Competition in Local Food Markets

Cristina Connolly and Henry Klaiber

Journal of Agricultural and Resource Economics, 2019, vol. 44, issue 2

Abstract: While local food production plays an increasingly prominent role in U.S. agriculture, there is growing concern about oversaturation. Using a national dataset, we identify locational attributes that are conducive to the establishment of direct-marketing operations and assess competitive behavior. Our model links firm-entry decisions to market size using reduced-form profit functions, which are characterized by the cost of agricultural land and demand variables. We find significant heterogeneity in the required population to support direct-marketing entrants and show that markets become perfectly competitive upon entry of the third direct-marketing establishment, with heterogeneous market potential for new entrants.

Keywords: Agricultural and Food Policy; Demand and Price Analysis; Marketing (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (3)

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Working Paper: Competition in Local Food Markets (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:jlaare:287980

DOI: 10.22004/ag.econ.287980

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