AREC 384 grading and standards

  1. standards
    • agreed upon language that simplifies the marketing process
    • often includes commonly agreed upon yardsticks of measurement 
    • need some type of enforcement for standards to be credible
  2. why are standards necessary?
    • facilitate the automated processes of modern agriculture
    • so people know what they're getting
  3. impacts of standards
    • operating efficiency 
    • pricing efficiency
  4. three types of standards
    • mandatory
    • permissive (recommended)
    • tentative (needs further study)
  5. grading
    • sorting of similar but not identical products into uniform categories according to a set of predetermined standards 
    • grading is common but not universal
  6. why is grading necessary?
    • allows differentiation of food products in terms of their value to consumers
    • consumers have different preferences and WTP for goods of different qualities
  7. grades, unlike standards, are based on __________
    • marketing concepts
    • heterogeneous preferences
  8. grading must be...
    • cost-effective (always consider marginal benefit vs marginal cost)
    • objective
    • meaningful
  9. problems with food grading
    • standards may not be easily measurable
    • some criteria are subjective making it hard to come up with standards
    • quality at a time/place of measurement may not reflect actual quality at time of purchase/consumption
  10. hedonic analysis
    • concerned with the study of the effect of a commodity's characteristics on price 
    • explains the price of a good in terms of its traits 
    • ex. housing price models
Author
hcunning
ID
324938
Card Set
AREC 384 grading and standards
Description
lecture 18
Updated