Markets segmented by regional-origin labelling with quality control

Sven Anders, Stanley Thompson () and Roland Herrmann

Applied Economics, 2009, vol. 41, issue 3, 311-321

Abstract: It is the objective of this paper to provide a methodological framework for the analysis of regional marketing programs which inlclude regional-origin labelling as well as quality assurance and control. Such programs are increasingly being introduced in Europe and other parts of the world as a means against quality uncertainty in globalized markets. An equilibrim - displacement model is developed for a segmented market with differential qualities that can be utilized for a broad variety of marketing programs. It is applied to one selected European case, i.e. “Gepruefte Qualitaet - Bayern”. It is shown that the price impacts on high-quality and low-quality segments depend crucially on substitutive relationships between the markets and the advertising elasticities. Welfare implications for producers in a program depend strongly on advertising elasticities, too, but also on the costs of participation including quality control and on the co-financing mechanism between government and producers.

Date: 2009
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Working Paper: Markets Segmented by Regional - Origin Labeling with Quality Control (2006)
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DOI: 10.1080/00036840601007237

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