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If You Can't Trust the Farmer, Who Can You Trust? The Effect of Certification Types on Purchases of Organic Produce

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Author Info

  • Lynn Hunnicutt
  • John Keith
  • Ruby Ward

Abstract

An information asymmetry exists in the market for organic produce since consumers cannot determine whether produce is organically or conventionally grown. Various methods may solve this problem including signaling, reputation, and certification. Signaling and reputation may not work well, because signals are noisy, and reputation may be difficult for a producer to establish. Certification of the farm and its growing methods shows the most promise. A survey instrument testing the efficacy of certification is presented along with empirical analysis suggesting that no notable difference existed between independent certification methods, although independent certification had significantly different effects than self-certification.

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File URL: ftp://repec.bus.usu.edu/RePEc/usu/pdf/ERI2002-18.pdf
File Function: First version, 2002
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Bibliographic Info

Paper provided by Utah State University, Department of Economics in its series Working Papers with number 2002-18.

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Length: 26 pages
Date of creation: Nov 2002
Date of revision:
Handle: RePEc:usu:wpaper:2002-18

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Web page: http://apec.usu.edu/
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Related research

Keywords: asymmetric information; certification; ordered probit; organic produce;

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References

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  1. Grossman, Sanford J & Hart, Oliver D, 1983. "An Analysis of the Principal-Agent Problem," Econometrica, Econometric Society, vol. 51(1), pages 7-45, January.
  2. Kerton, Robert R. & Bodwell, Richard W., 1995. "Quality, Choice, and the Economics of Concealment: The Marketing of Lemons," Working Papers 9510, University of Waterloo, Department of Economics.
  3. Loureiro, Maria L. & McCluskey, Jill J. & Mittelhammer, Ronald C., 2001. "Assessing Consumer Preferences For Organic, Eco-Labeled, And Regular Apples," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(02), December.
  4. 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.
  5. Caswell, Julie A. & Mojduszka, Eliza M., 1996. "Using Informational Labeling To Influence The Market For Quality In Food Products," Working Papers 25989, Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance.
  6. Gary D. Thompson, 1998. "Consumer Demand for Organic Foods: What We Know and What We Need to Know," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(5), pages 1113-1118.
  7. Gary D. Thompson & Julia Kidwell, 1998. "Explaining the Choice of Organic Produce: Cosmetic Defects, Prices, and Consumer Preferences," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(2), pages 277-287.
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Citations

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Cited by:
  1. Urutyan, Vardan E., 2007. "Market Assessment and Development for Organically Grown Produce in Armenia," 106th Seminar, October 25-27, 2007, Montpellier, France 7914, European Association of Agricultural Economists.
  2. Napitupulu, Togar Alam & Natawidjaja, Ronnie S., 2009. "Adding value to fresh and processed produce through product certification," Working Papers 121040, United Nations Centre for Alleviation of Poverty Through Secondary Crops' Development in Asia and the Pacific (CAPSA).
  3. Zorn, Alexander & Lippert, Christian & Dabbert, Stephan, 2012. "Zur Nichteinhaltung Von Vorschriften Des Ökologischen Landbaus In Deutschland Und In Der Schweiz – Statistische Analyse Einzelbetrieblicher Daten," 52nd Annual Conference, Stuttgart, Germany, September 26-28, 2012 133414, German Association of Agricultural Economists (GEWISOLA).
  4. Kim Sønderskov & Carsten Daugbjerg, 2011. "The state and consumer confidence in eco-labeling: organic labeling in Denmark, Sweden, The United Kingdom and The United States," Agriculture and Human Values, Springer, vol. 28(4), pages 507-517, December.

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