Labeling Policies in Food Markets: Private Incentives, Public Intervention, and Welfare Effects
Angelo Zago and
Daniel Pick ()
Journal of Agricultural and Resource Economics, 2004, vol. 29, issue 01
This study considers the welfare impact of labeling policies of agricultural commodities with specific characteristics. Using a model of vertical differentiation, the effects on equilibrium and welfare levels are calculated. The introduction of the regulation and the emergence of two differentiated competitive markets leaves consumers and high-quality producers better off, while low-quality producers are worse off. With high costs and low quality differences, the total welfare impact of the regulation can be negative. Findings show that when high-quality producers can exercise market power, the regulation could be more easily accepted by producers, but it would have a negative effect on consumers.
Keywords: asymmetric information; food markets; labeling; market power; vertical differentiation; welfare effects; Agricultural and Food Policy (search for similar items in EconPapers)
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Persistent link: http://EconPapers.repec.org/RePEc:ags:jlaare:31143
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