Karipidis, Tsakiridou, Tabakis, and Mattas Hedonic Analysis of Retail Egg Prices 69 Hedonic Analysis of Retail Egg Prices

The fast growth of product differentiation affects even the raw food product market and causes substantial price varia-tions. The hedonic price technique is applied to examine raw-egg attributes because of a recent transformation from an undifferentiated to a highly differentiated market. The effects of product attributes, production methods, distribution, and product image on retail egg prices are considered. Results reveal that retail egg prices are influenced by specific product attributes including nutritional characteristics and unconventional production methods. Results provide knowl-edge useful in the development of marketing strategies and suggest areas for possible involvement of policymakers. Two intriguing trends in the food market can be observed in developed economies. First, food markets are being split into smaller niches as con-sumer choices become highly differentiated due to income variations or socioeconomic changes. Second, a simple commodity market is gradually transformed into a highly differentiated product market in order to fulfill consumer preferences for product attributes (Barkema and Drabenstott 1995; Boehlje 1996). Food-chain actors are aware of these changes and try to develop new strategies using all available data on product differentiation. Product-differentiation questions can be exam-ined through various methods. The hedonic pricing approach, introduced by Rosen (1974), is recog-nized as one of the most appropriate. This method facilitates the analysis of the price structure of a commodity in relation to its specific attributes through the estimation of product-attribute shadow prices. Valuable information is thereby extracted for an effective product-differentiation strategy. It is generally argued that the hedonic pricing approach is suitable for substantially varied food products. Nevertheless, we assert that even in products with less variation, such as raw food products, the he-donic approach can be successfully applied. The hedonic price approach has been applied to study various agricultural products and foods. Brorsen, Grant, andRister (1984) studied the price structure in the rice market in United States. Veema