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Geographical Indications and the Competitive Provision of Quality in Agricultural Markets
Author(s) -
Moschini GianCarlo,
Menapace Luisa,
Pick Daniel
Publication year - 2008
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1111/j.1467-8276.2008.01142.x
Subject(s) - certification , quality (philosophy) , product (mathematics) , production (economics) , business , agriculture , welfare , industrial organization , economics , microeconomics , market economy , geography , philosophy , geometry , mathematics , management , archaeology , epistemology
The economics of geographical indications (GIs) is assessed within a vertical product differentiation framework that is consistent with the competitive structure of agriculture. 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 and lead to clear welfare gains, although they fall short of delivering the (constrained) first best. The main beneficiaries are consumers. Producers may also accrue some benefit if production of the high‐quality products draws on scarce factors that they own.