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Modeling Beef Quality Heterogeneity AgEcon
Lusk, Jayson L.; Norwood, F. Bailey.
The effects of various supply and demand shifts on beef price, quantity, and industry welfare have been widely studied under the assumption of beef quality homogeneity. In this paper, we construct a model of the beef sector that incorporates differences in beef quality. The model is used to analyze the effect of supply and demand shifts on changes in prices and quantities of high-and low-quality beef and changes in revenue accruing to producers of high-and low-quality beef. Model results indicate that supply and demand shocks have the potential to alter the average quality of beef on the market and the price premium charged for high-quality beef, which has important implications for retailers selling quality-differentiated beef and producers selling...
Tipo: Journal Article Palavras-chave: Beef; Equilibrium displacement model; Multisector model; Quality heterogeneity; Q11; Q18.
Ano: 2005 URL: http://purl.umn.edu/43483
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Managing Quality under Heterogeneous Consumer Demand and Product Quality AgEcon
Carriquiry, Miguel A.; Babcock, Bruce A..
Based on accepted advances in the marketing, economics, consumer behavior, and satisfaction literatures, we develop a micro-foundations model of a firm that needs to manage the quality of a product that is inherently heterogeneous in the presence of varying customer tastes or expectations for quality. Our model blends elements of the returns to quality, customer lifetime value, and service profit chain approaches to marketing. The model is then used to explain several empirical results pertaining to the marketing literature by explicitly articulating the trade-offs between customer satisfaction and costs (including opportunity costs) of quality. In this environment firms will find it optimal to allow some customers to go unsatisfied. We show that the...
Tipo: Working or Discussion Paper Palavras-chave: Consumer satisfaction; Heterogeneous customers; Quality expectations; Quality heterogeneity; Quality management; Repeated purchases; Demand and Price Analysis.
Ano: 2005 URL: http://purl.umn.edu/18637
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