The political economy of labeling

Zilberman, David; Kaplan, Scott; Gordon, Ben

doi:10.1016/j.foodpol.2018.02.008

Cited by 22 publications

(16 citation statements)

References 30 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…Food fraud is motivated by economic gains and is enabled by the fact that the information about the nature of the, increasingly prevalent in the food system, credence goods is normally asymmetric; while producers know whether a product is high quality or not, certain product attributes are not detectable by consumers through search or experience. While the introduction of certification and labelling can solve this information problem and ensure the presence of the high‐quality products in the market (Giannakas ; Bonroy and Constantatos ; Roe et al ; Zilberman et al ), it can also create incentives for fraudulent behaviour by producers in the form of food adulteration and mislabelling. Such fraudulent behaviour is normally enabled by imperfect monitoring and enforcement systems and the fact that the ability and efforts of key actors in these markets (like firms and regulatory and enforcement agencies) may be unobservable by consumers (Sheldon ).…”

Section: Introductionmentioning

confidence: 99%

Markets and welfare effects of food fraud

Meerza

Giannakas

Yiannaka

2019

Aus J Agri & Res Econ

View full text Add to dashboard Cite

This study develops a theoretical framework of heterogeneous consumers and producers and imperfectly competitive food companies to analyse the system-wide market and welfare effects of food fraud in the form of food adulteration and mislabelling. The results show that, while the price impacts of food fraud are productspecific with the equilibrium prices of high-quality and low-quality products moving in different directions, the equilibrium quantities depend on the relative magnitude of the demand and supply effects of food fraud. Regarding the welfare effects of food fraud, they are shown to be highly asymmetric across different consumers and producers. In addition to enabling the disaggregation of the welfare effects of food fraud, the explicit consideration of agent heterogeneity, asymmetries in the probability of fraud detection and the endogeneity of the producer quality choices also enables the derivation of a key result of this study; contrary to what is traditionally believed, both low-quality and high-quality producers can have economic incentives to commit fraud. The group that is more likely to cheat is determined by the social attitudes towards fraudulent behaviour, the enforcement policy parameters and the relative magnitude of the demand and supply effects of food fraud. A comparison of the market effects of mislabelling and food adulteration reveals that, while the equilibrium quantity of the high-quality product is higher in the presence of mislabelling, producers are more likely to mislabel than adulterate their products.

show abstract

Section: Introductionmentioning

confidence: 99%

Markets and welfare effects of food fraud

Meerza

Giannakas

Yiannaka

2019

Aus J Agri & Res Econ

View full text Add to dashboard Cite

show abstract

“…Other studies show how the certification process should be monitored (Zago and Pick 2004). A new branch of literature investigates how political processes can promote the emergence on the market of a type of label and/or a certification process (Zilbermann et al 2018).…”

Section: Introductionmentioning

confidence: 99%

An empirical framework to study food labelling fraud: an application to the Italian extra‐virgin olive oil market

Bimbo

Bonanno

Viscecchia

2019

Aus J Agri & Res Econ

View full text Add to dashboard Cite

The mislabelling of agricultural and food products is one of the most common types of food fraud. Despite the frequency with which labelling fraud occurs, there is no empirical framework to study its welfare implications, the probability that it may occur, and the measures that can limit its occurrence. We present an empirical framework to study the economic consequences of food labelling fraud in a differentiated products food market. Such framework requires the availability of sales data and the use of an 'attribute-space' demand model. The model is applied to the Italian extra-virgin olive oil market to simulate the occurrence of fraudulent '100 per cent Italian' claims. Our results indicate that potential consumer losses due to overpayments for a false claim are higher than manufacturer gains, suggesting that labelling fraud results in welfare losses and not just in welfare transfers. Simulation results indicate that the level of the current administrative fines is not likely to be effective to discourage '100 per cent Italian' labelling fraud. Imposing larger fines or other measures negatively affecting a firm's image could be more effective in deterring labelling fraud.

show abstract

“…The foregoing conceptual analysis, however, leaves many questions open, partly given its reliance on a few requisite simplifications. For instance, we have ignored the distinct variants of labeling approaches (mandatory vs. voluntary, governmental vs. self-declared vs. third-party), as these are both less important for the present analysis and, moreover, covered in much greater detail in the relevant literature (e.g., Zilberman et al, 2018b). Nevertheless, further analysis of the comparative strengths and weaknesses of the varied approaches against the background of our findings would be interesting and informative.…”

Section: Discussionmentioning

confidence: 99%

“…While useful, it still remains that labels ought not be taken to be “sufficient” for the effectiveness of exit, especially given the range of other factors involved. Some of these have been addressed in the rather extensive literature on the economics of labeling (McCluskey et al, 2018; Zilberman et al, 2018b). A particularly important question is “What should be labeled?” There has been a proliferation of labeling schemes in recent years, all of which, by claiming to provide different kinds of information, both relevant and irrelevant, induce a constant risk of information overload (Verbeke, 2005).…”

Section: Hirschman's Exit–voice Framework and Its Applicationmentioning

confidence: 99%

Dealing With Rejection: An Application of the Exit–Voice Framework to Genome-Edited Food

Bartkowski

Baum

2019

Front. Bioeng. Biotechnol.

View full text Add to dashboard Cite

Genome editing has been hailed as both a revolutionary technology and potential solution to many agriculture-related and sustainability problems. However, owing to the past challenges and controversy generated by widespread rejection of genetic engineering, especially once applied to agriculture and food production, such innovations have also prompted their fair share of concern. Generally speaking, much of the discussion centers on the inadequacy or uncertainty of current regulatory regimes, partly owing to the vastly different approaches in the European Union and United States. Insofar as this focus on regulatory regimes is stimulated by the desire to bridge the divide between proponents and critics of genome editing, it risks losing sight of an essential aim of regulatory action: effectively responding to and fostering trust in consumers and the public. In this article, we thus assign priority to understanding the contours of individual dissatisfaction and its related responses. Toward this end, we apply and extend Hirschman's exit–voice framework to bring together, synthesize, and give much-needed substance to the diverse expressions of dissatisfaction and discontent with novel genome-editing technologies. Through the resulting synthetic framework, we then identify and evaluate which governance approaches can prevent actions seen to be problematic and, moreover, open up the space for a more active public. In this context, we devote specific attention to (i) use of labeling as a means to enable “exit” of consumers from markets and (ii) public deliberation as a possible expression of “voice.” Indeed, both options are proposed and utilized in the context of genome editing, e.g., as a way for skeptical consumers to express their viewpoints, seek change in prevailing food systems, and navigate the conflicts and tensions from applying unique sets of values to assess the balance of risks and benefits. So far missing, though, is an evaluation of how well such efforts offer effective means for public expression, which is why we also link this framework to the wider issue of consumer sovereignty. Having done so, we conclude with a brief commentary on the potential and limitations of both options in the existing institutional framework of the EU.

show abstract

The political economy of labeling

Cited by 22 publications

References 30 publications

Markets and welfare effects of food fraud

Markets and welfare effects of food fraud

An empirical framework to study food labelling fraud: an application to the Italian extra‐virgin olive oil market

Dealing With Rejection: An Application of the Exit–Voice Framework to Genome-Edited Food

Contact Info

Product

Resources

About