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Transaction costs and slaughter cattle procurement: Processors' selection of supply channels

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  • Jill E. Hobbs

    (Excellence in the Pacific Research Institute, University of Lethbridge and Faculty of Management, University of Calgary, 4219 Village Terrace SW, Calgary T3H 2L4, Canada)

Abstract

This article investigates the hypothesis that different supply channels impose different types (and levels of) transaction costs on beef processors in the United Kingdom. The choice of supply channel is therefore influenced by these transaction costs. Recent food safety legislation and increasing consumer concerns over farm animal welfare may have altered the transaction costs arising from different supply channels. Conjoint analysis is used to measure the relative importance of selected transaction costs in a processor's procurement decision. A survey of UK beef processing firms is used to collect data for the conjoint analysis. The results suggest that the monitoring costs arising from the traceability of cattle to the farm of origin are particularly important. The implications for vertical coordination in the beef marketing chain are discussed. © 1996 John Wiley & Sons, Inc.

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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Agribusiness.

Volume (Year): 12 (1996)
Issue (Month): 6 ()
Pages: 509-523

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Handle: RePEc:wly:agribz:v:12:y:1996:i:6:p:509-523

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Web page: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297

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References

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  1. Dillon M. Feuz & Scott W. Fausti & John J. Wagner, 1993. "Analysis of the efficiency of four marketing methods for slaughter cattle," Agribusiness, John Wiley & Sons, Ltd., vol. 9(5), pages 453-463.
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Cited by:
  1. Ward, Ruby A. & Bailey, DeeVon & Jensen, Robert, 2005. "An American BSE Crisis: Has it Affected the Value of Traceability and Country-of-Origin Certifications for US and Canadian Beef?," 2005 Annual Meeting, February 5-9, 2005, Little Rock, Arkansas 35515, Southern Agricultural Economics Association.
  2. Harrison, R. Wes & Gillespie, Jeffrey M. & Fields, Deacue, 2001. "Theoretical And Empirical Considerations Of Eliciting Preferences And Model Estimation In Conjoint Analysis," 2001 Annual meeting, August 5-8, Chicago, IL 20680, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  3. Fertő, Imre & Szabó G., Gábor, 2004. "Értékesítési csatornák választása a magyar zöldség-gyümölcs szektorban. Esettanulmány
    [The choice of supply channels in the Hungarian fruit and vegetable sector - a case study]
    ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(1), pages 77-89.
  4. Wijnands, Jo H.M. & van der Lans, Karin & Hobbs, Jill E., 2006. "International Flower Networks: Transparency and Risks in Marketing Channel Choice," 99th Seminar, February 8-10, 2006, Bonn, Germany 7759, European Association of Agricultural Economists.
  5. Liddell, Sterling & Bailey, DeeVon, 2001. "Market Opportunities And Threats To The U.S. Pork Industry Posed By Traceability Systems," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IAMA), vol. 4(03).
  6. Holleran, Erin & Bredahl, Maury E. & Zaibet, Lokman, 1999. "Private incentives for adopting food safety and quality assurance," Food Policy, Elsevier, vol. 24(6), pages 669-683, December.
  7. Bailey, DeeVon & Slade, Jeremy, 2004. "Factors Influencing Support For A National Animal Identification System In The United States," 2004 Annual meeting, August 1-4, Denver, CO 20293, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  8. Martinez, Stephen W. & Zering, Kelly D., 2004. "Pork Quality And The Role Of Market Organizaton," Agricultural Economics Reports 33973, United States Department of Agriculture, Economic Research Service.
  9. Naiquan Sang & Randy Stringer, 2003. "Food Safety Concerns and Changing Procurement Arrangements by Food Processors: A Conjoint Analysis," School of Economics Working Papers 2003-02, University of Adelaide, School of Economics.
  10. Alpay, Savas & Yalcin, Ismet & Dolekoglu, Turker, 2001. "Export Performance Of Firms In Developing Countries And Food Quality And Safety Standards In Developed Countries," 2001 Annual meeting, August 5-8, Chicago, IL 20521, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  11. Stringer, Randy & Sang, Naiquan & Croppenstedt, André, 2009. "Producers, Processors, and Procurement Decisions: The Case of Vegetable Supply Chains in China," World Development, Elsevier, vol. 37(11), pages 1773-1780, November.
  12. Noelke, Corinna M. & Caswell, Julie A., 2000. "A Model Of The Implementation Of Quality Management Systems For Credence Attributes," 2000 Annual meeting, July 30-August 2, Tampa, FL 21874, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  13. Dickinson, David L. & Bailey, DeeVon, 2005. "Experimental Evidence on Willingness to Pay for Red Meat Traceability in the United States, Canada, the United Kingdom, and Japan," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 37(03), December.
  14. Harrison, R. Wes & Gillespie, Jeffrey M. & Fields, Deacue, 2005. "Analysis of Cardinal and Ordinal Assumptions in Conjoint Analysis," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 34(2), October.
  15. Nielsen, Niels Asger & Jeppesen, Lisbeth Fruensgaard, 2001. "The beef market in the European Union," MAPP Working Papers 75, University of Aarhus, Aarhus School of Business, The MAPP Centre.
  16. Jan Fałkowski, 2008. "Vertical coordination from the angle of farmer loyalty and access to credit. Evidence from the Polish dairy sector," Working Papers 2008-01, Faculty of Economic Sciences, University of Warsaw.

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