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Product Differentiation and Quality in Food Markets: Industrial Organization Implications

Author

Listed:
  • Tina L. Saitone
  • Richard J. Sexton

    (Department of Agricultural and Resource Economics,
    The Giannini Foundation of Agricultural Economics, University of California, Davis, California 95616)

Abstract

This paper summarizes and evaluates recent research on food product quality and differentiation, both key dimensions of modern food markets. We emphasize the implications for modeling of violation of the product homogeneity and perfect information axioms of perfect competition and focus on issues that are important and/or unique to agriculture. We first review modeling approaches for studying competition in differentiated-agricultural-product markets and then address research in the areas of product quality, labeling, and certification. A unique aspect of agricultural industries is the autonomy that they often have to engage in collective action and self-regulation through producer-controlled marketing organizations. We investigate the role of these organizations in influencing and certifying product quality and in creating product differentiation.

Suggested Citation

  • Tina L. Saitone & Richard J. Sexton, 2010. "Product Differentiation and Quality in Food Markets: Industrial Organization Implications," Annual Review of Resource Economics, Annual Reviews, vol. 2(1), pages 341-368, October.
    • Handle: RePEc:anr:reseco:v:2:y:2010:p:341-368
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    File URL: http://www.annualreviews.org/doi/abs/10.1146/annurev.resource.050708.144154
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    Citations

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    Cited by:

    1. Jason Winfree, 2024. "Food Origin Labeling and “Promoting Competition”," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 64(2), pages 267-287, March.
    2. Sang‐Hyun Kim & Hao Lan, 2021. "Fishy labeling: Inter‐regional inequality of truthful product information," Contemporary Economic Policy, Western Economic Association International, vol. 39(4), pages 831-848, October.
    3. Dipankar Das, 2019. "Multilayer of Suppliers Fixed Costs and Spatial Competition in the Upstream Market as a Source of Retailers Buying Power," Studies in Microeconomics, , vol. 7(2), pages 210-226, December.
    4. Nes, Kjersti & Ciaian, Pavel & Di Marcantonio, Federica, 2021. "Economic determinants of differences in the composition of seemingly identical branded food products in the EU," Food Policy, Elsevier, vol. 100(C).
    5. Pavel Ciaian & Federica Di Marcantonio & Liesbeth Colen & Kjersti Nes & Jesus Barreiro-Hurle & François J. Dessart & Luisa Menapace & Carlo Russo & Annarita Colamatteo & Negin Fathinejad & Maria Anna , 2020. "Economic analyses of differences in composition of seemingly identical branded food products in the Single Market," JRC Research Reports JRC120297, Joint Research Centre.
    6. Wenting Wang & Longbao Wei, 2021. "Impacts of agricultural price support policy on price variability and welfare: Evidence from China's soybean market," Agricultural Economics, International Association of Agricultural Economists, vol. 52(1), pages 3-17, January.
    7. Rousselière, Samira & Rousselière, Damien & Ramani, Shyama, 2016. "Innovation Led Alliances: Theory and application to the GM Plant Industry," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235711, Agricultural and Applied Economics Association.
    8. Tim Lloyd, 2017. "Forty Years of Price Transmission Research in the Food Industry: Insights, Challenges and Prospects," Journal of Agricultural Economics, Wiley Blackwell, vol. 68(1), pages 3-21, February.
    9. Adjemian, Michael & Brorsen, B. Wade & Hahn, William & Saitone, Tina L. & Sexton, Richard J., 2016. "Thinning Markets in U.S. Agriculture," Economic Information Bulletin 232928, United States Department of Agriculture, Economic Research Service.
    10. John M. Crespi & Stéphan Marette, 2022. "How Carbon Credits are Certified Could Change the Market Structure [Certification des crédits carbone et structure du marché]," Working Papers hal-03524998, HAL.
    11. Rojas Christian & Lavoie Nathalie & Wang Shinn-Shyr, 2012. "Buyer Power and Vertically Differentiated Retailers," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 10(1), pages 1-28, July.
    12. Malone, Trey & Schaefer, K. Aleks & Lusk, Jayson L., 2021. "Unscrambling U.S. egg supply chains amid COVID-19," Food Policy, Elsevier, vol. 101(C).
    13. Samira Rousselière & Shyama V. Ramani & Damien Rousselière, 2021. "The organizational choice of technology transfer mode: Theory and application to the genetically modified plant industry," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(6), pages 1466-1476, September.
    14. Murray Fulton & James Vercammen, 2014. "Optimal NGO Financing of a Resource Management Certification Scheme," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 58(4), pages 605-626, August.
    15. Colin A. Carter & K. Aleks Schaefer & Daniel Scheitrum, 2021. "Piecemeal Farm Regulation and the U.S. Commerce Clause," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(3), pages 1141-1163, May.
    16. Soulé Akinhola Adéchian & Mohamed Nasser Baco & Luke Oyesola Olarinde & Ismail Moumouni & David C. Natcher, 2022. "Social Ties Development as Competitive Strategies in Vegetables Marketing: Evidence from Small-Scale Farmers in Benin," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(2), pages 1030-1049, April.
    17. Alessandro Banterle & Stefanella Stranieri, 2013. "Sustainability Standards and the Reorganization of Private Label Supply Chains: A Transaction Cost Perspective," Sustainability, MDPI, vol. 5(12), pages 1-17, December.

    More about this item

    Keywords

    asymmetric information; certification; horizontal differentiation; labeling; producer organization; vertical differentiation;
    All these keywords.

    JEL classification:

    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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