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Contracts and Quality in the California Winegrape Industry

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Author Info
Rachael E. Goodhue
Dale M. Heien
Hyunok Lee
Daniel A. Sumner

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Abstract

We analyze the relationship between product quality and contracting choices using the results of a survey of California winegrape growers. Growers who produce high-quality grapes are more likely to use formal written contracts than are growers who produce low-quality grapes. Written contracts for high-quality grapes are more likely to include provisions regarding the production process, while written contracts for low-quality grapes are more likely to include explicit financial incentives for sugar content and other product attributes.

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Publisher Info
Article provided by Springer in its journal Review of Industrial Organization.

Volume (Year): 23 (2003)
Issue (Month): 3_4 (December)
Pages: 267-282
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:kap:revind:v:23:y:2003:i:3_4:p:267-282

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Web page: http://www.springerlink.com/link.asp?id=100336

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Avner Bar-Ilan, 1991. "Monitoring Workers as a Screening Device," Canadian Journal of Economics, Canadian Economics Association, vol. 24(2), pages 460-70, May. [Downloadable!] (restricted)
  2. Shaban, Radwan Ali, 1987. "Testing between Competing Models of Sharecropping," Journal of Political Economy, University of Chicago Press, vol. 95(5), pages 893-920, October. [Downloadable!] (restricted)
  3. Goodhue, Rachael E. & Rausser, Gordon C., 2003. "Value Differentiation," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 28(03), December. [Downloadable!]
  4. Francine Lafontaine & Margaret E. Slade, 1998. "Incentive Contracting and the Franchise Decision," NBER Working Papers 6544, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Brent Hueth & Ethan Ligon, 2002. "Estimation of an efficient tomato contract," European Review of Agricultural Economics, Oxford University Press for the Foundation for the European Review of Agricultural Economics, vol. 29(2), pages 237-253, June.
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  6. Kirk Monteverde & David J. Teece, 1982. "Supplier Switching Costs and Vertical Integration in the Automobile Industry," Bell Journal of Economics, The RAND Corporation, vol. 13(1), pages 206-213, Spring. [Downloadable!] (restricted)
  7. Ritter, Joseph A & Taylor, Lowell J, 1994. "Workers as Creditors: Performance Bonds and Efficiency Wages," American Economic Review, American Economic Association, vol. 84(3), pages 694-704, June. [Downloadable!] (restricted)
  8. Knoeber, Charles R & Thurman, Walter N, 1994. "Testing the Theory of Tournaments: An Empirical Analysis of Broiler Production," Journal of Labor Economics, University of Chicago Press, vol. 12(2), pages 155-79, April. [Downloadable!] (restricted)
  9. Pirrong, Stephen Craig, 1993. "Contracting Practices in Bulk Shipping Markets: A Transactions Cost Explanation," Journal of Law & Economics, University of Chicago Press, vol. 36(2), pages 937-76, October.
  10. Lafontaine, Francine & Slade, Margaret E, 1997. "Retail Contracting: Theory and Practice," Journal of Industrial Economics, Blackwell Publishing, vol. 45(1), pages 1-25, March. [Downloadable!] (restricted)
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  11. Masten, Scott E, 1984. "The Organization of Production: Evidence from the Aerospace Industry," Journal of Law & Economics, University of Chicago Press, vol. 27(2), pages 403-17, October.
  12. Douglas W. Allen & Dean Lueck, 2004. "The Nature of the Farm: Contracts, Risk, and Organization in Agriculture," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262511851.
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Christopher Snyder, 2003. "Introduction to the 2003 International Industrial Organization Conference Special Issue," Review of Industrial Organization, Springer, vol. 23(3), pages 175-177, December. [Downloadable!] (restricted)
  2. Olmos, Marta Fernandez & Rosell-Martinez, Jorge & Espitia-Escuer, Manuel Antonio, 2008. "On the co-existence of spot and contract markets: an analysis of quality," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6082, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  3. Christian Hirschhausen & Anne Neumann, 2008. "Long-Term Contracts and Asset Specificity Revisited: An Empirical Analysis of Producer–Importer Relations in the Natural Gas Industry," Review of Industrial Organization, Springer, vol. 32(2), pages 131-143, March. [Downloadable!] (restricted)
    Other versions:
  4. Fernandez-Olmos, M. & Rosell-Martinez, J. & Espitia-Escuer, M., 2008. "Quality and governance mode choice: a transaction cost approach to the wine industry," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44266, European Association of Agricultural Economists. [Downloadable!]
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