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Modeling Beef Quality Heterogeneity

Published online by Cambridge University Press:  28 April 2015

Jayson L. Lusk  and
F. Bailey Norwood
Jayson L. Lusk
Affiliation:
Department of Agricultural Economics, Oklahoma State University, Stillwater, OK
F. Bailey Norwood
Affiliation:
Department of Agricultural Economics, Oklahoma State University, Stillwater, OK
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Abstract

The effects of various supply and demand shifts on beef price, quantity, andindustry welfare have been widely studied under the assumption of beefquality homogeneity. In this paper, we construct a model of the beef sectorthat incorporates differences in beef quality. The model is used to analyzethe effect of supply and demand shifts on changes in prices and quantitiesof high- and low-quality beef and changes in revenue accruing to producersof high- and low-quality beef. Model results indicate that supply and demandshocks have the potential to alter the average quality of beef on the marketand the price premium charged for high-quality beef, which has importantimplications for retailers selling quality-differentiated beef and producersselling cattle on a grid.

Keywords

beefequilibrium displacement modelmultisector modelquality heterogeneityQ11Q18
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 37 , Issue 3 , December 2005 , pp. 603 - 618
Copyright
Copyright © Southern Agricultural Economics Association 2005

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