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Sales performance of direct food marketers: African American‐led operations

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  • Timothy Park
  • Steve Martinez
  • Mohammed Ibrahim

Abstract

This paper examines the impact of participation in direct marketing on the entire distribution of farm sales for African American (AA) operations using the unconditional quantile regression (UQR) estimator. Our analysis yields unbiased estimates of the unconditional impact of direct marketing on farm sales and reveals the heterogeneous effects that occur across the distribution of farm sales. The sales gap for AA‐led operations is about 11% across all quantiles when we control for farming and marketing experience along with key features of the farm operation such as crop choice and geographic location. The relative sales gap for AA operations declines across the distribution of farm sales and actually disappears for the largest operations. The network effect that we identify is associated with a sales premium for AA‐led operations relative to other operations engaged in direct marketing. Marketing experts and extension professionals can use this information to guide farmers who are considering initiating or expanding direct marketing activities.

Suggested Citation

  • Timothy Park & Steve Martinez & Mohammed Ibrahim, 2024. "Sales performance of direct food marketers: African American‐led operations," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 46(1), pages 255-274, March.
    • Handle: RePEc:wly:apecpp:v:46:y:2024:i:1:p:255-274
    DOI: 10.1002/aepp.13405
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    References listed on IDEAS

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    1. Martinez, Steve W. & Park, Timothy, 2021. "Marketing Practices and Financial Performance of Local Food Producers: A Comparison of Beginning and Experienced Farmers," USDA Miscellaneous 313069, United States Department of Agriculture.
    2. Markus Frölich & Blaise Melly, 2013. "Unconditional Quantile Treatment Effects Under Endogeneity," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 31(3), pages 346-357, July.
    3. Timothy Park & Ashok K. Mishra & Shawn J. Wozniak, 2014. "Do farm operators benefit from direct to consumer marketing strategies?," Agricultural Economics, International Association of Agricultural Economists, vol. 45(2), pages 213-224, March.
    4. Emily Oster, 2019. "Unobservable Selection and Coefficient Stability: Theory and Evidence," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 37(2), pages 187-204, April.
    5. MacDonald, James M. & Korb, Penni & Hoppe, Robert A., 2013. "Farm Size and the Organization of U.S. Crop Farming," Economic Research Report 262221, United States Department of Agriculture, Economic Research Service.
    6. Park, Timothy A., 2015. "Direct Marketing and the Structure of Farm Sales: An Unconditional Quantile Regression Approach," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 40(2), pages 1-19, May.
    7. Uematsu, Hiroki & Mishra, Ashok K., 2011. "Use of Direct Marketing Strategies by Farmers and Their Impact on Farm Business Income," Agricultural and Resource Economics Review, Cambridge University Press, vol. 40(1), pages 1-19, April.
    8. Sergio P. Firpo & Nicole M. Fortin & Thomas Lemieux, 2018. "Decomposing Wage Distributions Using Recentered Influence Function Regressions," Econometrics, MDPI, vol. 6(2), pages 1-40, May.
    9. Timothy Park & Krishna Paudel & Seydina Sene, 2018. "Sales impacts of direct marketing choices: treatment effects with multinomial selectivity," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 45(3), pages 433-453.
    10. Jeffrey K. O'Hara & Jeffrey Lin, 2020. "Population Density and Local Food Market Channels," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 42(3), pages 477-496, September.
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