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Efficient Estimation Of Hedonic Inverse Input Demand Systems

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  • Kristofersson, Dadi
  • Rickertsen, Kyrre

Abstract

The paper is concerned with efficient estimation of characteristics demand. We derive and estimate an inverse input demand system for quality characteristics by using 172,946 observations over 881 trading days in the Icelandic fish auctions. An improved estimation method based on an expanded random coefficient model is suggested as an alternative to the currently used two-stage method of Brown and Rosen (1982). The estimates demonstrate the improved efficiency of the suggested method. A number of empirical results emerge, including a general increase in the demand for quality.

Suggested Citation

  • Kristofersson, Dadi & Rickertsen, Kyrre, 2003. "Efficient Estimation Of Hedonic Inverse Input Demand Systems," 2003 Annual meeting, July 27-30, Montreal, Canada 21926, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea03:21926
    DOI: 10.22004/ag.econ.21926
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    3. Cecilia Hammarlund, 2015. "The Big, the Bad, and the Average: Hedonic Prices and Inverse Demand for Baltic Cod," Marine Resource Economics, University of Chicago Press, vol. 30(2), pages 157-177.
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    5. Gobillon, Laurent & Wolff, François-Charles, 2020. "The local effects of an innovation: Evidence from the French fish market," Ecological Economics, Elsevier, vol. 171(C).
    6. Julia Bronnmann & Frank Asche, 2016. "The Value of Product Attributes, Brands and Private Labels: An Analysis of Frozen Seafood in Germany," Journal of Agricultural Economics, Wiley Blackwell, vol. 67(1), pages 231-244, February.
    7. Johan Blomquist & Valerio Bartolino & Staffan Waldo, 2015. "Price Premiums for Providing Eco‐labelled Seafood: Evidence from MSC‐certified Cod in Sweden," Journal of Agricultural Economics, Wiley Blackwell, vol. 66(3), pages 690-704, September.
    8. Hammarlund, Cecilia, 2013. "The Big, the Bad and the Average: Hedonic Prices and Inverse Demand for Baltic Cod," Working Papers 2013:34, Lund University, Department of Economics.
    9. Smed, Sinne & Hansen, Lars Garn, 2018. "Consumer Valuation of Health Attributes in Food," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 43(2), May.
    10. Marsh, Thomas L. & Piggott, Nicholas E., 2013. "Measuring Pre-Commited Quantities Through Consumer Price Formation," 2013 Conference (57th), February 5-8, 2013, Sydney, Australia 152165, Australian Agricultural and Resource Economics Society.
    11. Wolff, François-Charles & Asche, Frank, 2022. "Pricing heterogeneity and transaction mode: Evidence from the French fish market," Journal of Economic Behavior & Organization, Elsevier, vol. 203(C), pages 67-79.
    12. Maynard, Leigh J. & Stoeppel, Kelly M., 2007. "Hedonic Price Analysis of Thoroughbred Broodmares in Foal," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 25(2), pages 1-15.
    13. Asche, Frank & Larsen, Thomas A. & Smith, Martin D. & Sogn-Grundvåg, Geir & Young, James A., 2015. "Pricing of eco-labels with retailer heterogeneity," Food Policy, Elsevier, vol. 53(C), pages 82-93.
    14. Laurent Gobillon & François-Charles Wolff & Patrice Guillotreau, 2013. "The anatomy of prices on the French fish market," Working Papers halshs-00839147, HAL.
    15. N. Koffi Amegbeto & Victor M. Manyong & Ousmane Coulibaly & Robert Asiedu, 2008. "Estimating market demand for fresh yam characteristics using contingent valuation: implications for crop breeding and production choices," Agricultural Economics, International Association of Agricultural Economists, vol. 39(3), pages 349-363, November.
    16. Laurent Gobillon & François-Charles Wolff & Patrice Guillotreau, 2017. "The effect of buyers and sellers on fish market prices," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 44(1), pages 149-176.
    17. Rangkakulnuwat, Poomthan & Wang, H. Holly & Ahn, Sung K., 2007. "The inverse imported factor demand system in Thailand: A cointegration analysis," Economics Letters, Elsevier, vol. 94(3), pages 402-407, March.
    18. François-Charles Wolff & Frédéric Salladaré & Laurent Baranger, 2024. "A classification of buyers in first-sale fish markets: Evidence from France," Post-Print hal-04586532, HAL.
    19. Eric Sjöberg, 2015. "Pricing on the Fish Market--Does Size Matter?," Marine Resource Economics, University of Chicago Press, vol. 30(3), pages 277-296.
    20. Knútsson, Ögmundur & Kristófersson, Daði Már & Gestsson, Helgi, 2016. "The effects of fisheries management on the Icelandic demersal fish value chain," Marine Policy, Elsevier, vol. 63(C), pages 172-179.
    21. Guillen, Jordi & Maynou, Francesc, 2014. "Importance of temporal and spatial factors in the ex-vessel price formation for red shrimp and management implications," Marine Policy, Elsevier, vol. 47(C), pages 66-70.
    22. Kyrre Rickertsen & Frode Alfnes & Pierre Combris & Géraldine Enderli & Sylvie Issanchou & Jason F. Shogren, 2017. "French Consumers' Attitudes and Preferences toward Wild and Farmed Fish," Marine Resource Economics, University of Chicago Press, vol. 32(1), pages 59-81.
    23. Teuber, Ramona, 2010. "Estimating the Demand for Sensory Quality – Theoretical Considerations and an Empirical Application to Specialty Coffee," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 59(3).

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    Keywords

    Demand and Price Analysis;

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation

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