Consumer preferences for country-of-origin, geographical indication, and protected designation of origin labels

Date
2009-11-02
Authors
Menapace, Luisa
Colson, Gregory
Grebitus, Carola
Facendola, Maria
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Economics
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Abstract

Motivated by the recognition that geography is often correlated with and/or an important determinant of the overall quality of agricultural products, consumer groups, industry representatives, and domestic and trade representatives have increasingly considered the potential role of geographical origin labels as consumer information and marketing tools. We investigate whether consumers recognize and value the informational content of a variety of nested geographical origin labels. In particular, this study disentangles and assesses three nested types of origin labels: country of origin (COOL), geographical indications (GI), and PDO/PGI. We find that, within the context of a high quality value-added commodity such as extra virgin olive oil, consumers' willingness to pay varies across different countries of origin, 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, but the result is not as strong as that found for GI versus non-GI. Overall, our findings support the recent surge in interest by both developed and developing nations in reaching an agreement for stricter and more widespread protection of GIs within ongoing WTO discussions and harnessing them as marketing tools for expanding shares in export markets.

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geographical indications, consumer preferences, country of origin labels, PDO, PGI, olive oil
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