Quota Deregulation and Organic versus Conventional Milk – A Bayesian Distance Function Approach

Johannes Sauer

No 6425, 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: Milk quota trading rules differ across EU member countries. In Denmark a biannual milk quota exchange was set up in 1997 to promote a more efficient reallocation of milk quotas as well as to reduce transaction costs related to the searching and matching of sellers and buyers. Using two comprehensive panel data sets on organic and conventional milk farms this study attempts to disentangle the effects of the introduction of quota transferability on the production structure of those farms as well as the probability of market entry/exit. Bayesian estimation techniques are used to estimate an input oriented generalized Leontief distance function as well as a curvature constrained specification. The results suggest that the deregulation in the quota allocation mechanism led to an increased allocative efficiency of organic as well as conventional milk production as well as a relative shift of the PPF in favor of the production of organic milk.

Keywords: Agricultural and Food Policy; Livestock Production/Industries (search for similar items in EconPapers)
Pages: 42
Date: 2008
New Economics Papers: this item is included in nep-agr
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Citations: View citations in EconPapers (1)

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Working Paper: Quota Deregulation and Organic versus Conventional Milk – A Bayesian Distance Function Approach (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea08:6425

DOI: 10.22004/ag.econ.6425

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