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How Cool is C.O.O.L.? AgEcon
Dinopoulos, Elias; Livanis, Grigorios T.; West, Carol Taylor.
This paper develops a partial equilibrium model of a small open-economy producing and trading an unsafe product that is supplied by perfectly competitive producers. The presence of product safety considerations, in this case risks to health, introduces a wedge between the market prices producers receive and the higher risk-adjusted prices consumers respond to. The size of the wedge depends positively on the per-unit cost of illness and the proportion of unsafe units embodied in the parent risky product. The model is used to analyze the welfare effects of trade with and without a country-of-origin labeling (COOL) program. Assuming imports are less safe than domestic production, the welfare gains from trade in the absence of COOL are ambiguous and may...
Tipo: Working or Discussion Paper Palavras-chave: Country-of-origin labeling; Protection; Product safety; Welfare; Food Consumption/Nutrition/Food Safety; International Relations/Trade; F10; F13; L15.
Ano: 2005 URL: http://purl.umn.edu/15658
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