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Value Differentiation

  • Goodhue, Rachael E.
  • Rausser, Gordon C.

American agriculture is shifting from homogeneous commodities to differentiated products. Value differentiation, the process by which agrifood chain actors isolate, match, and exploit heterogeneity in consumer preferences and product attributes, is examined. Value differentiation is characterized by complementarities across four activities at each stage of the production chain: product characteristic measurement, product characteristic production, coordination between stages, and customer preference detection. Complementarities at the firm level are modeled using supermodularity. The model's predictions are discussed, as are potential testing approaches, and implications are presented for agrifood firms, marketing orders, and returns to research.

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File URL: http://purl.umn.edu/31069
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Article provided by Western Agricultural Economics Association in its journal Journal of Agricultural and Resource Economics.

Volume (Year): 28 (2003)
Issue (Month): 03 (December)
Pages:

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Handle: RePEc:ags:jlaare:31069
Contact details of provider: Web page: http://waeaonline.org/
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  1. Perloff, Jeffrey M & Rausser, Gordon C., 1983. "The effect of asymmetrically held information and market power in agricultural markets," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt9vf0g556, Department of Agricultural & Resource Economics, UC Berkeley.
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  5. repec:cdl:agrebk:666281 is not listed on IDEAS
  6. Goodhue, Rachael E. & Rausser, Gordon C., 2003. "Value Differentiation," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 28(03), December.
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  13. Arora, Ashish, 1996. "Testing for complementarities in reduced-form regressions: A note," Economics Letters, Elsevier, vol. 50(1), pages 51-55, January.
  14. Hennessy, David A. & Roosen, Jutta & Miranowski, John, 2001. "Leadership and the Provision of Safe Food," Staff General Research Papers 10549, Iowa State University, Department of Economics.
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