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Country of Origin Labeling (C.O.O.L.): How cool is it?

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  • Dinopoulos, Elias
  • Livanis, Grigorios
  • West, Carol
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    Abstract

    This paper develops a partial-equilibrium model of a small open-economy trading an unsafe product. The model is used to analyze the welfare effects of trade with and without a country-of-origin labeling (COOL) program. The welfare gains from trade in the absence of COOL are ambiguous, may justify the imposition of a trade ban. Even if a full ban does not improve welfare and some restriction of trade is always welfare-enhancing. Under a tariff regime, more COOL trade is better than less trade. Independently of domestic market power, free trade coupled with a COOL program maximizes national welfare.

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    File URL: http://www.sciencedirect.com/science/article/B6W4V-4Y0T97T-1/2/8a99ee2f63a86c4be05b0878b36ac162
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    Bibliographic Info

    Article provided by Elsevier in its journal International Review of Economics & Finance.

    Volume (Year): 19 (2010)
    Issue (Month): 4 (October)
    Pages: 575-589

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    Handle: RePEc:eee:reveco:v:19:y:2010:i:4:p:575-589

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    Web page: http://www.elsevier.com/locate/inca/620165

    Related research

    Keywords: Country-of-origin labeling Protection Product safety Welfare Insurance markets;

    References

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