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RESEARCH PAYOFF FROM QUALITY IMPROVEMENT: THE CASE OF BACKFAT DEPTH IN PIGS
Author(s) -
Voon J. P.,
Edwards G. W.
Publication year - 1991
Publication title -
journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.157
H-Index - 61
eISSN - 1477-9552
pISSN - 0021-857X
DOI - 10.1111/j.1477-9552.1991.tb00333.x
Subject(s) - stochastic game , quality (philosophy) , economics , supply and demand , estimation , market share , measure (data warehouse) , microeconomics , agricultural economics , natural resource economics , econometrics , business , computer science , finance , philosophy , management , epistemology , database
Closed‐market models embodying alternative specifications of supply, demand and substitutability conditions are developed to measure the economic benefits from a research‐caused improvement in quality. The models are applied to the estimation of the economic benefits from reducing backfat depth in Australian pork. A major finding is that the Australian pig industry has the potential to derive a gross research benefit of about $7 million per annum from a 10% reduction in backfat thickness in pigs. Under each of the chosen specifications, the larger share of this gain accrues to pig producers. There could be additional social gains as a result of health benefits not incorporated in consumers' valuations.