Regulatory Choice between a Label and a Minimum-Quality Standard, The

Stéphan Marette (stephan.marette@agroparistech.fr)

Center for Agricultural and Rural Development (CARD) Publications from Center for Agricultural and Rural Development (CARD) at Iowa State University

Abstract: This paper revisits the issue of the regulatory choice between a mandatory label and a minimum-quality standard. When the cost of regulation is relatively low, we show that the socially optimal choice depends on the producers' cost structure for complying with regulation and improving quality. Under a marginal cost for improving quality, the mandatory labeling is sufficient for reaching the socially optimal level of quality. Under a fixed cost for improving quality, we show that each instrument or the combination of both instruments may emerge at the equilibrium.

Keywords: cost of regulation; information; standard. (search for similar items in EconPapers)
Date: 2005-12
New Economics Papers: this item is included in nep-agr and nep-reg
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Related works:
Working Paper: Regulatory Choice between a Label and a Minimum-Quality Standard, The (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:ias:cpaper:05-wp416

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