nep-mkt New Economics Papers
on Marketing
Issue of 2016‒06‒09
twenty-six papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Retail Channel and Beef Preferences in Argentina: Experimental Results from Consumers in Buenos Aires By Colella, Florencia; Ortega, David
  2. Non-Sequential Search, Competition and Price Dispersion in Retail Electricity By Klaus Gugler; Sven Heim; Mario Liebensteiner
  3. Who are the CSA Consumers and how to Promote CSA to more Consumers? By Vassalos, Michael; Gao, Zhifeng; Zhang, Lisha
  4. Effects of food additives information on consumers’ risk perceptions and willingness to accept: Based on a random nth-price auction By Yingqi, Zhong; Zuhui, Huang; Linhai, Wu
  5. Consumers’ Willingness-to-pay for Health-enhancing Attributes in Food Products: A Meta-analysis By Dolgopolova, Irina; Teuber, Ramona
  6. Willingness to Pay for “Taste of Europe”: Geographical Origin Labeling Controversy in China By Li, Chenguang; Bai, Junfei; Gao, Zhifeng
  7. Dimension of the Country of Origin Effect in the Perception of Medical Services in EU Countries– an International Comparison By Ewa Magier-Šakomy; Monika Boguszewicz-Kreft; Brigita Janiūnaitė
  8. Consumer Preferences Before and After a Food Safety Scare: An Experimental Analysis of the 2010 Egg Recall By Li, Tongzhe; Bernard, John; Johnston, Zachary; Messer, Kent; Kaiser, Harry
  9. Consumers’ Willingness to Pay for Locally Grown Produce: Comparison of New Hampshire and Massachusetts Results By Shi, Wei; Halstead, John; Huang, Ju-Chin
  10. The Changing Structure of Retail Food Stores, Direct Marketing (DM) and Its Impact on Farmers’ Financial Performance By Sene, Seydina; Paudel, Dr. Krishna; Park, Dr. Timothy
  11. Maximizing the Efficiency of Your Marketing Costs By Simona Sabou; Liliana Adela Zima; Rada Florina Hahn
  12. Impacts from a retail grocery acquisition: Do national and store brand prices respond differently? By Secor, William; Çakır, Metin
  13. Impact of Contract Farming on Profits and Yield of Smallholder Farms in Nepal: An Evidence from Lentil Cultivation By Kumar, Anjani; Roy, Devesh; Joshi, Pramod Kr; Tripathi, Gaurav; Adhikari, Rajendra Pd
  14. Welfare Effects of the U.S Food Safety Modernization Act Produce Safety Rule By Ferrier, Peyton; Zhen, Chen; Bovay, John
  15. Accurately Estimating Poverty Effects of Food Price Escalation: A Mexican Case Study By Wood, Benjamin DK; Nelson, Carl N; Garduno, Rafael
  16. An Effect of the List of Carcinogenic Food Categories in Consumers’ Feelings of Guilt and Purchase Behavior By Hwang, Seoyoung; Moon, Junghoon
  17. Determinants of Weanling Thoroughbred Auction Prices By Hansen, Charlotte R.; Stowe, C. Jill
  18. China’s emerging dairy markets and potential impacts on U.S. alfalfa and dairy product exports By Wang, Qingbin; Hansen, James; Xu, Fang
  19. A Latent Class Analysis of Public Attitudes toward Water Resources with Implications for Recreational Demand By Ehrlich, Oren; Bi, Xiang; Borisova, Tatiana; Larkin, Sherry
  20. The prospects for smart energy prices: observations from 50 years of residential pricing for fixed line telecoms and electricity By Musiliu O. Oseni; Michael G. Pollitt
  21. Behavioral Determinants of Biofortified Food Acceptance: The Case of Orange-fleshed Sweet Potato in Ghana By Etumnu, Chinonso
  22. Satisfaction with Food Policies for Consumer: A Case Study of South Korea By Heo, Seong-Yoon; Kim, Sanghyo; Zulauf, Carl; Lee, Kye-Im
  23. Consumer preference for supermarket food sampling in China By Chen, Lijun; Parcell, Joe L; Chen, Chao; James, Harvey S. Jr; Xu, Danning
  24. Small Retailer’s Merchandise Decision Making: A Grounded Theory Approach By Sinha, Piyush Kumar; Mishra, Hari Govind; Koul, Surabhi
  25. Does Competition Eliminate Discrimination? Evidence from the Commercial Sex Market in Singapore By Huailu Li; Kevin Lang; Kaiwen Leong
  26. The Impact of Child-Directed TV Food Advertising Regulations on Pocket Money Allowances By Higgins, Lindsey; Silva, Andres

  1. By: Colella, Florencia; Ortega, David
    Abstract: Traditionally-produced beef from Argentina is recognized and demanded internationally. Locally, consumers are often unable to afford these certified beef products, and may rely on external cues to determine beef quality. Are Argentinean consumers willing to pay for sustainably or organically produced beef? Are these consumers using alternative sources of information, other than product labels? Determining demand for beef attributes may require an understanding of consumers’ product purchasing strategies, which involves retailer choice. We develop a framework utilizing latent class analysis to identify consumer groups with different retailer preferences, and separately estimate their demand for beef product attributes. This framework accounts for the interrelationship between consumers’ choice of retail outlets and beef product preferences. Our analysis identifies two groups of consumers, a convenience- (67%) and a service- (33%) oriented group. We uncover significant differences in demand for beef attributes across these groups, and find that the service oriented group, while unable to pay for credence attributes, relies on a service-providing retailer (butcher) as a source of product quality assurance. We note that failing to account for the interrelationship between retailer and product preferences can lead to an overestimation of preferences and demand for beef attributes.
    Keywords: Latent class analysis, demand heterogeneity, random parameters logit, consumer behavior, butcher, decision modelling, choice experiment, Agribusiness, Consumer/Household Economics, Livestock Production/Industries, Marketing,
    Date: 2016
  2. By: Klaus Gugler (Department of Economics, Vienna University of Economics and Business); Sven Heim (ZEW Centre for European Economic Research and MaCCI Mannheim Centre for Competition and Innovation); Mario Liebensteiner (Department of Economics, Vienna University of Economics and Business)
    Abstract: We investigate the impact of consumer search and competition on pricing strategies in Germany’s electricity retail. We utilize a unique panel dataset on spatially varying search requests at major online price comparison websites to construct a direct measure of search intensity and combine this information with zip code level data on electricity tariffs between 2011 and 2014. The paper stands out by explaining price dispersion by differing pricing strategies of former incumbents and entrant firms, which are distinct in their attributable shares in informed versus uninformed consumers. Our empirical results suggest causal evidence for an inverted U-shape effect of consumer search intensity on price dispersion in a clearinghouse environment as in Stahl (1989). The dispersion is caused by opposite pricing strategies of incumbents and entrants, with incumbents initially increasing and entrants initially decreasing tariffs as a reaction to more consumer search. We also find an inverted U-shape effect of competition on price dispersion, consistent with theoretical findings by Janssen and Moraga-González (2004). Again, the effect can be explained by opposing pricing strategies of incumbents and entrants.
    Keywords: Search, Information, Competition, Price Dispersion, Electricity Retail
    JEL: D43 D83 L11 L13 Q40
    Date: 2016–05
  3. By: Vassalos, Michael; Gao, Zhifeng; Zhang, Lisha
    Abstract: Data from a national online survey, in conjunction with a probit and an ordered probit formulations are utilized to investigate the impact of: i) demographic characteristics, ii) lifestyle preferences, and iii) different information outlets, on the probability that a consumer is a CSA member, or, considers joining a CSA arrangement. The results indicate that while demographic characteristics do not affect the probability that a consumer is currently a CSA member, they have a statistically significant impact on the probability that a responder will join a CSA arrangement in the future. Lifestyle preferences had a statistically significant impact on both the probability that: i) a consumer is currently a CSA member and/or ii) is considering to join a CSA in the future. From the information outlets examined only word of mouth and online sources influence the probability that a consumer will join a CSA in the future. These findings may have important implications regarding the marketing strategies employed by CSA farm managers
    Keywords: Community supported agriculture (CSA), direct marketing, local foods, Agribusiness, Marketing, Q13,
    Date: 2016–05–25
  4. By: Yingqi, Zhong; Zuhui, Huang; Linhai, Wu
    Abstract: In this study, we used a random nth-price auction to estimate consumers’ willingness to accept (WTA) when exchanging orange juice containing additives for freshly squeezed orange juice without additives. Also, we analyzed the effects of positive and negative information of orange juice additives on consumers’ risk perceptions. In summary, three basic findings are obtained. a. Negative information of orange juice additives is given a higher weight by consumers; consumers with some knowledge about additives, rather than those without knowledge about additives, have a higher WTA. b. Consumers with the information processing capacity, concern about the health of themselves and their families, and the ability to foresee the consequences of information have a deep impact on their WTA. c. The initial bid has a significant anchoring effect on consumers’ WTA. As a result, there are three effective approaches to eliminate consumer food scares. The first is to disclose information about food safety risks timely and accurately. The second is to prevent the misguidance by the media, especially the internet media. The third is to employ different communication strategies based on the differences among consumer groups.
    Keywords: Food Safety, Risk Perception, Willingness to Accept, Food additives., Food Consumption/Nutrition/Food Safety,
    Date: 2016–08–02
  5. By: Dolgopolova, Irina; Teuber, Ramona
    Abstract: Assessing potential demand for functional or healthy foods is crucial from several perspectives. First, foods with functional attributes in many cases require more expensive production process than traditional foods, for example, when the functional attribute is provided by enhancing or enriching the products with additional substances. It is necessary, then, to estimate potential demand for functional foods prior to the delivering product to the consumers. Second, the promotion of healthier food options is related to the fact that an unhealthy diet is among the four main behavioral risk factors of non-communicable diseases (NCD) and are mostly spread in low- and middle-income countries. It has been demonstrated that prices can be a barrier for healthy food consumption, especially among low-income groups of the population. From this perspective, it needs to be clearly stated if consumers indeed are ready to pay price premiums for foods aimed at improving their health. Third, market introduction of functional foods and foods with health benefits has not always been successful. Despite the importance of a healthy diet in the prevention of some diseases and sustaining well-being in general, economists and marketing researchers observe some uncertainty in consumers’ perception and acceptance of foods with health benefits. This paper investigates the body of research that has been performed so far on consumers’ valuations of healthy attributes in food products by means of a meta-analysis. It explores if variation in willingness to pay (WTP) for healthy attributes in foods that have been reported in scientific papers on the topic can be attributed to common factors related to the choice of the methodology, the place and time of data collection, the choice of the carrier product and the health benefit specified. Thus, our study contributes to the existing literature on health-enhancing foods by (i) reviewing the existing empirical evidence on consumer valuations of different healthy attributes, (ii) identifying the major underlying drivers of differences in WTP estimates via meta-analysis and (iii) deriving directions of research to be taken into account for the future developments in the field. Literature search resulted in 28 studies which provided 175 WTP estimates. Stata meta-regression command specifically designed for meta-analyses was employed. This command allows analyzing study-level data and estimates the between-study variance and the coefficients by weighted least squares when the outcome variable is continuous. The results of the meta-regression imply that the elicitation method, the carrier product, the specific health benefit, and the place of the study significantly influence variations in WTP estimates across studies. First, hypothetical methods of willingness to pay elicitation produce higher valuations compared to non-hypothetical methods like experimental auction and real purchase data. Second, with respect to the base product the results indicate that in case of dairy products (milk, yogurt, cream cheese, cheese, butter and ice cream) and fruits and vegetables the WTP estimates for a specific health attribute are significantly lower than for all other product categories included. Third, according to our results the specific health attribute “Cholesterol lowering” leads to significantly higher WTP estimates than any other health/nutrition claim. The valuations of this attribute varied from 0% to 200% with the highest values referring to the spread for lowering cholesterol. Finally, the place where the data was collected influences WTP estimates. Our results indicate that there are no significant differences between studies conducted in Europe, the United States and other regions. However, studies conducted with Canadian consumers report statistically significant lower WTP values. In general, it can be noticed that despite an established connection between diet and the development of non-communicable diseases, economics and marketing research so far fails to provide systematic view on the consumer valuations of different healthy attributes in food and, consequently, on the perspective demand for these products. Studies reviewed reported very different valuations of healthy attributes in foods. Studies also differ greatly in basically all parameters of the research: data collection, methodology, and analysis of the results. Although it seems rather difficult to draw general conclusions about consumers’ willingness to pay for healthy attributes in foods, this research summarizes the efforts performed so far and may be employed to determine the directions for future analysis.
    Keywords: health-enhancing attributes, meta-analysis, willingness to pay, Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety, Q18 Agricultural Policy • Food Policy,
    Date: 2016
  6. By: Li, Chenguang; Bai, Junfei; Gao, Zhifeng
    Abstract: In recent years more attention has been placed to the use of “geographical origin” labels by regulators, marketers, and consumers for food products, largely due to increased incidences of food related scares and the shift of traditional agricultural price-support programs to promotion of value-added and high quality products via labels and certifications (Unterschultz 1998; Gilmore 2002; Clemens and Babcock 2004; Menapace et. al, 2011). The underline economic motivation of product labeling is to facilitate the resolution of market failures associated with high-quality product under asymmetric information (Akelof, 1970). Because geography is often correlated with a product’s overall quality, “geographical origin” labels is perceived by consumer as a signal of quality, especially under situations of lacking prior consumption experience or the quality of the product is not easily observable. Market failures due to asymmetric information are often seen when high-quality products enter into “new markets” where recognition rates among consumers are low. As western countries remain mired post financial turmoil, the continuous economic growth in emerging markets have made emerging markets increasingly relevant to international producers and marketers. One significant challenge in these “new markets” is that many of the renowned national or regional brands are new to consumers. Under this situation, the use of “geographical origin” labels for new comers to overcome asymmetric information problem in emerging markets plays an important role. The European Union has long policy tradition to support “geographical origin” labels of member and finance product promotions to third countries. Over the past fifteen years, around €50 million was provided by the European commission annually in terms of co-financing of promotional programs, 10% of which has been used for supporting “geographical origin” labels. China, the world’s largest economy and the most populous nation, holds significant opportunities for international producers and exporters. However, with intense competitions from both domestic and international players, promoting international products in China is no easy task. One recent promotional program carried out by the European Commission was the launch of a ‘Tastes of Europe’ campaign in China in May 2015. The campaign aims to create awareness among the Chinese consumers about the characteristics and benefits of Geographical Indications for food products as a guarantee of authenticity, quality and safety, and ultimately to drive consumer purchase of these products. Yet in order to gain broader consumer recognition, an “umbrella” message, i.e., “Taste of Europe”, was used to carry a generic geographical origin message to reach consumers (EU Commission, 2015) . There are a few key questions to ask under this situation: For policy makers, whether such generic origin message can carry sufficient value to promote member country products, which essentially validate the effectiveness of the policy. For producers and marketers in member countries, what are the advantages and disadvantages to be associated with the European umbrella message, and whether the use of generic regional labeling compliments or compromises country specific labeling? Answers to the above questions rely on the evaluation of consumer response to the product quality signals associated with different geographical origin messages. A consumer survey on geographic labeling for imported dairy products was carried out in Beijing, China in May 2015 to tackle above-mentioned questions. We chose dairy research product for this study for several considerations: the strategic importance of dairy products to EU exporters and policy makers; the unsettled debate on mandatory COO labeling for dairy products; the leading role of China as a key emerging market for global dairy exporters; and the increased opportunity for international dairy exporters to use COO labels as quality signals in China market. One contribution of the paper is the comparison of the COO effect between generic regional label and country specific origin label. Under the “products of EU” range, we used “product of Ireland” as a case study for the country specific origin label. Information on consumer demographic, dairy consumption, safety perceptions, knowledge on Ireland and Irish products, as well as willingness to pay (WTP) for different geographic labeling and product attributes were collected through 307 face-to-face interviews. WTP was elicited using double-bounded contingent valuation method, and estimated with maximum log-likelihood function. Our study showed slightly higher consumer WTP for “product of EU” label compared to “product of Ireland” label, which seems to suggest the use of EU label as quality signal adds value to Irish products. But we also found that consumers have much higher WTP for grass-fed and sustainable dairy production, compared to product of EU labeling. Grass-fed dairy production and agricultural sustainability are two main characteristics of Irish dairy industry, yet such characteristics of Irish dairy are not registered in Chinese consumers’ minds. Using EU label may have an immediate value to promote Irish products, however our study suggested that promoting country specific origin labeling with product differentiation and brand establishment can be more beneficial in the long run. Although the study uses only one country as an example to evaluate and compare the generic origin labeling and country specific labeling, the study holds broader implication for many other countries, products, and marketers facing similar challenges.
    Keywords: Geographical origin label, GI, COO, Consumer studies, WTP, Agribusiness, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, International Relations/Trade,
    Date: 2016–05–25
  7. By: Ewa Magier-Šakomy (WSB University in Gdańsk); Monika Boguszewicz-Kreft (WSB University in Gdańsk); Brigita Janiūnaitė (Kaunas University of Technology)
    Abstract: The influence of the country’s images on consumer attitudes has been defined as the country of origin (COO) effect. So far, the research in that field in services has been relatively scarce, and the analysis of expert literature indicated that the question of the COO effect in medical services has been discussed only in one article.The aim of the paper is to provide the answers to the following questions: 1) do the COO dimensions apply to the assessment of medical services?; 2) what is the significance of the particular dimensions in these services?; 3) does the significance of the particular dimensions depend on consumers’ origin?Four dimensions have been introduced: innovativeness, diversity, quality, prestige. Study has been carried out in three European countries (Germany, Lithuania and Poland) and the survey sample consists of 264 respondents. The data have been collected with the use of a questionnaire form developed by the authors. Their statistical processing has been provided with the use of a t test and the analysis of variance with repeated measurement.The analysis confirms very high significance of the COO dimensions in medical services, and the fact that the significance is of differentiated nature. The research indicates that Quality and Innovativeness are the most important dimensions as regards medical services. Diversity and Prestige are significantly less important. The differentiation pertaining to the significance of dimensions indirectly indicates that medical services are affected by the COO effect. The analysis indicates that the COO dimensions as well as consumers’ origin affect the assessment of the importance pertaining to a particular dimension, however the pattern of dimension preference is similar in all three countries. The results of the research may be applied in economic practice: in marketing operations of service providers and in operations of institutions which deal with shaping the image of their country and its positioning in the international environment.
    Keywords: country-of-origin (COO) effect, the dimensions of the COO effect, medical services, services marketing
    JEL: M31 L84 L83
  8. By: Li, Tongzhe; Bernard, John; Johnston, Zachary; Messer, Kent; Kaiser, Harry
    Abstract: In August 2010, more than half a billion eggs were recalled in the U.S. because of a Salmonella outbreak. This study examines the effect of the recall with a unique pair of auction experiments investigating willingness to pay (WTP) for conventional and organic eggs, one conducted shortly before and one after the recall with the same participants. In addition to the before and after bids, participants bid again after a negative information or balanced information treatment about the event. Accompanying surveys showed consumers had a high level of awareness of the recall but less knowledge of specific details, and viewed information on egg farm conditions as very important in their WTP. While there were no significant before and after differences, WTP for organic eggs significantly increased in the negative information treatment, and balanced information had a positive effect on consumer WTP for conventional eggs.
    Keywords: Consumer preferences, Laboratory experiments, Revealed preference, Food recall, Eggs, Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety, D12, M31, Q13,
    Date: 2016
  9. By: Shi, Wei; Halstead, John; Huang, Ju-Chin
    Abstract: The increasing interest in locally grown produce in the U.S. has resulted in a number of studies examining consumers’ willingness to pay for local specialty food. This paper extends the literature to investigate Massachusetts and New Hampshire survey respondents’ preferences for locally grown and other attributes of a variety of produce types. Choice experiments are used to discern the relative importance of these produce attributes. Our results show that the average premiums for locally grown green beans, cucumbers and snap peas are respectively 30.74 percent, 67.30 percent, and 32.62 percent above the prices of the non-locally grown counterparts among New Hampshire respondents. In comparison, the average premiums for locally grown green beans, cucumbers and snap peas are respectively 57.66 percent, 17.31 percent (insignificant), and 35.45 percent above the prices of the non-locally grown counterparts among Massachusetts respondents. We also find mixed results on the willingness to pay for the organic feature across different produce. Consumers are willing to pay a price premium for organically grown green beans (about 29.02 percent in New Hampshire and 32.63 percent in Massachusetts), but none for snap peas.
    Keywords: Local Agriculture, Willingness to Pay, Choice Experiments, Agribusiness, Agricultural and Food Policy, Consumer/Household Economics,
    Date: 2016
  10. By: Sene, Seydina; Paudel, Dr. Krishna; Park, Dr. Timothy
    Abstract: We examine the changing structure of retail food stores, direct marketing (DM), and its impact on farmers’ financial performance in the United States. We use a maximum simulated likelihood estimation with multinomial treatments and continuous measures of sales to accommodate the treatment effects relative to the base (no direct marketing). Our analyses indicate that on the changing structure of retail food stores, no direct marketing (base case) outlet is the most adopted channel by direct marketers compared to direct market to consumers only (Treatment-1), direct marketing to retailers only (Treatment-2), and direct marketing to both consumers and retailers (Treatment-3). We find that farmers who have chosen no direct marketing option show better earning performance compared to the other treatments or market outlets channel options from which earning decreases by 75%, 19%, and 11%, respectively under Treatment-1, T-Treatment-2 and Treatment-3 from 2008 to 2010. Direct marketers who are more likely to choose either Treatment 1-3 option relative to no direct marketing on the basis of their unobserved characteristics, choose direct marketing less and less.
    Keywords: : Direct marketing, Earning, Endogenous treatment, Latent factors, Agribusiness, Agricultural and Food Policy, Agricultural Finance, Community/Rural/Urban Development, Consumer/Household Economics, Demand and Price Analysis, Farm Management, Financial Economics, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, International Development, International Relations/Trade, Labor and Human Capital, Production Economics, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies, Research Methods/ Statistical Methods, C25, Q12, Q13, Q16,
    Date: 2016
  11. By: Simona Sabou; Liliana Adela Zima; Rada Florina Hahn (Department of Economics and Physics, Technical University of Cluj Napoca)
    Abstract: Costs represent the expenses made for the production and sale of a particular good or service. In marketing, the analysis of the costs is made especially from the point of view of their sensitivity as regards changing the number of units produced and sold. But, in this paper, we have considered that the most important costs, along with the production costs, are the distribution and promotion costs, and that the decision made in accordance with the company's desire to carry out a profit is made through prior examination of the foreseen situations, on the basis of the estimate marketing budget. The case study presented in this paper approaches the problematic of decision making at the level of the marketing department of a company, where this would have as potential priority objectives maximizing the profit, increasing the market share or improving the company's image, in the sense of creating an image of superior quality products.
    Keywords: Efficiency, marketing costs, optimal decision, budget, profit
    JEL: C80 L11 M31
    Date: 2014–06
  12. By: Secor, William; Çakır, Metin
    Abstract: We investigate the extent to which a grocery retailer merger has different effects on the prices of national and store brands. Using retail scanner data, we retrospectively analyze a food retail acquisition in a large United States city. We focus on fluid milk and ready-to-eat cereal categories, which represent a relatively homogenous and a relatively differentiated product category, respectively. We use a difference-in-difference estimation framework to obtain the causal effect of the acquisition on prices for the acquiring retailer. Our findings provide evidence that store brands in differentiated product categories could allow a retailer to improve its market power.
    Keywords: Merger and acquisition, grocery retail, store brands, market power, difference-in-difference, Agribusiness, Consumer/Household Economics, L11, L13, L22, L81,
    Date: 2016
  13. By: Kumar, Anjani; Roy, Devesh; Joshi, Pramod Kr; Tripathi, Gaurav; Adhikari, Rajendra Pd
    Abstract: This study is undertaken to quantify the benefits of contract farming (CF) on farmers’ income in a case where new market opportunities are emerging for smallholder farmers in Nepal. CF is emerging as an important form of vertical coordination in the agrifood supply chain. The prospect for CF in a country like Nepal with accessibility issues, underdeveloped markets, and lack of amenities remains ambiguous. On the one hand, contractors find it difficult to build links in these cases, particularly when final consumers have quality and safety requirements. On the other hand, lack of other market opportunities makes the contracts more sustainable. The latter happens if there are product-specific quality advantages because of agroecology and, more important, lack of side-selling opportunities. At the same time concerns remain about monoposonistic powers of the buyers when small farmers do not have outside options. Results of this study show that CF is significantly more profitable (81 percent greater net income) than independent production, the main pathway being higher yield and price realization. The positive impact of CF on farmers’ profits can help Nepal in harnessing the growing demand for pulses, especially in neighboring international markets, like India.
    Keywords: Contract farming, lentil, income, small farmers, Nepal, Agribusiness, Agricultural and Food Policy, International Relations/Trade, Production Economics, Q12, Q13, Q17, Q18,
    Date: 2016–05–25
  14. By: Ferrier, Peyton; Zhen, Chen; Bovay, John
    Abstract: The Produce Rules of the Food Safety Modernization Act (FSMA) marked the first instance of the FDA directly regulating food safety activities at the farm-level. Since most fruits and vegetables were covered, the law’s comprehensive ‘across-the-board’ implementation potentially created offsetting cross-price effects on the demand side since most producers would be bearing the implementation costs simultaneously. However, the fixed costs nature of some other regulations costs, the different distribution of farm sizes across commodities and the potential for some commodities to be exempted suggest that the effects would vary across commodities. We present an Equilibrium Displacement Model (EDM) to consider the effect of FSMA costs on prices and consumer and producer welfare. To parameterize the model, we use National Agricultural Statistics Service (NASS) and Food and Drug Administration (FDA) data to calculate the cost of implementing FSMA rules for 18 fruits and 21 vegetables, IRI storescan data to estimate demand elasticities, Agricultural Marketing Service data to calculate data wholesale costs shares, and supply elasticities from extant sources While varying across commodities, the average cost of implementing FSMA is 2.79 percent of farm revenue for fruits and 1.52 percent of farm revenue for vegetables, that farm prices increase by 1.68 percent (fruit) and 0.44 percent (vegetables), and that consumer prices increase by 0.70 percent (fruit) and 0.12 percent (vegetables). If there is no corresponding demand effect or cost saving at the farm level associated with the implementation of these regulations, farm welfare, as a percentage of revenue, falls by 1.11 percent (fruit) and 0.96 percent (vegetables). Also, we found that weak substitution patterns between commodities at the retail level caused off-setting cross-price effects to be weak.
    Keywords: Agricultural and Food Policy, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety,
    Date: 2016
  15. By: Wood, Benjamin DK; Nelson, Carl N; Garduno, Rafael
    Abstract: With the continued instability in consumer food prices, questions abound regarding how food price shocks affect poverty in the developing world. Following up on Wood et al. (2012), this research uses repeated cross sectional Government of Mexico household surveys to test the longer term effects of food price shocks on household poverty status. Summary statistics for biennial surveys conducted in 2008 and 2010 provide an initial understanding of how households react to food price spikes. After calculating food demand systems for these years, we compare the importance of accounting for second order welfare effects during time of high and low food price increases. Assessing the accuracy of different measurement options will allow researchers to know which technique to use when assess the effect of future food price changes.
    Keywords: Mexico, food price, demand system, economic welfare, poverty, substitution, Demand and Price Analysis, Food Security and Poverty, International Development, Research Methods/ Statistical Methods,
    Date: 2016
  16. By: Hwang, Seoyoung; Moon, Junghoon
    Abstract: In October, 2015, the World Health Organization (WHO) reported that the International Agency for Research on Cancer (IARC) classified the consumption of both red and processed meats as carcinogenic to humans (Bouvard et al., 2015; IARC, 2015). The primary purpose of this study is to investigate the effect of consumers’ awareness of the WHO's announcement on Korean married female consumers’ moral attitudes, with a particular focus on sense of the guilt and purchase behavior. Through questionnaire survey and real purchase data analysis, we discovered that the effect of consumers’ recognition of the carcinogenicity assessment by IARC on the consumer guilt of purchasing processed meat and their consumptions.
    Keywords: WHO, carcinogenic food category, feeling of guilt, purchase behavior, Agribusiness, Agricultural and Food Policy, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Health Economics and Policy, Marketing,
    Date: 2016
  17. By: Hansen, Charlotte R.; Stowe, C. Jill
    Abstract: Determinants of the prices of weanling Thoroughbreds sold at the 2010 November Breeding Stock Sale at the Keeneland Association, Inc. are investigated. A cross-sectional dataset of 1,343 weanlings are used who were for sale at this auction. Weanlings, whose quality and racing potential is unknown, often have hammer prices at auctions that range from low to high prices, but this can also be reflected by the market at a given time. Even weanlings whose reserve price is not met at an auction, the highest bidding price reveals something about the market and the quality of that weanling based on certain determinants. But what determinants drive weanling prices in which they have yet to prove themselves in any way, but buyers are willing to buy at a low or a high price. By using hedonic price analysis, the determinants of weanling sales prices can be identified and the corresponding marginal values of those determinates estimated. Weanlings who have a sire that is successful in the breeding shed, and a dam that won graded races, as well as her progeny that won graded races, influence the price of a weanling positively. Results of this study aids sellers in the decision-making process of valuing their weanlings and, perhaps, deciding whether to enter them in the sale. Additionally, this information can be used to inform buyers in their ability to fairly value their purchase of a weanling.
    Keywords: Auction price, Hedonic price analysis, Thoroughbred industry, Thoroughbred weanlings, Pinhook, Agribusiness, Agricultural Finance, Demand and Price Analysis,
    Date: 2016
  18. By: Wang, Qingbin; Hansen, James; Xu, Fang
    Abstract: China has rapidly emerged as a large milk producer and dairy product importer and there is a growing need for information on China’s dairy market and trade behavior. This study uses the most recently available data to examine the trends of China’s dairy production, demand, and imports and to assess the potential impacts on U.S. exports of alfalfa and dairy products. While the empirical results suggest that China is very likely to remain as a large importer of alfalfa, powder milk, whey, cheese, and many other dairy products for meeting its growing domestic demand, China’s emerging demand for these imports is expected to bring more opportunities for the U.S. dairy industry. On the other hand, the United States is facing more competitions from other alfalfa and dairy product exporters and more studies are needed for developing effective programs to enhance U.S. competitiveness in the Chinese markets.
    Keywords: China’s dairy market, U.S. dairy exports, alfalfa, powder milk, whey, projection, Livestock Production/Industries, Marketing,
    Date: 2016
  19. By: Ehrlich, Oren; Bi, Xiang; Borisova, Tatiana; Larkin, Sherry
    Abstract: This study examines the extent to which heterogeneous environmental attitudes influence recreational demand in a river basin and the valuation of recreational benefits. We first employed a latent class analysis to reveal two distinct classes of respondents that differ in their environmental attitudes despite representing similar demographic characteristics. We then estimated a recreational demand model conditional on respondent’s latent class membership after controlling for the probabilistic nature of the membership classification. We found that environmental attitudes directly influence consumer recreational demand and valuation. Ignoring preference heterogeneity leads to overestimation of the recreational benefits.
    Keywords: Latent Class Analysis (LCA), Recreational Demand, Travel Cost Method (TCM), Non-market Valuation., Environmental Economics and Policy, Resource /Energy Economics and Policy, Q51, Q57,
    Date: 2016–07–31
  20. By: Musiliu O. Oseni; Michael G. Pollitt
    Abstract: This study focuses on how energy and communications have evolved over the last 50 years and what we can learn from history in order to examine the prospects for smart energy pricing by 2050. We begin by discussing the nature of energy and telecoms products and why price discrimination should be expected. We then review various business and pricing strategies that have evolved in the two industries. We find that business models for both the telecoms and energy sectors have changed from the traditional services business model (i.e., offering of calls and messages for telecoms, and utility supply services for energy) to more dynamic, integrated and complex business models. These new business models include the managed services provider model, the bundled services model, and the prosumer business model, among others. Similarly, several changes in pricing structure have evolved. There has been a reduction in the number of distanced-based and increasing time-based price differentiation in fixed line telecoms and the abolition of residential floor area-based differentiation in residential electricity pricing. We conclude with a discussion on how the rollout of the next generation of electricity meters (smart and advanced meters) may further shape electricity pricing in the future.
    Keywords: smart pricing, business models, telecoms, energy, residential, UK
    JEL: L94 L96
    Date: 2016–03–22
  21. By: Etumnu, Chinonso
    Abstract: Biofortified foods are being introduced in sub-Saharan Africa as an important strategy to help address micronutrient malnutrition. However, there has been little research on factors that could play decisive roles in their successful introduction. This paper investigates the determinants of consumer acceptance of biofortified orange-fleshed sweet potato (OFSP) using data from a choice experiment conducted in Ghana. I find that OFSP is preferred to traditional white-fleshed and yellow-fleshed sweet potatoes as indicated by consumers' marginal willingness to pay for the three varieties. I also find that consumers' socio-economic characteristics do not have a significant effect on the acceptance of OFSP. Conversely, providing consumers with information about the nutritional benefits of OFSP exert a substantial, positive and significant effect on their acceptance of the produce. Providing nutritional information thus appears to be more crucial in the successful introduction of OFSP and other biofortified foods.
    Keywords: Biofortification, Orange-fleshed Sweet Potato, Willingness-to-pay, Information, Choice Experiment, Agricultural and Food Policy, Consumer/Household Economics, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, Health Economics and Policy, Institutional and Behavioral Economics, International Development, Marketing, D12, Q18,
    Date: 2016
  22. By: Heo, Seong-Yoon; Kim, Sanghyo; Zulauf, Carl; Lee, Kye-Im
    Keywords: Food Consumption/Nutrition/Food Safety,
    Date: 2016–05–25
  23. By: Chen, Lijun; Parcell, Joe L; Chen, Chao; James, Harvey S. Jr; Xu, Danning
    Keywords: Sampling, Supermarket, Preference, Trust, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, Marketing,
    Date: 2016–05–25
  24. By: Sinha, Piyush Kumar; Mishra, Hari Govind; Koul, Surabhi
    Abstract: This study is focused on small retail stores of Jammu province of J&K which examines the relationship between retailer’s perceptions of the trading area and their assortment policy decisions and their reported performance levels for a FMCG product category. The study focuses on the external environment as well as internal environment of the small stores which affect the decision making of the assortment. Retailers keep a small range of assortments as the when market uncertainty is high. Moreover the study focuses on the impact of store attributes on the assortment policies. This study controls for both store space and the store location factors. The impact of customer profile and the local market environment faced by small retailers is also analyzed as an important factor towards the assortment policy decision. A grounded theory based analysis was carried out. The analysis brought out four criteria used by the retailers in selecting products for their store based on the evaluation of the external and internal environment.
  25. By: Huailu Li (Fudan University); Kevin Lang (Boston University & NBER); Kaiwen Leong (Nanyang Technological University)
    Abstract: The street sex worker market in Geylang, Singapore is a highly competitive market in which clients can search legally at negligible cost, making it ideal for testing Diamondís hypothesis regarding search and monopoly pricing. As Diamond predicts, price discrimination survives in this market. Despite an excess supply of workers, but consistent with their self-reported attitudes and beliefs, sex workers charge Caucasians (Bangladeshis) more (less), based on perceived willingness to pay, and are more (less) likely to approach and reach an agreement with them. Consistent with taste discrimination, they avoid Indians, charge more and reach an agreement with them less frequently.
    JEL: J7
  26. By: Higgins, Lindsey; Silva, Andres
    Keywords: TV advertising, children, eating behavior, regulations, Food Consumption/Nutrition/Food Safety, Health Economics and Policy, Marketing, M37, M38,
    Date: 2016

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