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2006

Iowa State University

CARD Working Papers

Quality

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Agricultural Production Clubs: Viability And Welfare Implications, Corinne Langinier, Bruce A. Babcock Aug 2006

Agricultural Production Clubs: Viability And Welfare Implications, Corinne Langinier, Bruce A. Babcock

CARD Working Papers

Consumers are in general less informed than producers about the quality of agricultural goods. To reduce he information gap, consumers can rely on standards (e.g., certification) that ensure quality and origin of the goods. These costly standards can be adopted by a group of producers of high-quality goods. We study the formation of such a group that we model as a club. We first investigate under what circumstances a club of a given size is desirable for producers, and for society. We then analyze the optimal size of the club when there exists a direct barrier to entry, and ...


How To Promote Quality Perception In Wine Markets: Brand Advertising Or Geographical Indication?, Chengyan Yue, Stéphan Marette, John C. Beghin Aug 2006

How To Promote Quality Perception In Wine Markets: Brand Advertising Or Geographical Indication?, Chengyan Yue, Stéphan Marette, John C. Beghin

CARD Working Papers

In the context of the wine industry, we investigate producers' choice between geographical indications and brand advertising to convey information to consumers. Producers also decide whether or not to select an effort level for improving the quality of their products. We show that if this effort level is selected, a producer will prefer to rely on brand advertising for promoting its products and setting up its own reputation. Despite allowing the cost of promotion to be shared, a geographical indication does not sufficiently reward the effort to improve quality. Finally, the selection of both instruments by producers is examined.