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Welfare Measurement Biases and Product Differentiation in Agriculture: An Example from the US Beef Sector

Author

Listed:
  • Maria Priscila Ramos
  • Sophie Drogué
  • Stephan Marette

Abstract

This paper examines the impact of two different model specifications on welfare estimations. A model specification that takes into account product differentiation is compared to a specification where the product differentiation is overlooked. The welfare comparison under both specifications show some biases of aggregation as well as ambiguous results: the welfare under one specification may be larger or lower than the welfare under the alternative assumption. In order to illustrate our theoretical conclusions, we present an application to the US beef market. We show that the welfare, when the product differentiation is taken into account, is smaller than the welfare when the product differentiation is omitted.

Suggested Citation

  • Maria Priscila Ramos & Sophie Drogué & Stephan Marette, 2006. "Welfare Measurement Biases and Product Differentiation in Agriculture: An Example from the US Beef Sector," Working Papers 2006/02, INRA, Economie Publique.
  • Handle: RePEc:apu:wpaper:2006/02
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    File URL: https://www6.versailles-grignon.inra.fr/economie_publique/Media/fichiers/Working-Papers/Working-Papers-2006/WP_2006_02
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    References listed on IDEAS

    as
    1. Abigail Tiffin & Richard Tiffin, 1999. "Estimates of Food Demand Elasticities for Great Britain: 1972-1994," Journal of Agricultural Economics, Wiley Blackwell, vol. 50(1), pages 140-147.
    2. Gracia, A. & Albisu, Luis Miguel, 1998. "The demand for meat and fish in Spain: Urban and rural areas," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 19(3), December.
    3. Laajimi, A. & Albisu, L. M., 1997. "La demande de viandes et de poissons en Espagne : une analyse micro-économique," Cahiers d'Economie et de Sociologie Rurales (CESR), INRA (French National Institute for Agricultural Research), vol. 42.
    4. Panos Fousekis & Brian J. Revell, 2002. "Primary Demand for Red Meats in the United Kingdom," Cahiers d'Economie et Sociologie Rurales, INRA Department of Economics, vol. 63, pages 31-50.
    5. James, Jennifer S. & Alston, Julian M., 2002. "Taxes and quality: A market-level analysis," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 46(3), September.
    6. Eenoo, Ed Van & Peterson, Everett & Purcell, Wayne, 2000. "Impact of Exports on the U. S. Beef Industry," Staff Papers 232380, Virginia Tech, Department of Agricultural and Applied Economics.
    7. Rickertsen, Kyrre, 1996. "Structural Change and the Demand for Meat and Fish in Norway," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 23(3), pages 316-330.
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    More about this item

    Keywords

    Product differentiation; Beef demand; Welfare;

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