Lending Credence: Motivation, Trust and Organic Certification

Steven Holland

No 205192, 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California from Agricultural and Applied Economics Association

Abstract: The information asymmetries inherent in credence goods have typically led economists to conclude these markets require well-defined quality standards and third-party verification that producers are meeting those standards. Nonetheless, many producers of credence goods appear to be opting out of certification. Why? This paper builds in previous research and develops a theoretical framework to think about how producers’ motivation and relationships with consumers affect the necessity and effectiveness of certification. I find the degree to which a consumer trusts the producer of a credence good and the certification standard that governs it, and the degree to which the producer is motivated to produce a good of a certain quality, both have important effects on certification-based regulation.

Keywords: Agricultural and Food Policy; Community/Rural/Urban Development; Food Consumption/Nutrition/Food Safety (search for similar items in EconPapers)
Pages: 22
Date: 2015
New Economics Papers: this item is included in nep-soc
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea15:205192

DOI: 10.22004/ag.econ.205192

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