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Abstract
As agricultural products move from being economic commodities to qualitydifferentiated
goods, price dispersion within specific markets increases and implicit
subsidies from high quality producers to low quality producers are removed. The
present paper examines how these distributional effects can influence patterns of
support and opposition to changes in marketing arrangements. The simple model
developed is calibrated using data from the USA slaughter cattle market. Estimates
of the impact on prices of measuring quality more accurately are found to be
similar in size to previous estimates of market power price suppression in the
market.