Credence Good Labeling: The Efficiency and Distributional Implications of Several Policy Approaches

Roe, Brian E.; Sheldon, Ian M.

doi:10.1111/j.1467-8276.2007.01024.x

Cited by 168 publications

(115 citation statements)

References 32 publications

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“…In many cases, this reduces the net benefit of certifying enough to outweigh the certified price premium. This result, and the one that follows, is similar to Roe and Sheldon (2007), although their conclusion was based on producers' need to obtain a second, more stringent, certification to assure consumers of their higher quality. 2) The certification standards do not align with the consumer's ideal level of quality.…”

Section: Discussionsupporting

confidence: 62%

Lending credence: motivation, trust, and organic certification

Holland

2016

Agric Econ

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The information asymmetries inherent in credence goods have typically led economists to conclude these markets require well-defined quality standards and third-party verification that producers are meeting those standards. Nonetheless, many producers of credence goods appear to be opting out of certification. Why? This paper builds in previous research and develops a theoretical framework to think about how producers' motivation and relationships with consumers affect the necessity and effectiveness of certification. I find the degree to which a consumer trusts the producer of a credence good and the certification standard that governs it and the degree to which the producer is motivated to produce a good of a certain quality both have important effects on certification-based regulation.

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Section: Discussionsupporting

confidence: 62%

Lending credence: motivation, trust, and organic certification

Holland

2016

Agric Econ

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“…Baksi and Bose (2007) and Roe and Sheldon (2007) emphasize that firms prefer private labeling but consumers prefer public labeling. Certification nevertheless costs more than private labeling.…”

mentioning

confidence: 99%

Corporate social responsibility and the economics of consumer social responsibility

Étilé

Teyssier

2013

RAEStud

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The promotion of Corporate Social Responsibility (CSR) is likely to depend on consumers' purchase behaviors. While many consumers like the idea of social responsibility, the responsible consumption remains at a low level. This survey analyses two main barriers to responsible consumption: the willingness-to-pay for it, which relates to consumer social preferences; and the information asymmetry between companies and consumers. The economic literature shows that consumer social preferences are related to altruistic, self-image and social image concerns. Only consumers with strong social preferences and a low marginal utility of income (a high income) are likely to purchase CSR products. Moreover, purchase decisions crucially depend on the existence of labels, which truthfully identify the CSR products. Public policies may promote consumer social responsibility through education programs, enhancement of self-and social-image concerns, and careful label regulation.

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“…According to Bonroy and Constantatos (2008, p. 238, footnote 1), 'examples of credence goods are organic products, FT products, types of goods claiming higher safety or better environmental performance, etc.' Steinrücken and Jaenichen (2007), Roe and Sheldon (2007), Baksi and Bose (2007) and Fridell et al (2008) …”

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confidence: 99%