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When Are Private Standards More Stringent than Public Standards?

Author

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  • Thijs Vandemoortele
  • Koen Deconinck

Abstract

Retailers' private standards are increasingly important for addressing consumer concerns about safety, quality, and social and environmental issues. Empirical evidence shows that these private standards are frequently more stringent than their public counterparts. This article develops a political economy model that helps explain this stylized fact. We show that if producers exercise their political power to persuade the government to impose a lower public standard, retailers may apply their market power to install a private standard at a higher level than the public one, depending on several factors.

Suggested Citation

  • Thijs Vandemoortele & Koen Deconinck, 2014. "When Are Private Standards More Stringent than Public Standards?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(1), pages 154-171.
    • Handle: RePEc:oup:ajagec:v:96:y:2014:i:1:p:154-171.
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    File URL: http://hdl.handle.net/10.1093/ajae/aat064
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    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

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