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Evaluating Quality Improvement in Nonhomogeneous Agricultural Commodities: The Case of Australian Beef

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  • Voon, Thomas Jan P.

Abstract

This paper develops conceptual and empirical frameworks for assessing the economic benefits from agricultural research which enhances the amount of a desirable characteristic in each unit of a heterogeneous commodity. The commodity is assumed to comprise two or more joint products accruable in fixed proportion. Quality improvement is perceived as an increase in the proportion of a joint product with more of a more-valued characteristic and, as such, is modelled as a shift in the supply curve of a joint product rather than via a shift in commodity demand. A proxy variable is constructed to measure an intertemporal quality change and to estimate the associated size of the supply shift. An application of the framework to the Australian beef industry indicates that the per unit amount of the characteristic 'freshness' in beef has increased over the last two decades. Substantial social benefits can be obtained by research which enhances the quality of Australian beef carcasses. A larger share of the total benefits accrue to beef producers.

Suggested Citation

  • Voon, Thomas Jan P., 1996. "Evaluating Quality Improvement in Nonhomogeneous Agricultural Commodities: The Case of Australian Beef," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 64(02), pages 1-7, August.
    • Handle: RePEc:ags:remaae:12411
    DOI: 10.22004/ag.econ.12411
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    References listed on IDEAS

    as
    1. Thomas J. Voon & Geoff W. Edwards, 1992. "Research Payoff from Quality Improvement: The Case of Protein in Australian Wheat," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(3), pages 564-572.
    2. repec:bla:ecorec:v:60:y:1984:i:168:p:45-56 is not listed on IDEAS
    3. Geoff W. Edwards & John W. Freebairn, 1984. "The Gains from Research into Tradable Commodities," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 66(1), pages 41-49.
    4. J. P. Voon, 1991. "Measuring Research Benefits From A Reduction Of Pale, Soft And Exudative Pork In Australia," Journal of Agricultural Economics, Wiley Blackwell, vol. 42(2), pages 180-183, May.
    5. Grant M. Scobie & Paul R. Johnson, 1979. "The Price Elasticity Of Demand For Exports: A Comment On Throsby And Rutledge," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 23(1), pages 62-66, April.
    6. Alston, Julian M., 1991. "Research Benefits in a Multimarket Setting: A Review," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 59(01), pages 1-30, April.
    7. Voon, T.J., 1993. "An Appraisal of the Effects of Demand Increasing Research in Distorted Markets," Economic Analysis and Policy, Elsevier, vol. 23(1), pages 45-58.
    8. Brennan, John P. & Godyn, Dirk L. & Johnston, Brian G., 1989. "An Economic Framework for Evaluating New Wheat Varieties," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 57(01-02-03), pages 1-18, December.
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    12. Porter, Darrell & Todd, Mike C., 1985. "The Effect Of Carcass Quality On Beef Carcass Auction Prices," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 29(3), pages 1-10, December.
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