Hostname: page-component-78c5997874-mlc7c Total loading time: 0 Render date: 2024-11-13T00:41:20.907Z Has data issue: false hasContentIssue false
  • English
  • Français

The Impact of Regulatory Change on Retail Pricing: The New York State Milk Price Gouging Law

Published online by Cambridge University Press:  15 September 2016

Adam. N. Rabinowitz  and
Yizao Liu
Adam. N. Rabinowitz*
Affiliation:
Department of Agricultural and Resource Economics and a research associate in the Zwick Center for Food and Resource Policy at University of Connecticut
Yizao Liu
Affiliation:
Department of Agricultural and Resource Economics at University of Connecticut
*
Correspondence: Adam Rabinowitz ▪ Department of Agricultural and Resource Economics ▪ University of Connecticut ▪ 1376 Storrs Road, Unit 4021 ▪ Storrs, CT 06269-4021 ▪ Phone 860.486.2826 ▪ Email [email protected].
Get access

Abstract

This study examines the causal effect of a change in administration of the New York State milk price gouging law on retail milk prices. Specifically, we focus on the November 2008 shift from a threshold pricing policy that consisted of monthly announced prices to a fixed margin policy. Using a regression discontinuity approach, we find lower prices and thus increased consumer welfare for retail milk purchasers in New York State. Furthermore, the change in application of the law may have eliminated previously hypothesized coordination in pricing by retailers through a more competitive retail milk environment.

Keywords

milkprice gougingregression discontinuity designregulatory policyretail prices
Type
Selected Papers
Information
Agricultural and Resource Economics Review , Volume 43 , Issue 1 , April 2014 , pp. 178 - 192
Copyright
Copyright © 2014 Northeastern Agricultural and Resource Economics Association 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Angrist, J.D., and Lavy, V. 1999. “Using Maimonides' Rule to Estimate the Effect of Class Size on Scholastic Achievement.” Quarterly Journal of Economics 114(2): 533–575.Google Scholar
Bento, A.M., Kaffine, D., Roth, K., and Zaragoza, M. Forthcoming. “The Unintended Consequences of Regulation in the Presence of Multiple Unpriced Externalities: Evidence from the Transportation Sector.” The American Economic Journal: Economic Policy.Google Scholar
Bolotova, Y.V., and Novakovic, A.M. 2012. “The Impact of the New York State Milk Price Gouging Law on the Price Transmission Process and Supermarket Pricing Strategies in the Fluid Whole Milk Market.” Agribusiness 28(4): 377–399.Google Scholar
Bonanno, A., and Lopez, R.A. 2005. “Private Label Expansion and Supermarket Milk Prices.” Journal of Agricultural and Food Industrial Organization 3: Article 2.Google Scholar
Carman, H.F., and Sexton, R.J. 2005. “Supermarket Fluid Milk Pricing Practices in the Western United States.” Agribusiness 21(4): 509–530.Google Scholar
Cotterill, R.W. 2006. “Pricing and Policy Problems in the Northeast Fluid Milk Industry.” Agricultural and Resource Economics Review 35(2): 239–250.Google Scholar
Davis, L.W. 2008. “The Effect of Driving Restrictions on Air Quality in Mexico City .“ Journal of Political Economy 116(1): 38–81.Google Scholar
Grill-Goodman, J. 2013. “Cold Beverages: PLBuyer Takes a Look at How Private Label Refrigerated Juices and Dairy and Nondairy Options Can Stand Out in the Beverages Market.” PLBuyer, May 10. Available at www.privatelabelbuyer.com/articles/print/87446-cold-beverages.Google Scholar
Hahn, J., Todd, P., and Van der Klaauw, W. 2001. “Identification and Estimation of Treatment Effects with a Regression Discontinuity Design.” Econometrica 69(1): 201–209.Google Scholar
Hendrickson, M., Heffernan, W.D., Howard, P.H., and Heffernan, J.B. 2001. “Consolidation in Food Retailing and Dairy.” British Food Journal 103(10): 715–728.Google Scholar
Imbens, G.W., and Kalyanaraman, K. 2009. “Optimal Bandwidth Choice for the Regression Discontinuity Estimator.” NBER Working Paper 14726, National Bureau of Economic Research, Cambridge, MA.Google Scholar
Imbens, G.W., and Lemieux, T. 2008. “Regression Discontinuity Designs: A Guide to Practice.” Journal of Econometrics 142(2): 615–635.Google Scholar
Johnson, R.N. 1985. “Retail Price Controls in the Dairy Industry: A Political Coalition Argument.” Journal of Law and Economics 28(1): 55–75.CrossRefGoogle Scholar
Lee, D.S., and Lemieux, T. 2009. “Regression Discontinuity Designs in Economics.” NBER Working Paper 14723, National Bureau of Economic Research, Cambridge, MA.Google Scholar
Rabinowitz, A.N. 2012. “A Comparative Analysis of Retail Milk Pricing with and without State Pricing Policies.” Paper presented at the Northeastern Agricultural and Resource Economics Association 2012 annual meeting, Lowell, MA.Google Scholar
Rabinowitz, A.N., and Cotterill, R.W. 2009. “The Need for New Milk Pricing Policies.” Invited testimony to the Environment Committee of the Legislature of the State of Connecticut.Google Scholar
Romain, R., Doyon, M., and Frigon, M. 2002. “Effects of State Regulations on Marketing Margins and Price Transmission Asymmetry: Evidence from the New York City and Upstate New York Fluid Milk Markets.” Agribusiness 18(3): 301–315.Google Scholar
Thistlethwaite, D.L., and Campbell, D.T. 1960. “Regression-Discontinuity Analysis: An Alternative to the Ex-Post Facto Experiment.” Journal of Educational Psychology 51(6): 309–317.Google Scholar
Van der Klaauw, W. 2002. “Estimating the Effect of Financial Aid Offers on College Enrollment: A Regression-Discontinuity Approach.” International Economic Review 43(4): 1249–1287.Google Scholar