Food Quality in Domestic Markets of Developing Economies: A Comparative Study of Two Countries

29 Pages Posted: 14 Jan 2012

See all articles by Anneleen Vandeplas

Anneleen Vandeplas

LICOS - Centre for Institutions and Economic Performance

Bart Minten

International Food Policy Research Institute (IFPRI) - CGIAR Consortium

Date Written: June 1, 2011

Abstract

Food quality has become an important determinant of success in global food trade and growers for international markets have to continuously adjust to buyers’ requirements. It is however not clear to what extent there is a demand for food quality - and how much buyers are willing to pay for it - in domestic food markets of developing economies. Based on unique comparable price and trader data in a poor country in Africa (Madagascar) and an emerging economy in Asia (India), we compare food quality and quality’s pricing. We find significantly better quality and higher quality premiums (using revealed as well as stated preference methods) in India than in Madagascar. We explain these observed differences through a simple theoretical model, solely based on large average income gaps between the two countries.

Keywords: food quality, quality premiums, development

JEL Classification: Q12, Q13, L15

Suggested Citation

Vandeplas, Anneleen and Minten, Bart, Food Quality in Domestic Markets of Developing Economies: A Comparative Study of Two Countries (June 1, 2011). Available at SSRN: https://ssrn.com/abstract=1984577 or http://dx.doi.org/10.2139/ssrn.1984577

Anneleen Vandeplas (Contact Author)

LICOS - Centre for Institutions and Economic Performance ( email )

Waaistraat 6 - bus 3511
Leuven, B-3000
Belgium

HOME PAGE: http://www.econ.kuleuven.be/licos

Bart Minten

International Food Policy Research Institute (IFPRI) - CGIAR Consortium ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

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