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Food quality in domestic markets of developing economies:A comparative study of two countries

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  • Anneleen Vandeplas
  • Bart Minten

Abstract

Food quality has become an important determinant of success in global food trade and growers for international markets have to continuously adjust to buyers’ requirements. It is however not clear to what extent there is a demand for food quality - and how much buyers are willing to pay for it - in domestic food markets of developing economies. Based on unique comparable price and trader data in a poor country in Africa (Madagascar) and an emerging economy in Asia (India), we compare food quality and quality’s pricing. We find significantly better quality and higher quality premiums (using revealed as well as stated preference methods) in India than in Madagascar. We explain these observed differences through a simple theoretical model, solely based on large average income gaps between the two countries.

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Bibliographic Info

Paper provided by LICOS - Centre for Institutions and Economic Performance, KU Leuven in its series LICOS Discussion Papers with number 28911.

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Date of creation: 2011
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Handle: RePEc:lic:licosd:28911

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Keywords: food quality; quality premiums; development;

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Cited by:
  1. Liang, Qiao & Hendrikse, George W. J. & Huang, Zuhui, 2010. "Quality provision and governance structure variety: Pooling versus double markup," IAMO Forum 2010: Institutions in Transition – Challenges for New Modes of Governance 52694, Leib­niz Institute of Agricultural Development in Central and Eastern Europe (IAMO).
  2. Minten, Bart & Stifel, David & Tamru, Seneshaw, 2012. "Structural transformation in Ethiopia: Evidence from cereal markets:," ESSP working papers 39, International Food Policy Research Institute (IFPRI).
  3. Schipmann, Christin & Qaim, Matin, 2011. "Modern food retailers and traditional markets in developing countries: Comparing quality, prices, and competition strategies in Thailand," Discussion Papers 108348, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
  4. Demont, Matty & Zossou, Esperance & Rutsaert, Pieter & Ndour, Maimouna & Mele, Paul Van & Verbeke, Wim, 2011. "Willingness to Pay for Enhanced Food Quality: Rice Parboiling in Benin," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114443, European Association of Agricultural Economists.
  5. Minten, Bart & Murshid, K.A.S. & Reardon, Thomas, 2012. "Food quality changes and implications: Evidence from the rice value chain of Bangladesh," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 125280, International Association of Agricultural Economists.

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