Geographical Indications and the Competitive Provision of Quality in Agricultural Markets

GianCarlo Moschini, Luisa Menapace and Daniel Pick

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

Abstract: The economics of geographical indications (GIs) is assessed within a vertical product differentiation framework that is consistent with the competitive structure of the agricultural sector with free entry/exit. It is assumed that certification costs are needed for GIs to serve as (collective) credible quality certification devices, and production of high-quality product is endogenously determined. We find that GIs can support a competitive provision of quality that partly overcomes the market failure and leads to clear welfare gains, although they fall short of delivering the (constrained) first-best level of the high-quality good. The main beneficiaries of the welfare gains are consumers. Producers may also accrue some benefit if the production of high-quality products draws on scarce factors that they own.

Keywords: competitive industry; free entry/exit; geographical indications; Marshallian stability; quality certification; trademarks; welfare. (search for similar items in EconPapers)
Date: 2008-01
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Related works:
Journal Article: Geographical Indications and the Competitive Provision of Quality in Agricultural Markets (2008)
Working Paper: Geographical Indications and the Competitive Provision of Quality in Agricultural Markets (2008)
Working Paper: Geographical Indications and the Competitive Provision of Quality in Agricultural Markets (2008)
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