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Incorrect Price Information for a Heterogeneous Commodity: A Conceptual Synthesis


  • Darren Hudson
  • Don Ethridge
  • Eduardo Segarra


Theory and analysis of markets and market behavior have typically assumed that the information available to market participants is correct. Additionally, most analyses examine market behavior assuming homogeneous products. This article examines the implications of incorrect market price information, especially price differentials based on quality, first conceptually and then with evidence from prior research on cotton prices as an illustration. This evidence shows that price differences based on quality have direct implications on production and marketing processes. Incorrect price/quality information can lead to distortions in the market and market inefficiency.

Suggested Citation

  • Darren Hudson & Don Ethridge & Eduardo Segarra, 1998. "Incorrect Price Information for a Heterogeneous Commodity: A Conceptual Synthesis," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 20(2), pages 365-376.
  • Handle: RePEc:oup:revage:v:20:y:1998:i:2:p:365-376.

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    Cited by:

    1. Hudson, Darren & Jones, Tom, 2001. "Willingness to Plant Identity Preserved Crops: The Case of Mississippi Soybeans," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 33(3), pages 475-485, December.
    2. Eric Koomen & Jasper Dekkers & Mark Koetse & Piet Rietveld & Henk Scholten, 2005. "Valuation of metropolitan open space - presenting the research framework," ERSA conference papers ersa05p599, European Regional Science Association.
    3. Hurttala, Henna & Cao, Tianjian & Valsta, Lauri, 2017. "Optimization of Scots pine (Pinus sylvestris) management with the total net return from the value chain," Journal of Forest Economics, Elsevier, vol. 28(C), pages 1-11.
    4. Suzanne Thornsbury & Kathy Davis & Tara Minton, 2003. "Adding Value to Agricultural Data: A Golden Opportunity," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 25(2), pages 550-568.
    5. Britt, Megan L. & Ramirez, Octavio A. & Carpio, Carlos E., 2002. "Effects of Quality Considerations and Climate/Weather Information on the Management and Profitability of Cotton Production in the Texas High Plains," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 34(3), pages 561-583, December.

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