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The Reliability of Certification: Quality Labels as a Consumer Policy Tool

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Abstract

Given the large number of certification systems in the food industry, it is surprising that there are only a few research approaches to the economics of certification. Certification schemes are used to ensure marketing claims for unobservable quality attributes. Under asymmetric information, process-oriented quality characteristics such as organic farming, animal welfare, or fair trade raise the question of mislabelling. In the long run, only a reliable control procedure can reduce the risk of food scandals. The article presents a model which includes several starting points to enhance the efficiency of certification systems and the corresponding labels. On the whole, tendencies towards price wars on the certification market and considerable differences in performance reveal the necessity of institutional changes. Strategies for reducing auditors’ dependence, intensifying liability, increasing reputation effects, and minimizing audit costs are suggested. Finally, policy implications for public and private monitoring are discussed.

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Authors and Affiliations

  1. Research Assistants, University of Goettingen, Platz der Goettinger Sieben 5, D-37073, Goettingen, Germany

    Gabriele Jahn & Matthias Schramm

  2. Professor of Food Marketing at the Institute of Agricultural Economics, University of Goettingen, Platz der Goettinger Sieben 5, D-37073, Goettingen, Germany

    Achim Spiller

Authors
  1. Gabriele Jahn
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  2. Matthias Schramm
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  3. Achim Spiller
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Correspondence to Achim Spiller.

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Jahn, G., Schramm, M. & Spiller, A. The Reliability of Certification: Quality Labels as a Consumer Policy Tool. J Consum Policy 28, 53–73 (2005). https://doi.org/10.1007/s10603-004-7298-6

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