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What Adds Value in Specialty Coffee? Managerial Implications from Hedonic Price Analysis of Central and South American E-Auctions

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  • Donnet, M. Laura
  • Weatherspoon, Dave D.
  • Hoehn, John P.

Abstract

We analyze price and quality information at the procurement level in the specialty coffee supply chain using data from small and large volume e-auctions. Hedonic price equations reveal that the Cup of Excellence auction is a more differentiated market disclosing more information about coffee values associated with ratings, rankings, quantities available, and country reputations whereas information in the Q auction is more limited and tends to be remunerated to a lesser extent. These results indicate that there are different business models and valuation of product characteristics within the specialty coffee industry. Management implications are drawn for specialty coffee producers and roasters.

Suggested Citation

  • Donnet, M. Laura & Weatherspoon, Dave D. & Hoehn, John P., 2007. "What Adds Value in Specialty Coffee? Managerial Implications from Hedonic Price Analysis of Central and South American E-Auctions," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 10(3), pages 1-18.
    • Handle: RePEc:ags:ifaamr:8162
    DOI: 10.22004/ag.econ.8162
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    References listed on IDEAS

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    1. M. Laura Donnet & Dave D. Weatherspoon & John P. Hoehn, 2008. "Price determinants in top‐quality e‐auctioned specialty coffees," Agricultural Economics, International Association of Agricultural Economists, vol. 38(3), pages 267-276, May.
    2. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132-132.
    3. Pierre Combris & Sebastien Lecocq & Michael Visser, 2000. "Estimation of a hedonic price equation for Burgundy wine," Applied Economics, Taylor & Francis Journals, vol. 32(8), pages 961-967.
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    1. Minten, Bart & Tamru, Seneshaw & Kuma, Tadesse & Nyarko, Yaw, 2014. "Structure And Performance Of Ethiopia’S Coffee Export Sector," Working Papers 190733, American Association of Wine Economists.
    2. Ebata, Ayako & Velasco, Pamela & von Cramon-Taubadel, Stephan, 2015. "Distance to market and farm-gate prices of staple beans in rural Nicaragua," GlobalFood Discussion Papers 197540, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    3. Jena, Pradyot R. & Grote, Ulrike, 2012. "Impact Evaluation of Traditional Basmati Rice Cultivation in Uttarakhand State of Northern India: What Implications Does It Hold for Geographical Indications?," World Development, Elsevier, vol. 40(9), pages 1895-1907.
    4. Chun-Chu Liu & Chu-Wei Chen & Han-Shen Chen, 2019. "Measuring Consumer Preferences and Willingness to Pay for Coffee Certification Labels in Taiwan," Sustainability, MDPI, vol. 11(5), pages 1-13, March.
    5. M. Laura Donnet & Dave D. Weatherspoon & Charles B. Moss, 2010. "Measuring Food Product Differentiation by Quality Ratings: A Cross‐Entropy Analysis of Specialty Coffee e‐Auctions," Journal of Agricultural Economics, Wiley Blackwell, vol. 61(1), pages 122-137, February.
    6. Henrik Barth & Per-Ola Ulvenblad & Pia Ulvenblad, 2017. "Towards a Conceptual Framework of Sustainable Business Model Innovation in the Agri-Food Sector: A Systematic Literature Review," Sustainability, MDPI, vol. 9(9), pages 1-15, September.
    7. Ebata, Ayako & Pacheco, Pamela Alejandra & Cramon-Taubadel, Stephan von, 2015. "Distance to market and farm-gate prices of staple beans in rural Nicaragua," 2015 Conference, August 9-14, 2015, Milan, Italy 211582, International Association of Agricultural Economists.
    8. Sinha, Avik, 2015. "Conceptualizing Service Export Price Optimization," MPRA Paper 102264, University Library of Munich, Germany, revised 2015.
    9. Lauren Rosenberg & Mark Swilling & Walter J V Vermeulen, 2018. "Practices of Third Wave Coffee: A Burundian Producer's Perspective," Business Strategy and the Environment, Wiley Blackwell, vol. 27(2), pages 199-214, February.

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    Keywords

    Demand and Price Analysis;

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