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Evaluating Price Enhancement by Processing Cooperatives
Author(s) -
Wills Robert L.
Publication year - 1985
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1240669
Subject(s) - market power , business , industrial organization , microeconomics , section (typography) , empirical evidence , agriculture , economics , power (physics) , marketing , advertising , monopoly , ecology , philosophy , physics , epistemology , quantum mechanics , biology
Section 2 of the Capper‐Volstead Act requires the secretary of agriculture to determine whether a cooperative has unduly enhanced its prices. There has been no consensus about what level of price enhancement is too high. This paper contrasts pricing of cooperative and proprietary brands of differentiated food products. Empirical evidence indicates that market share and advertising do not generally provide cooperatives any more power to enhance prices than they give proprietary firms. The paper suggests a standard for undue price enhancement, the predicted price level of proprietary brands in similarly structured markets.