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Title: |
The Welfare and Resource Allocation
Implications of the U.S. Dairy Quotas |
| Author: |
Flynn, Joseph
E.; Reinert, Kenneth A. |
| Author
Affiliation: |
US ITC;
Kalamazoo College |
| Source: |
International Economic Journal, Summer 1993, v. 7, no. 2, pp. 91-108 |
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Publication Date: |
Summer 1993 |
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Abstract: |
This paper examines the welfare and
resource allocation implications of the U.S. dairy quotas. A computable
general equilibrium model detailing five dairy sectors and nine
aggregate sectors is calibrated to a 1989 benchmark of the U.S. economy.
The model is used to simulate the removal of the U.S. dairy quotas both
with and without a first-best subsidy to maintain a dairy farm output
objective. Welfare, production, trade, and employment results are
provided. The welfare cost of the U.S. dairy quotas ranges from $0.7 to
$1.0 billion. The first-best subsidy ranges from $2.0 to $2.3 billion or
approximately $1.4 million per full-time equivalent job maintained in
the dairy farm sector. |
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