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Labeling Policies in Food Markets: Private Incentives, Public Intervention, and Welfare Effects

  • Zago, Angelo M.
  • Pick, Daniel H.

This study considers the welfare impact of labeling policies of agricultural commodities with specific characteristics. Using a model of vertical differentiation, the effects on equilibrium and welfare levels are calculated. The introduction of the regulation and the emergence of two differentiated competitive markets leaves consumers and high-quality producers better off, while low-quality producers are worse off. With high costs and low quality differences, the total welfare impact of the regulation can be negative. Findings show that when high-quality producers can exercise market power, the regulation could be more easily accepted by producers, but it would have a negative effect on consumers.

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File URL: http://purl.umn.edu/31143
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Article provided by Western Agricultural Economics Association in its journal Journal of Agricultural and Resource Economics.

Volume (Year): 29 (2004)
Issue (Month): 01 (April)
Pages:

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Handle: RePEc:ags:jlaare:31143
Contact details of provider: Web page: http://waeaonline.org/

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  1. repec:cup:cbooks:9780521736602 is not listed on IDEAS
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  3. McCluskey, Jill J., 1999. "A Game Theoretic Approach to Organic Foods: An Analysis of Asymmetric Information and Policy," 2000 Conference (44th), January 23-25, 2000, Sydney, Australia 123706, Australian Agricultural and Resource Economics Society.
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  9. Eliza M. Mojduszka & Julie A. Caswell, 2000. "A Test of Nutritional Quality Signaling in Food Markets Prior to Implementation of Mandatory Labeling," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 298-309.
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  12. Stephan Marette & Crespi & Schiavina, 1999. "The role of common labelling in a context of asymmetric information," Working Papers 156523, Institut National de la Recherche Agronomique, France.
  13. J.-C. Bureau & E. Gozlan & S. Marette, 1999. "Quality signaling and international trade in food products," THEMA Working Papers 99-13, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
  14. Bureau, Jean-Christophe & Marette, Stephan & Schiavina, Alessandra, 1998. "Non-tariff Trade Barriers and Consumers' Information: The Case of the EU-US Trade Dispute over Beef," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 25(4), pages 437-62.
  15. David Kreps & Robert Wilson, 1999. "Reputation and Imperfect Information," Levine's Working Paper Archive 238, David K. Levine.
  16. Ibanez, L., 1999. "Competition in Environmental Labeling," Papers 99.524, Toulouse - GREMAQ.
  17. Auriol, Emmanuelle & Schilizzi, Steven, 2000. "Quality Signaling through Certification," 2000 Conference (44th), January 23-25, 2000, Sydney, Australia 123598, Australian Agricultural and Resource Economics Society.
  18. Marette, Stephan & Crespi, John M & Schiavina, Allesandra, 1999. "The Role of Common Labelling in a Context of Asymmetric Information," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 26(2), pages 167-78, June.
  19. Dermot J. Hayes & Sergio H. Lence & Andrea Stoppa, 2004. "Farmer-owned brands?," Agribusiness, John Wiley & Sons, Ltd., vol. 20(3), pages 269-285.
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