Explaining variations in the price of dairy quota: Flow returns, liquidity, quota characteristics, and policy risk

Journal Article (Journal Article)

An econometric model based on the net present value model is used to examine factors that drive the variation of California dairy quota values over a 29-year period. The results suggest the price of quota is based on expected returns, variations in quota owner liquidity, and the risk of policy default. The dominant influence on the variation of the quota price was the historical variation in monthly flow of net benefits from owning quota. This analysis confirms that the rate of return to quota rises in periods of policy uncertainty.

Duke Authors

Cited Authors

  • Wilson, NLW; Sumner, DA

Published Date

  • April 1, 2004

Published In

Volume / Issue

  • 29 / 1

Start / End Page

  • 1 - 16

International Standard Serial Number (ISSN)

  • 1068-5502

Citation Source

  • Scopus