Transaction costs and slaughter cattle procurement: Processors' selection of supply channels
This article investigates the hypothesis that different supply channels impose different types (and levels of) transaction costs on beef processors in the United Kingdom. The choice of supply channel is therefore influenced by these transaction costs. Recent food safety legislation and increasing consumer concerns over farm animal welfare may have altered the transaction costs arising from different supply channels. Conjoint analysis is used to measure the relative importance of selected transaction costs in a processor's procurement decision. A survey of UK beef processing firms is used to collect data for the conjoint analysis. The results suggest that the monitoring costs arising from the traceability of cattle to the farm of origin are particularly important. The implications for vertical coordination in the beef marketing chain are discussed. © 1996 John Wiley & Sons, Inc.
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Volume (Year): 12 (1996)
Issue (Month): 6 ()
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- Scott W. Fausti & Dillon M. Feuz, 1995. "Production Uncertainty and Factor Price Disparity in the Slaughter Cattle Market: Theory and Evidence," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(3), pages 533-540.
- Dillon M. Feuz & Scott W. Fausti & John J. Wagner, 1993. "Analysis of the efficiency of four marketing methods for slaughter cattle," Agribusiness, John Wiley & Sons, Ltd., vol. 9(5), pages 453-463.