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Modeling The Effects Of Country Of Origin Labeling On Meat Producers And Consumers

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  • Lusk, Jayson L.
  • Anderson, John D.

Abstract

Although several studies have estimated the costs of implementing and maintaining country of origin labeling (COOL), no previous study has documented how increased costs imposed by COOL will be distributed throughout the livestock sector and how producer and consumer welfare will ultimately be affected. This paper develops an equilibrium displacement model of the farm, wholesale, and retail markets for beef, pork, and poultry that is able to document how producers and consumers will be affected by added costs of COOL. In addition the model is able to determine the level of increased consumer demand needed to make producers welfare neutral to the policy. Empirical results indicate that as COOL costs are shifted from the producer to the processor and retailer, producers are made increasingly better off while consumers are made increasingly worse off. Empirical model results also indicate that an increase in aggregate consumer demand (willingness-to-pay) on the magnitude of 2% to 3% is likely sufficient to offset lost producer welfare due to increased costs imposed by COOL.

Suggested Citation

  • Lusk, Jayson L. & Anderson, John D., 2003. "Modeling The Effects Of Country Of Origin Labeling On Meat Producers And Consumers," Staff Papers 28660, Purdue University, Department of Agricultural Economics.
    • Handle: RePEc:ags:puaesp:28660
    DOI: 10.22004/ag.econ.28660
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    References listed on IDEAS

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    4. Laurian J. Unnevehr & Miguel I. Gómez & Philip Garcia, 1998. "The Incidence of Producer Welfare Losses from Food Safety Regulation in the Meat Industry," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 20(1), pages 186-201.
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    Cited by:

    1. Chung, Chanjin & Zhang, Tong & Peel, Derrell S., 2004. "Will Country-Of-Origin Labeling (Cool) Be 'Cool' For The U.S. Meat Industry?," 2004 Annual meeting, August 1-4, Denver, CO 19934, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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