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Supplier reputation and price premium: the case of groundnuts in Rotterdam

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  • Revoredo-Giha, Cesar
  • Fletcher, Stanley M.

Abstract

Firm’s reputation depends on the quality of its goods and its reliability as a supplier. This may explain observed price differences between commodities from different origins but with the same observable characteristics. We analyse data for the Rotterdam market and use hedonic price analysis to show the existence of a price premium that favours the US over other origins. As secondary information points out exporter reliability as one explanation we formalise the relationship between reliability and price premiums in a theoretical model and analyse its implications.

Suggested Citation

  • Revoredo-Giha, Cesar & Fletcher, Stanley M., 2005. "Supplier reputation and price premium: the case of groundnuts in Rotterdam," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 6(2), pages 1-12.
    • Handle: RePEc:ags:aergaa:44095
    DOI: 10.22004/ag.econ.44095
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    References listed on IDEAS

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    1. Carl Shapiro, 1983. "Premiums for High Quality Products as Returns to Reputations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 98(4), pages 659-679.
    2. Combris, Pierre & Lecocq, Sebastien & Visser, Michael, 1997. "Estimation for a Hedonic Price Equation for Bordeaux Wine: Does Quality Matter?," Economic Journal, Royal Economic Society, vol. 107(441), pages 390-402, March.
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    Cited by:

    1. Nadolnyak, Denis A. & Fletcher, Stanley M. & Revoredo-Giha, Cesar, 2005. "Can Rank-Order Tournaments Improve Efficiency of Quality Differentiated Crop Markets Under Marketing Loan Program Operation? The Case of U.S. Peanuts," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24703, European Association of Agricultural Economists.
    2. Fletcher, Stanley M. & Nadolnyak, Denis A., 2005. "Accommodating Imperfect Competition in A Model of World Peanut Trade," 2005 Annual meeting, July 24-27, Providence, RI 19460, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Nadolnyak, Denis A. & Fletcher, Stanley M., 2006. "Quality Premiums and the Post-Harvest Spot Market Thinness: The Case of U.S. Peanuts," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25274, International Association of Agricultural Economists.

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