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Three Essays on the Political Economy of Live Stock Sector in Turkey

My dissertation consists of three empirical essays where I analyze animal products consumption and marketing. First using cross-sectional household data, I investigate the importance of consumption from home produce (self-provisioning) and conclude that studying food consumption decisions in isolation from production is not warranted for Turkey. I develop a testing procedure incorporated into linear approximation of the almost ideal demand system (LA/AIDS) model to formally test the relevance of food self-provisioning. Studying consumption in isolation from production leads significant overestimation of rural households' responsiveness to price and income signals especially for the dairy and egg products. Second I investigate the contribution of consumption from home produce to alleviate vulnerability to undernutrition in rural areas. I find that the level, depth and severity of food poverty to be least among rural households who engage in food self-provisioning and food self-provisioning reduce vulnerability to undernutrition. Moreover, food self-provisioning is concentrated in expensive calories from vegetables and dairy so self-provisioning rural households also have a more balanced diet. Finally I investigate whether milk processing firms abuse their oligopsony power to excessively profit themselves to the expense of milk farmers and final consumers. I look for evidence whether the speed of adjustment of processed milk price is same when farm-gate milk prices increase and decrease. I find no evidence that will point out any price gauging on the part of milk processors to benefit themselves. Actually I detect a long-term downward trend in processed milk prices coinciding with new major entries to milk processing industry.