Three Essays on Informal and Formal Food Markets

• Author / Creator

  Shaoyan Sun

• Understanding individual and organizational behaviour in reaction to changes in the informal and formal food markets has been an essential topic in economics. This dissertation explores the solutions individuals in a rural economy and retail firms in food markets use to cope with external changes. The first study focuses on the effect of gift-giving and kinship networks on household food security in rural Tanzania. The second and third studies examine how retailers use private labels (PLs) in vertical competition and product line choices in horizontal competition, respectively.
  The main objective of the first study is to examine the e¤ect of food gifting and kinship on household food security and incentive to exert self-protection e¤ort. Using data collected in rural Tanzania, the results show that food gifting, either within or outside kinship networks, does not have a significant impact on household food security. The Food Security Scores (FCSs), a measurement of household food security status, for households engaging in food gifting within kinship networks do not significantly differ from those engaging in food gifting outside kinship networks. This study also confirms the free rider effect of kinship sharing norms. Kinship appears to attenuate poor households' incentive to exert self-protection efforts in a high-risk environment.
  The second paper examines the strategic roles of PLs in the retailer-manufacturer relationship when the external weather condition changes. By estimating a structural demand-supply model, I find that it is advantageous for the retailer to use PLs in the competition with manufacturers. As temperature increases, market shares of PLs increase faster than NBs. PLs are not only a source of profit for the retailer but also a strategic tool to gain bargaining power over national brand (NB) manufacturers.
  The third paper explores retailers' product line strategy in a differentiated food market, with an objective to identify why some retailers (e.g., Whole Foods Market) choose to specialize in a niche market while product proliferation has become a prevailing strategy for other retailers. This study examines the "halo effect", held by consumers for the retailers who sell exclusively high-quality products, on their product line choice. Through a theoretical model where the retailer halo is incorporated, I find that retailers can benefit from product line specialization. The results show that without the halo effect, both retailers choose a full product line. In the presence of the halo effect, a retailer can be better off with product line specialization, i.e., providing a restricted product line that specializes in the high-quality niche market.

• Subjects / Keywords

  • Economics

• Graduation date

  Fall 2019

• Type of Item

  Thesis

• Degree

  Doctor of Philosophy

• DOI

  https://doi.org/10.7939/r3-byf2-z820

• License

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