ABSTRACT

Price-quality relationships play an important role in cotton marketing because the price incentives available for quality provide an important incentive to improve quality. As information about price-quality relationships improves, market participants can better respond to quality incentives. In this paper, the price-quality relationships are evaluated using data collected (over 800 observations) at the mill level. Cotton prices were found to be significantly effected by quality specifications for color grade, leaf grade, strength, and mironaire. In addition, prices for cotton originating from the desert Southwest region (New Mexico and Arizona) were found to be discounted relative to other regions.

* The research on which this report is based was financed by a grant from Cotton Incorporated.