Information As A Double-Edged Sword: The Economic And Welfare Consequences Of Certified Labeling For Credence Attributes
Certified labeling for credence attributes is examined using the concepts of pooled and separating equilibria. Credence attributes are product features that cannot be experienced directly by consumer, features such as pesticide-free, dolphin-safe, hormone-free, and organic. Without labeling, the traded good is a mix of credence and conventional goods. With certified labeling, the pooled market is replaced with separate markets for the credence and conventional good. Market outcomes are examined theoretically and with empirical simulations. Costless labeling is net welfare improving, but impacts are highly asymmetric. Credence producers gain largely at the expense of conventional producers. Costly labeling may reduce welfare even with rather modest labeling costs.
|Date of creation:||2003|
|Contact details of provider:|| Postal: Justin S. Morrill Hall of Agriculture, 446 West Circle Dr., Rm 202, East Lansing, MI 48824-1039|
Phone: (517) 355-4563
Fax: (517) 432-1800
Web page: http://www.aec.msu.edu/agecon/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Calvin, Linda & Cook, Roberta L. & Denbaly, Mark & Dimitri, Carolyn & Glaser, Lewrene K. & Handy, Charles R. & Jekanowski, Mark D. & Kaufman, Phillip R. & Krissoff, Barry & Thompson, Gary D. & Thornsb, 2001. "U.S. Fresh Fruit and Vegetable Marketing: Emerging Trade Practices, Trends, and Issues," Agricultural Economics Reports 33915, United States Department of Agriculture, Economic Research Service.
- Golan, Elise H. & Kuchler, Fred & Mitchell, Lorraine, 2000. "Economics Of Food Labeling," Agricultural Economics Reports 34069, United States Department of Agriculture, Economic Research Service.
- Teisl, Mario F. & Roe, Brian & Hicks, Robert L., 2002. "Can Eco-Labels Tune a Market? Evidence from Dolphin-Safe Labeling," Journal of Environmental Economics and Management, Elsevier, vol. 43(3), pages 339-359, May.
- Jeffrey R. Blend & Eileen O. van Ravenswaay, 1999. "Measuring Consumer Demand for Ecolabeled Apples," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(5), pages 1072-1077.
- Darby, Michael R & Karni, Edi, 1973. "Free Competition and the Optimal Amount of Fraud," Journal of Law and Economics, University of Chicago Press, vol. 16(1), pages 67-88, April.
- Buzby, Jean C. & Ready, Richard C. & Skees, Jerry R., 1995.
"Contingent Valuation In Food Policy Analysis: A Case Study Of A Pesticide-Residue Risk Reduction,"
Journal of Agricultural and Applied Economics,
Southern Agricultural Economics Association, vol. 27(02), December.
- Buzby, Jean C. & Ready, Richard C. & Skees, Jerry R., 1995. "Contingent Valuation in Food Policy Analysis: A Case Study of a Pesticide-Residue Risk Reduction," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 27(02), pages 613-625, December.
- Brown, Mark G. & Lee, Jonq-Ying, 2002. "Restrictions On The Effects Of Preference Variables In The Rotterdam Model," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 34(01), April.
- Huang, Kuo S. & Lin, Biing-Hwan, 2000. "Estimation of Food Demand Nutrient Elasticities from household Survey Data," Technical Bulletins 184370, United States Department of Agriculture, Economic Research Service.
- Huang, Kuo S. & Lin, Biing-Hwan, 2000. "Estimation Of Food Demand And Nutrient Elasticities From Household Survey Data," Technical Bulletins 33579, United States Department of Agriculture, Economic Research Service.
- John M. Crespi & St)phan Marette, 2001. "How Should Food Safety Certification be Financed?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(4), pages 852-861.
- Sedjo, Roger & Swallow, Stephen, 1999. "Eco-Labeling and the Price Premium," Discussion Papers dp-00-04, Resources For the Future.
- Brown, Mark G. & Lee, Jonq-Ying, 2002. "Restrictions on the Effects of Preference Variables in the Rotterdam Model," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 34(01), pages 17-26, April.
- Greene, Catherine R., 2001. "U.S. Organic Farming Emerges in the 1990s: Adoption of Certified Systems," Agricultural Information Bulletins 33777, United States Department of Agriculture, Economic Research Service. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:ags:midasp:11762. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.