Market and Welfare Effects of Mandatory Country-of-Origin Labeling in the U.S. Specialty Crops Sector: An Application to Fresh Market Apples
AbstractThis study provides a new framework of analysis of the market and welfare effects of mandatory country-of-origin labeling (MCOOL) for fruits and vegetables that accounts for heterogeneous consumer preferences, differences in producer agronomic characteristics, and retailer market power. The market and welfare effects of MCOOL are shown to be case-specific and dependent on the labeling costs at the farm and retail levels, the strength of consumer preference for domestic products, the market power of retailers, the marketing margin along the supply chain, and the relative costs of imported and domestic products. Simulation results for the U.S. market of fresh apples indicate that domestic producers are the most likely beneficiaries of MCOOL, followed by domestic consumers. Being unable to exercise market power on consumers or suppliers of fresh apples, retailers will lose if the implementation of MCOOL entails fixed costs. Imports of fresh apples decline after MCOOL introduction.
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Bibliographic InfoArticle provided by Southern Economic Association in its journal Southern Economic Journal.
Volume (Year): 77 (2011)
Issue (Month): 4 (April)
Find related papers by JEL classification:
- Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
- Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
- Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
- L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
- C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
- D60 - Microeconomics - - Welfare Economics - - - General
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- Pouliot, Sébastien & Sumner, Daniel A., 2012. "Differential Impacts of Country of Origin Labeling: COOL Econometric Evidence from Cattle Markets," Working Papers 148593, Structure and Performance of Agriculture and Agri-products Industry (SPAA).
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