 Consumer perceptions and the effects of country of origin labeling on purchasing decisions and welfareLana Awada and Amalia Yiannaka Food Policy, 2012, vol. 37, issue 1, 21-30 Abstract: The study develops a general analytical framework of heterogeneous consumer preferences to examine the effects of country of origin labeling (COOL) regulation on consumer purchasing decisions and welfare. We show that while differences in consumer perceptions about COOL information, namely, whether it is viewed as an attribute that differentiates products vertically or horizontally, do not alter the nature of the market and consumer welfare effects of mandatory COOL, the relative strength of consumer preferences for COOL are shown to be important in determining the magnitude of these effects. In addition, our results show that the benchmark used (a no COOL versus a voluntary COOL regime) is critical in evaluating the effects of the policy. We show that, under both horizontal and vertical product differentiation, a change from a no COOL to a mandatory COOL regime decreases (increases) the welfare of consumers with weak (strong) preference for COOL while a change from a voluntary to a mandatory COOL regime leads to an unambiguous loss in consumer welfare. Keywords: Country of origin labeling; Heterogeneous consumer preferences; Vertical and horizontal product differentiation; Market effects and consumer welfare (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jfpoli:v:37:y:2012:i:1:p:21-30 DOI: 10.1016/j.foodpol.2011.10.004 Access Statistics for this article Food Policy is currently edited by J. Kydd More articles in Food Policy from Elsevier |
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