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When are private standards more stringent than public standards?

Journal Contribution - Journal Article

Retailers' private standards are increasingly important for addressing consumer concerns about safety, quality, and social and environmental issues. Empirical evidence shows that these private standards are frequently more stringent than their public counterparts. This article develops a political economy model that helps explain this stylized fact. We show that if producers exercise their political power to persuade the government to impose a lower public standard, retailers may apply their market power to install a private standard at a higher level than the public one, depending on several factors. © 2013 The Author (2013). Published by Oxford University Press on behalf of the Agricultural and Applied Economics Association. All rights reserved.
Journal: American Journal of Agricultural Economics
ISSN: 0002-9092
Issue: 1
Volume: 96
Pages: 154 - 171
Publication year:2014