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Are geographical indications a worthy quality label? A framework with endogenous quality choice

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  • Desquilbet, Marion
  • Monier-Dilhan, Sylvette

Abstract

We analyze the effects of Geographical Indication (GI) labeling on quality choices and welfare with two vertically differentiated goods, one labelable, the other not. We consider two attributes of these goods: gustatory quality and geographical origin. We investigate two extreme cases of the Protected Designation of Origin (PDO) label: a denomination standard, which guarantees only the origin of the product, without any requirement on production specifications; and a minimum quality requirement, which guarantees both the origin and the quality of the product. We find that the PDO good is not necessarily the high-quality good. When it is, the introduction of the denomination standard causes its quality to decrease. Binding production specifications that maintain the quality level of the labeled good adversely affect the PDO firm.

Suggested Citation

  • Desquilbet, Marion & Monier-Dilhan, Sylvette, 2011. "Are geographical indications a worthy quality label? A framework with endogenous quality choice," TSE Working Papers 11-263, Toulouse School of Economics (TSE), revised Jun 2012.
    • Handle: RePEc:tse:wpaper:25317
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    Cited by:

    1. Koen Deconinck & Johan Swinnen, 2014. "The Political Economy of Geographical Indications," LICOS Discussion Papers 35814, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    2. Leufkens, D., 2015. "Der Wert geschützter Herkunftsangaben in einer industrieökonomischen und hedonischen Preisanalyse," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 50, March.
    3. Costanigro, Marco & Scozzafava, Gabriele & Casini, Leonardo, 2019. "Vertical differentiation via multi-tier geographical indications and the consumer perception of quality: The case of Chianti wines," Food Policy, Elsevier, vol. 83(C), pages 246-259.
    4. 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).
    5. DESBOIS, Dominique, 2015. "La qualité du lait a-t-elle un prix ? Une estimation hédonique de la valeur des attributs spécifiques du lait de vache," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement (RAEStud), Institut National de la Recherche Agronomique (INRA), vol. 96(3), September.
    6. Catherine Haeck & Giulia Meloni & Johan Swinnen, 2019. "The Value of Terroir: A Historical Analysis of the Bordeaux and Champagne Geographical Indications," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 41(4), pages 598-619, December.
    7. Dubravka Užar & Jelena Filipović, 2023. "Determinants of Consumer Purchase Intention Towards Cheeses with Geographical Indication in a Developing Country: Extending the Theory of Planned Behavior," Tržište/Market, Faculty of Economics and Business, University of Zagreb, vol. 35(2), pages 183-204.
    8. Martijn Huysmans & D. van Noord, 2021. "The market for lemons from Sorrento and Gouda from Holland. Do geographical indications certify origin and quality?: Do geographical indications certify origin and quality?," Working Papers 2108, Utrecht School of Economics.
    9. Petit, Michel & Ilbert, Helene, 2015. "Geographic Indicators and Rural Development in North Africa Implications for TTIP Negotiations," 145th Seminar, April 14-15, 2015, Parma, Italy 200231, European Association of Agricultural Economists.
    10. Valentina Raimondi & Chiara Falco & Daniele Curzi & Alessandro Olper, 2020. "Trade effects of geographical indication policy: The EU case," Journal of Agricultural Economics, Wiley Blackwell, vol. 71(2), pages 330-356, June.
    11. Martijn Huysmans, 2022. "On Feta and Fetta: Protecting EU geographical indications in Australia," Journal of Agricultural Economics, Wiley Blackwell, vol. 73(2), pages 598-613, June.
    12. Leufkens, Daniel, 2014. "Der Wert Geschützter Herkunftsangaben In Einer Industrieökonomischen Und Hedonischen Preisanalyse," 54th Annual Conference, Goettingen, Germany, September 17-19, 2014 187429, German Association of Agricultural Economists (GEWISOLA).
    13. Sorgho Zakaria & Larue Bruno, 2018. "Do Geographical Indications Really Increase Trade? A Conceptual Framework and Empirics," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 16(1), pages 1-18, January.
    14. Annalisa Zezza & Federica Demaria & Maria Rosaria Pupo d'Andrea & Jo Swinnen & Giulia Meloni & Senne Vandevelde & Alessandro Olper & Daniele Curzi & Valentina Raimondi & Sophie Drogue, 2018. "Research for AGRI Committee - Agricultural trade: assessing reciprocity of standards," Working Papers hal-02787948, HAL.
    15. Anna Carbone, 2017. "Food supply chains: coordination governance and other shaping forces," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 5(1), pages 1-23, December.
    16. Daniele Curzi & Martijn Huysmans, 2022. "The Impact of Protecting EU Geographical Indications in Trade Agreements," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(1), pages 364-384, January.
    17. Marie-Vivien, Delphine & Biénabe, Estelle, 2017. "The Multifaceted Role of the State in the Protection of Geographical Indications: A Worldwide Review," World Development, Elsevier, vol. 98(C), pages 1-11.
    18. Belletti, Giovanni & Marescotti, Andrea & Touzard, Jean-Marc, 2017. "Geographical Indications, Public Goods, and Sustainable Development: The Roles of Actors’ Strategies and Public Policies," World Development, Elsevier, vol. 98(C), pages 45-57.
    19. Huysmans, Martijn, 2021. "On Feta and Fetta: Protecting EU Geographical Indications Down Under," 2021 Conference, August 17-31, 2021, Virtual 314978, International Association of Agricultural Economists.
    20. Takayama, Taisuke & Norito, Takashi & Nakatani, Tomoaki & Ito, Ryoji, 2021. "Do geographical indications preserve farming in rural areas? Evidence from a natural experiment in Japan," Food Policy, Elsevier, vol. 102(C).
    21. Zakaria Sorgho & Bruno Larue, 2014. "Geographical indication regulation and intra-trade in the European Union," Agricultural Economics, International Association of Agricultural Economists, vol. 45(S1), pages 1-12, November.
    22. Ehmke, Mariah Dolsen & Bonanno, Alessandro & Boys, Kathryn & Smith, Trenton G., 2019. "Food fraud: economic insights into the dark side of incentives," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 63(4), October.

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    More about this item

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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