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Multi-Market Economic Analysis of Food Policy and Agricultural Technology

Yunkyung Lee, University of Nebraska - Lincoln

Abstract

This dissertation studies the market and welfare effects of a sugar-sweetened beverages (SSBs) tax policy and the adoption of gene-edited technologies in soybean production, aimed at increasing the domestic consumption of healthy foods and beverages. The two essays utilize different methodologies to analyze the impacts of the SSBs tax policy and gene-edited technologies on the market for beverages and crop production, respectively, and the welfare of the interest groups involved. The first essay studies the market and welfare effects of a nationwide SSBs tax. The study develops a theoretical framework that considers (a) the interaction of sugary drinks and their healthier substitutes (i.e.,100% fruit juice), (b) differences in consumer preferences, (c) differences in producer agronomic characteristics, and (d) imperfect competition among the beverage firms involved. The introduction of a $0.01 per ounce tax is shown to reduce soda firms’ profits by an astounding 81.7%, while increasing fruit juice firms’ profits by 52.9%. The introduction of this tax benefits fruit producers, while hurting crop producers and beverage consumers. Although the SSBs tax is shown to reduce consumer welfare the most, consumer welfare losses can be offset by the healthcare cost savings from reduced SSBs consumption. The second essay studies the market and welfare impact of a gene-edited technology on the U.S. soybean and oil markets. In 2018, genetically edited high-oleic soybeans were introduced to the domestic farmers first as there was an increasing consumer demand for healthy substitutes of low-oleic oils and trans-fat regulation in processed foods. We use an equilibrium displacement model (Perrin, 1997) to represent the current supply chain of soybean and related markets and introduce two demand and supply shocks (a) an increased demand for high-oleic oil, (b) a decreased demand for low-oleic oil, (c) a greater accessibility of high-oleic soybean seed, and (d) a higher marginal cost of high-oleic soybean production. Results show that farmers, who own inputs, and adopt a new high-oleic soybean seed, realize the greatest welfare gains.

Subject Area

Agricultural economics|Public policy

Recommended Citation

Lee, Yunkyung, "Multi-Market Economic Analysis of Food Policy and Agricultural Technology" (2021). ETD collection for University of Nebraska-Lincoln. AAI28865347.
https://digitalcommons.unl.edu/dissertations/AAI28865347

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