Factors Affecting Wheat Proteins Premiums

Abstract

This study used the Rosen methodology of deriving a marginal implicit price series of a characteristic from traditional first-stage hedonic modeling and then using this series to estimate a demand model for the characteristic wheat protein. This procedure was applied to Kansas Hard Red Winter and North Dakota Hard Red Spring wheat. Estimated flexibilities indicate an elastic demand for both Hard Red Winter and Hard Red Spring wheat protein. Also, cross-price flexibilities for wheat protein indicate that an increase in the demand for protein in one region has a significant impact on the value of the other regions' wheat crop.