IDEAS home Printed from https://ideas.repec.org/a/wly/agribz/v16y2000i4p471-484.html
   My bibliography  Save this article

Price skewness and the marketing of finished cattle

Author

Listed:
  • C. Jack

    (Department of Agricultural and Food Economics, The Queen's University of Belfast, Newforge Lane, Belfast BT9 5PX, Northern Ireland)

  • S.A. McErlean

    (Department of Agricultural and Food Economics, The Queen's University of Belfast, Newforge Lane, Belfast BT9 5PX, Northern Ireland)

  • D. Anderson

    (Department of Agricultural and Food Economics, The Queen's University of Belfast, Newforge Lane, Belfast BT9 5PX, Northern Ireland)

  • T. McCallion

    (Department of Agricultural and Food Economics, The Queen's University of Belfast, Newforge Lane, Belfast BT9 5PX, Northern Ireland)

Abstract

Incomplete information about product quality generates risk for market participants. The amount of information and perceived risk varies between marketing channels and an agent's attitude to this risk influences their choice of marketing channel. For risk-averse sellers, expected price and the associated price risk (dispersion) are relevant to their choice of marketing route. This paper examines how the choice of marketing channel by farmers selling finished cattle is influenced by their perceptions of expected market price and price variation. The study uses a unique dataset of “matched” animals, sold first in liveweight auction markets in Northern Ireland and subsequently to a meat packer. The findings indicate that price skewness also influences channel choice. The positive skewness exhibited by auction market prices combined with the negative skewness exhibited by meat packer prices may mean that some risk-averse individuals, faced with incomplete information about product quality, prefer the liveweight auction market to selling directly to meat packers [JEL Codes: Q110]. © 2000 John Wiley & Sons, Inc.

Suggested Citation

  • C. Jack & S.A. McErlean & D. Anderson & T. McCallion, 2000. "Price skewness and the marketing of finished cattle," Agribusiness, John Wiley & Sons, Ltd., vol. 16(4), pages 471-484.
    • Handle: RePEc:wly:agribz:v:16:y:2000:i:4:p:471-484
    DOI: 10.1002/1520-6297(200023)16:4<471::AID-AGR6>3.0.CO;2-K
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    References listed on IDEAS

    as
    1. Machina, Mark J, 1982. ""Expected Utility" Analysis without the Independence Axiom," Econometrica, Econometric Society, vol. 50(2), pages 277-323, March.
    2. Joseph Golec & Maurry Tamarkin, 1998. "Bettors Love Skewness, Not Risk, at the Horse Track," Journal of Political Economy, University of Chicago Press, vol. 106(1), pages 205-225, February.
    3. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Andreas Tsakiridis & Michael Wallace & James Breen & Cathal O'Donoghue & Kevin Hanrahan, 2021. "Beef quality assurance schemes: Can they improve farm economic performance?," Agribusiness, John Wiley & Sons, Ltd., vol. 37(3), pages 451-471, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nolan Miller & Alexander Wagner & Richard Zeckhauser, 2013. "Solomonic separation: Risk decisions as productivity indicators," Journal of Risk and Uncertainty, Springer, vol. 46(3), pages 265-297, June.
    2. Brian Chezum & Bradley S. Wimmer, 2000. "Evidence of Adverse Selection from Thoroughbred Wagering," Southern Economic Journal, John Wiley & Sons, vol. 66(3), pages 700-714, January.
    3. Gaudeul, Alexia, 2009. "A (micro) course in microeconomic theory for MSc students," MPRA Paper 15388, University Library of Munich, Germany.
    4. Henri Loubergé, 1998. "Risk and Insurance Economics 25 Years After," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 23(4), pages 540-567, October.
    5. Upravitelev, A., 2023. "Neoclassical roots of behavioral economics," Journal of the New Economic Association, New Economic Association, vol. 58(1), pages 110-140.
    6. Heidelbach, Olaf, 2007. "Efficiency of selected risk management instruments: An empirical analysis of risk reduction in Kazakhstani crop production," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 40, number 92323.
    7. M Cain & D Law & D Peel, 2005. "Cumulative prospect theory and gambling," Working Papers 566823, Lancaster University Management School, Economics Department.
    8. Jullien, Bruno & Salanié, Bernard, 2005. "Empirical Evidence on the Preferences of Racetrack Bettors," IDEI Working Papers 178, Institut d'Économie Industrielle (IDEI), Toulouse.
    9. Assaf Razin & Efraim Sadka & Chi-Wa Yuen, 1999. "An Information-Based Model of Foreign Direct Investment: The Gains from Trade Revisited," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 6(4), pages 579-596, November.
    10. Tisdell, Clem, 2014. "Information Technology's Impacts on Productivity, Welfare and Social Change: Second Version," Economic Theory, Applications and Issues Working Papers 195701, University of Queensland, School of Economics.
    11. Konduru, Srinivasa & Kalaitzandonakes, Nicholas G. & Magnier, Alexandre, 2009. "GMO Testing Strategies and Implications for Trade: A Game Theoretic Approach," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49594, Agricultural and Applied Economics Association.
    12. König, Philipp J. & Pothier, David, 2018. "Safe but fragile: Information acquisition, sponsor support and shadow bank runs," Discussion Papers 15/2018, Deutsche Bundesbank.
    13. Andrea Attar & Thomas Mariotti & François Salanié, 2021. "Entry-Proofness and Discriminatory Pricing under Adverse Selection," American Economic Review, American Economic Association, vol. 111(8), pages 2623-2659, August.
    14. Reynolds, Travis & Kolodinsky, Jane & Murray, Byron, 2012. "Consumer preferences and willingness to pay for compact fluorescent lighting: Policy implications for energy efficiency promotion in Saint Lucia," Energy Policy, Elsevier, vol. 41(C), pages 712-722.
    15. Ginger Zhe Jin & Andrew Kato & John A. List, 2010. "That’S News To Me! Information Revelation In Professional Certification Markets," Economic Inquiry, Western Economic Association International, vol. 48(1), pages 104-122, January.
    16. Ritu Agarwal & Michelle Dugas & Guodong (Gordon) Gao & P. K. Kannan, 2020. "Emerging technologies and analytics for a new era of value-centered marketing in healthcare," Journal of the Academy of Marketing Science, Springer, vol. 48(1), pages 9-23, January.
    17. Villas-Boas, Sofia B, 2020. "Reduced Form Evidence on Belief Updating Under Asymmetric Information," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt08c456vk, Department of Agricultural & Resource Economics, UC Berkeley.
    18. Yaofeng Fu & Ruokun Huang & Yiran Sheng, 2017. "Labor Contract Law -An Economic View," Papers 1702.03977, arXiv.org.
    19. Ghosh, Suman, 2007. "Job mobility and careers in firms," Labour Economics, Elsevier, vol. 14(3), pages 603-621, June.
    20. Eunsoo Kim & Suyon Kim & Jaehong Lee, 2021. "Do Foreign Investors Affect Carbon Emission Disclosure? Evidence from South Korea," IJERPH, MDPI, vol. 18(19), pages 1-14, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:agribz:v:16:y:2000:i:4:p:471-484. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.