The economics of geographically differentiated agri-food products : Theoretical considerations and empirical evidence

Geographical names for agri-food products and particularly the legal protection of those names are discussed more than ever. The reasons for this recent interest are manifold. First, an increasing consumer segment is concerned about food safety and food quality issues and thus wants to know where the food they eat comes from. Second, from a policy point of view it is assumed that the protection and promotion of geographically differentiated agri-food products (GDAFPs) can foster rural development. For the European Commission, geographically differentiated products even constitute one main pillar of the EU’s agricultural quality policy besides organic and other food quality certification schemes. Against this background, the dissertation provides a comprehensive picture of the eco-nomic aspects of geographically differentiated agri-food products in general, while at the same time presenting very specific results for certain products and markets.The first section introduces major research questions discussed in the context of GDAFPs and provides a comprehensive review and assessment of the economic analysis of these products. Section II presents results from two consumer studies carried out in Germany. The first study analyses consumers’ preferences for regional food in general, whereas the second one addresses the protection of Hessian Apple wine as a geographical indication in particular. In both studies logit models based on survey data are estimated. The obtained results indicate that psychographic factors such as the wish to support domestic producers are central deter-minants of consumers’ preferences and willingness to pay for GDAFPs, whereas sociodemo-graphic and economic factors do not possess much explanatory power. Section III provides empirical evidence with respect to the importance of country- and region-of-origin effects in the price formation of single-origin coffees. All four articles in this section are closely linked with each other. The econometric results highlight that coffees from origins without any established reputation for high quality are discounted even after having controlled for sensory quality differences. These significant origin effects can be interpreted as collective reputation effects, a phenomenon well known for wine. Methodologically section III contributes to the exisiting scientific literature by (i) analysing how a two-stage hedonic model can be specified according to the available data set and (ii) providing an empirical application for single-origin coffee data consisting of nonlinear hedonic price functions at stage one and an inverse demand function for sensory quality at stage two.