Labeling Policies in Food Markets: Private Incentives, Public Intervention, and Welfare Effects

This study considers the welfare impact of labeling policies of agricultural commodities with specific characteristics. Using a model of vertical differentiation, the effects on equilibrium and welfare levels are calculated. The introduction of the regulation and the emergence of two differentiated competitive markets leaves consumers and high-quality producers better off, while low-quality producers are worse off. With high costs and low quality differences, the total welfare impact of the regulation can be negative. Findings show that when high-quality producers can exercise market power, the regulation could be more easily accepted by producers, but it would have a negative effect on consumers.


Issue Date:
2004-04
Publication Type:
Journal Article
Record Identifier:
http://ageconsearch.umn.edu/record/31143
PURL Identifier:
http://purl.umn.edu/31143
Published in:
Journal of Agricultural and Resource Economics, Volume 29, Number 1
Page range:
150-165
Total Pages:
16




 Record created 2017-04-01, last modified 2018-01-22

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