Horizontal Consolidation in the U.S. Food Processing Industry: Boon or Bane?

This study measured the effect of increased concentration on industry market power and cost efficiency, using a bilateral oligopoly model. Cost efficiency gains dominate market power effects from increase in industry concentration. This result is consistent with previous finding that consolidation in the U.S. beef industry is efficiency driven.Agribusiness,

Does Generic Advertising Help or Hurt Brand Advertising?

The purpose of this study is to investigate whether the generic advertising helps or hurts the brand advertising within the differentiated product environments. We develop an analytical model that includes both generic and brand advertising expenditures considering vertical product differentiation. Then the analysis is devoted to examine how marginal effects of expenditure affect each other under product differentiation. To help examine the relationship, we also include a new variable, the degree of product differentiation. Analytical results show that when the generic advertising increases the product differentiation, the high quality brand tends to take benefits while the low quality brand loses. When generic advertising includes messages that do not differentiate quality attributes, the high quality brand loses while the low quality brand takes benefits.check off, generic advertising, brand advertising, vertical product differentiation, Marketing,

Dynamic Assessment of Oligopoly, Oligopsony Power, and Cost Efficiency using the New Empirical Industrial Organization in the U.S. Beef Packing Industry

In this paper, the new empirical industrial organization approach with a dynamic model is simultaneously employed to measure the degree of oligopoly, oligopsony power, and cost efficiency in the U.S. beef packing industry. The oligopsony power is estimated with two effects: cash cattle procurement market power and captive supply market power. The model is estimated by the Generalized Method of Moments using monthly data from 1990 to 2006. The empirical results reveal the presence of market power in both the beef retail market and the cattle procurement market in the sample period. The captive supply is a source of oligopsony market power, but the effect is considerably small. The oligopsony market power is greater and less stable than oligopoly market power for the whole sample period. The cost efficiency effect outweighs the market power effects for the sample period.beef packing industry, captive supply, cost efficiency, industrial concentration, market power, NEIO, Agricultural and Food Policy, Industrial Organization, Livestock Production/Industries, Marketing, Q13,

Integrating the Structural Auction Approach and Traditional Measures of Market Power

This study asks the question, what is the relationship between traditional models of market power and structural auction models? An encompassing model is derived that considers both price markdowns due to bid shading during an auction and price markdowns at the industry-level due to imperfect competition. Data from a cattle procurement experimental market is used to compare the appropriateness of the two alternative theories. Regression results show that while the number of firms is more important than the number of bidders on lot of cattle in explaining pricing behavior in the game, the number of bidders does contain some unique information and should be included in the model. Both the traditional NEIO and structural auction approaches overestimated the true markdowns possibly due to failure to account for the winner's curse.Marketing,

Dynamic Assessment of Bertrand Oligopsony in the U.S. Cattle Procurement Market

The new empirical industrial organization approach with the Bertrand model is employed to measure the oligopsony market power in the U.S. cattle procurement market. The assumption of price competition (Bertrand model) based on the nature of cattle production such as cattle cycle and seasonality is used and compared to quantity competition (Cournot model). The empirical results show that the oligopsony market power exists in the U.S. cattle procurement market. The cattle cycle and seasonality affect the oligopsony market power and the cattle cycle causes the change of market power. However, concentration has a negative effect on the oligopsony market power.cattle cycle, concentration, market power, NEIO, oligopsony, seasonality, Agribusiness, Demand and Price Analysis, Industrial Organization, Livestock Production/Industries, Marketing, Q13, L13, L16,

Generic Advertising in Concentrated and Differentiated Agricultural Markets

This study develops an analytical framework to examine the impact of generic advertising on brand advertising with alternative assumptions on demand changes (shift-up and rotation), product differentiation, market concentration, and relationship between commodity and brand advertising programs. The newly developed model allows one to determine the relationship between generic and brand advertising, which has not been clearly shown in previous studies. Analytical results show that when generic advertising leads to an inelastic demand, generic advertising would help brand advertising and could decrease the optimal brand advertising expenditures. However, when generic advertising leads to an elastic demand, it would negatively affect the profitability of brand advertising.generic advertising, brand advertising, product differentiation., Agribusiness, Demand and Price Analysis, Industrial Organization, Marketing,

WILL THE VOLUNTARY CHECKOFF PROGRAM BE THE ANSWER? AN ANALYSIS OF OPTIMAL ADVERTISING AND FREE-RIDER PROBLEM IN THE U.S. BEEF INDUSTRY

Replaced with revised version of paper 04/21/04.Marketing,

Valuing Quality Attributes and Country Equity in the Korean Beef Market

Demand and Price Analysis, International Relations/Trade,

Effects of Food Assistance Programs, Demographic Characteristics, and Living Environments on Children’s Food Insecurity

The objective of this study is to examine impacts of food assistance programs, demographic characteristics, and socioeconomic status of households on children’s food insecurity in U.S. Annual cross-sectional and pseudo-panel analyses with fixed effect regressions are conducted in this study using probit and truncated regressions. The simultaneous equation procedure is applied to address the endogeneity problem caused by the reverse influence of food insecurity on participation of food programs. Results show that some government-sponsored food programs are effective in alleviating the children’s food insecurity problem, and demographic characteristics and living environments are important factors in determining the status of children’s food insecurity. Our results also manifest the importance of considering the endogeneity problem of food program variables in evaluating the effectiveness of food programs

PANEL DATA DOUBLE-HURDLE MODEL: AN APPLICATION TO DAIRY ADVERTISING

In this study, we extend to panel data structures the double-hurdle model typically used in cross-sectional data. The new double-hurdle model can account not only for the censored nature of commodity purchases, but also for the dynamics of the purchase process. In this model, a flexible error structure is assumed to account for state dependence and household-specific heterogeneity. In the empirical application for milk purchase, we find that generic advertising increases the probability of market participation as well as the purchase quantity and incidence. Temporal dependence is also found in both purchase and participation equations.double-hurdle model, panel data, household purchase, milk, advertising, heterogeneity, state dependence, simulated maximum likelihood, Marketing,