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Measuring Consumers' Attachment to Geographical Indications: Implications for Competition Policy

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  • Hassan, Daniel
  • Monier-Dilhan, Sylvette
  • Orozco, Valérie

Abstract

Geographical Indications (GIs) are considered as upmarket products because they are based on tradition and convey information about their geographical origin. Otherwise, the limitation of the geographical areas devoted to GIs and the exclusivity they benefit on the product lead to suspicions of monopoly power. Quality and market power should however reflect a stronger attachment, making consumers less price sensitive than for standard goods. This research aims to compare theses conjectures to empirical measures concerning the French cheese market. Price elasticities are computed from a demand model on 21 products, 11 Protected Designation of Origin (PDO) products and 10 non PDOs. The results are counterintuitive, PDOs being as price elastic as or more price elastic than standard products. This finding thus challenges the widespread idea that PDOs systematically correspond to high quality. It also has important implications in terms of competition policy, showing that PDO cheeses suppliers cannot decide on price increases without suffering large reductions in demand.

Suggested Citation

  • Hassan, Daniel & Monier-Dilhan, Sylvette & Orozco, Valérie, 2011. "Measuring Consumers' Attachment to Geographical Indications: Implications for Competition Policy," TSE Working Papers 11-225, Toulouse School of Economics (TSE).
    • Handle: RePEc:tse:wpaper:24188
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    Cited by:

    1. Duvaleix, Sabine & Emlinger, Charlotte & Gaigné, Carl & Latouche, Karine, 2021. "Geographical indications and trade: Firm-level evidence from the French cheese industry," Food Policy, Elsevier, vol. 102(C).
    2. Gelaw, F., 2018. "Impacts of Trademarking on Export and Producer Prices in Ethiopian Coffee," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277290, International Association of Agricultural Economists.
    3. Sabine Duvaleix-Treguer & Charlotte Emlinger & Carl Gaigné & Karine Latouche, 2018. "On the Competitiveness Effects of Quality Labels: Evidence from the French Cheese Industry," Working Papers hal-01925630, HAL.

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    More about this item

    Keywords

    Geographical indications; demand model; price elasticities; competition policy;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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