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Welfare Measurement and Quality Product Differentiation in Agriculture: An Example From the EU15 Beef Sector

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  • Ramos, Maria Priscila
  • Drogue, Sophie
  • Marette, Stephan

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 EU15 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

  • Ramos, Maria Priscila & Drogue, Sophie & Marette, Stephan, 2005. "Welfare Measurement and Quality Product Differentiation in Agriculture: An Example From the EU15 Beef Sector," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24720, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae05:24720
    DOI: 10.22004/ag.econ.24720
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    References listed on IDEAS

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    1. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    2. Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, vol. 9(4), pages 469-479, November.
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    More about this item

    Keywords

    Livestock Production/Industries;

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • F15 - International Economics - - Trade - - - Economic Integration

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