What is a Commodity? An Empirical Definition Using Time Series Econometrics

Abstract

One of the core premises of food and agribusiness marketing is that for effective promotion to take place a product should not be a commodity. Concepts such as niché marketing, product differentiation and market segmentation are all based on the creation of products which are not characterized as commodities. Government assistance- commodity programs-are justified on the basis that marketing based alternatives cannot improve profitability. While commodities are obviously very important, they are only vaguely defined. This paper develops an empirically testable definition of a commodity using frozen groundfish as an example.

Key Words:

• Commodity
• fish
• definition
• cointegration
• error-correction