Price formation in associations of milk producers in the Atlántico department, in Colombia: a sub-territorial case under the precepts of the New Institutional Economics

Abstract

This document analyzes the incidence of institutional factors, from the perspective of the New Institutional Economy, that affect price formation in the primary market of associated milk producers in Colombia. For this, an instrument was developed that was applied through telephone calls or online forms to 62 associated producers. At the methodological level, the Boruta algorithm was used for the selection of relevant variables to explain the probability that a producer obtained a price above the average, and a Probit model was proposed. Based on this, it was found that the possession of computers in the association and that the producer had the capacity to increase supply in the face of positive demand shocks, increased the probability of obtaining a price above the average. While belonging to an association legally constituted as a cooperative, that the association invests considerably in the hiring of trained personnel and the presence of problems for the fulfillment of the contract in the associations, decreased the probability of obtaining a price above the average ; results that were analyzed from the theoretical precepts of the New Institutional Economics, reflecting the contribution of this work, since there is no study of price formation in Colombia from a complementary perspective to the neoclassical approach.