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Are geographical indications a worthy quality label? A framework with endogenous quality choice

Marion Desquilbet and Sylvette Monier-Dilhan

No 11-263, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: We analyze the effects of Geographical Indication (GI) labeling on quality choices and welfare with two vertically differentiated goods, one labelable, the other not. We consider two attributes of these goods: gustatory quality and geographical origin. We investigate two extreme cases of the Protected Designation of Origin (PDO) label: a denomination standard, which guarantees only the origin of the product, without any requirement on production specifications; and a minimum quality requirement, which guarantees both the origin and the quality of the product. We find that the PDO good is not necessarily the high-quality good. When it is, the introduction of the denomination standard causes its quality to decrease. Binding production specifications that maintain the quality level of the labeled good adversely affect the PDO firm.

JEL-codes: D21 L13 L15 Q13 (search for similar items in EconPapers)
Date: 2011-12, Revised 2012-06
New Economics Papers: this item is included in nep-agr, nep-geo and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Related works:
Journal Article: Are geographical indications a worthy quality label? A framework with endogenous quality choice (2015) Downloads
Working Paper: Are geographical indications a worthy quality label? A framework with endogenous quality choice (2015)
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