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

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  • Kim, Changhee
  • Chung, Chanjin

Abstract

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.

Suggested Citation

  • Kim, Changhee & Chung, Chanjin, 2011. "Hedonic Analysis of Retail Egg Prices Using Store Scanner Data: An Application to the Korean Egg Market," Journal of Food Distribution Research, Food Distribution Research Society, vol. 42(3), November.
  • Handle: RePEc:ags:jlofdr:139428
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    File URL: http://purl.umn.edu/139428
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    References listed on IDEAS

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    1. 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, June.
    2. Hansen, Lars Peter, 1982. "Large Sample Properties of Generalized Method of Moments Estimators," Econometrica, Econometric Society, vol. 50(4), pages 1029-1054, July.
    3. Schmit, Todd M. & Kaiser, Harry M., 1998. "Egg Advertising, Dietary Cholesterol Concerns, and U.S. Consumer Demand," Agricultural and Resource Economics Review, Cambridge University Press, vol. 27(01), pages 43-52, April.
    4. 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.
    5. 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.
    6. 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.
    7. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 38(2), pages 112-134.
    8. 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).
    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 537-541, August.
    10. Wilson, William W., 1984. "Hedonic Prices In The Malting Barley Market," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 9(01), July.
    11. 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.
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    Cited by:

    1. Ankamah-Yeboah, Isaac & Nielsen, Max & Nielsen, Rasmus, 2016. "Price premium of organic salmon in Danish retail sale," Ecological Economics, Elsevier, vol. 122(C), pages 54-60.
    2. Xu, Xun & Loke, Matthew K. & Leung, PingSun, 2015. "Is There a Price Premium for Local Food? The Case of the Fresh Lettuce Market in Hawaii," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 44(1), April.
    3. Ankamah-Yeboah Isaac & Max Nielsen & Rasmus Nielsen, 2015. "Organic Salmon – Considered a Fisheries or Agricultural Product Among Consumers?," 2015 EAFE (European Association of Fisheries Economists) Conference Papers 003, Nisea.

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