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Modeling Beef Quality Heterogeneity
Published online by Cambridge University Press: 28 April 2015
Abstract
The effects of various supply and demand shifts on beef price, quantity, andindustry welfare have been widely studied under the assumption of beefquality homogeneity. In this paper, we construct a model of the beef sectorthat incorporates differences in beef quality. The model is used to analyzethe effect of supply and demand shifts on changes in prices and quantitiesof high- and low-quality beef and changes in revenue accruing to producersof high- and low-quality beef. Model results indicate that supply and demandshocks have the potential to alter the average quality of beef on the marketand the price premium charged for high-quality beef, which has importantimplications for retailers selling quality-differentiated beef and producersselling cattle on a grid.
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- Copyright © Southern Agricultural Economics Association 2005
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