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Hedonic Prices Of Malawi Burley Tobacco

Author

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  • Samikwa, Duncan D.
  • Brorsen, B. Wade
  • Sanders, Larry D.

Abstract

Tobacco is notorious for being one of the most difficult commodities to grade. Here, we determine the implicit prices of various tobacco characteristics using a hedonic price model. The factors affecting the price received for burley tobacco include reputation of the producer, month of auction and lot size in addition to variables representing quality characteristics. Many of these characteristics can be controlled by producers through production, harvesting, and curing practices. The implicit prices should help farmers evaluate whether they should adopt processes to increase quality. In spite of the large number of factors included, only about half of the price variation across lots could be explained. Thus, the difficulty of grading tobacco is confirmed. Since a universally acceptable grading system is unlikely, any attempts to develop an electronic market will likely need to include pictures of the tobacco and may need more precise measurements of characteristics such as texture, aroma, and uniformity.

Suggested Citation

  • Samikwa, Duncan D. & Brorsen, B. Wade & Sanders, Larry D., 1998. "Hedonic Prices Of Malawi Burley Tobacco," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 1(01).
  • Handle: RePEc:ags:ifaamr:34318
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    File URL: http://purl.umn.edu/34318
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    References listed on IDEAS

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    1. Ethridge, Don E. & Davis, Bob, 1982. "Hedonic Price Estimation For Commodities: An Application To Cotton," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 7(02), December.
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    3. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    4. Lucas, Robert E B, 1975. "Hedonic Price Functions," Economic Inquiry, Western Economic Association International, vol. 13(2), pages 157-178, June.
    5. B. Wade Brorsen & Warren R. Grant & M. Edward Rister, 1984. "A Hedonic Price Model for Rough Rice Bid/Acceptance Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 66(2), pages 156-163.
    6. Fredoun Z. Ahmadi-Esfahani & Roland G. Stanmore, 1994. "Values of Australian wheat and flour quality characteristics," Agribusiness, John Wiley & Sons, Ltd., vol. 10(6), pages 529-536.
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    1. repec:oup:revage:v:26:y:2004:i:4:p:552-562. is not listed on IDEAS
    2. Agbola, Frank W. & Kelley, Timothy G. & Bent, Martin J.M. & Rao, P. Parthasarathy, 2002. "Eliciting And Valuing Market Preferences With Traditional Food Crops: The Case Of Chickpea In India," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 5(01).
    3. Wachenheim, Cheryl J. & Nganje, William E. & Kaitibie, Simeon & Johnston, Gretchen, 2005. "Consumer Willingness to Pay for Breads Marketed as "Low-Carbohydrate"," 2005 Annual meeting, July 24-27, Providence, RI 19428, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Agbola, Frank W. & Kelley, Timothy G. & Bent, Martin J.M. & Rao, Partha P., 2002. "A Hedonic Price Analysis of Quality Characteristics of Chickpea in India," 2002 Conference (46th), February 13-15, 2002, Canberra 125049, Australian Agricultural and Resource Economics Society.

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    Keywords

    Crop Production/Industries; Marketing;

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