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Farm Price Estimation When There Is Bargaining: The Case Of Processed Fruit And Vegetables

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  • French, Ben C.
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    Abstract

    Raw product prices for many processed fruits and vegetables are determined in part as an outcome of negotiations between processors and farmer bargaining associations. In such cases, unique market equilibrium solutions may not exist. This study develops a framework for price prediction under bargaining and applies it to the California cling peach industry. The price prediction equation turns out to involve the same variables as would a model specified for perfect competition. Hence a mistaken assumption about the structure of competition may still provide a model that predicts well, provided the structure remains constant.

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    File URL: http://purl.umn.edu/32473
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    Bibliographic Info

    Article provided by Western Agricultural Economics Association in its journal Western Journal of Agricultural Economics.

    Volume (Year): 12 (1987)
    Issue (Month): 01 (July)
    Pages:

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    Handle: RePEc:ags:wjagec:32473

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    Web page: http://waeaonline.org/
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    Related research

    Keywords: Demand and Price Analysis; Marketing;

    References

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    1. Salkever, David S., 1976. "The use of dummy variables to compute predictions, prediction errors, and confidence intervals," Journal of Econometrics, Elsevier, vol. 4(4), pages 393-397, November.
    2. Kennedy, Peter, 1983. "Logarithmic Dependent Variables and Prediction Bias," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 45(4), pages 389-92, November.
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    Cited by:
    1. Folwell, Raymond J. & Mittelhammer, Ronald C. & Wang, Q., 1998. "An Empirical Bargaining Model Of Price Discovery: An Application To The Washington/Oregon Asparagus Industry," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IAMA), vol. 1(04).
    2. Gabrielyan, Gnel & Marsh, Thomas L., 2012. "Domestic and Export Price Formation of U.S. Hops," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124722, Agricultural and Applied Economics Association.

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