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Abstract

This paper investigates the impact of geographical origin labels on consumers' preferences. Specifically, we consider the preferences of Canadian consumers for extra virgin olive oils marketed with country-of-origin labels (COOL) and geographical indications (GIs). In contrast to previous studies, by considering a third-country market (a market different from that where production occurs), we can look simultaneously at COOL and GIs and separate the impacts of these two forms of geographical origin labels. We find that, within the context of a high quality value-added commodity such as extra virgin olive oil, consumers value both COOL and GI labels. But, in terms of the fraction of consumers with positive preferences and willingness to pay, COOL labels are valued more by Canadian consumers compared to GI labels. To better account for taste heterogeneity among consumers, we partition the sample on the basis of consumers' choice of shopping location. We find that different consumer groups vary to a large degree in their relative valuations for COOL, GI, and organic olive oils.

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