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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.

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.

Suggested Citation

  • French, Ben C., 1987. "Farm Price Estimation When There Is Bargaining: The Case Of Processed Fruit And Vegetables," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 12(1), pages 1-10, July.
    • Handle: RePEc:ags:wjagec:32473
    DOI: 10.22004/ag.econ.32473
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    References listed on IDEAS

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    1. E. M. Babb & S. A. Belden & C. R. Saathoff, 1969. "An Analysis of Cooperative Bargaining in the Processing Tomato Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 51(1), pages 13-25.
    2. 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.
    3. Richard E. Just & Wen S. Chern, 1980. "Tomatoes, Technology, and Oligopsony," Bell Journal of Economics, The RAND Corporation, vol. 11(2), pages 584-602, Autumn.
    4. George W. Ladd, 1974. "A Model of a Bargaining Cooperative," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 56(3), pages 509-519.
    5. 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 389-392, November.
    6. Minami, Dwight D. & French, Ben C. & King, Gordon A., 1979. "An Econometric Analysis of Market Control in the California Cling Peach Industry," Monographs, University of California, Davis, Giannini Foundation, number 251909, December.
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    Cited by:

    1. Blank, Steven, 1991. "Affects of Farmland Cash Leasing Rates on crop Selections of owners and Tenants: A Portfolio Analysis," WAEA/ WFEA Conference Archive (1929-1995) 321474, Western Agricultural Economics Association.
    2. 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, vol. 1(4), pages 1-13.
    3. French, Ben C. & King, Gordon A., 1988. "Dynamic Economic Relationships in the California Cling Peach Industry," Research Reports 251938, University of California, Davis, Giannini Foundation.
    4. 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.
    5. Jones, Eugene & Batte, Marvin T. & Schnitkey, Gary D., 1990. "A Socioeconomic Analysis Of Marketing Information Usage Among Ohio Fruit Producers," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 22(2), pages 1-9, December.
    6. French, Ben C. & Willett, Lois Schertz, 1989. "An Econometric Model of the U.S. Asparagus Industry," Research Reports 251937, University of California, Davis, Giannini Foundation.

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    Keywords

    Demand and Price Analysis; Marketing;

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