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Portuguese olive oil and the price of regional products: does designation of origin really matter?

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Abstract

Resources (tangible and intangible) can be mobilised to increase region’s reputation and confer a competitive advantage to certain products with origin in that region. The returns of a region’s resources depend upon the ability of local firms to appropriate the rents earned and whether the consumers value the characteristics of the region that are associated with the product, being disposed to pay a price premium. The results we got through the estimation of a hedonic price function, which relates the price of portuguese regional olive oil to its various attributes, provided empirical support to this idea. The study shows that designation of origin, producer’s brand and olive oil characteristics (biological and mixed with herbs) have strong impact on price. Specifically, olive oil from regions of “Trás-os-Montes e Alto Douro”, “Beiras e Ribatejo” and “Alentejo” are expected to have price premiums relative to other olive oil without region indication (base category). It also allows to conclude that olive oil acidity has a negative impact on price.

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  • José Cadima Ribeiro & José de Freitas Santos, 2004. "Portuguese olive oil and the price of regional products: does designation of origin really matter?," NIPE Working Papers 3/2004, NIPE - Universidade do Minho.
    • Handle: RePEc:nip:nipewp:3/2004
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    File URL: http://www3.eeg.uminho.pt/economia/nipe/docs/2004/NIPE_WP_3_2004.PDF
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    1. Warren J Bilkey & Erik Nes, 1982. "Country-of-Origin Effects on Product Evaluations," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 13(1), pages 89-100, March.
    2. Harald Bathelt, 2001. "Regional competence and economic recovery: divergent growth paths in Boston's high technology economy," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 13(4), pages 287-314, October.
    3. Schamel, Guenter, 2003. "International Wine Trade: Analyzing The Value Of Reputation And Quality Signals," 2003 Annual meeting, July 27-30, Montreal, Canada 22157, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
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    1. Anania, Giovanni & Pupo D'Andrea, Maria Rosaria, 2008. "The Global Market for Olive Oil: Actors, Trends, Policies, Prospects and Research Needs," Working Papers 6109, TRADEAG - Agricultural Trade Agreements.

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