An analysis of the effect of quality on prices of horticultural produce

Abstract

This paper reports an analysis of price data for apples, tomatoes and bananas from three metropolitan markets in Australia. Weekly quantities, average prices and price differences for apples and tomatoes on the Brisbane market show large differences in prices at any particular time, irrespective of supplies and average price. Price data from the Sydney and Melbourne markets for Delicious apples and bananas, respectively are also examined for price level and variation for specific product lines. The attributes of quality in horticultural produce are described and classified as either sensory or objective. It is postulated that the reputation of a product line, and hence its average price, is influenced primarily by the composite of all attributes, particularly those sensory ones which are taste- and time-dependent. The price variation or bandwidth is controlled by a limited number of factors—appearance and colour, and, on the wholesale level, package weight. Objective quality attributes are of concern in the control of post-harvest deterioration and in nutritional matters. A framework for the analysis and price-quality relationships is proposed, based on the effects of supply and demand, reputation and price bandwidth of particular lines. This framework forms the basis for the prediction of prices of horticultural produce.