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Effects of Traceability on the Italian Fresh Vegetables Market: A Demand System Simulation

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  • Caracciolo, Francesco
  • Cembalo, Luigi

Abstract

Traceability can serve various purposes in the food sector, including that of chain quality control. However, the aspects that seem to be most frequently required of traceability are those related to food safety. Nevertheless, traceability systems development has recently shifted its focus from the major aspects of food safety to a price premium search approach. Although such an approach often appears to lie behind production strategies, there is no technical or theoretical evidence to support it: traceability systems do not guarantee, per se, quality. On the other hand, a rigorous traceability system that pursues multiple objectives involves costly procedures that are very likely to feed all the way up to the consumer side. The mainstream literature is rich in technical and economic studies on traceability. Nevertheless, little has been written on the effects of traceability costs on quantity demanded. While numerous studies show a higher consumer willingness to pay for certified products, it is not clear in what way and to what extent price increases affect the market.

Suggested Citation

  • Caracciolo, Francesco & Cembalo, Luigi, 2010. "Effects of Traceability on the Italian Fresh Vegetables Market: A Demand System Simulation," 2010 Internatonal European Forum, February 8-12, 2010, Innsbruck-Igls, Austria 100503, International European Forum on Innovation and System Dynamics in Food Networks.
  • Handle: RePEc:ags:iefi10:100503
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    File URL: http://purl.umn.edu/100503
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    Keywords

    Traceability; early potato; censored demand system estimation; sample selection approach; Agribusiness; Agricultural and Food Policy; Farm Management; Food Consumption/Nutrition/Food Safety; Production Economics; Research Methods/ Statistical Methods; D12; C31; C34;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models; Switching Regression Models

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