Buyers' response to third-party quality certification: Theory and evidence from Ethiopian wheat traders
When quality attributes of a product are not directly observable, third-party certification (TPC) enables buyers to distinguish between quality levels and reward sellers accordingly. We study the adoption of TPC by traders in smallholder-based agricultural value chains in low-income countries, where...
| Main Authors: | , , , , |
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| Format: | Journal Article |
| Language: | Inglés |
| Published: |
Wiley
2026
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| Subjects: | |
| Online Access: | https://hdl.handle.net/10568/177256 |
| _version_ | 1855522464331726848 |
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| author | Abate, Gashaw T. Bernard, Tanguy Bulte, Erwin Miguel, Jérémy Do Nascimento Sadoulet, Elisabeth |
| author_browse | Abate, Gashaw T. Bernard, Tanguy Bulte, Erwin Miguel, Jérémy Do Nascimento Sadoulet, Elisabeth |
| author_facet | Abate, Gashaw T. Bernard, Tanguy Bulte, Erwin Miguel, Jérémy Do Nascimento Sadoulet, Elisabeth |
| author_sort | Abate, Gashaw T. |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | When quality attributes of a product are not directly observable, third-party certification (TPC) enables buyers to distinguish between quality levels and reward sellers accordingly. We study the adoption of TPC by traders in smallholder-based agricultural value chains in low-income countries, where traders aggregate products from many small-scale producers before selling in bulk to downstream processors. In this context, the introduction of TPC services has oftentimes failed. We develop a theoretical model identifying how different market conditions affect traders' choice to purchase certified output from farmers. Next, using a novel lab-in-the-field experiment with Ethiopian wheat traders, we examine the model's predictions. Traders’ willingness to specialize in certified output increases with the share of certified wheat in the market, and this effect is stronger in larger markets. However, we find that traders do not optimally respond to variation in the quality of uncertified wheat in the market. We also analyze conditions where traders deviate from optimal behavior and discuss implications for research and policy making to promote TPC in smallholder-based value-chains.
JEL Codes: Q13; D22; O13; C93 |
| format | Journal Article |
| id | CGSpace177256 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2026 |
| publishDateRange | 2026 |
| publishDateSort | 2026 |
| publisher | Wiley |
| publisherStr | Wiley |
| record_format | dspace |
| spelling | CGSpace1772562026-01-02T15:32:42Z Buyers' response to third-party quality certification: Theory and evidence from Ethiopian wheat traders Abate, Gashaw T. Bernard, Tanguy Bulte, Erwin Miguel, Jérémy Do Nascimento Sadoulet, Elisabeth agricultural value chains certification markets smallholders wheat When quality attributes of a product are not directly observable, third-party certification (TPC) enables buyers to distinguish between quality levels and reward sellers accordingly. We study the adoption of TPC by traders in smallholder-based agricultural value chains in low-income countries, where traders aggregate products from many small-scale producers before selling in bulk to downstream processors. In this context, the introduction of TPC services has oftentimes failed. We develop a theoretical model identifying how different market conditions affect traders' choice to purchase certified output from farmers. Next, using a novel lab-in-the-field experiment with Ethiopian wheat traders, we examine the model's predictions. Traders’ willingness to specialize in certified output increases with the share of certified wheat in the market, and this effect is stronger in larger markets. However, we find that traders do not optimally respond to variation in the quality of uncertified wheat in the market. We also analyze conditions where traders deviate from optimal behavior and discuss implications for research and policy making to promote TPC in smallholder-based value-chains. JEL Codes: Q13; D22; O13; C93 2026 2025-10-21T19:54:40Z 2025-10-21T19:54:40Z Journal Article https://hdl.handle.net/10568/177256 en Open Access Wiley Abate, Gashaw T.; Bernard, Tanguy; Bulte, Erwin; Miguel, Jérémy Do Nascimento; and Sadoulet, Elisabeth. Buyers' response to third-party quality certification: Theory and evidence from Ethiopian wheat traders. American Journal of Agricultural Economics. Article in press. First published online October 16, 2025. https://doi.org/10.1111/ajae.70015 |
| spellingShingle | agricultural value chains certification markets smallholders wheat Abate, Gashaw T. Bernard, Tanguy Bulte, Erwin Miguel, Jérémy Do Nascimento Sadoulet, Elisabeth Buyers' response to third-party quality certification: Theory and evidence from Ethiopian wheat traders |
| title | Buyers' response to third-party quality certification: Theory and evidence from Ethiopian wheat traders |
| title_full | Buyers' response to third-party quality certification: Theory and evidence from Ethiopian wheat traders |
| title_fullStr | Buyers' response to third-party quality certification: Theory and evidence from Ethiopian wheat traders |
| title_full_unstemmed | Buyers' response to third-party quality certification: Theory and evidence from Ethiopian wheat traders |
| title_short | Buyers' response to third-party quality certification: Theory and evidence from Ethiopian wheat traders |
| title_sort | buyers response to third party quality certification theory and evidence from ethiopian wheat traders |
| topic | agricultural value chains certification markets smallholders wheat |
| url | https://hdl.handle.net/10568/177256 |
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