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Measuring Price–Quantity Relationships in the Dutch Flower Market

Published online by Cambridge University Press:  26 January 2015

Marie Steen
Marie Steen*
Affiliation:
School of Economics and Business, Norwegian University of Life Sciences, Aas, Norway
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Abstract

This research applies an inverse, almost ideal demand model with seasonal adjustments to estimate price–quantity relationships among major cut flower species traded at the Dutch flower auctions. Trigonometric functions are used as a flexible and efficient alternative to standard seasonal dummies. The estimated price and scale flexibilities were all found to be statistically significant with signs as expected. The demand for all flower groups is inflexible, and most of them are quantity substitutes. Based on the estimated values for price and scale flexibilities, a potential for market timing seems to exist, i.e., flower producers may use easily available calendar information to predict prices and quantities.

Keywords

cut flower productioninverse linear aidsmarket timingrisk managementseasonalitytrigonometric functionsD12Q11
Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 46 , Issue 2 , May 2014 , pp. 299 - 308
Copyright
Copyright © Southern Agricultural Economics Association 2014

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