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Direct-selling farming and urban externalities: What impact on product quality and market size?

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  • Fournier, Anne J.

Abstract

In this paper, we study how proximity to cities affects the decisions of farmers to enter the direct-sales market in the presence of spatial heterogeneity in agricultural yields. We develop a theoretical model which takes account of the externality of urban pollution and market access costs on direct-selling profits. We find that regions hosting an intermediate-size city are more likely to supply a wider range of direct-selling varieties. Additionally, we highlight that spatial heterogeneity in productivity creates distortions in the competition among farmers, and can have concomitant undesired effects on both the quality and range of available varieties.

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  • Fournier, Anne J., 2018. "Direct-selling farming and urban externalities: What impact on product quality and market size?," Regional Science and Urban Economics, Elsevier, vol. 70(C), pages 97-111.
    • Handle: RePEc:eee:regeco:v:70:y:2018:i:c:p:97-111
    DOI: 10.1016/j.regsciurbeco.2018.03.001
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    More about this item

    Keywords

    Direct-selling farming; Spatial heterogeneity; Urban pollution; City size;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis

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