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