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Economic Implications of Protecting Regional Reputations

Author

Listed:
  • Winfree Jason A.

    (Department of Agricultural Economics and Rural Sociology, University of Idaho, 875 Perimeter Drive MS 2334, Moscow, ID 83844, USA)

  • McCluskey Jill J.

    (School of Economic Sciences, Washington State University, Pullman, WA 99164, USA)

Abstract
This article develops a theoretical model to analyze how policies such as regional labeling, geographic indications, and quality standards affect welfare when firms have a collective reputation corresponding to a region. The tradeoff is between consumer information and protection of the regional names against the effect of supply restriction, which is often considered to be collusive behavior. Regional labeling is found to increase quality for all firms and increases profits for firms in the high-quality producing region, although the effect on profits for firms in the low-quality producing region is ambiguous. Quality standards may also increase quality and profits in all regions, but can also be used as a way to restrict imports if standards are too high. Quotas can also alleviate the collective information problem and increase profits, but does so at the expense of consumers. We argue that clear labeling and achievable standards are preferable to import quotas due to consumer surplus.

Suggested Citation

  • Winfree Jason A. & McCluskey Jill J., 2022. "Economic Implications of Protecting Regional Reputations," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 20(1), pages 1-10, May.
    • Handle: RePEc:bpj:bjafio:v:20:y:2022:i:1:p:10:n:2
    DOI: 10.1515/jafio-2019-0051
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    Citations

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    Cited by:

    1. Pecchioli, Bruno & Moroz, David, 2023. "Do geographical appellations provide useful quality signals? The case of Scotch single malt whiskies," Economic Modelling, Elsevier, vol. 124(C).

    More about this item

    Keywords

    regional labeling; quality standards; geographic indications;
    All these keywords.

    JEL classification:

    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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