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A Semiparametric Approach to Analyzing Differentiated Agricultural Products

Published online by Cambridge University Press:  26 January 2015

Anton Bekkerman ,
Gary W. Brester  and
Tyrel J. McDonald
Anton Bekkerman
Affiliation:
Department of Agricultural Economics, Montana State University, Bozeman, Montana
Gary W. Brester
Affiliation:
Department of Agricultural Economics and Economics, Montana State University, Bozeman, Montana
Tyrel J. McDonald
Affiliation:
Verified Beef, LLC, Bozeman, Montana
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When consumers have heterogeneous perceptions about product quality, traditional parametric methods may not provide accurate marginal valuation estimates of a product's characteristics. A quantile regression framework can be used to estimate valuations of product characteristics when quality perceptions are not homogeneous. Semiparametric quantile regressions provide identification and quantification of heterogeneous marginal valuation effects across a conditional price distribution. Using purchase price data from a bull auction, we show that there are nonconstant marginal valuations of bull carcass and growth traits. Improved understanding of product characteristic valuations across differentiated market segments can help producers develop more cost-effective management strategies.

Keywords

bull salesheritable traitsproduct differentiationquantile regressionQ13L15C52D49
Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 45 , Issue 1 , February 2013 , pp. 79 - 94
Copyright
Copyright © Southern Agricultural Economics Association 2013

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