HEDONIC PRICES IN THE MALTING BARLEY MARKET

Wilson

Hedonic Prices

TABLE 3. Continued.

^a Only the first six months of the 1981/82 crop year were included in the sample.

^b Following the results of the hypotheses testing (see Table 1), the values of these coefficients were not signif-
icantly different across varieties and were restricted in the results here. Consequently, the estimated coefficient
is listed only once but applies to each variety.

less prominent, and Morex was not grown
in significant quantities. Premiums in
1981/82 for Morex represents a shift in
the industry to increased utilization of
Morex because of its greater extraction
rate.

The estimated coefficients in Table 3
describe the pricing structure for malting
barley and can be used to derive estimates
of marginal implicit prices of the quality
characteristics. The estimated coefficients
for plumpness varied across varieties ex-
cept in 1981/82. Those for protein were
the same across varieties except in 1979/
80. These restrictions simply indicate the
homogeneity of implicit prices for the
characteristics across varieties. Marginal
implicit prices are defined as the partial
derivative of the hedonic price equation
with respect to the quality characteristic
and are as follows for plumpness and pro-
tein, respectively.

MIP_pl = β_2a + 2‰ PLU

MIPpijO ⁼ βla

The estimated coefficients indicate that the
marginal implicit price for plumpness is
linear, but dependent on the level of
plumpness; in other words, prices increase
with increases in plumpness, but at a de-
creasing rate. The estimated coefficients
indicate that the marginal implicit price
of protein in the malting barley market is
negative.

Marginal implicit prices for protein and
plumpness were calculated from the esti-
mated equations for each year and are
shown in Table 4. The marginal implicit

TABLE 4. Estimated Marginal Implicit Prices
for Plumpness (at the 65 Percent
Level) and Protein for Crop Years
1978/79-1981∕82.^a

Marginal Implicit Prices for Plumpness

1978/79 1979/80 1980/81 1981/82

.............S/Bushel........................................

^a Not estimated.

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