New publication in “Applied Economics”
New publication in “Applied Economics”: Hirsch, S., Tiboldo, G. Lopez, R.A. (2018): A tale of two Italian cities: brand-level milk demand and price competition, Applied Economics, DOI: 10.1080/00036846.2018.1486016.
We apply the BLP random coefficient logit model demand model to fluid milk sales data from two north-south Italian cities: Turin and Naples. By virtue of their location and socioeconomic differences, these cities provide a natural experiment for contrasting consumer choices and retail market power related to milk physical and marketing characteristics. Results reveal that, regardless of location, consumers negatively value price increases, fat content and ultra-high temperature (UHT) treatment. However, location matters with respect to brand and type of milk purchased. While in Turin (the higher-income region) demand for the leading manufacturers’ brands is the most price inelastic, in Naples consumers have the lowest price elasticities in case of cheaper milk, often small manufacturer or private label brands. Unlike previous studies, we do not find price elasticities for private labels to be consistently lower (or markups to be higher) compared to manufacturer brands, indicating that private labels have reached maturity in these markets. Further, while demand for fresh milk is more price inelastic in Turin, it is more inelastic for UHT milk in Naples. Likewise, markups and Lerner indexes are higher for fresh milk in Turin and for UHT in Naples corresponding to the more inelastic demands under Bertrand price competition.
New Blog contribution regarding Risk determinants of German dairy farms
New Blog contribution regarding Risk determinants of German dairy farms.
Please click here to go to the article on Agrarpolitik-blog.com.
New publication in the “European Review of Agricultural Economics”
New publication in the “European Review of Agricultural Economics” Finger, R., Dalhaus, T., Allendorf, J. and Hirsch, S. “Determinants of downside risk exposure of dairy farms".
We investigate determinants of dairy producers’ risk exposure using a unique combination of foci on (i) downside risks, (ii) a holistic representation of revenues from milk and animal sales, (iii) climatic extremes and (iv) the role of animal health. A sample of German dairy farms reveals that animal health and heat stress indicators influence mean and semi-variance of revenues. For instance, heat stress exposure reduces expected milk revenues significantly. In the case of animal health-related indicators, our results show trade-offs between expected revenues and downside risks. Furthermore, variabilities in revenues from milk and animal sales are significantly interrelated.
Newly appointed Tenure Track Professor for Agricultural and Food Economics
On April 1st, 2018, Stefan Hirsch joined the Technical University of Munich School of Management as a W2 Tenure Track Professor for Agriculture and Food Economics located at the Campus Weihenstephan of the Technical University of Munich.
The professorship aims to improve the understanding of competitiveness and strategic actions of firms in the agricultural and food sector