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on Agricultural Economics |
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Issue of 2011‒01‒03
27 papers chosen by |
| By: | FAO Economic and Social Development Department |
| Abstract: | Recent bouts of extreme price volatility in global agricultural markets portend rising and more frequent threats to world food security. A new Policy Brief of the UN's Food and Agriculture Organization argues that countries should improve market functioning and equip themselves better to cope with the adverse effects of extreme volatility. Apart from improving global safety nets, countries can lower their vulnerability by raising agricultural productivity for a diverse set of crops that proves both competitive and sustainable, as well as by promoting dietary diversification. |
| Keywords: | rural development, hunger, food security, economic crisis, prices, agriculture |
| JEL: | Q18 Q11 O13 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fao:pbrief:12en&r=agr |
| By: | Gilberto M. Llanto; Jocelyn R. Badiola (Philippine Institute for Development Studies) |
| Abstract: | A recent publication of the UN Food and Agricultural Organization (FAO) has highlighted the food insecurity problem facing the globe: food production will have to increase by 70% in 2050 to keep up with a global population that is projected to grow from 6 billion to 9 billion. There has to be more investments in agriculture to improve productivity, which will be critical to the goal of achieving food security. There is scope for governments and the private sector cooperation in food production. The paper discusses innovative financing schemes geared to food production and identifies policy gaps, that is, areas where governments could intervene to enhance the workings of the market. |
| Keywords: | food insecurity, innovative financing schemes, value chain financing, covariant risks, risk management tools, index‐based insurance, warehouse receipts lending, trade finance |
| JEL: | Q18 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:2441&r=agr |
| By: | Jiang, Yong; Koo, Won W. |
| Abstract: | The purpose of this study is to examine the possible impacts of cap-and-trade climate policy on agricultural producers in North Dakota. In this study, we focused on carbon sequestration potential and production cost impacts of carbon prices, and explicitly considered farmer preferences and adaptation behavior to estimate the benefits and costs of greenhouse gas cap-and-trade. Based on empirically estimated farmer behavior models, a policy simulation with agricultural census data identified farmer acreage allocation for carbon sequestration, carbon offset supplies and revenues, the production cost impacts of carbon prices, and impacts on net farm income and their distributions among heterogeneous farmers. Our analysis found that: 1) farmer ex ante preferences in general were biased against carbon sequestration participation although farmer involvement increased with carbon prices; 2) with the fertilizer industry exempted from cap-and-trade regulation, the production cost impact would be small, and more than half of the farms would gain with a carbon price possibly greater than $10 per metric ton of carbon; and 3) the production cost impact with a caped fertilizer industry would be 2 times higher, and more than half of the farms or farmland would lose unless the carbon price could reach more than $55 per metric ton of carbon. |
| Keywords: | cap-and-trade, climate change, agricultural impacts, economics, carbon sequestration, Agricultural Finance, Financial Economics, |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:nddaae:98170&r=agr |
| By: | James, Laura |
| Abstract: | Biomass is being researched as a possible alternative to fossil sources of energy, in order to avoid externalities from fossil fuel use that affect the environment and the economy. Some biomass-based energy production systems may produce unwanted externalities in their own right, such as increasing the production pressure on the agricultural land base, resulting in a rise in prices of food commodities. Using marginal land for biomass production has been suggested as a solution. However, the definition of what constitutes marginal land is poorly understood. This paper provides a theoretical foundation for identification of marginal lands, and analyzes recent literature to assess how current usage of the term marginal correspond to the theoretical framework. Then, the paper devises empirical models that test possible methods of identification of the extensive margin of agricultural land in 19 counties in the state of Michigan. The models find that dynamic variables such as price changes have a statistically significant effect on land use change into and out of cropland. Land quality and regional effects are also statistically significant. |
| Keywords: | biomass, biofuel, marginal lands, extensive margin, Agribusiness, Agricultural and Food Policy, Community/Rural/Urban Development, Crop Production/Industries, Environmental Economics and Policy, Production Economics, Research and Development/Tech Change/Emerging Technologies, Resource /Energy Economics and Policy, Q15 Land Ownership and Tenure, Land Reform, Land Use, Irrigation, Agriculture and Environment, Q28 Government Policy, Q42 Alternative Energy Sources, Q48 Government Policy, R14 Land Use Patterns, R52 Land Use and Other Regulations, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:midagr:98203&r=agr |
| By: | Patel, Vasita; Selim, Sheikh (Cardiff Business School) |
| Abstract: | Following the rural reform in 1978 a series of agricultural reforms were introduced in China. The main aim of these reforms was to create incentives for the farmers to produce more. The nineties' price reform that was aimed at deregulating the agricultural market eventually resulted in a huge drop in agricultural production; this apparently motivated the government to take over the control of agricultural prices in 1998. In this paper we examine how and to what extent these reforms affected the productivity and welfare of wheat farmers in China for a dataset that covers all the major rural reforms undertaken in China. We find that the nineties' price reforms resulted in a high magnitude of effort-response from wheat farmers which led to a faster growth of the incentive component of productivity. Due to random weather shocks this response did not result in the expected level of profit and as a result the farmers suffered a huge decline in welfare. The regulations introduced in 1998 destroyed the incentive-induced growth in TFP. In general wheat farmers in China responded highly when markets were made more competitive, and their effort-response for flat subsidies (e.g. at the ones introduced in the eighties) was very marginal. |
| Keywords: | China; Incentives; TFP; Agriculture; Wheat Production |
| JEL: | N55 O13 O53 Q12 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:cdf:wpaper:2010/16&r=agr |
| By: | Todd, Jessica E.; Mancino, Lisa; Ephraim, Leibtag; Tripodo, Christina |
| Abstract: | The Quarterly Food-at-Home Price Database (QFAHPD) was developed to provide market-level food prices that can be used to study how prices affect food choices, intake, and health outcomes. This report presents a detailed description of the methodology used to construct the QFAHPD. The database, constructed from 1999-2006 Nielsen Homescan data, includes quarterly observations on the mean price of 52 food categories for 35 market groups covering the contiguous United States. Data from 2006 indicate that cross-market price variation can be as much as three to four times greater than annual food price infl ation. |
| Keywords: | Nielsen Homescan, food prices, diet quality, market prices, Food Consumption/Nutrition/Food Safety, |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:uerstb:97799&r=agr |
| By: | Wilson, William W.; Dahl, Bruce |
| Keywords: | Agricultural Finance, Crop Production/Industries, Marketing, |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:ags:nddaae:98202&r=agr |
| By: | Roehlano M. Briones (Philippine Institute for Development Studies) |
| Abstract: | Sustaining and accelerating agricultural growth remains a development imperative in view of persistent rural poverty and emerging threats to food security. While growth can be achieved by expansion of agricultural area and input intensification, growth through improvement in productivity is a promising option. However, productivity growth appears to be a relatively low priority for policy. Rather, the agricultural strategy is oriented toward domestic protection to achieve self‐sufficiency and to support production by generous subsidies. In contrast, an alternative strategy may be one that is competition‐oriented and productivity‐based, i.e., one that favors integration with the international economy through trade, as well as making domestic investments targeted at productivity growth. Scenarios for Philippine agriculture under these policy options are evaluated using a new supply and demand model (Agricultural Multi‐market Model for Policy Evaluation or AMPLE). Model simulations suggest that: rapid productivity growth, even when combined with trade liberalization, is generally favorable for farmers and consumers based on improved outlook on production, exports, and food consumption. In contrast, trade liberalization alone has a contractionary effect on agriculture; and production support is a costly instrument for promoting agricultural growth. The model experiments suggest that a back‐to‐basics strategy for agriculture, incorporating various productivity‐based instruments such as investments in R&D, extension, rural infrastructure, protection of the resource base of agriculture, and even human capital formation and institutional reforms, are key to long‐term agricultural growth. |
| Keywords: | Productivity growth, agriculture, scenario analysis, supply and demand, technological change |
| JEL: | Q10 Q11 Q16 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:2451&r=agr |
| By: | Chakravorty, Ujjayant; Hubert, Marie-Hélène; Moreaux, Michel; Nostbakken, Linda |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:23865&r=agr |
| By: | Eric Bahel; Walid Marrouch |
| Abstract: | In this paper we study the effects on the food market of the introduction of biofuels as a substitute for fossil fuel in the energy market. We consider a world economy with an oil cartel and a competitive fringe of farmers producing energy in the form of biofuels. Farmers also produce food and sell it on the world food market. We determine the resulting relationship between prices in the energy and food markets and characterize the cartel's extraction path and the price path of energy. We show that the price of food will be growing as long the oil stock is being depleted, whether population is growing or not, and that it will keep growing after the oil stock is exhausted if population is growing. |
| Keywords: | biofuel, oil depletion, population growth, energy price, food price |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:vpi:wpaper:e07-26&r=agr |
| By: | Shaik, Saleem; Atwood, Joseph A.; Helmers, Glenn A. |
| Abstract: | The proportions of land values generated by farm program payments and farm returns are examined using an extended income capitalization model. The extended income capitalization model addresses the identification issue introduced by the counter-cyclical nature of farm program payments and farm returns. Procedures are presented that allow the estimation of agriculture land value shares without requiring explicit knowledge or assumptions with respect to the net land rental shares of farm returns or farm program payments. Results from the panel recursive or triangular-structure simultaneous equation model applied to 48 states in the U.S. for the period 1938 to 2006 indicate on average 41-45.6 percent and 54.4-59 percent of the agricultural land values can be identified with farm program payments and farm returns respectively. Spatially, at the resource regional level the contribution of farm program payments was as low as 16.8 percent in Eastern Upland region compared to a high of 51 percent in the Southern Plains region. |
| Keywords: | Farm programs payments, Land values, Extended income capitalization model, Panel recursive/triangular structure simultaneous equation model, Resource regional analysis, U.S. State-level data, 1938-2007., Agricultural Finance, Farm Management, |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:nddaae:98201&r=agr |
| By: | Rahut, Dil Bahadur; Velásquez Castellanos, Iván; Sahoo, Pravakar |
| Abstract: | Increased market integration and commercialization of traditional agriculture in the Himalayas is part of a development strategy towards growth and better standard of living. More than 97 percent households depend upon agricultural and allied activities for livelihood which constitutes 30 percent of the household income. Given the importance of commercialization of agriculture to improve the productivity, per capita income and thereby the standard of living in the Himalayas, we examine the factors affecting the commercialization of agriculture on the basis of primary survey data. The results reveal that the land size, gender of the household head, livestock assets, ethnicity, education and location are important determinants of commercialization. Although commercialization of agriculture is considered as stimulated private-sector activity, public policy is essential to facilitate driving forces viz., trade and market reforms, rural infrastructure, and the institutional framework for legal and contractual arrangements between farmers and processors. |
| Keywords: | Agriculture, Agricultural policy, Rural societies, Market, Household, India, Himalaya, Commercialization, Rural, Poverty, Production |
| JEL: | D6 I30 O1 O13 O53 Q1 Q13 R00 R11 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper265&r=agr |
| By: | Patrice Guillotreau (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272); Véronique Le Bihan (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272); Sophie Pardo (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272) |
| Abstract: | The article analyses risk perception in shellfish farming as well as farmers' willingness to rely on coverage mechanisms. Factor and econometric analyses (logit and ordered multinomial logit models) have shown that a number of socio-economic factors specific to farmers and their businesses contribute to defining their degree of risk perception and reliance on management tools. Beyond the conventional self-protective mechanisms, the study will focus on farmers' willingness to rely on risk-transfer mechanisms that the market has so far failed to provide. |
| Keywords: | Shellfish farmers, risk perception, logit and ordered multinomial logit models, factor analyses, coverage instruments |
| Date: | 2010–12–17 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00547701_v1&r=agr |
| By: | FAO Economic and Social Development Department |
| Abstract: | Emergency situations have become increasingly frequent over the past 25 years, often coupled with acute and chronic food insecurity in the affected countries. International responses to these crises have generally focused on addressing immediate humanitarian needs, as evidenced by the growing share of food aid that is channelled to emergencies. However, achieving lasting food security would often require an integrated development approach that combines short-term relief measures with longer-term mitigation strategies. A reformed Food Aid Convention (FAC) could provide the institutional framework for more effective interventions. |
| Keywords: | rural development, hunger, food security, economic crisis, prices, agriculture |
| JEL: | Q18 Q11 O13 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fao:pbrief:11en&r=agr |
| By: | Rajesh Mehta (Research and Information System for Developing Countries) |
| Abstract: | The paper tries to understand precisely how the food safety regulations applied by the industrialized countries have an effect on India’s export of processed food to these markets. It also examines the information deficiencies of Indian firms about international food safety standards, which influence their current performance. In the light of these objectives the paper tests a few hypotheses using primary data. This has been carried out by estimating gravity model using three-dimensional statistics. Our results show that India stood to loose around 156 per cent of actual exports because of higher stringent food safe regulations in select developed countries. It also proves that foreign collaborators provide better information about the prevailing food safety regulations and how to meet those obligations. |
| Keywords: | India’s processed food export, international food safety standards, Gravity Model, fixed effects model, random effect model |
| JEL: | F10 L66 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:eab:tradew:2466&r=agr |
| By: | Chia-Lin Chang (National Chung Hsing University); Li-Hsueh Chen (California State University-Los Angeles); Shawkat Hammoudeh (Drexel University); Michael McAleer (Erasmus University Rotterdam, Tinbergen Institute, The Netherlands, and Institute of Economic Research, Kyoto University) |
| Abstract: | This paper examines the long- and short-run asymmetric adjustments for nine pairs of spot and futures prices, itemized as three own pairs for three different bio-fuel ethanol types, three own pairs for three related agricultural products, namely corn, soybeans and sugar, and three cross pairs that included hybrids of the spot price of each of the agricultural products and an ethanol futures price. Most of the spreads' asymmetric adjustments generally happen during narrowing. The three ethanol pairs that contain the eCBOT futures with each of Chicago spot, New York Harbor spot and Western European (Rotterdam) spot show different long- run adjustments, arbitrage profitable opportunities and price risk hedging capabilities. The asymmetric spread adjustments for the three grains are also different, with corn spread showing the strongest long-run widening adjustment, and sugar showing the weakest narrowing adjustment. Among others, the empirical analysis indicates the importance of potentially hedging the spot prices of agricultural commodities with ethanol futures contracts, which sends an important message that the ethanol futures market is capable of hedging price risk in agricultural commodity markets. The short-run asymmetric adjustments for individual prices in the nine pairs (with exception of the corn own pair underscore the importance of futures prices in the price discovery and hedging potential, particularly for ethanol futures. |
| Keywords: | Long-run and short-run asymmetric adjustments, ethanol, agricultural products, arbitrage opportunities, hedging, widening and narrowing adjustment. |
| JEL: | E43 Q11 Q13 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:kyo:wpaper:752&r=agr |
| By: | Latruffe, Laure; Nauges, Céline |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:23861&r=agr |
| By: | Gerardo Marletto; C. Silling |
| Abstract: | The environmental impact of food transportation depends on the trade-off between (increased) distances and the efficiency of modern logistics procedures. The relevant literature points out that such a trade-off is place and product specific, thus supporting the broadening of “food miles” research to new territories and product categories. Here we analyze the environmental impact – in terms of global warming, local pollution and traffic congestion – of two different canned tomatoes brands produced in Italy and consumed in Sassari (Sardinia, Italy). The supply chain of the first brand extends over the whole continental Italian territory, while the second one is mainly located in Sardinia. Different distribution patterns (modern vs. independent retail) and shopping modalities (foot vs. car) are also considered. The case study shows that the national supply chain contributes to global warming much more than the regional one, and therefore supports the view that shorter supply chains can be more sustainable than efficient logistics. The case study also confirms the very high impact of shopping by car, both in terms of global warming and local pollution. |
| Keywords: | food miles; transportation; logistics; environmental impact; Italy; canned tomatoes |
| JEL: | Q51 L99 Q56 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:201025&r=agr |
| By: | Adolf Stroombergen (Infometrics Ltd) |
| Abstract: | This research takes a closer look at the effects of climate change on New Zealand agriculture and on the wider economy, including indirect international effects such as changes in the prices of goods exported from and imported to New Zealand, as well as carbon prices and policies. Economic loss from short term catastrophic events such floods and landslides is not investigated. Infometrics (2007) presented an initial quantitative analysis of some of the above issues. In this paper they update the part of that report that looked at the effect of climate change on agricultural commodity prices, by considering some new scenarios based on international research since 2007, and expand the time-period from 2025 to 2070. |
| Keywords: | agricultural commodity prices, GE modelling |
| JEL: | F18 Q1 Q54 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:mtu:wpaper:10_14&r=agr |
| By: | Van Hecken, Gert; Bastiaensen, Johan; Vásquez, William F. |
| Abstract: | The concept of Payments for Environmental Services (PES) has gained increasing popularity in the conservation literature as it offers the potential to reconcile opposing social and ecological objectives by paying land owners for the positive environmental externalities they generate on their land. Based on extensive fieldwork in Matiguás, Nicaragua, this paper aims to complement the literature on locally-financed PES schemes in agricultural watersheds. Using both qualitative and quantitative research approaches, it inquires into the under-researched demand-side potential by assessing local willingness to pay (WTP) for water and watershed services in an upstream-downstream setting. Our results show a significant WTP for improved water services and a clear local consciousness about upstream-downstream interdependencies, suggesting potential for a ‘Coasean’ water-related PES scheme. Contrary to expectations, the feasibility of such a locally-financed PES system is however undermined by prevailing local perceptions of agricultural externalities and entitlements, questioning the fairness of such payments. Also low levels of mutual trust seem to undermine the credibility of the PES framework. The viability and acceptance of locally-financed PES mechanisms will thus also depend on the prior social production of cognitive synergies and improved collective action. |
| Keywords: | Payments for Environmental Services; Watershed; Willingness to pay; Fairness; Externalities; Institutions |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:iob:dpaper:2010004&r=agr |
| By: | Giovannucci, Daniele; Pierrot, Joost; Kasterine, Alexander |
| Abstract: | The coffee segment that is known as sustainable has grown much faster than nearly any other industry segment in the past decade. It is difficult to understand both the market trends and the impacts of these coffees and it is therefore difficult for producers, industry and even consumers to make rational decisions. This paper consolidates the best available data on the global trade volumes for all of the certified (or verified) coffee in the past decade and the distribution by major geographic regions. |
| Keywords: | sustainable; certification; standard; voluntary; Fairtrade; FLO; Organic; Utz Certified; Rainforest Alliance; 4C; coffee |
| JEL: | H4 F14 Q0 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:27551&r=agr |
| By: | Alexei Kireyev |
| Abstract: | The paper models export taxation of a primary commodity in a large country under two hypotheses about the structure of its export market. The first is perfect competition among exporters, where there is an indefinite number of buyers of the local product and at least a partial pass-through of international prices to local producers. The second is an oligopsony, a market structure in some low-income countries where numerous scattered local producers face a few powerful exporters that can influence domestic prices. For both hypotheses, export taxation can be justified on efficiency grounds only for the country that adopts the tax. Designed correctly, a low export tax may be welfare-enhancing for that country but will always be welfare-reducing for its trading partners. The models of export taxation for both hypotheses are calibrated for the illustrative case of cocoa exports from Côte d’Ivoire. |
| Keywords: | Agricultural exports , Cocoa , Commodity prices , Competition , Côte d'Ivoire , Export markets , Export taxes , International trade , Low-income developing countries , Price structures , Taxation , |
| Date: | 2010–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:10/269&r=agr |
| By: | Chen, Susan |
| Abstract: | Forests and timber are important natural resources in the state of Michigan. Forestlands make of 53% of the total land area and the forest related industry and manufacturing sector in Michigan generate approximately $12 billion to the stateâs economy. Though forestry related industry and manufacturing is a multi-billion dollar industry that affects millions of acres of land in Michigan, there have been few recently published articles regarding timber stumpage appraisal in the state particularly about the northern hardwood forests. This paper uses a hedonic timber stumpage appraisal model to calculate stumpage value for state managed forests. The model uses data from Michigan Department of Natural Resources to estimate the affect of various parameters on the accepted bid of public timber sales. From our results we found there were certain parameters that were statistically significant in raising the final bid price of a sales and this may have implications for the management of state owned forest lands. |
| Keywords: | Forests, Hedonics, Stand valuation, Stumpage value, Environmental Economics and Policy, Resource /Energy Economics and Policy, Q23 Forestry, Q51 Valuation of Environmental Effects, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ags:midagr:98072&r=agr |
| By: | Szogs, Astrid (ATPS, Tanzania); Mwantima, Kelefa (UDSM, University of Dar es Salaam) |
| Abstract: | We use a case study approach to examine whether new knowledge and technological capabilities can be acquired by a set of informal firm operating in the agricultural subsistence sector in Tanzania as a result of interaction with the College of Engineering and Technology at the University of Dar es Salaam. We find that by becoming members of Gatsby Club, firms have been introduced to important new organisations which assisted in the process of new knowledge acquisition. Technological capabilities have mainly been improved but also acquired; mainly at basic level. |
| Keywords: | Technological capabilities; Knowledge acquisition; Informal firm; Agricalture sector; Tanzania |
| JEL: | D80 O30 O39 O55 Q16 |
| Date: | 2010–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2010_004&r=agr |
| By: | Nanak Kakwani (Philippine Institute for Development Studies) |
| Abstract: | In this paper, we present a new model for constructing poverty lines. The model uses consumer theory to construct both food and non-food poverty thresholds. Although one cannot completely eliminate the value judgments inherent in the construction of poverty thresholds, this model helps to make the ad hoc assumptions that are generally made more justifiable. The model ensures that poverty line is consistent across regions. The methodology developed in the paper is used to illustrate the construction of poverty thresholds in Pakistan. |
| Keywords: | Poverty line, Consumer theory, Consistent poverty Line, Calorie cost, economies of scale and poverty measures |
| JEL: | O10 D11 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:eab:develo:2439&r=agr |
| By: | Jabbar, Mohammad A. |
| Abstract: | A study by on behalf of Unnayan Shamunnay for Strengthening the Dairy Value Chain in Bangladesh, project of CARE Bangladesh |
| Keywords: | Livestock Production/Industries, |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:miscpa:98005&r=agr |
| By: | Nicolas Gérard Vaillant (LEM - Lille - Economie et Management - CNRS : UMR8179 - Université des Sciences et Technologies de Lille - Lille I - Fédération Universitaire et Polytechnique de Lille); François-Charles Wolff (INED - Institut National d'Etudes Démographiques Paris - INED, LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272) |
| Abstract: | Drawing on data from an annual French guidebook published in 2004, this paper focuses on the determinants of experts' ratings on Cuban cigars. We find that high quality cigars are more likely to be recommended to more experienced cigar lovers. Both the self-assessed quality and recommendation depend on the length and diameter of the cigars, but also on more subjective characteristics like number and type of aromas. Results from a Fields' decomposition show that the quality of cigars is much more sensitive to the presence of a defect and number of aromas than the experts' recommendation, which is more influenced by the rarity of cigars. Finally, it is essentially the cigars' objective characteristics that have an influence on their prices, meaning that consumers truly benefit from additional qualitative information when reading experts' advice and ratings. |
| Keywords: | Cigars, expert opinion, quality |
| Date: | 2010–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00547705_v1&r=agr |