On the Consumer Value of Complementarity: A Benefit Function Approach

14 Pages Posted: 28 Apr 2020

See all articles by Michelle Baggio

Michelle Baggio

University of Maryland

Jean‐Paul Chavas

University of Maryland

Date Written: May 2009

Abstract

The article develops a conceptual model of the consumer value of complementarity and illustrates its usefulness in an application to fisheries. Complementarity arises when some goods have a positive effect on the marginal value of other goods. We propose a measurement of the value of complementarity based on the benefit function. Our econometric analysis of fish consumption in Italy examines these issues, with special attention given to dynamics. Our results show that, while short‐run fish demand is characterized by substitution relationships, complementarity does develop in the intermediate run and in the long run.

Keywords: benefit function, complementarity, duality, inverse demand

Suggested Citation

Baggio, Michelle and Chavas, Jean‐Paul, On the Consumer Value of Complementarity: A Benefit Function Approach (May 2009). American Journal of Agricultural Economics, Vol. 91, Issue 2, pp. 489-502, 2009, Available at SSRN: https://ssrn.com/abstract=3585288 or http://dx.doi.org/10.1111/j.1467-8276.2008.01188.x

Michelle Baggio (Contact Author)

University of Maryland

College Park
College Park, MD 20742
United States

Jean‐Paul Chavas

University of Maryland

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