Markets segmented by regional-origin labelling with quality control
Abstract:It is the objective of this paper to provide a methodological framework for the analysis of regional marketing programs which inlclude regional-origin labelling as well as quality assurance and control. Such programs are increasingly being introduced in Europe and other parts of the world as a means against quality uncertainty in globalized markets. An equilibrim - displacement model is developed for a segmented market with differential qualities that can be utilized for a broad variety of marketing programs. It is applied to one selected European case, i.e. “Gepruefte Qualitaet - Bayern”. It is shown that the price impacts on high-quality and low-quality segments depend crucially on substitutive relationships between the markets and the advertising elasticities. Welfare implications for producers in a program depend strongly on advertising elasticities, too, but also on the costs of participation including quality control and on the co-financing mechanism between government and producers.
Document Type: Research Article
Affiliations: 1: Department of Rural Economy, University of Alberta, Edmonton, Alberta, Canada 2: Department of Agricultural, Environmental, and Development Economics at Ohio State University, Columbus, OH, USA 3: Institute of Agricultural Policy and Market Research, University of Giessen, Giessen, Germany
Publication date: February 1, 2009