dfc-plc.ca

Agribusiness, 2002, vol. 18, issue 3, 301-315

Abstract: A marketing margin model that allows testing for constant returns to scale technology and asymmetric marketing costs and farm price transmissions is proposed. Results indicate that a constant returns to scale technology cannot be rejected. During the period prior to the enactment of the price gouging law in June 1991 by the New York State Legislature, significant short-run and long-run asymmetries in both marketing costs and farm price transmissions were identified. After 1991, these asymmetries were no longer significant or were reduced substantially. Finally, the legislative change that occurred in 1987, allowing Farmland Dairies' entry into the New York City fluid milk market, contributed significantly to reducing marketing margins in the New York City fluid milk market. [EconLit Citations: D400, C300] © 2002 Wiley Periodicals, Inc.

Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:wly:agribz:v:18:y:2002:i:3:p:301-315

DOI: 10.1002/agr.10019

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