It may help to avoid some confusion later by noting now that equation (1) is not a definition of patronage refund per unit of pro duct j. Equation (1) is a method of determining patronage refunds; other methods also exist. Two other methods of determining patronage refunds will be presented. These are not to be interpreted as recommended methods...
Ladd, George W., "Nonoptimality Of A Simple And Common Method For Determining Patronage Refunds" (1975). Economic Staff Paper Series. 175.