A conceptual clarification of the sources and meaning of cross-sectional price variability is used to motivate a theoretical and econometric framework for the estimation of cross-sectional demand functions. Quality effects are distinguished from supply-related price variability to identify cross-sectional demand for disaggregated food commodities. An empirical application using data from the 1977-78 Nationwide Food Consumption Survey indicates that parameter differences resulting from a failure to adjust cross-sectional prices for quality effects are likely to be small for relatively homogenous, disaggregated food commodities.

We formulate an econometric model of fluid milk expenditures, taking into account two important characteristics: expenditures may be censored at zero and may be interdependent across milk type. Censoring of fluid milk expenditures is addressed with a generalized Tobit system estimator. Interdependence of milk expenditures is examined through a likelihood function with no restrictions on elements of the Engel curve error covariance matrix. Expenditure function parameters are estimated using a March 1991 to March 1992 U.S. consumer panel.

Many people share the view that too little is invested in R & D in agriculture. The relationship between several measures of productivity and research expenditure was estimated using data from ABARE's surveys of broadacre industries and a new data series on R & D expenditure for the period 1953 to 1988. The internal rate of return to research was estimated to be in the range of 15 to 40 percent which does not provide strong evidence that Australia is either under-or over-investing in public research.

The U.S. dairy sector has experienced several reforms in both government price support and classified pricing under state and federal milk marketing orders. An interregional spatial market equilibrium model of the U.S. dairy sector is used to provide quantitative measures of the aggregate and regional impacts of alternative domestic deregulation scenarios. The model simulates the allocation of farm milk used in the production of nine dairy products in a way consistent with milk component balances for milk fat, protein, and carbohydrate both within and across regions. Results suggest current policies induce substantive aggregate and regional distortions relative to an unregulated policy context.