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Welfare Measurement Biases and Product Differentiation in Agriculture: An Example from the US Beef Sector

Author

Listed:
  • Maria Priscila Ramos
  • Sophie Drogué
  • Stephan Marette

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 US 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

  • Maria Priscila Ramos & Sophie Drogué & Stephan Marette, 2006. "Welfare Measurement Biases and Product Differentiation in Agriculture: An Example from the US Beef Sector," Working Papers 2006/02, INRA, Economie Publique.
    • Handle: RePEc:apu:wpaper:2006/02
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    References listed on IDEAS

    as
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    2. James, Jennifer S. & Alston, Julian M., 2002. "Taxes and quality: A market-level analysis," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 46(3), pages 1-29.
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    4. Gracia, A. & Albisu, L. M., 1998. "The demand for meat and fish in Spain: Urban and rural areas," Agricultural Economics, Blackwell, vol. 19(3), pages 359-366, December.
    5. Laajimi, A. & Albisu, L. M., 1997. "La demande de viandes et de poissons en Espagne : une analyse micro-économique," Cahiers d'Economie et de Sociologie Rurales (CESR), Institut National de la Recherche Agronomique (INRA), vol. 42.
    6. Eenoo, Ed Van & Peterson, Everett & Purcell, Wayne, 2000. "Impact of Exports on the U. S. Beef Industry," Staff Papers 232380, Virginia Polytechnic Institute and State University, Department of Agricultural and Applied Economics.
    7. Rickertsen, Kyrre, 1996. "Structural Change and the Demand for Meat and Fish in Norway," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 23(3), pages 316-330.
    Full references (including those not matched with items on IDEAS)

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