Characteristics and hedonic pricing of differentiated beef demands

Abstract

AbstractWe estimate a CBS system model of U.S. derived demand for meat. We use this model (1) to examine relationships between three quality categories of beef and three other meats and (2) to simulate how taste shifts have affected demands for meats over time. We extend previous studies by disaggregating wholesale beef production into three quality categories: (1) USDA Choice grade or higher, (2) USDA Select or lower, and (3) cow and bull beef. Innovative features of our empirical model include a breakout of ‘table cuts’ into Choice and Select and the use of a hedonic characterization of the two breakouts to value “Choice‐ness” and “beef‐ness.” Our model demonstrates important shifts in separate demands for Choice and Select beef. We show that, separately, the demand for Choice‐grade beef declined in the 1980s and 1990s and the demand for Select beef increased, a departure from the relatively stable demand characterizations of more aggregated measures of combined Choice and Select beef.