A multi-stage hedonic market model of cotton characteristics with separable supply and demand

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Title: A multi-stage hedonic market model of cotton characteristics with separable supply and demand
Author: Bowman, Kenneth Ray
Abstract: This study examined the impacts of fiber characteristics on cotton prices from 1976 to 1986 for 4 production and marketing regions of the United States . A set of 11 equations were estimated to determine the effects of cotton fiber characteristics on cotton prices . Trash , color , staple length , micronaire , and strength were found to have statistically significant impacts on cotton prices . Length uniformity was not statistically significant . Characteristic effects were found to vary across time and across regions . However , trends in attribute values were similar for all characteristics across all regions . Characteristic price flexibilities were calculated using the regional base prices and characteristic averages of each year . Cotton prices were not price responsive with respect to characteristic variation . In this context , percentage changes in characteristic levels did not cause equivalent percentage changes in cotton prices . A set of 24 equations found that cotton characteristic values were functions of other characteristics as well as characteristic specific demand shifters , base price and proportion of open end spindles to ring spindles . Characteristic impacts on characteristic values were similar across regions , though some variation of effects were present . The effects of base price were also similar across regions . The proportion of open end spindles to ring spindles affected characteristic values with the largest impacts occurring in the West . Separate systems of equations were constructed to estimate the effects of environmental variables on each cotton characteristic in each production region of the country . Seasonal rainfall and temperature affected characteristics in all regions though parameter estimates and functional forms varied considerably among production areas . There is a growing recognition of the need to understand the values of fiber characteristics . Fiber characteristic values affect the revenues of producers and the costs of buyers . The results of this study demonstrate that there is a functioning market for cotton characteristics . The characteristics model constructed in this paper is useful because it presents an alternative to the current method of determining fiber quality premiums and discounts .
URI: http : / /hdl .handle .net /2346 /10933
Date: 1989-05

Citation

Bowman, Kenneth Ray A multi-stage hedonic market model of cotton characteristics with separable supply and demand. Doctoral dissertation, Texas Tech University. Available electronically from http : / /hdl .handle .net /2346 /10933 .

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