Retail and wholesale market power in organic apples
Timothy J. Richards,
Ram N. Acharya and
Ignacio Molina
Agribusiness, 2011, vol. 27, issue 1, 62-81
Abstract:
The demand for organic fresh fruits and vegetable continues to grow at a rate far higher than the rest of the produce industry. The cost of meeting organic certification standards, however, has meant that supply has been slow to adjust. With limited supply, the authors hypothesize that organic suppliers enjoy more market power in bargaining over their share of the retail-production cost margin for fresh apples. We test this hypothesis using random parameters, generalized extreme value demand model (mixed logit) combined with a structural model of retail and wholesale pricing that allows conduct to vary by product attributes (organic or nonorganic) and time. They apply this model to data on wholesale prices of organic and nonorganic apples from Washington State, and retail data from five major metropolitan markets. They find that organic growers do indeed earn a larger share of the total margin than nonorganic growers, but this vertical market power is eroding over time as market supply adjusts. [EconLit citations: C35; D12; D43; L13; L41; Q13]. (C) 2010 Wiley Periodicals, Inc.
Date: 2011
References: Add references at CitEc
Citations: View citations in EconPapers (3)
Downloads: (external link)
http://hdl.handle.net/10.1002/agr.20251
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:wly:agribz:v:27:y:2011:i:1:p:62-81
Access Statistics for this article
Agribusiness is currently edited by Ronald W. Cotterill
More articles in Agribusiness from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().