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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].
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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 

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