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How to Promote Quality Perception in Wine Markets: Brand Advertising or Geographical Indication?

Author

Listed:
  • Yue, Chengyan
  • Marette, Stephan
  • Beghin, John C.

Abstract

In the context of the wine industry, we investigate producers' choice between geographical indications and brand advertising to convey information to consumers. Producers also decide whether or not to select an effort level for improving the quality of their products. We show that if this effort level is selected, a producer will prefer to rely on brand advertising for promoting its products and setting up its own reputation. Despite allowing the cost of promotion to be shared, a geographical indication does not sufficiently reward the effort to improve quality. Finally, the selection of both instruments by producers is examined.

Suggested Citation

  • Yue, Chengyan & Marette, Stephan & Beghin, John C., 2006. "How to Promote Quality Perception in Wine Markets: Brand Advertising or Geographical Indication?," Hebrew University of Jerusalem Archive 18608, Hebrew University of Jerusalem.
    • Handle: RePEc:ags:hebarc:18608
    DOI: 10.22004/ag.econ.18608
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    References listed on IDEAS

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    1. Stéphan Marette & John Crespi, 2003. "Can Quality Certification Lead to Stable Cartels?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 23(1), pages 43-64, August.
    2. Jason A. Winfree & Jill J. McCluskey, 2005. "Collective Reputation and Quality," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(1), pages 206-213.
    3. Fluet, Claude & Garella, Paolo G., 2002. "Advertising and prices as signals of quality in a regime of price rivalry," International Journal of Industrial Organization, Elsevier, vol. 20(7), pages 907-930, September.
    4. Marette, Stephan & Crespi, John M & Schiavina, Allesandra, 1999. "The Role of Common Labelling in a Context of Asymmetric Information," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 26(2), pages 167-178, June.
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