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Common Labels and Market Mechanisms

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  • Boizot-Szantai, Christine
  • Lecocq, Sebastien
  • Marette, Stephan

Abstract

In this article, the impact of common labels is investigated with both theoretical and empirical approaches. Recent statistics regarding the egg market in France suggest that retailer brands largely adopt common labels. A simple theoretical framework enables us to determine the conditions under which producers and/or retailers with different product qualities decide to post a common label on their products. In particular, a situation of multiple equilibria (one where the label is used by the high-quality seller only and one where it is used by the low-quality seller only) is exhibited when the cost of the label is relatively large. The demand is then estimated for different segments of the French egg market, including producer/retailer brands with/without common labels. The estimates are used to derive expenditure and price elasticities and allow us to calculate welfare measures revealing a relatively large willingness-to-pay for labels.

Suggested Citation

  • Boizot-Szantai, Christine & Lecocq, Sebastien & Marette, Stephan, 2005. "Common Labels and Market Mechanisms," Hebrew University of Jerusalem Archive 18588, Hebrew University of Jerusalem.
    • Handle: RePEc:ags:hebarc:18588
    DOI: 10.22004/ag.econ.18588
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    2. Fares, M’hand & Raza, Saqlain & Thomas, Alban, 2018. "Is there complementarity between labels and brands? Evidence from small French co-operatives," TSE Working Papers 18-895, Toulouse School of Economics (TSE).
    3. Stéphan Marette, 2005. "The Collective-Quality Promotion in the Agribusiness Sector: An Overview," Food and Agricultural Policy Research Institute (FAPRI) Publications (archive only) 05-wp406, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    4. Bougherara Douadia & Ropars-Collet Carole & Saint-Gilles Jude, 2022. "Impact of Private Labels and Information Campaigns on Organic and Fair Trade Food Demand," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 20(1), pages 39-59, May.
    5. Mireia Ercilla-Montserrat & David Sanjuan-Delmás & Esther Sanyé-Mengual & Laura Calvet-Mir & Karla Banderas & Joan Rieradevall & Xavier Gabarrell, 2019. "Analysis of the consumer’s perception of urban food products from a soilless system in rooftop greenhouses: a case study from the Mediterranean area of Barcelona (Spain)," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 36(3), pages 375-393, September.
    6. Dentoni, Domenico & Menozzi, Davide & Capelli, Maria Giacinta, "undated". "Heterogeneity of Members’ Characteristics and Cooperation within Producer Groups Regulating Geographical Indications: The Case of the “Prosciutto di Parma” Consortium," 116th Seminar, October 27-30, 2010, Parma, Italy 95203, European Association of Agricultural Economists.
    7. M’hand Fares & Saqlain Raza & Alban Thomas, 2018. "Is There Complementarity Between Certified Labels and Brands? Evidence from Small French Cooperatives," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 53(2), pages 367-395, September.

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