Geographical indications and quality promotion in food and agricultural markets: domestic and international issues

Abstract

This dissertation addresses three questions concerning the economics of geographical indications (GIs) and the role of intellectual property (IP) protection in the provision of quality in food and agricultural markets. The first essay compares and contrasts different instruments (i.e., alternative certification schemes and trademarks) used to provide IP protection for GIs. From a policy perspective, this essay offers recommendations with regard to the most desirable type of IP protection instrument for GIs. The model indicates that a sui generis scheme based on appellations is preferable to standard instruments, such as certification marks, that are currently used in many important markets including the United States, because appellations improve the collective reputation of certified products and reduce the total cost (i.e., the sum of production and information costs) of providing quality compared to standard instruments.The second essay investigates whether consumers recognize and value the informational content of a variety of nested geographical origin labels from foreign countries. This study disentangles three types of geographical origin labels with different levels of geographical differentiation: country-of-origin labels and two types of GIs, protected designations of origin (PDO) and protected geographical indications (PGI). Consumer data show that, within the context of a high-quality value-added commodity such as extra virgin olive oil, consumers' willingness to pay for oils from different countries varies, ceteris paribus, across countries, and that within a country consumers have a greater willingness to pay for GI-labeled than non-GI-labeled products. We also find evidence that consumers value PDOs more than PGIs.The third essay investigates the incentives of GI-exporting and GI-importing countries to strengthen the current TRIPS provisions for GIs. This essay explicitly considers the role of promotion in expanding market demand when consumers lack information regarding either the existence or the features of the GI and GI-like products. The model highlights the diverging interests of GI-exporting and GI-importing countries with regard to GI provisions in international markets and provides a key to interpret the current controversy over GIs among WTO members.