京都大学 大学院経済学研究科・経済学部

Title: "State Certified Lemons: A Randomized Intervention on Agricultural Quality Certification"

Abstract: Information frictions along the supply chain can severely undermine the provision of high quality products and result in a market for lemons. One potential solution to this problem is to attain certification on product quality which can mitigate asymmetric information between producers and buyers. This paper empirically investigates whether state certification can solve the lemons problem. I conducted a randomized intervention on Good Agricultural Practices (GAP) certification with dragon fruit farms in Vietnam. This paper presents three main findings. First, I find no effect of certification eligibility on farmers’ provision of quality. Second, previous GAP certificates have no price premium on the market although there is a price premium associated with complying to GAP standards. Third, the pesticide regulation compliance rate reported by the state certified food testing lab is almost twice as high as that reported by a private lab, raising questions on the credibility of the state lab’s test reports. These findings imply that the credibility of state certification programs is crucial for incentivizing producers to upgrade product quality.

Keywords: Certification; Quality Provision; Agricultural Technology

Webpage of the speaker: https://sites.google.com/view/sangyoonpark

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