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Market Structure And Consumer Valuation In The Rbst-Free And Organic Milk Markets

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  • Dhar, Tirtha Pratim
  • Foltz, Jeremy D.
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    Abstract

    This study uses revealed preferences of consumers to study the consumer valuations of rBST-free and organic milk. The study specifies and estimates a quadratic AIDS model for different milk types using US supermarket scanner data. The introduction of rBST-free and organic milk is used to estimate both competitive and variety effects as measures of consumer valuations. Results show significant consumer valuations for organic milk and to a lesser extent rBST-free milk.

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    File URL: http://purl.umn.edu/22177
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    Bibliographic Info

    Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2003 Annual meeting, July 27-30, Montreal, Canada with number 22177.

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    Date of creation: 2003
    Date of revision:
    Handle: RePEc:ags:aaea03:22177

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    Keywords: Consumer/Household Economics; Industrial Organization;

    References

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    1. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June.
    2. Richard Blundell & Jean-Marc Robin, 2000. "Latent Separability: Grouping Goods without Weak Separability," Econometrica, Econometric Society, vol. 68(1), pages 53-84, January.
    3. Tirtha Pratim Dhar & Jean-Paul Chavas & Brian W. Gould, 2002. "An Empirical Assessment of Endogeneity Issues In Demand Analysis for Differentiated Products," Food Marketing Policy Center Research Reports 066, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    4. Hausman, Jerry A, 1981. "Exact Consumer's Surplus and Deadweight Loss," American Economic Review, American Economic Association, vol. 71(4), pages 662-76, September.
    5. Huffman, Wallace E. & Rousu, M.C. & Shogren, Jason F. & Tegene, Abebayehu, 2004. "Consumers' Resistance to Genetically Modified Foods: The Role of Information in an Uncertain Environment," Staff General Research Papers 12339, Iowa State University, Department of Economics.
    6. Kadiyali, Vrinda & Vilcassim, Naufel J & Chintagunta, Pradeep K, 1996. "Empirical Analysis of Competitive Product Line Pricing Decisions: Lead, Follow, or Move Together?," The Journal of Business, University of Chicago Press, vol. 69(4), pages 459-87, October.
    7. Mario F. Teisl & Nancy E. Bockstael & Alan Levy, 2001. "Measuring the Welfare Effects of Nutrition Information," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(1), pages 133-149.
    8. Hausman, Jerry A & Leonard, Gregory K, 2002. "The Competitive Effects of a New Product Introduction: A Case Study," Journal of Industrial Economics, Wiley Blackwell, vol. 50(3), pages 237-63, September.
    9. Cotterill, Ronald W. & Franklin, Andrew W. & Ma, Li Yu, 1996. "Measuring Market Power Effects in Differentiated Product Industries: An Application to the Soft Drink Industry," Research Reports 25229, University of Connecticut, Food Marketing Policy Center.
    10. Cotterill, Ronald W & Putsis, William P, Jr & Dhar, Ravi, 2000. "Assessing the Competitive Interaction between Private Labels and National Brands," The Journal of Business, University of Chicago Press, vol. 73(1), pages 109-37, January.
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    Cited by:
    1. Bernard, Daria J. & Mathios, Alan D., 2005. "Factors Affecting Consumer Choice and Willingness to Pay for Milk Attributes," 2005 Annual meeting, July 24-27, Providence, RI 19366, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Gillespie, Jeffrey M. & Nehring, Richard F. & Hallahan, Charles B. & Morrison Paul, Catherine J. & Sandretto, Carmen L., 2008. "Economics and Productivity of Organic versus Non-organic Dairy Farms in the United States," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44415, European Association of Agricultural Economists.
    3. Kolodinsky, Jane, 2008. "Affect or information? Labeling policy and consumer valuation of rBST free and organic characteristics of milk," Food Policy, Elsevier, vol. 33(6), pages 616-623, December.
    4. Frank Bunte & Michiel Galen & W. Kuiper & Gemma Tacken, 2010. "Limits to Growth in Organic Sales," De Economist, Springer, vol. 158(4), pages 387-410, November.

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