Coffee Economics -- motivation is how to shape Coffee market and Futures

 

Economists like to analyze those hidden or visible motivated people face when making the selection such as I. Motivation is the basis for assessment of economic analysis and policy. Because we often is exposed to many kinds of motivation, so it is no exaggeration to say, the incentives shaping our daily life and habits.

 

Most of the time, public policy has created a motive, but the result of motivation is contrary to the original intention of policy makers. A classic case is the mandatory seat belt use law. Once the use of safety belts, drivers will feel more secure, have accelerated the motivation. The likely outcome is rising vehicle accident law application area, when using the method of the period before and not enacted safety belt than in most cases is the market to create a variety of motives, Coffee market is no exception.

Therefore, let's take a look at the impact of the recent market for coffee and coffee drinking way those motivation and its results.

 

We start from the terminal consumption value chain, at present, we often can see big city coffee car, it provides the whole menu are hot, like all retail coffee house like. This is a trend, to a certain extent has affected the coffee supply chain, manufacturers, machinery and equipment and consumers now have a new option for convenient. I'm sure that coffee cart not those coffee company marketing department development result of financial sector but creative. Big city real estate prices for coffee house out of a fixed place of business to create a powerful motivation street.

 

This is why there is no reason that we see food car trying to no problem into a small city or house prices area. Maybe you will ask when the housing prices in developed economies soared, why coffee cart before did not appear. The reason is that the coffee shop and coffee consumer disposable income are very high.

Similarly, other cost pressures are Coffee house chain creating motivation to change that could affect the local consumption habits and the typical consumer group menu. In 2014 Coffee, milk and cocoa prices rising. When will they all together after the formation of the important cost structure mainly -- hot drinks menu the underpinnings of any Coffee Hall of the. Therefore, the increase of hot drinks menu prices may be short-term needs and long-term prospects for the Coffee museum cause real harm. This fact creates motivation for those Coffee store management, replace the means to seek that can keep the profits and do not increase the price Coffee drinks.

 

This is why Coffee Gallery menu all change and cause significant increase food menu. Coffee Museum recommending their menu and pull high food prices (profit). Can foreknow, Coffee the demand for food and for Coffee own more than a lack of price elasticity of demand. Therefore, this turn to have Coffee profits without increasing the drink prices expected results food menu. This is called a cross subsidy of product cost.

As mentioned above, the price is the main driving motivation in the economy'. Let us from the terminal consumer value chain to producer, by the Coffee price growth driving motivation is what?

 

A motive is to increase obviously Coffee acreage to influence the total output of the mid Coffee. But higher prices will increase production Coffee creation motivation? This requires further research: on the one hand, Coffee producers in the face of better prices tend to put more disposable income to increase productivity; on the other hand, the higher prices provide a good profit space, when the space up to a height may let growers meet, so much so that he will not be expand the profit motive, even if only increase yield can be obtained. If this is the case, then a downturn in the market environment may be better than a good price environment better, as we saw in 2014 that, is more favorable for increasing the yield of Coffee.