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Hedonic Analysis of Retail Egg Prices Using Store Scanner Data: An Application to the Korean Egg Market

  • Kim, Changhee
  • Chung, Chanjin

The objective of this study is to identify product characteristics that affect retail prices of fresh eggs. The study develops a hedonic price model to estimate implicit prices of product attributes of Korean fresh eggs. Then, the estimated shadow prices of attributes are used to identify a preference ranking of different levels of the same attribute and the relative importance of the attributes. The study uses store-level scanner data which include prices, sales quantities, and product attributes for all egg transactions for an entire one-year period. Unlike many earlier hedonic price models, the model developed in this study considers the potential effect of quantity sold in estimating implicit prices of attributes. Results suggest that sales quantity is one of important variables in hedonic price models, and therefore omitting the quantity variable could lead to a biased result, particularly when prices and sales vary widely across observations. Results also indicate that Korean consumers put a significantly high value on fertile, organic, free-range-feeding, and larger sized eggs, plus smaller package sizes. The findings could help both producers and retailers formulate better production and marketing strategies by focusing on these attributes.

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File URL: http://purl.umn.edu/139428
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Article provided by Food Distribution Research Society in its journal Journal of Food Distribution Research.

Volume (Year): 42 (2011)
Issue (Month): 3 (November)
Pages:

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Handle: RePEc:ags:jlofdr:139428
Contact details of provider: Web page: http://fdrs.ag.utk.edu/
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  1. Schmit, Todd M. & Kaiser, Harry M., 1998. "Egg Advertising, Dietary Cholesterol Concerns, And U.S. Consumer Demand," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 27(1), April.
  2. Hansen, Lars Peter, 1982. "Large Sample Properties of Generalized Method of Moments Estimators," Econometrica, Econometric Society, vol. 50(4), pages 1029-54, July.
  3. Tronstad, Russell & Huthoefer, Lori Stephens & Monke, Eric A., 1992. "Market Windows And Hedonic Price Analyses: An Application To The Apple Insdustry," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 17(02), December.
  4. Wilson, William W., 1984. "Hedonic Prices In The Malting Barley Market," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 9(01), July.
  5. Dadi Kristofersson & Kyrre Rickertsen, 2007. "Hedonic Price Models for Dynamic Markets," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 69(3), pages 387-412, 06.
  6. Chung, Chanjin & Han, Sungill & Boyer, Tracy A., 2007. "Valuing Quality Attributes and Country Equity in the Korean Beef Market," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN 9751, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  7. J. A. Hausman, 1976. "Specification Tests in Econometrics," Working papers 185, Massachusetts Institute of Technology (MIT), Department of Economics.
  8. Chung L. Huang & Biing-Hwan Lin, 2007. "A Hedonic Analysis of Fresh Tomato Prices among Regional Markets," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 29(4), pages 783-800.
  9. Stanley, Linda R & Tschirhart, John, 1991. "Hedonic Prices for a Nondurable Good: The Case of Breakfast Cereals," The Review of Economics and Statistics, MIT Press, vol. 73(3), pages 537-41, August.
  10. Kenneth E. McConnell & Ivar E. Strand, 2000. "Hedonic Prices for Fish: Tuna Prices in Hawaii," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(1), pages 133-144.
  11. Harris, James Michael, 1997. "The Impact Of Food Product Characteristics On Consumer Purchasing Behavior: The Case Of Frankfurters," Journal of Food Distribution Research, Food Distribution Research Society, vol. 28(1), February.
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