Exploring the Consumer welfare effects of MCOOL

Imposing MCOOL in the United States was anticipated to affect demand by providing customers with additional, valuable information. Advocacy groups for MCOOL pointed to studies suggesting that consumers would prefer U.S. meat products and would be willing to pay premiums for confirmation of U.S. origin. MCOOL detractors, including Canada and Mexico, argued that the increased burden from record keeping would favor domestic meat. The subsequent lawsuits and WTO hearings have called into question the relative value of MCOOL to consumers as compared to costs faced by both domestic meat processors and North American trading partners promoting the idea that MCOOL imposes restrictions on imports and acts as a de facto trade barrier. To measure consumer welfare effects on MCOOL, we develop a measure by approximating Hicksian compensating variation as a function of three imported meat product prices and compensated price elasticities. The results show a mild consumer welfare and decrease in demand when MCOOL was implemented.

Issue Date:
Jan 17 2018
Publication Type:
Conference Paper/ Presentation
Total Pages:

 Record created 2018-01-18, last modified 2018-01-22

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