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Spatial allocation and the shadow pricing of product characteristics
Author(s) -
Chavas JeanPaul,
Cox Thomas L.,
Jesse Edward
Publication year - 1998
Publication title -
agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.29
H-Index - 82
eISSN - 1574-0862
pISSN - 0169-5150
DOI - 10.1111/j.1574-0862.1998.tb00483.x
Subject(s) - context (archaeology) , shadow price , consumption (sociology) , economics , production (economics) , product (mathematics) , resource allocation , agriculture , shadow (psychology) , distribution (mathematics) , resource (disambiguation) , industrial organization , microeconomics , computer science , geography , mathematics , market economy , psychology , mathematical optimization , social science , mathematical analysis , geometry , archaeology , sociology , psychotherapist , computer network
The paper considers an industry transforming primary commodities (farm products) into processed commodities (food products). It focuses on the allocation of embedded characteristics (carbohydrate, protein, etc.) both across space and among commodities. The approach generates a spatial competitive market equilibrium of production, consumption, transformation, and trade for both primary and processed commodities, along with the spatial distribution of shadow prices for the product characteristics. The model provides a basis for analyzing the allocation and pricing of agricultural products, food products, and characteristics in spatial markets. The empirical usefulness of the model is illustrated in the context of regional resource allocation in the U.S. dairy sector.