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Distribution of Gains from Research and Promotion in Multi‐Stage Production Systems: The Case of the U.S. Beef and Pork Industries
Author(s) -
Wohlgenant Michael K.
Publication year - 1993
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 - 10.2307/1243571
Subject(s) - nonfarm payrolls , comparative statics , production (economics) , distribution (mathematics) , promotion (chess) , economics , supply and demand , business , agricultural economics , industrial organization , microeconomics , agriculture , mathematics , ecology , mathematical analysis , politics , political science , law , biology
Abstract A producer‐financed program that leads to either an increase in retail demand from promotion or a decrease in marketing costs from research will generate returns to producers that are generally smaller than returns generated through an equivalent change in producer supply from research. The distribution of gains depends on the degree of substitutibility between farm and nonfarm inputs. Comparative statics of equal absolute changes in demand, supply, and marketing costs in the U.S. beef and pork industries show the significance of input substitutibility for distribution of gains, and sensitivity of the results to beef and pork demand interrelationships.