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Estimation of market equilibrium values for apple attributes

Jong Woo Choi (Korea Rural Economic Institute, Naju-si, South Korea)
Chengyan Yue (University of Minnesota Twin Cities, Minneapolis, Minnesota, USA)
James Luby (University of Minnesota Twin Cities, Minneapolis, Minnesota, USA)
Shuoli Zhao (Department of Applied Economics, University of Minnesota, Plymouth, Minnesota, USA)
Karina Gallardo (Washington State University, Pullman, Washington, USA)
Vicki McCracken (School of Economic Sciences, Washington State University, Pullman, Washington, USA)
Jim McFerson (Washington Tree Fruit Research Commission, Wenatchee, Washington, USA)

China Agricultural Economic Review

ISSN: 1756-137X

Article publication date: 5 February 2018

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Abstract

Purpose

Development of new cultivars requires extensive genetic knowledge, trained personnel, and significant financial resources, so it is crucial for breeders to focus on the attributes most preferred by the key supply chain stakeholders such as consumers and producers. The purpose of this paper is to identify which attributes generate the highest total revenue or social surplus, information that breeders can take into account as they allocate resources to focus on attributes in their breeding programs.

Design/methodology/approach

This study used mail-in and online surveys to collect consumer and producer choice experiment data, and then employed mixed logit models to analyze and simulate individual producer and consumer willingness to pay (WTP) for the apple attributes.

Findings

Based on the simulation results, this study derived the supply and demand curves and the market equilibrium prices and quantities for each apple attribute. Based on the WTP analysis for both consumer and producer, this paper found the highest equilibrium price and welfare for apples come from crispness, followed by flavor.

Originality/value

The authors propose a framework to estimate the equilibrium prices and quantities of a product based on the results of choice experiments. The framework can be easily adapted to understand any countries’ producer and consumer preferences for certain products.

Keywords

Acknowledgements

This project was funded by Specialty Crop Research Initiatives, US Department of Agriculture.

Citation

Choi, J.W., Yue, C., Luby, J., Zhao, S., Gallardo, K., McCracken, V. and McFerson, J. (2018), "Estimation of market equilibrium values for apple attributes", China Agricultural Economic Review, Vol. 10 No. 1, pp. 135-151. https://doi.org/10.1108/CAER-12-2016-0192

Publisher

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Emerald Publishing Limited

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