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Interaction Between Food Attributes in Markets: The Case of Environmental Labeling

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  • Grolleau, Gilles
  • Caswell, Julie A.

Abstract

Some consumers derive utility from using products produced with specific processes, such as environmentally friendly practices. Means of verifying these credence attributes, such as certification, are necessary for the market to function effectively. A substitute or complementary solution may exist when consumers perceive a relationship between a process attribute and other verifiable product attributes. We present a model where the level of search and experience attributes influences the likelihood of production of eco-friendly products. Our results suggest that the market success of eco-friendly food products requires a mix of environmental and other verifiable attributes that together signal credibility.

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File URL: http://purl.umn.edu/8636
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Bibliographic Info

Article provided by Western Agricultural Economics Association in its journal Journal of Agricultural and Resource Economics.

Volume (Year): 31 (2006)
Issue (Month): 03 (December)
Pages:

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Handle: RePEc:ags:jlaare:8636

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Web page: http://waeaonline.org/
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Related research

Keywords: environmental labeling; food attributes; food marketing; quality perception; Food Consumption/Nutrition/Food Safety;

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References

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  1. Nelson, Phillip, 1970. "Information and Consumer Behavior," Journal of Political Economy, University of Chicago Press, vol. 78(2), pages 311-29, March-Apr.
  2. Darby, Michael R & Karni, Edi, 1973. "Free Competition and the Optimal Amount of Fraud," Journal of Law and Economics, University of Chicago Press, vol. 16(1), pages 67-88, April.
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  4. McCluskey, Jill J. & Loureiro, Maria L., 2005. "Reputation and Production Standards," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 30(01), April.
  5. McCluskey, Jill J., 1999. "A Game Theoretic Approach to Organic Foods: An Analysis of Asymmetric Information and Policy," 2000 Conference (44th), January 23-25, 2000, Sydney, Australia 123706, Australian Agricultural and Resource Economics Society.
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  8. Klein, Benjamin & Leffler, Keith B, 1981. "The Role of Market Forces in Assuring Contractual Performance," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 615-41, August.
  9. Julie A. Caswell & Eliza M. Mojduszka, 1996. "Using Informational Labeling to Influence the Market for Quality in Food Products," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(5), pages 1248-1253.
  10. Stefanie Kirchhoff, 2000. "Green Business and Blue Angels," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 15(4), pages 403-420, April.
  11. Barzel, Yoram, 1982. "Measurement Cost and the Organization of Markets," Journal of Law and Economics, University of Chicago Press, vol. 25(1), pages 27-48, April.
  12. Luanne Lohr, 1998. "Implications of Organic Certification for Market Structure and Trade," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(5), pages 1125-1129.
  13. Bagwell, Kyle & Riordan, Michael H, 1991. "High and Declining Prices Signal Product Quality," American Economic Review, American Economic Association, vol. 81(1), pages 224-39, March.
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Citations

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Cited by:
  1. Mohamed Akli Achabou & Adel Rink, 2014. "Barrières et motivations pour la consommation des produits de la mode éthique en France," Working Papers 2014-138, Department of Research, Ipag Business School.
  2. Mohamed Akli Achabou, 2014. "Brand influence on consumer preference for environmental labels," Working Papers 2014-139, Department of Research, Ipag Business School.
  3. Douadia Bougherara & Gilles Grolleau & Naoufel Mzoughi, 2009. "Buy Local, Pollute Less: What Drives Households to Join A Community Supported Farm ?," Working Papers 26135, Institut National de la Recherche Agronomique, France.
  4. Nadia Cuffaro & Marina Di Giacinto, 2011. "High quality exports and consumers’ trust: a development perspective," Working Papers 2011-04, Universita' di Cassino, Dipartimento di Scienze Economiche.
  5. Prosperi, Maurizio & Viscecchia, Rosaria, 2007. "Indirect Effects of Eco-labelling of agricultural products on Natural Resources," 105th Seminar, March 8-10, 2007, Bologna, Italy 7868, European Association of Agricultural Economists.
  6. von Meyer-Höfer, Marie & von der Wense, Vera & Spiller, Achim, 2013. "Characterising convinced sustainable food consumers," Discussion Papers 161887, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
  7. Costanigro, Marco & Deselnicu, Oana & Kroll, Stephan, 2012. "Truthful, Misguiding Labels: The Implications of Labeling Production Processes rather than their Outcomes," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124615, Agricultural and Applied Economics Association.
  8. Grolleau, Gilles & Ibanez, Lisette & Mzoughi, Naoufel, 2009. "Too much of a good thing? Why altruism can harm the environment?," Ecological Economics, Elsevier, vol. 68(7), pages 2145-2149, May.
  9. Meyer-Höfer, Marie von & Nitzko, Sina & Spiller, Achim, 2013. "Expectation Gaps and Halo-Effects in Organic Food Positioning: Characteristics of Organic Food from a Consumer’s Point of View," Discussion Papers 160420, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
  10. Ward, Clement E. & Lusk, Jayson L. & Dutton, Jennifer M., 2008. "Implicit Value of Retail Beef Product Attributes," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 33(3), December.

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