Roland Herrmann

Determinants of new product introductions in the US food industry: a panel-model approach

Economic theory suggests that market structure variables influence technical change, growth and new product introductions. Based on a broad data set for new product introductions in various food industries, it is elaborated in this article how market structure variables affect innovative activities in the US food sector. It is different from earlier studies in the way that cross-sectional and time-series data are combined and panel data models are used in the econometric analysis. A major result is that new product introductions are driven by market structure variables and industry-specific characteristics, i.e. fixed effects. A significant determinant of new food product introductions is the concentration ratio which affects the number of innovations in a nonlinear form. The fixed-effects estimates reveal a U-type effect of concentration on innovations. Furthermore, the number of firms, the degree of existing product differentiation and the size of a market show a positive influence on the number of innovations. From a methodological point of view, plain OLS models yield biased results on the concentration-innovation linkage and on the relationship between the size of a market and innovations. Therefore, it is very important to include sector-specific characteristics as is done in the fixed-effects models.

A welfare analysis of the EC‐ACP sugar protocol

The Sugar Protocol, laid down in the Convention of Lome, has been an established instrument of commodity policy for nearly 20 years. Its basic rule is that the EC imports at guaranteed prices specified quantities of sugar from ACP countries. It is the objective of the article to provide an economic evaluation of the Sugar Protocol. Impacts on prices, trade, export earnings and economic welfare are elaborated. The Sugar Protocols impacts on the level and instabilty of sugar export earnings are jointly evaluated by computing transfer and risk benefits along the lines of Newbery/Stiglitz. A major conclusion is that the policy has to be evaluated differently from the donors and the recipients point of view. The Sugar Protocol induces international income transfers that are untargeted in terms of per capita income. It causes, however, rather strong risk benefits compared with other instruments of international commodity policy and sizeable welfare gains for individual recipient countries.

Some neglected issues in food demand analysis: retail-level demand, health information and product quality

Food demand analysis is dominated by the econometric estimation of demand systems based on aggregate market data and steady progress has been made in analytical techniques. Yet some issues have been neglected in food demand analysis which are crucial for understanding recent consumption trends in industrialised countries. Three of these issues are dealt with here: analysis of food demand at the retail level; influence of health information on food demand; and importance of product quality for food demand. It is shown that answers to important questions in these areas can be given when large and unconventional data sets are used.

Tariff rate quotas and the economic impact of agricultural trade liberalization in the world trade organization

Since their implementation at the Uruguay Round, tariff rate quotas (TRQs) have become a widely used instrument of trade policy in agricultural trade. With almost 1,300 TRQs scheduled at the World Trade Organization, this paper will examine their economic effects more closely. First, the theoretical background of TRQs is examined. Then, a short overview of the Uruguay Round and their institutional background is given. We demonstrate that official statistics, which do not count TRQs as nontariff barriers, are at least highly misleading. Very often, their effects are the same as those of regular quotas, including redistributive effects. The prominent example of the European banana regime is used to illustrate all of these points.

Markets segmented by regional-origin labelling with quality control

It is the objective of this paper to provide a methodological framework for the analysis of regional marketing programs which inlclude regional-origin labelling as well as quality assurance and control. Such programs are increasingly being introduced in Europe and other parts of the world as a means against quality uncertainty in globalized markets. An equilibrim – displacement model is developed for a segmented market with differential qualities that can be utilized for a broad variety of marketing programs. It is applied to one selected European case, i.e. “Gepruefte Qualitaet – Bayern”. It is shown that the price impacts on high-quality and low-quality segments depend crucially on substitutive relationships between the markets and the advertising elasticities. Welfare implications for producers in a program depend strongly on advertising elasticities, too, but also on the costs of participation including quality control and on the co-financing mechanism between government and producers.

The Southern African customs union, cereal price policy in South Africa, and food security in Botswana

It is elaborated in this article that external factors may affect food security in developing countries even if these countries are not exposed to price instability in world food markets. This is the case in the Southern African Customs Union where the agricultural price policy in South Africa affects food security in Botswana, Lesotho and Swasiland. It is analysed quantitatively how cereal price policy in South Africa influenced the cereal import sector of Botswana in the period 1969–84. Cereal import prices increased due to Botswanas membership of the customs union, and cereal imports declined. The price increase was accompanied by a price‐stabilising impact.

Processing Costs and Price Transmission in the Meat Marketing Chain: Analysis for a German Region

Abstract The purpose of this paper is to deduce a clear picture of the producer-retail price relationship for a regional market segment of the German meat sector. The price transmission approach of Palaskas (1995) is extended by considering the wholesale level separately and implementing a cost variable that reflects slaughtering costs explicitly. The vertical price transmission analysis is based on weekly prices for the period 1995-1997. The hypothesis of perfect price transmission in both the long and short run has been rejected. While the producer-wholesale relationship is quite competitive, retailers seem to exercise market power.

The differential impact of world prices and exchange rates on food imports: an econometric analysis for Peru

This article suggests that there is a differential response of food imports in developing countries to world price changes and to changes in the exchange rate. The theoretical rationale for this assumption is presented, and it is argued that a world-price cariable and an exchange-rate variable should be introduced separately in import demand functions. In an econometric analysis for Peruvian grain imports in the period 1969–84, it is shown that imports reacted significantly more strongly to exchange rate changes than to world price changes. This finding has important implicaions for policy and for future research.

Dietary quality among the elderly in Germany: a retirement-nutrition puzzle?

PurposeWe test the hypothesis of a retirement-nutrition puzzle with data from the German National Nutrition Survey II, starting from the economic debate on whether a retirement-consumption puzzle actually exists. The major question is whether unexpected income changes following retirement cause a reduced consumption of nutrients and/or a lower dietary quality.MethodsThree indices of dietary quality are computed for 6,504 individuals in the 50+ generation. Descriptive and inductive statistics are used first to compare retired and working people with regard to the consumption of foods and nutrients as well as their dietary quality. Then, multiple regression models are utilized in order to analyse the influence of retirement on dietary quality under ceteris-paribus conditions.ResultsThe empirical findings do not support the hypothesis of a retirement-nutrition puzzle. Although retired people consume fewer nutrients than their working counterparts, their dietary quality is not worse. When income and age effects are controlled in a multivariate analysis, none of the three dietary quality indicators is significantly affected by retirement. The multivariate analysis reveals highly significant influences of other sociodemographic and personal characteristics on dietary quality within the 50+ generation.ConclusionThe analysis suggests there is no general need to target nutrition policy at a retirement-nutrition puzzle. However, pensioners are a very diverse group, and it remains a task for future research to disaggregate the findings for different clusters of retired persons.

Gravity Meets Pricing to Market: What a Combined-Method Approach Tells Us on German Beer Exports and Pricing

Abstract Gravity and pricing to market (PTM) models have been used to elaborate determinants of bilateral trade and export pricing for different countries and branches. Typically, only one of the two methods was chosen. We show in a stepwise approach how a combination of both methods can reveal novel results on the determinants of exports and export pricing behaviour. For the case of German beer exports, we show that structural differences exist between markets on which exporters apply either PTM or non-PTM strategies. German beer exporters apply PTM strategies, in particular local-currency stabilization, on those markets where imports are very sensitive to exchange-rate changes. Non-PTM strategies, i. e. full exchange-rate transmission, occur on export markets with insensitive reactions. Apart from PTM strategies, German beer exports are strongly dependent on policy variables such as the introduction of the Euro and the partner country’s membership in the EU.