Journal of Agricultural and Resource Economics
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The Women, Infants, and Children (WIC) Program has changed its food benefit issuance method from paper vouchers to electronic benefit transfer (EBT). WIC participation among the eligible population base has been declining since 2010, and EBT has been viewed as a way to arrest the decline. We utilize county-level WIC data from Oklahoma to analyze the impact of EBT on participation and food cost. We find no significant effect on program participation due to the EBT transition, but EBT reduced average participant food costs about $8.18/month, the equivalent of $56 million annually if similar savings apply nationally.
We examine the shopping behavior of Women, Infants, and Children (WIC) Program participants located in food deserts in the Greater Los Angeles area relative to peers in GLA located outside of food-desert boundaries. Results indicate that food-desert participants traveled slightly farther to shop than comparison participants. However, food-desert and non-food-desert participants were equally likely to visit multiple vendors and to visit a supermarket vendor. Food-desert participants did not pay more for program foods relative to comparison participants. On balance, the results indicate that WIC shopping behavior is very similar among food-desert and comparison participants.
This paper investigates spatial, quality, and temporal factors impacting prices of calves and yearlings in the western United States using satellite video auction data and a hedonic regression framework. Prices received by western ranchers are discounted by approximately the costs of shipping cattle to the Midwest for processing. Other key results include identifying the presence of temporal price premiums for seller-offered forward contracts, providing new estimates of the marginal value associated with key quality attributes and management practices and finding support for the price benefits of third-party quality certification. We also link variability in estimated valuations for value-added attributes to the stage of the cattle cycle.
We study a heretofore unexamined type of product differentiation, horizontally differentiated products with differential costs, and apply the analysis to retail pricing of fluid milk products. The theoretical models yield unique predictions for the relationship among prices of the four horizontally differentiated fluid milk products (skim, 1%, 2%, and whole milk) and the impacts of butterfat and nonfat milk costs on prices, depending upon the form of retail competition. An empirical analysis of retail milk pricing for four major cities in California enables tests to be conducted of which form of behavior best characterizes grocery retailing in these cities.
Market power is discussed in debates about subsidies for ethanol production. The structural conditions in the corn industry create a case for concerns about market power. We develop an analytical model for determining the production and price impacts and the distribution of benefits from the U.S ethanol subsidy when upstream sellers in the seed sector and downstream buyers in the processing sector may exercise market power. Results demonstrate that the impacts on prices and output are probably limited. Distribution impacts are much greater. Seed producers and corn processors with market power capture relatively large shares of subsidy benefits.
This study investigates market conditions when food processor/handler brand advertising, whether undertaken by an investor-owned firm or by a cooperative, will benefit or harm farmers. Addressing this question provides insight into the policy issue of whether and when promotion funds intended to benefit farmers should be used in support of brand advertising. Analysis of a two-stage oligopoly-oligopsony model shows that advertising by an investor-owned firm is most likely to be harmful to farmers when it takes place in a relatively unconcentrated industry and when advertising is relatively more effective at creating brand market power than at increasing total demand.
Exclusive contracts (often called “captive supplies”) between processors and farmers are in increasingly important feature of modern agriculture. We study an interesting empirical regulatory occurring in markets that feature both contract and spot exchange: the spot price is inversely related to the incidence of contract use in the market. We use a spatial model and a noncooperative game approach to show that processors can use exclusive contracts to manipulate the spot price in certain situations. Captive supplies in these settings represent geographic buffers that reduce competition among processors. However, in markets where the spatial dimension is less important, captive supplies are ineffective as barriers to competition because firms have incentive to “jump” across a captive supply region to procure the farm product.
Grading systems are often introduced to address the classic adverse selection problem associated with asymmetric information about product quality. However, grades are rarely measured perfectly, and adverse selection outcomes may persist due to grading error. We study the effects of errors in grading, focusing on asymmetric grading errors- namely when low-quality product can erroneously be classified as high quality, but not vice versa. In conceptual model, we show the effects of asymmetric grading errors on returns to producers. Application to the California prune industry shows that grading errors reduce incentives to produce more valuable, larger prunes.
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