Measuring Benefits from a Marketing Cooperative in the Copper River Fishery

• Environmental and Resource Economics Workshop

Date and Location

Tuesday, December 11, 2012, 12:10 PM - 1:30 PM
ARE Conference Room, 2102 Social Sciences and Humanities

Abstract

There is evidence that marketing cooperatives have certain advantages in meeting the growing demand for high-quality food products. With multiple stages in the production process, information asymmetries can arise, which restrict the supply of high-quality food products from the market. As vertically integrated firms, marketing cooperatives can address these information asymmetries. Although marketing cooperatives are only one manifestation of a vertically integrated firm, this particular institutional arrangement may have more to offer today's consumer. In this research we explore the potential of a fishing marketing cooperative to generate benefits for members through the exploitation of niche markets for high-quality foods. We develop a simple theoretical model that describes the impact of moving from a homogeneous-goods world to a world with heterogeneous product quality, in a limited-entry fishery. We then estimate the impact that the Copper River Fisherman's Cooperative, an Alaskan salmon marketing cooperative, had on salmon prices and salmon quality through difference-in-difference (DiD) analyses. We find evidence of significant impacts on both salmon prices and salmon quality. We subject all of our results to "placebo years" and "placebo species" tests and find our results robust to both tests.