Abstract
Two possible sources of error in measuring grade factors and prices with the current peanut (Arachis hypogaea L.) grading procedure are rounding of grade factors and taking overweight samples. Rounding did not affect average grade factors or prices. Instead, rounding introduced noise, increased the probability of regrading, and provided an incentive for taking overweight samples. Taking overweight samples resulted in higher producer prices. A 1% increase in the sample weight resulted in a 1% increase in the producer price. A policy implication is that USDA should round to tenths rather than whole percentages.
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American Peanut Research and Education Society
2001
American Peanut Research and Education Society