The Value of Certification: Evidence from the U.S. Organic Food Market

2023-06
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The Value of Certification: Evidence from the U.S. Organic Food Market

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2023-06

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Consumers may value some costly production procedures that improve sustainability without affecting the observed quality of products. Without credible disclosure, consumers cannot distinguish products compliant with these procedures from others, giving rise to a lemons problem and potentially inhibiting efficient trade. This dissertation explores whether third-party certification provides an effective solution to this problem in the context of the U.S. food market. This dissertation finds that consumers are willing to pay between 4 and 116% of a product’s price for organic certification. Consistent with the theory that certification provides otherwise unverifiable information, estimates of the willingness to pay across product types covary negatively with the predictability of organic certification using other product characteristics. Results from the counterfactual analysis suggest a decrease in consumer welfare from removing the organic certification program, equivalent to 0.05% of total spending on organic products.

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University of Minnesota Ph.D. dissertation. June 2023. Major: Economics. Advisor: Amil Petrin. 1 computer file (PDF); viii, 69 pages.

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Yu, Dan. (2023). The Value of Certification: Evidence from the U.S. Organic Food Market. Retrieved from the University Digital Conservancy, https://hdl.handle.net/11299/258697.

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