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Valuing Vineyards: A Directional Distance Function Approach

Author

Listed:
  • Cross, Robin
  • Färe, Rolf
  • Grosskopf, Shawna
  • Weber, William L.

Abstract

We exploit the duality between the cost function and the directional distance function in value space to recover hedonic prices of product or asset characteristics. An application is offered for 96 Oregon vineyards located in the Willamette Valley of Oregon that sold between 1995 and 2007. Specifically, we recover hedonic prices for the number of high-, medium-, and low-quality vineyard acres and the number of nonvineyard acres sold in the parcel. Not surprisingly, higher-quality vineyard acres have a higher estimated hedonic price than medium- or low-quality acres, but as the number of high-quality acres increases, the hedonic price falls. (JEL Classification: D24, C61, Q10)

Suggested Citation

  • Cross, Robin & Färe, Rolf & Grosskopf, Shawna & Weber, William L., 2013. "Valuing Vineyards: A Directional Distance Function Approach," Journal of Wine Economics, Cambridge University Press, vol. 8(1), pages 69-82, May.
    • Handle: RePEc:cup:jwecon:v:8:y:2013:i:01:p:69-82_00
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    Cited by:

    1. Caviglia-Harris, Jill & Biggs, Trent & Ferreira, Elvino & Harris, Daniel W. & Mullan, Katrina & Sills, Erin O., 2021. "The color of water: The contributions of green and blue water to agricultural productivity in the Western Brazilian Amazon," World Development, Elsevier, vol. 146(C).
    2. Bhattacharyya, Aditi & Kutlu, Levent & Sickles, Robin C., 2018. "Pricing Inputs and Outputs: Market prices versus shadow prices, market power, and welfare analysis," Working Papers 18-009, Rice University, Department of Economics.
    3. Karagiannis, Roxani & Karagiannis, Giannis, 2023. "Nonparametric estimates of price efficiency for the Greek infant milk market: Curing the curse of dimensionality with shannon entropy," Economic Modelling, Elsevier, vol. 121(C).
    4. Eunice Adu Donkor & Emmanuel Donkor & Enoch Owusu-Sekyere & Victor Owusu, 2020. "The Development and Promotion of Sweet Potato Yoghurt in Ghana: Implications for Sustainable Production and Consumption Policies," Sustainability, MDPI, vol. 12(8), pages 1-16, April.
    5. Flavius Badau & Nicholas Rada, 2022. "Disequilibrium effects from misallocated markets: An application to agriculture," Agricultural Economics, International Association of Agricultural Economists, vol. 53(4), pages 592-604, July.
    6. Badau, Flavius & Rada, Nicholas, 2016. "The Price of Inefficiency in Indian Agriculture," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235622, Agricultural and Applied Economics Association.
    7. Rolf Färe & Shawna Grosskopf & William L. Weber, 2016. "Pricing Nonmarketed Outputs with an Application to Community Colleges," Public Finance Review, , vol. 44(2), pages 197-219, March.

    More about this item

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General

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