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Quality, market mechanisms and regulation in the food chain

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  • Marette, Stephan

Abstract

This paper focuses on questions related to the regulation of quality in the food chain. The paper first recalls the new challenges related to quality in the food chain, with an emphasis on the issue of sustainability. This first part underlines that the numerous dimensions related to sustainability make the regulation necessary but difficult. Then the paper introduces a partial equilibrium model calibrated with empirical data, for helping evaluate which regulatory instrument should be socially preferred ex ante on a case-by-case basis. An application to the milk market focuses on linseed for feeding dairy cows, which reduces methane emissions and increases the omega-3 content of milk. Simulations compare the impact of the exclusive use of one label signaling omega-3, versus the impact of a minimum-quality standard imposing linseed in the diet of all dairy cows. Both instruments would have a positive impact on consumers’ surpluses and some producers’ profits. This application shows that details about the influence of regulatory tools on surpluses may be given on a case-by-case basis.

Suggested Citation

  • Marette, Stephan, 2017. "Quality, market mechanisms and regulation in the food chain," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 5(3), February.
    • Handle: RePEc:ags:aieabj:276278
    DOI: 10.22004/ag.econ.276278
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    References listed on IDEAS

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    2. Rousu, Matthew C. & Marette, Stéphan & Thrasher, James F. & Lusk, Jayson L., 2014. "The economic value to smokers of graphic warning labels on cigarettes: Evidence from combining market and experimental auction data," Journal of Economic Behavior & Organization, Elsevier, vol. 108(C), pages 123-134.
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