Hostname: page-component-78c5997874-g7gxr Total loading time: 0 Render date: 2024-11-05T19:39:29.514Z Has data issue: false hasContentIssue false
  • English
  • Français

Modeling Beef Quality Heterogeneity

Published online by Cambridge University Press:  28 April 2015

Jayson L. Lusk  and
F. Bailey Norwood
Jayson L. Lusk
Affiliation:
Department of Agricultural Economics, Oklahoma State University, Stillwater, OK
F. Bailey Norwood
Affiliation:
Department of Agricultural Economics, Oklahoma State University, Stillwater, OK
Get access Rights & Permissions [Opens in a new window]

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.

Keywords

beefequilibrium displacement modelmultisector modelquality heterogeneityQ11Q18
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 37 , Issue 3 , December 2005 , pp. 603 - 618
Copyright
Copyright © Southern Agricultural Economics Association 2005

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Alchian, A.A., and Allen, W.R.. University Economics. Belmont, CA: Wadsworth Publishing Company, 1964.Google Scholar
Alston, J.M. “Research Benefits in a Multimarket Setting: A Review.” Review of Marketing and Agricultural Economics 59(April 1991):23–52.Google Scholar
Borcherding, T.E., and Silberberg, E.. “Shipping the Good Apples Out: The Alchian and Allen Theorem Reconsidered.” Journal of Political Economy 86(1978):131–38.Google Scholar
Brester, G.W., and Schroeder, T.C.. “The Impacts of Brand and Generic Advertising on Meat Demand.” American Journal of Agricultural Economics 77(November 1995):969–79.Google Scholar
Brester, G.W., and Wohlgenant, M.K.. “Estimating Interrelated Demands for Meats Using New Measures for Ground and Table Cut Beef.” American Journal of Agricultural Economics 73(1991):1182–95.Google Scholar
Chung, C., and Kaiser, H.M.. “Distribution of Gains from Research and Promotion in Multi-Stage Production Systems: Comment.” American Journal of Agricultural Economics 81,3(August 1999):593–97.Google Scholar
Crespi, J.M., and Marette, S.. “Generic Advertising and Product Differentiation.” American Journal of Agricultural Economics 84(2002):691–701.Google Scholar
Diewert, W.E. “A Note on the Elasticity of Derived Demand in the N-Factor Case,” Economica 38,150(May 1971):192–98.Google Scholar
Diewert, W.E. “The Comparative Statics of Industry Long-Run Equilibrium” The Canadian Journal of Economics 14(1981):78–92.Google Scholar
Eales, J.S., and Unnevehr, L.J.. “Demand for Beef and Chicken Products: Separability and Structural Change.” American Journal of Agricultural Economics 70(1988)521–33.Google Scholar
Eales, J.S., and Unnevehr, L.J.. “Simultaneity and Structural Change in U.S. Meat Demand.” American Journal of Agricultural Economics 75(1993):259–68.Google Scholar
Freebairn, J.W., Davis, J.S., and Edwards, G.W.. “Distribution of Research Gains in Multistage Production Systems.” American Journal of Agricultural Economies 64(February 1982):39–46.Google Scholar
Greer, H.C., and Trapp, J.N.. “Impact of Alternative Grid Marketing Structures on Cattle Marketing Decisions.” Proceedings of the 2000 NCR-134 Conference on Applied Price Analysis, Forecasting, and Market Risk Management. Chicago, April 2000.Google Scholar
James, J.S. Aggregation and the Effects of Tax Policies in a Closed Economy. Internet site: http://www.personal.psu.edu/faculty/j/s/jsj2/research/research.htm. Accessed 6 October 2005.Google Scholar
James, J.S., and Alston, J.M.. “Taxes and Quality: A Market-Level Analysis.” Australian Journal of Agricultural Economics 26(September 2002): 417–45.Google Scholar
Lemieux, C.M., and Wohlgenant, M.K.. “Ex Ante Evaluation of the Economic Impact of Agricultural Biotechnology: The Case of Porcine So-matotrophin.” American Journal of Agricultural Economics 71(November 1989):903–14.Google Scholar
Livestock Marketing Information Center (LMIC). Various data sets. Internet site: http://lmicl.co.nrcs.usda.gov.Google Scholar
Lorenzen, C.L., Miller, R.K., Taylor, J.F., Neely, T.R., Tatum, J.D., Wise, J.W., Buyck, M.J., Reagan, J.O., and Savell, J.W.. “Beef Customer Satisfaction: Trained Sensory Panel Ratings and Warn-er-Bratzler Shear Force Values.” Journal of Animal Science 81(2003): 143–49.10.2527/2003.811143xGoogle Scholar
Lusk, J.L., Little, R., Williams, A., Anderson, J., and McKinley, B.. “Utilizing Live Animal Ultrasound to Improve Livestock Marketing Decisions.” Review of Agricultural Economics 25(2003)293–17.10.1111/1467-9353.00054Google Scholar
Lusk, J.L., Marsh, T.L., Schroeder, T.C., and Fox, J.A.. “Wholesale Demand for USDA Quality Graded Boxed Beef and the Effects of Seasonality.” Journal of Agriculture and Resource Economics 26(July 2001):91–106.Google Scholar
McDonald, R.A., and Schroeder, T.C.. “Fed Cattle Profit Determinants Under Grid Pricing.” Journal of Agricultural and Applied Economics 35(April 2003):97–106.Google Scholar
McFadden, D.L. “Estimation Techniques for the Elasticity of Substitution and Other Production Parameters.” Production Economics: A Dual Approach to Theory and Applications, Volume II: Applications of the Theory of Production. Fuss, M. and McFadden, D.L., eds. Amsterdam: North Holland. (1978):73–123.Google Scholar
Mullen, J.D., Alston, J.M., and Wohlgenant, M.K.. “The Impact of Farm and Processing Research on the Australian Wool Industry.” Australian Journal of Agricultural Economics 33(1989): 32–47.Google Scholar
Mullen, J.D., Wohlgenant, M.K., and Farris, D.. “Input Substitution and the Distribution of Surplus Gains from Lower US Beef-Processing Costs.” American Journal of Agricultural Economics 70(1988):245–54.Google Scholar
Schroeder, T.C., and Graff, J.L.. “Estimated Value of Increased Pricing Accuracy for Fed Cattle.” Review of Agricultural Economics 22(Spring/Summer 2000):89–101.Google Scholar
Schroeder, T.C., Ward, C.E., Lawrence, J., and Feuz, D.M.. “Fed Cattle Marketing Trends and Concerns: Cattle Feeder Survey Results.” Kansas State University Agricultural Experiment Station and Cooperative Extension Service Bulletin MF-2561. Manhattan, KS, June 2002.Google Scholar
Unnevehr, L.J., Gomez, M.I., and Garcia, P.. “The Incidence of Producer Welfare Losses from Food Safety Regulation in the Meat Industry.” Review of Agricultural Economics 29(1998)186–201.10.2307/1349542Google Scholar
Wohlgenant, M.K. “Demand for Farm Output in a Complete System of Demand Functions.” American Journal of Agricultural Economics 71(May 1989):241–52.Google Scholar
Wohlgenant, M.K. “Distribution of Gains from Research and Promotion in Multi-Stage Production Systems: The Case of the US Beef and Pork Industries.” American Journal of Agricultural Economics 75(1993):642–51.Google Scholar
Wohlgenant, M.K. “Distribution of Gains from Research and Promotion in Multi-Stage Production Systems: Reply.” American Journal of Agricultural Economics 81,3(August 1999):598–600.10.2307/1244019Google Scholar