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Dennis Rickert

Mathematical and Quantitative Economics Research Group, Toulouse

The Effectiveness of Environmental Public Policies in Multi-Level Food Supply Chains

Annual meeting: 2017

Fields-Topics: P6 Applied Maths,P7 Economics, Social Sciences

Type of talk: Fellows Speed Presentation

The Effectiveness of Environmental Public Policies in Multi-Level Food Supply Chains


After school, I decided to work at a homeless shelter to help people with serious problems to reintegrate into society and the job market. Following the social year, I started studying economics in Paderborn and Dublin to gain the B.Sc. and pursued studying in Düsseldorf to gain the M.Sc. in Economics. I appreciated being part of the academic world and enjoyed studying economic topics, in particular during writing my master thesis on demand estimation modelling. The next logical step was joining the “Düsseldorf Graduate School of Economics”, where classes in Advanced Microeconomics and Advanced Econometrics provided a comprehensive understanding of theoretical and empirical methods. Subsequently, I have worked on several empirical projects related to retailing markets, which shaped form and content of my dissertation. A three-month research visit in Toulouse enabled me to meet some of the leading researchers in the field of Industrial Organization and to gain valuable insights and initiate collaborations. However, equally important parts of my academic life were the teaching positions and positions as student guidance. Having obtained the PhD degree in October 2016, I feel prepared to implement my current research agenda, which aims at understanding environmental issues in vertical supply chains in interaction with strategic behavior of channel members.


The Effectiveness of Environmental Public Policies in Multi-Level Food Supply Chains

Agricultural production is one of the industries with the highest impact on the environment. Among agricultural activities, the dairy sector is a significant contributor to the climate change, and it raises further concerns in terms of eutrophication, land use, water use, and toxicity. Many countries support organic farming systems to address environmental problems since they generate fewer residues of pesticides than conventional agriculture and contribute to reducing the contamination of water sources and wildlife extinction. The objective of my project is to assess the environmental impact of organic-friendly policies in agrifood markets. Since the environmental impact of food is mostly determined by household diet and consumption habits, taxes on organic products or subsidies on conventional products can be used to address environmental problems, and provide incentives for farmers and processors to promote sustainability. However, this is a challenging task due to the strategic behavior of the channel members, who potentially exploit their market power, which affects the effectiveness of public policies. To evaluate the effectiveness of environmental public policies, we develop a structural model of demand and supply for the fluid milk sector allowing for strategic behavior of manufacturers, retailers, and farmers. We build on existing literature to estimate consumer demand based on retail scanner data and infer on both retailer and processor price-cost margins without observing cost data. The innovativeness of our approach is the integration of a strategic farm level into a three-tier supply chain model, which allows predicting changes of channel members’ behavior in response to public policies. Having accurately modeled the complexity of the supply chain, we assess the impact of environmental public policies on prices, profits, and environmental indicators. We compare the efficiency of organic-friendly policies at the consumer-, at the processing-, and at the farm level.

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