The impact of quota rent and supply elasticity estimates for EU dairy policy evaluation: a comparative analysis

Roel Jongeneel, Axel Tonini

Published: 03.07.2009  〉 Jahrgang 58 (2009), Heft 5/6  〉 Resort: Articles 
Submitted: N. A.   〉 Feedback to authors after first review: N. A.   〉 Accepted: N. A.

ABSTRACT

The aim of this paper is to gain better insights in the implications of some of the most important economic assumptions and empirical choices made in partial equilibrium models focusing on dairy. Three partial equilibrium models are considered: the AGricultural Member states MODeling (AGMEMOD) model, the Common Agricultural Policy SIMulation (CAPSIM) model, and the European Dairy Industry Model (EDIM). This paper analyses how quota rent and supply elasticity estimates, as they are used in these models affect milk output and price projections. Sensitivity analysis is also considered in order to take into account uncertainty in quota rent and supply elasticity estimates. Taking into account the considered uncertainty our best estimate is in case of abolishing the quota the EU’s aggregate milk production will expand, with the increase being somewhere in the range between 5 and 15%.
CONTACT AUTHOR
DR. AXEL TONINI
European Commission, Joint Research Centre (JRC)
Institute for Prospective and Technological Studies (IPTS)
Edificio EXPO
c/Inca garcilaso, 3, E-41092 Seville, Spain
phone: +(34)-954-48 83 95, fax: +(34)-954-48 84 34
e-mail: axel.tonini@ec.europa.eu
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