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A Semiparametric Approach to Analyzing Differentiated Agricultural Products

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  • Bekkerman, Anton
  • Brester, Gary W.
  • McDonald, Tyrel J.

Abstract

When consumers have heterogeneous perceptions about product quality, traditional parametric methods may not provide accurate marginal valuation estimates of a product’s characteristics. A quantile regression framework can be used to estimate valuations of product characteristics when quality perceptions are not homogeneous. Semiparametric quantile regressions provide identification and quantification of heterogeneous marginal valuation effects across a conditional price distribution. Using purchase price data from a bull auction, we show that there are nonconstant marginal valuations of bull carcass and growth traits. Improved understanding of product characteristic valuations across differentiated market segments can help producers develop more cost-effective management strategies.

Suggested Citation

  • Bekkerman, Anton & Brester, Gary W. & McDonald, Tyrel J., 2013. "A Semiparametric Approach to Analyzing Differentiated Agricultural Products," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 45(01), pages 1-16, February.
    • Handle: RePEc:ags:joaaec:143640
    DOI: 10.22004/ag.econ.143640
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    1. Gary W. Brester, 2002. "Meeting Consumer Demands with Genetics and Market Coordination: The Case of the Leachman Cattle Company," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 24(1), pages 251-265.
    2. Koenker,Roger, 2005. "Quantile Regression," Cambridge Books, Cambridge University Press, number 9780521608275, November.
    3. Dhuyvetter, Kevin C. & Schroeder, Ted C. & Simms, Danny D. & Bolze, Ronald P., Jr. & Geske, Jeremy, 1996. "Determinants Of Purebred Beef Bull Price Differentials," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 21(2), pages 1-15, December.
    4. Michelle L. Barnes & Anthony W. Hughes, 2002. "A quantile regression analysis of the cross section of stock market returns," Working Papers 02-2, Federal Reserve Bank of Boston.
    5. Jones, Rodney & Turner, Tyler & Dhuyvetter, Kevin C. & Marsh, Thomas L., 2008. "Estimating the Economic Value of Specific Characteristics Associated with Angus Bulls Sold at Auction," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 40(1), pages 315-333, April.
    6. Omar Arias & Walter Sosa-Escudero & Kevin F. Hallock, 2001. "Individual heterogeneity in the returns to schooling: instrumental variables quantile regression using twins data," Empirical Economics, Springer, vol. 26(1), pages 7-40.
    7. Eide, Eric & Showalter, Mark H., 1998. "The effect of school quality on student performance: A quantile regression approach," Economics Letters, Elsevier, vol. 58(3), pages 345-350, March.
    8. Allan M. Walburger, 2002. "Estimating the Implicit Prices of Beef Cattle Attributes: A Case from Alberta," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 50(2), pages 135-149, July.
    9. Parcell, Joseph L. & Schroeder, Ted C., 2007. "Hedonic Retail Beef and Pork Product Prices," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 39(1), pages 1-18, April.
    10. repec:cup:jagaec:v:40:y:2008:i:1:p:315-333_17 is not listed on IDEAS
    11. Roger Koenker & Kevin F. Hallock, 2001. "Quantile Regression," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 143-156, Fall.
    12. Gary W. Brester, 2002. "Meeting Consumer Demands with Genetics and Market Coordination: The Case of the Leachman Cattle Company," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 24(1), pages 251-265.
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    Cited by:

    1. B. Wade Brorsen & Notie H. Lansford, 2013. "Sales Tax Collections in Nonmetropolitan Communities," Public Finance Review, , vol. 41(4), pages 489-503, July.
    2. Boyer, Christopher & Griffith, Andrew P. & Thompson, Jada M. & Rhinehart, Justin & Burdine, Kenneth H., 2022. "Bred Heifer Price Determinants in the Southeast," Journal of Applied Farm Economics, Purdue University, vol. 3(2), May.
    3. Tang, M. & Thompson, N.M. & Boyer, C.N. & Widmar, N.J.O. & Lusk, J.L., 2023. "Implicit Market Segmentation and Valuation of Angus Bull Attributes," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 48(2), May.

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    More about this item

    Keywords

    Marketing;

    JEL classification:

    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • D49 - Microeconomics - - Market Structure, Pricing, and Design - - - Other

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