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Direct-selling farming and urban externalities: what impact on products quality and market size?

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  • Anne Fournier,

Abstract

In this paper, we study how the proximity to cities affects the decision of farmers to enter the direct-selling market in presence of spatial heterogeneity in agricultural yields. We develop a theoretical model which takes into account 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 competition between farmers, and can have concomitant undesired effects on both the quality and the range of available varieties.

Suggested Citation

  • Anne Fournier,, 2016. "Direct-selling farming and urban externalities: what impact on products quality and market size?," Working Papers SMART 16-05, INRAE UMR SMART.
    • Handle: RePEc:rae:wpaper:201605
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    File URL: http://ageconsearch.umn.edu/bitstream/234644/2/wp16-05.pdf
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    More about this item

    Keywords

    direct-selling farming; spatial heterogeneity; urban pollution; city sized;
    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
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations

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