Economics Research Institute Study Paper
Utah State University Department of Economics
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An information asymmetry exists in the market for organic produce since consumers cannot determine whether produce is organically or conventionally grown. Various methods may solve this problem including signaling, reputation, and certification. Signaling and reputation may not work well, because signals are noisy, and reputation may be difficult for a producer to establish. Certification of the farm and its growing methods shows the most promise. A survey instrument testing the efficacy of certification is presented along with empirical analysis suggesting that no notable difference existed between independent certification methods, although independent certification had significantly different effects than self-certification.
Hunnicutt, Lynn; Keith, John E.; and Ward, Ruby, "If You Can't Trust the Farmer, Who Can You Trust? The Effect of Certification Types on Purchases of Organic Produce" (2002). Economic Research Institute Study Papers. Paper 251.