IDEAS home Printed from https://ideas.repec.org/p/tse/wpaper/24188.html
   My bibliography  Save this paper

Measuring Consumers' Attachment to Geographical Indications: Implications for Competition Policy

Author

Listed:
  • Hassan, Daniel
  • Monier-Dilhan, Sylvette
  • Orozco, Valérie

Abstract

Geographical Indications (GIs) are considered as upmarket products because they are based on tradition and convey information about their geographical origin. Otherwise, the limitation of the geographical areas devoted to GIs and the exclusivity they benefit on the product lead to suspicions of monopoly power. Quality and market power should however reflect a stronger attachment, making consumers less price sensitive than for standard goods. This research aims to compare theses conjectures to empirical measures concerning the French cheese market. Price elasticities are computed from a demand model on 21 products, 11 Protected Designation of Origin (PDO) products and 10 non PDOs. The results are counterintuitive, PDOs being as price elastic as or more price elastic than standard products. This finding thus challenges the widespread idea that PDOs systematically correspond to high quality. It also has important implications in terms of competition policy, showing that PDO cheeses suppliers cannot decide on price increases without suffering large reductions in demand.

Suggested Citation

  • Hassan, Daniel & Monier-Dilhan, Sylvette & Orozco, Valérie, 2011. "Measuring Consumers' Attachment to Geographical Indications: Implications for Competition Policy," TSE Working Papers 11-225, Toulouse School of Economics (TSE).
    • Handle: RePEc:tse:wpaper:24188
    as

    Download full text from publisher

    File URL: http://www.tse-fr.eu/sites/default/files/medias/doc/wp/fff/11-225.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Moschini, Giancarlo, 1998. "The semiflexible almost ideal demand system," European Economic Review, Elsevier, vol. 42(2), pages 349-364, February.
    2. Jerry Hausman & Gregory Leonard & J. Douglas Zona, 1994. "Competitive Analysis with Differentiated Products," Annals of Economics and Statistics, GENES, issue 34, pages 143-157.
    3. repec:adr:anecst:y:1994:i:34:p:06 is not listed on IDEAS
    4. Dhar, Tirtha Pratim & Chavas, Jean-Paul & Gould, Brian W., 2002. "An Empirical Assessment of Endogeneity Issues In Demand Analysis for Differentiated Products," Research Reports 25227, University of Connecticut, Food Marketing Policy Center.
    5. Arnade Carlos & Gopinath Munisamy & Pick Daniel, 2007. "Measuring the Degree of Retail Competition in U.S. Cheese Markets," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 5(1), pages 1-20, February.
    6. Shenggen Fan & Eric J. Wailes & Gail L. Cramer, 1995. "Household Demand in Rural China: A Two-Stage LES-AIDS Model," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(1), pages 54-62.
    7. Sergio H. Lence & Stéphan Marette & Dermot J. Hayes & William Foster, 2007. "Collective Marketing Arrangements for Geographically Differentiated Agricultural Products: Welfare Impacts and Policy Implications," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(4), pages 947-963.
    8. James S. Eales & Laurian J. Unnevehr, 1988. "Demand for Beef and Chicken Products: Separability and Structural Change," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(3), pages 521-532.
    9. Daniel Pick, 2008. "Geographical Indications and the Competitive Provision of Quality in Agricultural Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(3), pages 794-812.
    10. Brian W. Gould, 2003. "An Empirical Assessment of Endogeneity Issues in Demand Analysis for Differentiated Products," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(3), pages 605-617.
    11. Giancarlo Moschini, 1995. "Units of Measurement and the Stone Index in Demand System Estimation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(1), pages 63-68.
    12. Adolf Buse, 1994. "Evaluating the Linearized Almost Ideal Demand System," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(4), pages 781-793.
    13. Berry, Steven & Levinsohn, James & Pakes, Ariel, 1995. "Automobile Prices in Market Equilibrium," Econometrica, Econometric Society, vol. 63(4), pages 841-890, July.
    14. Dwight Merunka & Sophie Changeur & Pascal Bourgeat, 1999. "Les modèles de concurrence entre les marques : Pratiques et limites," Post-Print hal-02018505, HAL.
    15. Pinkse, Joris & Slade, Margaret E., 2004. "Mergers, brand competition, and the price of a pint," European Economic Review, Elsevier, vol. 48(3), pages 617-643, June.
    16. Marette, Stephan & Crespi, John M & Schiavina, Allesandra, 1999. "The Role of Common Labelling in a Context of Asymmetric Information," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 26(2), pages 167-178, June.
    17. Frank Verboven, 1999. "Product Line Rivalry and Market Segmentation—with an Application to Automobile Optional Engine Pricing," Journal of Industrial Economics, Wiley Blackwell, vol. 47(4), pages 399-425, December.
    18. Véronique Nichèle & Jean-Marc Robin, 1993. "Évaluation des effets budgétaires et redistributifs de réformes de la fiscalité indirecte française," Économie et Prévision, Programme National Persée, vol. 110(4), pages 105-128.
    19. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
    20. LaFrance, Jeffrey T., 2004. "Integrability of the linear approximate almost ideal demand system," Economics Letters, Elsevier, vol. 84(3), pages 297-303, September.
    21. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
    22. J. Miguel Villas-Boas & Russell S. Winer, 1999. "Endogeneity in Brand Choice Models," Management Science, INFORMS, vol. 45(10), pages 1324-1338, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Duvaleix, Sabine & Emlinger, Charlotte & Gaigné, Carl & Latouche, Karine, 2021. "Geographical indications and trade: Firm-level evidence from the French cheese industry," Food Policy, Elsevier, vol. 102(C).
    2. Sabine Duvaleix-Treguer & Charlotte Emlinger & Carl Gaigné & Karine Latouche, 2018. "On the competitiveness effects of quality labels: Evidence from the French cheese industry," Working Papers 2018-17, CEPII research center.
    3. Gelaw, F., 2018. "Impacts of Trademarking on Export and Producer Prices in Ethiopian Coffee," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277290, International Association of Agricultural Economists.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hassan Daniel & Monier-Dilhan Sylvette & Orozco Valérie, 2011. "Measuring Consumers' Attachment to Geographical Indications," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 9(1), pages 1-30, June.
    2. Fabian Bergès & Daniel Hassan & Sylvette Monier-Dilhan, 2013. "Are Consumers More Loyal To National Brands Than To Private Labels?," Bulletin of Economic Research, Wiley Blackwell, vol. 65, pages 1-16, May.
    3. Irz, Xavier & Mazzocchi, Mario & Réquillart, Vincent & Soler, Louis-Georges, 2015. "Research in Food Economics: past trends and new challenges," Revue d'Etudes en Agriculture et Environnement, Editions NecPlus, vol. 96(01), pages 187-237, March.
    4. Susanto, Dwi & Rosson, C. Parr, III & Henneberry, Shida Rastegari, 2008. "The Structure of U.S. Red Meat and Livestock Imports," 2008 Annual Meeting, February 2-6, 2008, Dallas, Texas 6824, Southern Agricultural Economics Association.
    5. Ryo Sakamoto & Kyle Stiegert, 2018. "Comparing competitive toughness to benchmark outcomes in retail oligopoly pricing," Agribusiness, John Wiley & Sons, Ltd., vol. 34(1), pages 44-60, December.
    6. Huysmans, Martijn, 2021. "On Feta and Fetta: Protecting EU Geographical Indications Down Under," 2021 Conference, August 17-31, 2021, Virtual 314978, International Association of Agricultural Economists.
    7. Jianyu Yu & Zohra Bouamra-Mechemache, 2016. "Production standards, competition and vertical relationship," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 43(1), pages 79-111.
    8. Jean‐Sauveur Ay, 2021. "The Informational Content of Geographical Indications," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(2), pages 523-542, March.
    9. Geoffrey Pofahl, 2009. "Merger Simulation in the Presence of Large Choice Sets and Consumer Stockpiling: The Case of the Bottled Juice Industry," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 34(3), pages 245-266, May.
    10. Jianyu Yu & Zohra Bouamra-Mechemache & Angelo Zago, 2018. "What is in a Name? Information, Heterogeneity, and Quality in a Theory of Nested Names," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 100(1), pages 286-310.
    11. Santeramo, Fabio Gaetano, 2014. "On the estimation of supply and demand elasticities of agricultural commodites," AGRODEP technical notes TN-10, International Food Policy Research Institute (IFPRI).
    12. Paolo Buccirossi & Lorenzo Ciari & Tomaso Duso & Sven-Olof Fridolfsson & Giancarlo Spagnolo & Cristiana Vitale, 2008. "A Short Overview of a Methodology for the Ex-Post Review of Merger Control Decisions," De Economist, Springer, vol. 156(4), pages 453-475, December.
    13. Ngokkuen, Chuthaporn & Grote, Ulrike, 2012. "Geographical Indication for Jasmine Rice: Applying a Logit Model to Predict Adoption Behavior of Thai Farm Households," Quarterly Journal of International Agriculture, Humboldt-Universitaat zu Berlin, vol. 51(2), pages 1-29, May.
    14. Olivier Bonroy & Christos Constantatos, 2015. "On the Economics of Labels: How Their Introduction Affects the Functioning of Markets and the Welfare of All Participants," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 97(1), pages 239-259.
    15. Belleflamme,Paul & Peitz,Martin, 2015. "Industrial Organization," Cambridge Books, Cambridge University Press, number 9781107687899, January.
    16. Rojas, Christian, 2005. "Does the King Use Its Power? Price Competition in U.S. Brewing," Research Reports 25172, University of Connecticut, Food Marketing Policy Center.
    17. Alessandro Bonanno & Carlo Russo & Luisa Menapace, 2018. "Market power and bargaining in agrifood markets: A review of emerging topics and tools," Agribusiness, John Wiley & Sons, Ltd., vol. 34(1), pages 6-23, December.
    18. Holt, Matthew T. & Goodwin, Barry K., 2009. "The Almost Ideal and Translog Demand Systems," MPRA Paper 15092, University Library of Munich, Germany.
    19. Chiara Landi & Gianluca Stefani, 2015. "Rent Seeking and Political Economy of Geographical Indication Foods," Agribusiness, John Wiley & Sons, Ltd., vol. 31(4), pages 543-563, October.
    20. repec:gbl:wpaper:2013-01 is not listed on IDEAS
    21. Lurkin, Virginie & Garrow, Laurie A. & Higgins, Matthew J. & Newman, Jeffrey P. & Schyns, Michael, 2017. "Accounting for price endogeneity in airline itinerary choice models: An application to Continental U.S. markets," Transportation Research Part A: Policy and Practice, Elsevier, vol. 100(C), pages 228-246.

    More about this item

    Keywords

    Geographical indications; demand model; price elasticities; competition policy;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tse:wpaper:24188. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/tsetofr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.