Grades or labels? Beef prices and quality

Stefan Mann (Department of Socioeconomics, Agroscope, Tänikon, Switzerland)
Daniel Erdin (Swiss Farmers Union, Brugg, Switzerland)

International Journal of Quality & Reliability Management

ISSN: 0265-671X

Publication date: 3 October 2016

Abstract

Purpose

The difference between quality grades and quality labels is that the latter are awarded on the basis of production processes, whilst the former are conferred on the strength of the actual production results. In the course of a de-ideologisation of society, it might be assumed that the price differences between quality grades would grow larger and larger, while those between quality labels would tend to shrink. The purpose of this paper is to develop and test this hypothesis.

Design/methodology/approach

Regressions for the calf market on the one hand and for 4,180 cattle-market data sets on the other are run with Stata.

Findings

The results largely confirm the rising importance of grades between 2000 and 2014. In the period under consideration, a price spread occurs between the individual grades of the Swiss grading system, whilst the surcharge for organic products shrinks. No price discrimination is identified a priori for conventional labels.

Practical implications

The focus of both chain management and policy makers should be put on effective grading systems rather than on labelling production methods.

Originality/value

This is the first econometrical comparison of the price effect of both grades and labels.

Keywords

Citation

Mann, S. and Erdin, D. (2016), "Grades or labels? Beef prices and quality", International Journal of Quality & Reliability Management, Vol. 33 No. 9, pp. 1406-1412. https://doi.org/10.1108/IJQRM-03-2015-0042

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Publisher

:

Emerald Group Publishing Limited

Copyright © 2016, Emerald Group Publishing Limited

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