Value Differentiation

American agriculture is shifting from homogeneous commodities to differentiated products. Value differentiation, the process by which agrifood chain actors isolate, match, and exploit heterogeneity in consumer preferences and product attributes, is examined. Value differentiation is characterized by complementarities across four activities at each stage of the production chain: product characteristic measurement, product characteristic production, coordination between stages, and customer preference detection. Complementarities at the firm level are modeled using supermodularity. The model's predictions are discussed, as are potential testing approaches, and implications are presented for agrifood firms, marketing orders, and returns to research.


Subject(s):
Issue Date:
2003-12
Publication Type:
Journal Article
Record Identifier:
http://ageconsearch.umn.edu/record/31069
PURL Identifier:
http://purl.umn.edu/31069
Published in:
Journal of Agricultural and Resource Economics, Volume 28, Number 3
Page range:
375-395
Total Pages:
21




 Record created 2017-04-01, last modified 2018-01-22

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