Title

Grading, Minimum Quality Standards, and the Labeling of Genetically Modified Products

Campus Units

Economics

Document Type

Article

Publication Version

Submitted Manuscript

Publication Date

8-2007

Journal or Book Title

American Journal of Agricultural Economics

Volume

89

Issue

3

First Page or Article ID Number

769

Last Page

783

DOI

10.1111/j.1467-8276.2007.01002.x

Abstract

We relate the labeling of genetically modified (GM) products to the theory of grading and minimum quality standards. The model represents three stages in the supply chain, assumes a vertical product differentiation framework, allows for the accidental commingling of non-GM products, and treats regulation as a purity threshold for non-GM products. We find that a non-GM purity level that is too strict leads to the disappearance of the non-GM product, and that some quality standard benefits farmers. Indeed, the standard that is optimal from the perspective of producers is stricter than what is optimal for consumers and for societal welfare.

JEL Classification

D18, L14, L15, L51, M31, Q13, Q16

Comments

This is a working paper of an article from American Journal of Agricultural Economics 89 (2007): 769, doi: 10.1111/j.1467-8276.2007.01002.x.