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An Optimal Control Framework for Inter-regional Dairy Policy Analysis

Published online by Cambridge University Press:  28 April 2015

Rudolfo V. Tanjuakio ,
Conrado M. Gempesaw II  and
G. Joachim Elterich
Rudolfo V. Tanjuakio
Affiliation:
Delaware Agricultural Experiment Station of the Department of Food and Resource Economics in the College of Agricultural Sciences at theUniversity of Delaware
Conrado M. Gempesaw II
Affiliation:
Delaware Agricultural Experiment Station of the Department of Food and Resource Economics in the College of Agricultural Sciences at theUniversity of Delaware
G. Joachim Elterich
Affiliation:
Delaware Agricultural Experiment Station of the Department of Food and Resource Economics in the College of Agricultural Sciences at theUniversity of Delaware
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Abstract

An eleven-region stochastic coefficient econometric model was estimated and used in an optimal control framework to evaluate the effectiveness of the dairy price support program and marketing orders in reducing and stabilizing government purchases of dairy products. The results showed significant pressure on the reduction of the support price both in the presence and absence of Class I differentials. The optimal control model also showed that the drop in price support levels did not dramatically alter the regional distribution of milk production.

Keywords

dairy policyoptimal controlstochastic coefficients
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 24 , Issue 2 , December 1992 , pp. 137 - 147
Copyright
Copyright © Southern Agricultural Economics Association 1992

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