Hedonic Pricing of Rice Attributes, Market Sorting, and Gains from Quality Improvement in the Beninese Market

Abstract

Latent class analysis is applied to a hedonic price model to examine the presence of hetero geneity in consumer valuation of quality attributesintheBeninesericemarket.Threeclasses of consumers are found in proportions of 5, 56, and 39 percent. We employ a partial equi librium model and find modest gains in consumer surplus from an increase in head rice and reduction inchalkiness.The resultsprovideevidenceofmarket sorting,whichshouldbe taken into consideration in upgrading rice value chains. Also, it is important to assess poten tial gains from quality improvement to determine priorities for research and development.