Stéphan Marette

The Combination of Gravity and Welfare Approaches for Evaluating Nontariff Measures

This article explores the link between gravity and welfare frameworks for measuring the impact of nontariff measures. First, an analytical approach suggests how to combine a gravity equation with a partial equilibrium model to determine the welfare impact of nontariff measures. Second, an empirical application focuses on the effects of a standard that caps antibiotic residues in crustaceans in the United States, the European Union, Canada, and Japan. While the econometric estimation of the gravity equation reports a negative impact on imports, welfare evaluations show that in most cases, a stricter standard leads to an increase in both domestic and international welfare.

“Does Contain” vs. “Does Not Contain”: Does it Matter which GMO Label is Used?

An analytical framework where heterogeneous consumers are imperfectly informed about product content is used to investigate the welfare effects of a public labeling system. Although a mandatory label that reads “Does Contain” or one that reads “Does Not Contain” genetically modified organisms (GMOs) provides information for both the labeled and the unlabeled goods, there is no reason why these labels should cause the same welfare effects. This paper shows that the two labels imply different distortions due to the associated cost of labeling. It is shown that the label “Does Contain” should be used if the ratio of consumers with a strong reluctance for consuming GMO goods to indifferent consumers is high, while the label “Does Not Contain” should be used if this ratio is low. Given the findings, the authors argue that current labeling differences in various countries need not be the result of protectionist trade regulations.

The public understanding of nanotechnology in the food domain: The hidden role of views on science, technology, and nature

In spite of great expectations about the potential of nanotechnology, this study shows that people are rather ambiguous and pessimistic about nanotechnology applications in the food domain. Our findings are drawn from a survey of public perceptions about nanotechnology food and nanotechnology food packaging (N = 752). Multinomial logistic regression analyses further reveal that knowledge about food risks and nanotechnology significantly influences people’s views about nanotechnology food packaging. However, knowledge variables were unrelated to support for nanofood, suggesting that an increase in people’s knowledge might not be sufficient to bridge the gap between the excitement some business leaders in the food sector have and the restraint of the public. Additionally, opposition to nanofood was not related to the use of heuristics but to trust in governmental agencies. Furthermore, the results indicate that public perceptions of nanoscience in the food domain significantly relate to views on science, technology, and nature.

Recent international and regulatory decisions about geographical indications

As worldwide consumer demand for high-quality products and for information about these products increases, labels and geographical indications (GIs) can serve to signal quality traits to consumers. However, GI systems among countries are not homogeneous and can be used as trade barriers against competition. Philosophical differences between the European Union and the United States about how GIs should be registered and protected led to the formation of a WTO dispute settlement panel. In this paper we discuss the issues behind the dispute, the World Trade Organization (WTO) panel decision, and the EU response to the panel decision leading to the new Regulation 510/2006. Given the potential for GI labels to supply consumer information, context is provided for the discussion using recent literature on product labeling. Implications are drawn regarding the importance of the panel decision and the EU response relative to GI issues yet to be negotiated under the Doha Round.

A Cost-Benefit Framework for the Assessment of Non-Tariff Measures in Agro-Food Trade

This report develops a conceptual framework for the assessment of costs and benefits associated with non-tariff measures that allows an evidence-based comparative assessment of alternative regulatory approaches.

Are uniform assessments for generic advertising optimal if products are differentiated

An analytical framework where consumers display preferences for various qualities of an agricultural commodity is used to investigate the producer welfare effects of generic advertising assessments. Depending upon the degree of differentiation present in the final goods, some producers are shown to benefit more than others from the use of a uniform, per-unit assessment on all producers. This article delineates those cases where producer assessments should be equal and where assessments should be different to insure an equitable benefit. lEconLit citations: Q130, L110r.

Measuring Costs and Benefits of Non-Tariff Measures in Agri-Food Trade

This paper provides a systematic welfare-based approach to analyze the impact of non-tariff measures (NTMs) on trade and welfare in presence of market imperfections. We focus on standard-like measures such as technical barriers and sanitary and phytosanitary regulations. The approach overcomes the shortcomings of the mainstream approach based on the analysis of forgone trade caused by trade costs. The latter ignores market imperfections: welfare increases when NTMs are removed and trade expands. We explain how to account for external effects and market failures in trade-focused welfare analysis, leading to a more balanced overall assessment of measures despite a potential reduction of trade flows. We show that the relationship between trade, welfare, and NTMs is complex. The optimum NTM is often not zero. An application to shrimp trade illustrates the feasibility of the proposed approach. The illustration shows that the reinforcement of a food safety standard can be socially preferable to the status-quo situation, both domestically and internationally.

The Combination of Lab and Field Experiments for Benefit-Cost Analysis

This article explores the combination of laboratory and field experiments in defining a welfare framework and the impact of different regulatory tools on consumer behaviors. First, an overview of strengths and weaknesses raised by the experimental literature show that, for food consumption, lab and field experiments may be complementary to each other. The lab experiment elicits willingness to pay useful for determining per-unit damages based on well-informed, thoughtful preferences, while the field experiment determines purchase/consumption reactions in real contexts. Second, the analytical approach suggests how to combine the results of both lab and field experiments to determine the welfare impact of different regulatory tools such as labels and/or taxes. Third, an empirical application focuses on a lab and a field experiment conducted in France to evaluate the impact of regulation on fish consumption. Estimations for the French tuna market show that a per-unit tax on tuna and/or an advisory policy lead to welfare improvements.

Balancing the risk of dioxins and polychlorinated biphenyls (PCBs) and the benefit of long-chain polyunsaturated fatty acids of the n-3 variety for French fish consumers in western coastal areas.

A study of 401 fish-eating adults living in a coastal region of France was undertaken to establish exposure to dioxins/polychlorinated biphenyls and the intake of long-chain polyunsaturated fatty acids of the n-3 variety. Fish consumption was estimated using food frequency diaries and the dioxin/polychlorinated biphenyl data collected by the French control authorities was used to calculate dietary exposure. The results showed that for a group of adult subjects selected because of their consumption of fish, 60% achieved the nutritional recommendation for long-chain n-3 polyunsaturated fatty acids and 79% were exposed to total dioxins below the toxicological threshold of 14 pg kg−1 body weight week−1. Nevertheless, only 41% of these subjects had an optimal balance between the risk and benefit of eating fish, because 19% were meeting the nutritional recommendation but exceeding the toxicological threshold, whereas 38% were exposed below the toxicological threshold but failed to reach the recommended intake of long-chain n-3 polyunsaturated fatty acids. Similar results were found regarding the balance between long-chain n-3 polyunsaturated fatty acids and polychlorinated biphenyls even if a toxicological threshold was not established for these compounds. The results show that meeting the nutritional requirements of 0.5 mg day−1 of long-chain n-3 polyunsaturated fatty acids is compatible with respect to toxicological thresholds, while an intake higher than 1.5 g day−1 is likely to lead to a dietary exposure above the provisional tolerable weekly intake for dioxins.

On Food Companies Liability for Obesity

The U.S. food industry faces tobacco-style lawsuits for providing misleading information about health risks linked to the consumption of fatty products. This article investigates the link between alternative liability rules and the incentive for disclosing health information to consumers. We show that if the expected damage is relatively low, the absence of intervention is socially optimal. If the expected damage is not too high, mandatory labeling is socially optimal. Liability rules are only welfare-enhancing for high levels of risk and/or when consumers misperceive health warnings.