Geographical Indications and the Competitive Provision of Quality in Agricultural Markets |
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| Authors: | GianCarlo Moschini Luisa Menapace Daniel Pick |
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| Affiliation: | GianCarlo Moschini is professor and Pioneer Chair in Science and Technology Policy and Luisa Menapace is a Ph.D. student, both with the Department of Economics, Iowa State University, Ames, IA. Daniel Pick is Chief of the Specialty Crops and Fiber Branch, Economic Research Service, U.S. Department of Agriculture. |
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| Abstract: | 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. |
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| Keywords: | competitive industry free entry/exit geographical indications Marshallian stability quality certification trademarks welfare |
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