Identification and Valuation of Public Goods within the Vertical of Cattle Breeding

Abstract

The paper identifies and discusses the production of public goods in the vertical of cattle breeding. The cattle breeding vertical was divided into four basic levels – producer, processor, retailer, and consumer and main public goods were determined and discussed. Moreover, it provides the methods for the valuation of public goods. The method is applied in the estimation of manure shadow price. Using the fitted multiple output distance function with two market and one non-market output and applying the Lagrange method and the Shephard’s dual lemma the shadow price of manure was calculated. The results show that the shadow prices differ significantly among the groups of farmers. This especially holds for the classification of groups according to the size and technology of production.