The welfare effects due to Canadian dairy supply management
LE3 .A278 2013
Bachelor of Arts
Since the early 2000s, the price of dairy products in Canada has been increasing significantly. Moreover, relative to other major economies such as the United States, the European Union and the Oceania region, Canada’s dairy products are consistently the most expensive. This paper will analyze the welfare effects due to Canadian dairy supply management through measuring the Dead-Weight Loss (DWL) for the year 2010. Data such as blend prices, total production and quota values are obtained through the Canadian Dairy Commission and the Canadian Dairy Information Center. Other required data, such as the demand elasticities, are obtained through a technical report by Moschini and Moro (1993). Other data such as the supply elasticity and total discount rate is observed and/or assumed from past work. Based on the calculated results, it is concluded that there was a DWL ranging from $307 million to $555 million in the year 2010.
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