Jean-Paul Chavas, University of Wisconsin-Madison, and Kwansoo Kim, Seoul National University, received the the 2005 JAAE Outstanding Journal Article Award for their paper "An Econometric Analysis of Price Dynamics in the Presence of a Price Floor: The Case of American Cheese."

"In this paper, we present an econometric analysis of the effects of a price floor on price dynamics and price volatility. A price floor (implemented as a part of government pricing policy) provides a censoring mechanism for price determinism. We specify and estimate a dynamic Tobit model under time-varying volatility. The model is applied to analyze the effects of a price support program on price dynamics and price volatility in the U.S. American cheese market. The econometric analysis provides useful insights on price dynamics in the presence of a governments-determined price floor."

The paper appears in the Journal of Agricultural and Applied Economics, volume 37, April 2005. To learn more about the research, contact Jean-Paul Chavas at <jchavas@wisc.edu>.