Industrial Organization of the Agricultural and Food Industry

<p>NON-TECHNICAL SUMMARY: <br/>This project analyzes both the demand and supply side of the agricultural and food industry. It encompasses several thematic areas. First, it analyzes the motivations for providing quality under different competition and financial health scenarios of manufacturers and retailers. This is of relevance given concerns regarding the welfare implications of the level of competition in the agribusiness industry and the recent focus of the Department of Justice on antitrust investigations of the biotech and food industry (such as Dean Foods and Monsanto). It is also important to understand firms' motivations for providing food safety in light of several recent high-profile food recalls. Understanding the relationship between a firm's financial health and its incentives for providing high quality products is particularly pertinent in today's
macroeconomic setting. Second, it studies consumers' responses to prices and information. A particular focus is placed on how consumers' behavior adapts to gas price changes, to more symmetric information regarding prices and quality, and to other consumers' preferences. Although much anecdotal evidence regarding consumers' responses to gas price changes exists, there is little systematic evidence in this regard. Research in this area is relevant for suppliers, consumers, and regulators. Third, this project studies the incentives of biotech firms, food manufacturers, and food retailers and restaurants to adopt innovations. This research can inform both suppliers and regulators on best practices and policies to ensure more efficient production and better quality.

<p>APPROACH:<br/>The empirical procedure for this project is econometric analysis. Secondary data and confidential novel data will be collected to conduct the analyses. Some of the data will be made accessible through governmental agencies such as the Department of Transportation, the U.S. Department of Agriculture, and the U.S. Food and Drug Administration. Other confidential data will be obtained from companies. All the data will be at the micro-level.

<p>PROGRESS: 2010/10 TO 2012/09
<p>OUTPUTS: <br/>Dr. Martens left the University of Illinois in February 2012, so this project is being terminated. PARTICIPANTS: Nothing significant to report during this reporting period. TARGET AUDIENCES: Nothing significant to report during this reporting period. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.

<p>PROGRESS: 2011/01/01 TO 2011/12/31
<p>OUTPUTS: <br/>Research under this Hatch project is still in its early stages, and as a result a discussion of outputs will take place in future reports. The overarching goals of the research are: (1) To deepen our understanding of the relationship between competition, financial health, and quality promise and delivery of food manufacturers and retailers; (2) To investigate how consumers' purchasing and lifestyle choices respond to gas price changes, more transparent price and attribute information, and changes in preferences of peers; and (3) To analyze the incentives for innovation adoption in the biotech, food, retail, and restaurant industries. PARTICIPANTS: Not relevant to this project. TARGET AUDIENCES: Not relevant to this project. PROJECT MODIFICATIONS: Not relevant to this project.