Agribusiness : An International Journal

Hosseini, S. Safdar; Khaledi, Mohammed; Gray, Richard

doi: 10.1002/agr.20211pmid: N/A

This study measures transaction costs of obtaining credit from Islamic banks. Data were collected from rural households in Iran. The factors affecting transaction costs and the probability of accessing Islamic financial markets are investigated. Similar to conventional financial institutions found in other developing countries, Iranian banks impose high transaction costs that limit poor rural household access to credit. The results reveal that the transaction costs of gaining credit are on average equivalent to an additional 13.8% annual interest cost. The contractual form, the size of credit, the borrower distance from a financial center, and the experience and education level of the borrower are important determinants of the transactions costs. (EconLit Citations: D230, R510, G210). © 2009 Wiley Periodicals, Inc.

Hogberg, Michael G.; Raper, Kellie Curry; Oehmke, James F.

doi: 10.1002/agr.20204pmid: N/A

Recent discussions of a subtherapeutic antibiotic ban in U.S. livestock gives rise to much speculation regarding industry impacts. Swine producers are heterogeneous; thus, a ban on subtherapeutic antibiotics could affect producers of different sizes, cost structures, different production systems and management styles differently. The authors combine average cost data with physical production data to simulate the impact of a subtherapeutic antibiotics ban on high, middle, and low‐cost producers in different types of swine production operations. Their results suggest that although economies of scale would still be important, the ban would potentially limit or reduce economies of scale in the swine industry. (JEL Codes: L11, Q12, Q13). © 2009 Wiley Periodicals, Inc.

Abdulai, Awudu; Kuhlgatz, Christian; Schmitz, Silke

doi: 10.1002/agr.20205pmid: N/A

In this study, the authors examined the incidence and determinants of quantity price discounts and quantity price surcharges in the German food sector through a bivariate probit model, using recent consumer scanner survey data. Selectivity bias was corrected for in estimating the magnitude of quantity price surcharges and quantity price discounts, using Heckman's procedure. The findings reveal that almost 10% of the investigated products attract higher unit prices for larger package sizes, although the extent of price surcharges varied among product categories. Quantity price discounts were found to dominate in the firms' pricing strategies. The econometric results showed that the number of package sizes, the average package size, the packaging and storage forms, as well as the price image of a product are all significant determinants of the decision to impose both quantity price surcharges and quantity price discounts. (JEL classification: D40, L11) © 2009 Wiley Periodicals, Inc.

Zheng, Yuqing; Kaiser, Harry M.

doi: 10.1002/agr.20208pmid: N/A

This study distinguishes nonadvertising marketing activities from generic advertising and investigates their separate impacts on the retail demand for fluid milk in New York State. Advertising, having an estimated elasticity (of demand) of 0.038 using panel data, is found to be about five times as effective as nonadvertising; therefore, it remains the more powerful marketing tool. Such results have policy implications in benefit‐cost analysis and optimal allocation of fluid‐milk check‐off funds. Our results suggest that NYS dairy producers have much to gain from investing more of their check‐off budgets in advertising. (EconLit citations: Q11, M37). © 2009 Wiley Periodicals, Inc.

Hsieh, Ming‐Feng; Mitchell, Paul D.; Stiegert, Kyle W.

doi: 10.1002/agr.20209pmid: N/A

The authors investigate pricing and demand issues for four fresh potato categories (russet, red, white, and minor colored), organic fresh potatoes, and two processed potato categories (frozen/refrigerated and dehydrated) using a nonlinear generalized almost ideal demand system (GAIDS) that is closed under unit scaling (CUUS). The model used regionally aggregated at‐home consumption data from 2000 to 2005. Estimated uncompensated own price elasticities for fresh potatoes were highly significant and ranged between −0.5 and −1.6. The study was designed to capture the effects of the aggregate organic market on the prices, expenditures, and demand for each potato category. Organic food market penetration elasticities suggest that specialty potatoes (organic and minor‐colored) are particularly well positioned if demands for organic products continue to rise, red potatoes are not well positioned and evidence of the early warning signs of slippage in market share for white and russet potatoes may exist. Producers and promoters of conventional potato products should account for the increasingly important role of organic products in making decisions. As an auxiliary exercise, we also statistically sourced the variance of the organic potato price premium relative to the other four fresh potato prices. At the present time, the variability of the organic potato premium is not much affected by production costs or other supply‐related factors: the premium variability was driven largely by demand, and demographic/seasonal factors. Producers should be cautious about shifting to organic potato production until lower cost practices emerge. (JEL Codes: D120, Q130, Q180). © 2009 Wiley Periodicals, Inc.

Innes, Brian; Cranfield, John

doi: 10.1002/agr.20206pmid: N/A

The authors assess consumer interest in a food product containing production‐derived attributes. They use the French Label Rouge system in the Ontario chicken market as an example of a producer‐controlled quality system. Conjoint analysis reveals a significant proportion of respondents value nonprice attributes; medication and housing had the highest importance scores, followed by price and brand ownership. Cluster analysis of the part‐worth utilities revealed three consumer segments: price conscious consumers; consumers focused on naturalness; and those focused on animal health. Segments do not appear to differ on the basis of socioeconomic and demographic profile of respondents. However, multiitem scales reflecting attitudes towards production systems vary significantly across segments. Price‐conscious respondents show agreement with use of medication and express concern over quality. Respondents in the naturalness segment express concern over quality, locality of production and impact of production methods on own health. Animal‐health‐conscious respondents show agreement with the use of medications, concern over quality, locality and impact of production methods on own health, but neutrality towards byproducts and traditional production methods. (EconLit citations: D120, Q130). © 2009 Wiley Periodicals, Inc.

Carpio, Carlos E.; Isengildina‐Massa, Olga

doi: 10.1002/agr.20210pmid: N/A

A contingent valuation framework is used to evaluate South Carolina consumers' willingness to pay for the “locally grown” characteristic (defined here as South Carolina grown) in produce and animal products and to identify the sociodemographic characteristics affecting consumer preferences for this characteristic. Findings show that South Carolina consumers are willing to pay an average premium of 27% for local produce and 23% for local animal products. Premiums for local products are influenced by age, gender, and income as well as by perceived product quality, a desire to support the local economy, patronage of farmers markets, and consumer ties to agriculture. (JEL Categories: D12, Q13). © 2009 Wiley Periodicals, Inc.

Keef, Stephen P.; Zhu, Hui

doi: 10.1002/agr.20207pmid: N/A

There is an extensive literature on the Monday effect with stock indices. It is regularly reported that the return on Monday is correlated with the return on the prior Friday. The bad Monday effect occurs when the return on the preceding Friday is negative. Cotton is an economically important commodity in the United States and around the world. This investigation into the daily price seasonality in the U.S. cotton market is based on spot prices from Memphis and futures prices from the New York Cotton Exchange. The regression methodologies employ adjustments to control for undesirable properties in the error terms. There are three main conclusions. First, the close‐to‐close changes in the futures price and in the spot price exhibit a negative Monday effect. Second, a negative bad Monday effect is observed on Mondays using close‐to‐close prices. The effect is present during the weekend nontrading period and continues into trading on Mondays. Third, the negative bad Monday effect does not appear to weaken in close‐to‐close prices and during the weekend over the period examined (1987–2003). However, there is weak evidence of a temporal decline during trading on Mondays. (EconLit Citations: G12, G14, Q14). © 2009 Wiley Periodicals, Inc.

McCluskey, Jill

doi: 10.1002/agr.20212pmid: N/A