Retail-Farm Price Margins and Consumer Product Diversity

Albert Reed , Howard Elitzak ; Michael K. Wohlgenant

United States Department of Agriculture

关键词: Retail-farm price margins;    marketing services;    food quality;    consumer demand;    Generalized Composite Commodity Theorem;    agricultural economics;   

RP-ID  :  TB-1899

学科分类：农业科学（综合）

美国|英语

来源: United States Department of Agriculture Publications

【 摘 要 】

This bulletin provides an alternative approach for computing retail-farm price margins. Current published estimates of retail-farm price margins are calculated assuming that food markets are comprised of identical firms producing, in fixed-factor proportions, a homogeneous set of final food products. The approach presented here relaxes these assumptions by relying on an expenditure-based measure, justified by the Generalized Composite Commodity Theorem, that reflects consumer demand for the many different elementary food products associated with a modern food market. This measure allows a direct link between consumer demand for diverse elementary products and food quality and marketing services where increases in retail-farm price margins, for example, can be traced to increases in consumer purchases of high-value products. Retail-farm price margins based on the alternative approach are estimated here for seven major U.S. food markets for each year from 1980-97. Although the alternative retail-farm price margins and the currently published estimates show similar trends, they also show significant differences, particularly in more recent years, that can be traced to shifts in increased consumer demand for marketing services.