IDEAS home Printed from https://ideas.repec.org/p/zwi/fpcrep/070.html
   My bibliography  Save this paper

Price Discrimination in the Context of Vertical Differentiation: An Application to Canadian Wheat Exports

Author

Listed:
  • Nathalie Lavoie

Abstract

This study examines the ability of the Canadian Wheat Board (CWB) to price discriminate in bread wheat exports. This study models wheat as a vertically differentiated intermediate good and modifies the model of vertical differentiation by Mussa and Rosen to the realities of wheat import demand. The conceptual model isolates the bases of price discrimination and demonstrates that the CWB?s ability to exploit cost differences in pricing depends on the extent of the differentiation between Canadian and U.S. wheat. This model is implemented using monthly confidential price data provided by the CWB for exports to Japan, the United Kingdom, and two markets aggregating remaining exports through Canada?s west and east coasts, for 1982 1994. The data indicate that the CWB charges different prices to different countries for wheat of the same grade and protein content. Results from the model indicate that the price difference between any two markets is not completely explained by elements of perfect competition. However, the evidence is mixed regarding the ability of the CWB to utilize all the instruments available to price discriminate. Thus, the CWB?s pricing strategy may be more complex and dynamic than the prescription for static producer surplus maximization derived in this study.

Suggested Citation

  • Nathalie Lavoie, 2002. "Price Discrimination in the Context of Vertical Differentiation: An Application to Canadian Wheat Exports," Food Marketing Policy Center Research Reports 070, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    • Handle: RePEc:zwi:fpcrep:070
    as

    Download full text from publisher

    File URL: http://fmpc.uconn.edu/publications/rr/rr70.pdf
    Download Restriction: no
    ---><---

    Citations

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


    Cited by:

    1. Scoppola, Margherita, 2006. "Economies of Scale and Endogenous Market Structures in International Grain Trade," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25322, International Association of Agricultural Economists.

    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:zwi:fpcrep:070. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/dauctus.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.