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Food quality in domestic markets of developing economies:A comparative study of two countries

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  • Anneleen Vandeplas
  • Bart Minten

Abstract

Food quality has become an important determinant of success in global food trade and growers for international markets have to continuously adjust to buyers’ requirements. It is however not clear to what extent there is a demand for food quality - and how much buyers are willing to pay for it - in domestic food markets of developing economies. Based on unique comparable price and trader data in a poor country in Africa (Madagascar) and an emerging economy in Asia (India), we compare food quality and quality’s pricing. We find significantly better quality and higher quality premiums (using revealed as well as stated preference methods) in India than in Madagascar. We explain these observed differences through a simple theoretical model, solely based on large average income gaps between the two countries.

Suggested Citation

  • Anneleen Vandeplas & Bart Minten, 2011. "Food quality in domestic markets of developing economies:A comparative study of two countries," LICOS Discussion Papers 28911, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  • Handle: RePEc:lic:licosd:28911
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    Cited by:

    1. Schipmann, Christin & Qaim, Matin, 2011. "Modern food retailers and traditional markets in developing countries: Comparing quality, prices, and competition strategies in Thailand," Discussion Papers 108348, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    2. Minten, Bart & Stifel, David & Tamru, Seneshaw, 2012. "Structural Transformation in Ethiopia: Evidence from Cereal Markets:," ESSP research notes 14, International Food Policy Research Institute (IFPRI).
    3. Minten, Bart & Murshid, K.A.S. & Reardon, Thomas, 2013. "Food Quality Changes and Implications: Evidence from the Rice Value Chain of Bangladesh," World Development, Elsevier, vol. 42(C), pages 100-113.
    4. Bart Minten & David Stifel & Seneshaw Tamru, 2014. "Structural Transformation of Cereal Markets in Ethiopia," Journal of Development Studies, Taylor & Francis Journals, vol. 50(5), pages 611-629, May.
    5. Demont, Matty & Zossou, Esperance & Rutsaert, Pieter & Ndour, Maimouna & Mele, Paul Van & Verbeke, Wim, 2011. "Willingness to Pay for Enhanced Food Quality: Rice Parboiling in Benin," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114443, European Association of Agricultural Economists.
    6. Liang, Qiao & Hendrikse, George W. J. & Huang, Zuhui, 2010. "Quality provision and governance structure variety: Pooling versus double markup," IAMO Forum 2010: Institutions in Transition – Challenges for New Modes of Governance 52694, Leibniz Institute of Agricultural Development in Central and Eastern Europe (IAMO).

    More about this item

    Keywords

    food quality; quality premiums; development;

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

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