Evaluating Price Enhancement by Processing Cooperatives

Robert L. Wills

American Journal of Agricultural Economics, 1985, vol. 67, issue 2, 183-192

Abstract: Section 2 of the Capper-Volstead Act requires the secretary of agriculture to determine whether a cooperative has unduly enhanced its prices. There has been no consensus about what level of price enhancement is too high. This paper contrasts pricing of cooperative and proprietary brands of differentiated food products. Empirical evidence indicates that market share and advertising do not generally provide cooperatives any more power to enhance prices than they give proprietary firms. The paper suggests a standard for undue price enhancement, the predicted price level of proprietary brands in similarly structured markets.

Date: 1985
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Persistent link: https://EconPapers.repec.org/RePEc:oup:ajagec:v:67:y:1985:i:2:p:183-192.

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