Welfare implications of stabilizing consumption and production

Abraham Subotnik, James P. Houck

Research output: Contribution to journalArticlepeer-review


Some economists are now urging the use of buffer stocks to help stabilize farm and food prices. Moreover, price stabilization has been shown to be socially beneficial from a theoretical point of view. Our purpose is to analyze the welfare implications of stabilized consumption and production and to compare them with the known implications of stabilized prices. It is shown that stabilized consumption is the least beneficial in its welfare implications. The relation between the gains from stabilization and the size of buffer stocks necessary to achieve stabilization also is analyzed. Finally, the presentation is extended to cover instability due to fluctuations in export demand.

Original languageEnglish
Pages (from-to)13-20
Number of pages8
JournalAmerican Journal of Agricultural Economics
Issue number1
StatePublished - Feb 1976
Externally publishedYes


  • Buffer stocks
  • Consumption stabilization
  • Export stabilization
  • Price stabilization
  • Production stabilization
  • Welfare gains

ASJC Scopus subject areas

  • Agricultural and Biological Sciences (miscellaneous)
  • Economics and Econometrics


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