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Fair Trade: In or Out the Market?

Author

Listed:
  • Sylvaine Poret

    (CECO - Laboratoire d'économétrie de l'École polytechnique - X - École polytechnique - CNRS - Centre National de la Recherche Scientifique)

  • Claire Chambolle

    (CECO - Laboratoire d'économétrie de l'École polytechnique - X - École polytechnique - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper focuses on a sustainable perspective of Fair Trade concept. We propose a simple model to provide some theoretical arguments in the debate about the sale of Fair Trade labelled goods in the large-scale distribution. The main hypothesis is related to the observation that some consumers are willing to pay a premium for Fair Trade products. We show that Fair Trade products are more likely to be on retailer's shelves if the Fair Trade certifier's objective is to maximize quantities labelled rather than the price paid to producers. We also underline that the key variable in the retailer's choice to sell the Fair Trade product is not the percentage of consumers who are willing to pay a Fair Trade good, but how much the Fair Trade likers are willing to pay for it.

Suggested Citation

  • Sylvaine Poret & Claire Chambolle, 2007. "Fair Trade: In or Out the Market?," Working Papers hal-00243062, HAL.
  • Handle: RePEc:hal:wpaper:hal-00243062
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00243062
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    File URL: https://hal.archives-ouvertes.fr/hal-00243062/document
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    References listed on IDEAS

    as
    1. Soberman, David A. & Parker, Philip M., 2004. "Private labels: psychological versioning of typical consumer products," International Journal of Industrial Organization, Elsevier, vol. 22(6), pages 849-861, June.
    2. Giovanni Immordino, 2003. "Fairness, NGO Activism and the Welfare of Less Developed Countries," CSEF Working Papers 101, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 09 Dec 2007.
    3. Giovannucci, Daniele & Koekoek, Freek Jan, 2003. "The State of Sustainable Coffee: A Study of Twelve Major Markets," MPRA Paper 17172, University Library of Munich, Germany.
    4. Fabrizio Adriani & Leonardo Becchetti, 2004. "Fair Trade: A 'Third Generation' Welfare Mechanism to Make Globalisation Sustainable," CEIS Research Paper 62, Tor Vergata University, CEIS.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Andreas Graichen, 2008. "Fairtrade Labelling in a Bertrand Competition Model with Monopsony Power," Working Papers 050, Bavarian Graduate Program in Economics (BGPE).

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