IDEAS home Printed from https://ideas.repec.org/a/bla/agecon/v18y1998i1p1-19.html
   My bibliography  Save this article

Spatial allocation and the shadow pricing of product characteristics

Author

Listed:
  • Jean‐Paul Chavas
  • Thomas L. Cox
  • Edward Jesse

Abstract

The paper considers an industry transforming primary commodities (farm products) into processed commodities (food products). It focuses on the allocation of embedded characteristics (carbohydrate, protein, etc.) both across space and among commodities. The approach generates a spatial competitive market equilibrium of production, consumption, transformation, and trade for both primary and processed commodities, along with the spatial distribution of shadow prices for the product characteristics. The model provides a basis for analyzing the allocation and pricing of agricultural products, food products, and characteristics in spatial markets. The empirical usefulness of the model is illustrated in the context of regional resource allocation in the U.S. dairy sector.

Suggested Citation

  • Jean‐Paul Chavas & Thomas L. Cox & Edward Jesse, 1998. "Spatial allocation and the shadow pricing of product characteristics," Agricultural Economics, International Association of Agricultural Economists, vol. 18(1), pages 1-19, January.
    • Handle: RePEc:bla:agecon:v:18:y:1998:i:1:p:1-19
    DOI: 10.1111/j.1574-0862.1998.tb00483.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1574-0862.1998.tb00483.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1574-0862.1998.tb00483.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. McDowell, Howard & Fleming, Ann & Spinelli, Felix, 1990. "U.S. Milk Markets Under Alternative Federal Order Pricing Policies," Staff Reports 278357, United States Department of Agriculture, Economic Research Service.
    2. Bruce L. Gardner, 1975. "The Farm-Retail Price Spread in a Competitive Food Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 57(3), pages 399-409.
    3. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    4. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74(2), pages 132-132.
    5. Henry W. Kinnucan & Olan D. Forker, 1987. "Asymmetry in Farm-Retail Price Transmission for Major Dairy Products," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 69(2), pages 285-292.
    6. Palmquist, Raymond B, 1984. "Estimating the Demand for the Characteristics of Housing," The Review of Economics and Statistics, MIT Press, vol. 66(3), pages 394-404, August.
    7. Willig, Robert D, 1976. "Consumer's Surplus without Apology," American Economic Review, American Economic Association, vol. 66(4), pages 589-597, September.
    8. Epple, Dennis, 1987. "Hedonic Prices and Implicit Markets: Estimating Demand and Supply Functions for Differentiated Products," Journal of Political Economy, University of Chicago Press, vol. 95(1), pages 59-80, February.
    9. Helmberger, Peter G. & Chen, Yu-Hui, 1994. "Economic Effects Of U.S. Dairy Programs," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 19(2), pages 1-14, December.
    10. McDowell, Howard & Fleming, Ann M. & Fallert, Richard F., 1988. "Federal Milk Marketing Orders: An Analysis of Alternative Policies," Agricultural Economic Reports 308061, United States Department of Agriculture, Economic Research Service.
    11. Jesse, Edward V. & Johnson, Aaron C. Jr, 1985. "An Analysis of Cooperative Over-Order Pricing of Fluid Milk," Technical Bulletins 156823, United States Department of Agriculture, Economic Research Service.
    12. Haidacher, Richard C. & Blaylock, James R. & Myers, Lester H., 1988. "Consumer Demand for Dairy Products," Agricultural Economic Reports 308041, United States Department of Agriculture, Economic Research Service.
    13. Lucas, Robert E B, 1975. "Hedonic Price Functions," Economic Inquiry, Western Economic Association International, vol. 13(2), pages 157-178, June.
    14. Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Julian M. Alston & Joseph V. Balagtas & Henrich Brunke & Daniel A. Sumner, 2006. "Supply and demand for commodity components: implications of free trade versus the AUSFTA for the US dairy industry ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(2), pages 131-152, June.
    2. Bouamra-Mechemache, Z. & Chavas, J.P. & Cox, T. & Réquillart, V., 2001. "Price discrimination and EU dairy policy : an economic evaluation of policy options," Economics Working Paper Archive (Toulouse) 23, French Institute for Agronomy Research (INRA), Economics Laboratory in Toulouse (ESR Toulouse).
    3. Seyed Habibollah Mosavi, 2016. "Energy price reform and food markets: the case of bread supply chain in Iran," Agricultural Economics, International Association of Agricultural Economists, vol. 47(2), pages 169-179, March.
    4. Zohra Bouamra‐Mechemache & Jean‐Paul Chavas & Tom Cox & Vincent Réquillart, 2002. "EU Dairy Policy Reform and Future WTO Negotiations: a Spatial Equilibrium Analysis," Journal of Agricultural Economics, Wiley Blackwell, vol. 53(2), pages 233-257, July.
    5. Stephen Hamilton & Scott Kjorlien & Ethan Ligon & Aric Shafran, 2024. "Spatial Procurement of Farm Products and the Supply of Processed Foods: Application to the Tomato Processing Industry," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 64(1), pages 11-33, February.
    6. Langley, Suchada V. & Somwaru, Agapi & Normile, Mary Anne, 2006. "Trade Liberalization in International Dairy Markets: Estimated Impacts," Economic Research Report 7214, United States Department of Agriculture, Economic Research Service.
    7. Bouamra-Mechemache, Zohra & Requillart, Vincent, 2006. "EU dairy policy and WTO negotiations," 98th Seminar, June 29-July 2, 2006, Chania, Crete, Greece 10105, European Association of Agricultural Economists.
    8. Abbassi, Abdessalem & Larue, Bruno, 2011. "Trade liberalization and inter-provincial dumping in a spatial equilibrium model: the case of the Canadian dairy industry," MPRA Paper 30363, University Library of Munich, Germany.
    9. Bouamra-Mechemache, Zohra & Chavas, Jean-Paul & Cox, Thomas L. & Requillart, Vincent, 2001. "Interregional Analysis Of The Impacts Of Eliminating European Union Milk Production Quotas," 2001 Annual meeting, August 5-8, Chicago, IL 20677, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    10. Ayele Gelan & Amos Omore, 2014. "Beyond Tariffs: The Role of Non-Tariff Barriers in Dairy Trade in the East African Community Free Trade Area," Development Policy Review, Overseas Development Institute, vol. 32(5), pages 523-543, September.
    11. Grams, Michael, 2005. "Reform der EU-Milchmarktpolitik bei instabilen Weltmärkten," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 54(03), pages 1-10.
    12. Bouamra-Mechemache, Zohra & Ali-Kein, Hela Hadj & Requillart, Vincent, 2006. "Impact of WTO reforms on the world dairy sector," 2006 Annual meeting, July 23-26, Long Beach, CA 21149, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    13. Bouamra-Mechemache, Zohra & Jogeneel, Roel & Requillart, Vincent, 2008. "Removing EU milk quotas, soft landing versus hard landing," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 43656, European Association of Agricultural Economists.
    14. Alston, Julian M. & Sumner, Daniel A. & Balagtas, Joseph Valdes & Brunke, Henrich, 2004. "Economic Implications Of The Australia-U.S. Free Trade Agreement For U.S. Dairy Markets And Domestic Dairy Farm Programs," 2004 Annual meeting, August 1-4, Denver, CO 20164, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    15. Pelikan, Janine & Boimah, Mavis & Chibanda, Craig & Deblitz, Claus & Gunarathne, Anoma & Almadani, Isam Mohamad & Schott, Johanna & Thobe, Petra & Weible, Daniela & Zamani, Omid, 2022. "European Exports of Poultry and Milk Products to Ghana and Senegal: A Blessing or a Curse?," Conference papers 333432, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chavas, Jean-Paul & Cox, Thomas L. & Jesse, Edward V., 1993. "Spatial Hedonic Pricing and Trade," Staff Papers 200574, University of Wisconsin-Madison, Department of Agricultural and Applied Economics.
    2. Chavas, Jean-Paul & Kim, Kwansoo, 2001. "Hedonic Pricing of Components and Cointegration Relationships: A Dynamic Analysis of Dairy Product Prices," Working Papers 201572, University of Wisconsin-Madison, Department of Agricultural and Applied Economics, Food System Research Group.
    3. Olivier Marchand & Eric Skhiri, 1995. "Prix hédoniques et estimation d'un modèle structurel d'offre et de demande de caractéristiques [Une application au marché de la location de logements en France ]," Économie et Prévision, Programme National Persée, vol. 121(5), pages 127-140.
    4. Teuber, Ramona, 2010. "Estimating the Demand for Sensory Quality – Theoretical Considerations and an Empirical Application to Specialty Coffee," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 59(03), pages 1-14, September.
    5. McVey, Marty Jay, 1996. "Valuing quality differentiated grains from a total logistics perspective," ISU General Staff Papers 1996010108000012326, Iowa State University, Department of Economics.
    6. Zvi Griliches, 1991. "Hedonic Price Indexes and the Measurement of Capital and Productivity: Some Historical Reflections," NBER Chapters, in: Fifty Years of Economic Measurement: The Jubilee of the Conference on Research in Income and Wealth, pages 185-206, National Bureau of Economic Research, Inc.
    7. 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).
    8. LaFrance, Jeffrey T., 1999. "U.S. Food and Nutrient Demand and the Effects of Agricultural Policies," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt52h9v4dq, Department of Agricultural & Resource Economics, UC Berkeley.
    9. Amelia Bilbao & Celia Bilbao & José M. Labeaga, "undated". "The excess burden associated to characteristics of the goods: Application to housing demand," Working Papers 2005-09, FEDEA.
    10. Parket, Douglas & Zilberman, David, 1989. "Price Transmission Across Marketing Levels in a Hedonic Framework," CUDARE Working Papers 198498, University of California, Berkeley, Department of Agricultural and Resource Economics.
    11. Manuel Landajo & Celia Bilbao & Amelia Bilbao, 2012. "Nonparametric neural network modeling of hedonic prices in the housing market," Empirical Economics, Springer, vol. 42(3), pages 987-1009, June.
    12. Cropper, Maureen L & Oates, Wallace E, 1992. "Environmental Economics: A Survey," Journal of Economic Literature, American Economic Association, vol. 30(2), pages 675-740, June.
    13. Mora Rodriguez, Jhon James, 2013. "Introduccion a la teoría del consumidor [Introduction to Consumer Theory]," MPRA Paper 48129, University Library of Munich, Germany, revised 08 Jul 2013.
    14. Nicolai V. Kuminoff & V. Kerry Smith & Christopher Timmins, 2010. "The New Economics of Equilibrium Sorting and its Transformational Role for Policy Evaluation," NBER Working Papers 16349, National Bureau of Economic Research, Inc.
    15. Andersen, Laura M. & Smed, Sinne, 2010. "What Is It Consumers Really Want And Why? The Case Of Fat In Milk," 115th Joint EAAE/AAEA Seminar, September 15-17, 2010, Freising-Weihenstephan, Germany 116455, European Association of Agricultural Economists.
    16. Victor Ginsburgh & Jianping Mei & Michael Moses, 2006. "On the computation of art indices in art," ULB Institutional Repository 2013/7290, ULB -- Universite Libre de Bruxelles.
    17. Reis, Hugo J. & Santos Silva, J.M.C., 2006. "Hedonic prices indexes for new passenger cars in Portugal (1997-2001)," Economic Modelling, Elsevier, vol. 23(6), pages 890-908, December.
    18. Green, Richard K. & Lee, Hyojung, 2016. "Age, demographics, and the demand for housing, revisited," Regional Science and Urban Economics, Elsevier, vol. 61(C), pages 86-98.
    19. Nerlove, Marc, 1995. "Hedonic price functions and the measurement of preferences: The case of Swedish wine consumers," European Economic Review, Elsevier, vol. 39(9), pages 1697-1716, December.
    20. David E. Clark, 2006. "Externality Effects on Residential Property Values: The Example of Noise Disamenities," Growth and Change, Wiley Blackwell, vol. 37(3), pages 460-488, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:agecon:v:18:y:1998:i:1:p:1-19. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/iaaeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.