Measuring Price–Quantity Relationships in the Dutch Flower Market

Abstract

This research applies an inverse, almost ideal demand model with seasonal adjustments to estimate price–quantity relationships among major cut flower species traded at the Dutch flower auctions. Trigonometric functions are used as a flexible and efficient alternative to standard seasonal dummies. The estimated price and scale flexibilities were all found to be statistically significant with signs as expected. The demand for all flower groups is inflexible, and most of them are quantity substitutes. Based on the estimated values for price and scale flexibilities, a potential for market timing seems to exist, i.e., flower producers may use easily available calendar information to predict prices and quantities.

Agent-level determinants of price expectation formation in online double-sided auctions

“…A quick series of such calls can give an investor a view of the market that is not entirely different from a view obtained by observing a multilateral negotiating process. Based on our findings and Kambil and Van Heck, 1998;Gebhart, 2014;and Steen, 2014 we propose the formation of an electronically brokered OTC market through the use of an electronic brokering platform that create a multilateral trading environment and will bring efficiency for price discovery and improve forecasting.…”

Do Sustainability Standards Exclude Small Farms? Modelling the Kenyan Floricultural Sector

“…We also used data from Macchiavello and Morjaria [13] who were able to obtain the data from Kenya's Horticultural Crops Directorate and were so kind to share it with us. Some other data were taken from the literature [3,5,[15][16][17].…”

“…The price on a flower auction fluctuates, but, in general, the price on the auction is considered to be lower than the buyers' prices (interviews). The average auction price is dependent on the quantities offered and is very volatile especially on a seasonal basis [5]. The model implemented a function that simulates the result of an auction, calculating an average auction price that, for simplicity, the model assigns to all roses traded in the auction market.…”

“…As reported in Section 2.1 the model, essentially, is based on literature published in the period 2014-2019 [3,5,13,[15][16][17], on data obtained from our interviews and research carried out in the period 2016-2017, on trade data from 2004-2008 obtained from Macchiavello and Morjaria, and on the few official statistical data from 2018-2019. All these data allowed us to build a realistic model, both from the point of view of numerical quantities and from the point of view of production and market trends.…”

“…Traditionally, the Dutch, and later on international farmers, united themselves in the flower auction, i.e., a place where the flowers were brought to and auctioned off with a downward ticking clock. The flowers are sold to the highest bidder [5,6]. The share of the flower trade going via auctions has decreased over the past decades, and with supermarkets establishing direct relationships with farms, the importance of sustainability standards has increased.…”