Owner Motivations in the UK Speciality Food Sector
AbstractThis paper investigates empirically whether owner motivations are consistent with neoclassical models of profit maximisation. Contrary to the neoclassical model, in some markets owners gain private benefits from supplying products with certain characteristics. To consider this issue, a full theoretical model that allows owners to consider not only profit, but also utility, in their choices of price, product quality, and the use of an owner-specific production method was developed. Information was gathered on owner motivations from the UK speciality food sector to test the propositions of the theoretical model. Evidence of systematic utility maximisation is found and utility maximising owners set higher profit maximising prices and produce a higher quality product. These findings have implications for the UK speciality food sector.
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Bibliographic InfoPaper provided by Centre for Competition Policy, University of East Anglia in its series Working Papers with number 07-4.
Length: 31 pages
Date of creation: Mar 2007
Date of revision:
Speciality food; objective function heterogeneity; factor analysis; seemingly unrelated regressions.;
Find related papers by JEL classification:
- C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
- C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
- L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
- L7 - Industrial Organization - - Industry Studies: Primary Products and Construction
- Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture
This paper has been announced in the following NEP Reports:
- NEP-AGR-2007-07-13 (Agricultural Economics)
- NEP-ALL-2007-07-13 (All new papers)
- NEP-UPT-2007-07-13 (Utility Models & Prospect Theory)
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