Scholarship & Research
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Item Measurement costs and pricing methods in the retail produce market(Montana State University - Bozeman, College of Agriculture, 1999) Malishka, Peter; Chairperson, Graduate Committee: Randal R. Rucker.A persistent practice in the retail produce market is the mixed use of per unit and per pound pricing for bulk produce commodities. While per pound pricing explicitly prices the size dimension of the produce, per unit pricing (known in the industry as "by the each" pricing) is a form of average pricing whereby units differing in size and value are sold for the same price. When goods are average priced, opportunities exist for buyers to find units of exceptional value at the going price. Exploiting these opportunities requires buyers to measure and compare the values of individual units. Measurement of this kind often results in costly wealth transfers among buyers and between buyers and sellers. Profit maximization implies that sellers will avoid average pricing and its associated measurement costs whenever alternative pricing methods can be implemented at lower cost. This study examines the implications of measurement costs in the retail produce market, and develops predictions concerning the seller's decision to set an average price (price per each) or a price per pound. Logistic regression analysis is used to test the predictions on retail price data from major retailers in Bozeman, Montana. The results suggest that sellers choose between the two pricing methods in a manner that is consistent with the minimization of pre-sale measurement costs.Item Consumer response to biotech food labeling : the effects of voluntary rBGH-free labels on fluid milk demand(Montana State University - Bozeman, College of Agriculture, 2002) Kiesel, Kristin; Chairperson, Graduate Committee: Vincent H. Smith; David E. Buschena (co-chair)Consumer response to labeling policies for genetically modified organisms (GMO) in food products is investigated by considering voluntary labeling with respect to the use of the genetically modified Bovine Growth Horri:lone (rBGH) in fluid milk. Existing theoretical approaches on the provision and acquisition of information are extended to develop a framework that specifically addresses the effects of labeling on the relationship between consumer knowledge, information search and product choice. A new data set is utilized in the data analysis. The data set combines national-level supermarket scanner data for fluid milk demand with information about the use of rBGH in milk production and product specific labeling. Estimated parameter coefficients indicate that consumer beliefs previously measured in survey responses lead to an observable and statistically significant change in market behavior. Demand for fluid milk products labeled as rBGH-:free is significantly higher than demand for conventional fluid milk products and increases slightly over time. A positive demand effect is identified for rBGH-:free labeled products but not for unlabeled products, indicating that the provision of labeling information is necessary for market segmentation between conventional and rBGH-:free products. Demand estimates with regard to organic certification of products appear to be affected by market penetration of organic products during the time period analyzed. In addition, price elasticity estimates for half gallons of milk suggest that consumers are less responsive to price changes in rBGH-:free labeled milk products than in conventional milk products.