THE VALUE OF INFORMATION PROVIDED BY A UNIFORM GRADING SYSTEM

The potential effects of a uniform meat grading scheme on market performance are evaluated in terms of a change in the information state. A uniform grading system may reduce the per unit costs involved in the collection and transmission of information on the characteristics of, and the price differentials for, different units of the commodity set. Under conditions of uncertainty an improved information state will increase market participants' expected utility. A general procedure for an empirical evaluation of a grading scheme is outlined.