Welfare Gain of Rice Grading Information

This study examines consumers' value of rice-grade labeling information to identify the effectiveness of the new mandatory rice grading policy in October 2018. This study measures consumers¡¯ premiums for ¡°super¡±, ¡°good¡±, and ¡°normal¡± grades before and after providing grade labeling information using a non-hypothetical random nth experimental auction. We then estimate consumers¡¯ value of grade labeling information by comparing with market premiums. The results suggest that consumers value the provision of grade labeling information, with the highest value for the ¡°super¡± grade. Given the grade labeling information, the additional detailed information about grade labeling does not affect consumers¡¯ rice purchasing behaviors. The findings suggest that the rice-grading information is the important factor differentiating domestic rice from imported rice, and it also provides consumers credible information on rice quality to make better purchasing decisions.