Performing Department
Agricultural & Consumer Economics
Non Technical Summary
This project analyzes both the demand and supply side of the agricultural and food industry. It encompasses several thematic areas. First, it analyzes the motivations for providing quality under different competition and financial health scenarios of manufacturers and retailers. This is of relevance given concerns regarding the welfare implications of the level of competition in the agribusiness industry and the recent focus of the Department of Justice on antitrust investigations of the biotech and food industry (such as Dean Foods and Monsanto). It is also important to understand firms' motivations for providing food safety in light of several recent high-profile food recalls. Understanding the relationship between a firm's financial health and its incentives for providing high quality products is particularly pertinent in today's macroeconomic setting. Second, it studies consumers' responses to prices and information. A particular focus is placed on how consumers' behavior adapts to gas price changes, to more symmetric information regarding prices and quality, and to other consumers' preferences. Although much anecdotal evidence regarding consumers' responses to gas price changes exists, there is little systematic evidence in this regard. Research in this area is relevant for suppliers, consumers, and regulators. Third, this project studies the incentives of biotech firms, food manufacturers, and food retailers and restaurants to adopt innovations. This research can inform both suppliers and regulators on best practices and policies to ensure more efficient production and better quality.
Animal Health Component
50%
Research Effort Categories
Basic
50%
Applied
50%
Developmental
(N/A)
Goals / Objectives
The objectives of this project are: 1) To deepen the understanding of the relationship between competition, financial health, and quality promise and delivery of food manufacturers and retailers. 2) To investigate how consumers' purchasing and lifestyle choices respond to gas price changes, more transparent price and attribute information, and changes in preferences of peers. 3). To analyze the incentives for innovation adoption in the biotech, food, retail, and restaurant industries.
Project Methods
The empirical procedure for this project is econometric analysis. Secondary data and confidential novel data will be collected to conduct the analyses. Some of the data will be made accessible through governmental agencies such as the Department of Transportation, the U.S. Department of Agriculture, and the U.S. Food and Drug Administration. Other confidential data will be obtained from companies. All the data will be at the micro-level.