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Quality policy, market structure and investment behavior in the food marketing chain

Hoffmann, Ruben (2006). Quality policy, market structure and investment behavior in the food marketing chain. Diss. (sammanfattning/summary) Uppsala : Sveriges lantbruksuniv., Acta Universitatis Agriculturae Sueciae, 1652-6880 ; 2006:42
ISBN 91-576-7091-9
[Doctoral thesis]

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Official URL: http://www.emeraldinsight.com/10.1108/000707000103...


This thesis, consisting of four articles, analyzes quality in relation to consumer demand and market structure, and the potential problem of asset fixity at primary level. All four articles, directly or indirectly, relate to different parts of the food marketing chain. Article I examines country of origin as a quality cue from a consumer perception perspective. This is an empirical article applied to the market for fresh meat in Sweden where the characteristics of consumers are related to how important they perceive the labelling ”Swedish” to be in evaluating (i) the eating quality and (ii) the food safety of pork, beef and chicken. Article II examines how ownership structure affects the equilibrium within a two-stage duopoly framework where firms first choose what qualities to produce and then compete in prices. Specifically, cooperatives and investor-owned firms are analyzed. It is shown that firms can have a structural cost advantage due to ownership structure in addition to the high-quality advantage identified in previous literature. The equilibrium outcomes are examined and the policy implications of the different structures are discussed. In a multi-product oligopoly framework article III examines what qualities firms choose to produce and the conditions for when firms choose specialization versus head-to-head competition. The conditions for symmetric and asymmetric equilibria are identified and discussed. It is shown that head-to-head competition rather than specialization is a common outcome and that holes may be left in the product line. Finally, article IV examines the impact of uncertainty on investment behavior in the U.S. hog production using an endogenous threshold model. The results indicate that the investment behavior is characterized by three regimes (investment, disinvestment and inaction) and thus yield support for asset fixity in sow investments. The importance of accounting for investment rigidity when estimating hog supply and variable input demands is highlighted. While quality is not explicitly modelled in article IV, the potential problem of asset fixity examined has implications for quality policy.

Authors/Creators:Hoffmann, Ruben
Title:Quality policy, market structure and investment behavior in the food marketing chain
Series Name/Journal:Acta Universitatis Agriculturae Sueciae
Year of publishing :May 2006
Number of Pages:34
ALLI. Country of origin — a consumer perception perspective of fresh meat. British Food Journal 102(3), 211-229, 2000. II. Ownership Structure and Endogenous Quality Choice: Cooperatives versus Investor-Owned Firms. Journal of Agricultural & Food Industrial Organization 3(2):8, 1-24, 2005. III. Product Line Competition and Vertical Integration in Vertically Differentiated Markets. IV. Estimating Investment Rigidity within a Threshold Regression Framework: The Case of U.S. Hog Production Sector. American Journal of Agricultural Economics (forthcoming) B. Boetel, R. Hoffmann and D. Liu.
Place of Publication:Uppsala
ISBN for printed version:91-576-7091-9
Publication Type:Doctoral thesis
Full Text Status:Public
Agrovoc terms:foods, quality, marketing channels, designation of origin, consumer behaviour, food industry, ownership, economic competition, food production, investment
Keywords:quality, meat marketing chain, country of origin, endogenous quality choice, ownership structure, vertical integration, product line competition, head-to-head competition, investment asymmetry, asset fixity, U.S. hog industry
Permanent URL:
ID Code:1117
Department:(NL, NJ) > Dept. of Economics
Deposited By: Ruben Hoffmann
Deposited On:12 May 2006 00:00
Metadata Last Modified:02 Dec 2014 10:09

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